Q2 2026 Evolv Technologies Holdings Inc Earnings Call Transcript
Key Points
- Revenue in Q2 2026 increased 34% year-over-year, driven by strong demand and the full transition to the direct fulfillment model.
- Added 70 new customers in Q2, the strongest quarter for new customer additions in two years, with approximately 60% of unit bookings from existing customers.
- Adjusted EBITDA margin expanded to 10.1% in Q2, up from 6.5% year-over-year, and total adjusted EBITDA for H1 2026 doubled compared to H1 2025.
- RPO grew 4.5% sequentially to $312.6 million, now exceeding 1.7 times the full-year revenue outlook, providing strong revenue visibility.
- Raised full-year 2026 revenue guidance to $180-$185 million (23%-27% growth) and ARR guidance to $148-$150 million (23%-25% growth), reflecting strong momentum.
- Expedite, the AI-powered bag screening solution, now has over 100 customers (8% of total customer base, up from 2% a year ago), with 70% of new Expedite customers also purchasing Evolve Express.
- Onboarded Plexus as a new contract manufacturer, which is expected to enhance production capacity, global reach, and reduce bill of material costs over time.
- Gross margin in Q2 was 51%, with near-term headwinds from a higher mix of purchase subscriptions (60% of new units vs. 55% previously), which recognize hardware costs upfront.
- Gen 2 upgrades create a temporary gross margin headwind of just under one point due to freight, refurbishment, and depreciation costs on returned Gen 1 units.
- Component and supply chain costs are modestly higher than anticipated, adding approximately half a point of gross margin headwind.
- ARR growth (20% year-over-year) is lower than unit growth (approximately 30% year-over-year) due to a mix of lower-ARPU Gen 1 redeployments and Expedite units, though pricing increases are expected to help over time.
- The company may invest an additional $2-$4 million in inventory safety stock to mitigate supply chain risks, which could impact cash flow.
- Revenue growth comparisons will normalize in Q3 as the company laps the fulfillment and pricing changes from mid-2025, potentially leading to more moderate growth rates.
Good afternoon and welcome to the Evolve Technology Second Quarter Earnings Results Conference Call. All participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's call, Brian Norris, Senior Vice President of Finance and Investor Relations for Evolve Technology. Please go ahead sir.
Thank you, and good afternoon, everyone. Welcome to today's call. I'm joined today by John Kozerski, our President and Chief Executive Officer, and Chris Kutzer, our Chief Financial Officer.
Earlier today, we issued a press release detailing our second quarter results and our updated 2026 outlook.
This release is available on the Investor Relations section of our website and has been filed with the Securities and Exchange Commission.
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