Evolv Technologies Holdings, Inc.EVLV
Evolv Technologies Holdings, Inc. Revenue Disclosure
Revenue Recognition
Remaining Performance Obligations
The following table includes estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) as of December 31, 2024.
| Less than 1 year | 1 - 2 years | More than 2 years | Total | ||||||||||||||||||||
| Product revenue | $ | 4,748 | $ | — | $ | — | $ | 4,748 | |||||||||||||||
| Subscription revenue | 72,928 | 61,137 | 57,509 | 191,574 | |||||||||||||||||||
| Service revenue | 27,527 | 23,356 | 19,021 | 69,904 | |||||||||||||||||||
| License fee and other revenue | 451 | 10 | 17 | 478 | |||||||||||||||||||
| Total revenue | $ | 105,654 | $ | 84,503 | $ | 76,547 | $ | 266,704 | |||||||||||||||
The amount of minimum future leases is based on expected income recognition. As of December 31, 2024, future minimum payments on noncancelable leases are as follows (in thousands):
| Year Ending December 31: | |||||
| 2025 | $ | 72,928 | |||
| 2026 | 61,137 | ||||
| 2027 | 41,316 | ||||
| 2028 | 15,399 | ||||
| Thereafter | 794 | ||||
| $ | 191,574 | ||||
Contract Balances from Contracts with Customers
Contract assets arise from unbilled amounts in customer arrangements when revenue recognized exceeds the amount billed to the customer and the Company’s right to payment is conditional and not only subject to the passage of time. As of December 31, 2024 and December 31, 2023, the Company had $0.8 million and $1.4 million (as restated) in current portion of contract assets and $0.7 million and $1.0 million (as restated) in contract assets, noncurrent on the consolidated balance sheets, respectively.
Contract liabilities represent the Company’s obligation to transfer goods or services to a customer for which it has received consideration (or the amount is due) from the customer. The Company has a contract liability related to service revenue, which consists of amounts that have been invoiced but that have not been recognized as revenue. Amounts expected to be recognized as revenue within 12 months of the balance sheet date are classified as current deferred revenue and amounts expected to be recognized as revenue beyond 12 months of the balance sheet date are classified as deferred
revenue, noncurrent. The Company recognized revenue of $46.4 million during the year ended December 31, 2024 that was included in the December 31, 2023 deferred revenue balance. The Company recognized revenue of $17.9 million (as restated) during the year ended December 31, 2023 that was included in the December 31, 2022 deferred revenue balance. The Company recognized revenue of $6.6 million (as restated) during the year ended December 31, 2022 that was included in the December 31, 2021 deferred revenue balance.
The following table provides a rollforward of deferred revenue (in thousands):
| Balance at December 31, 2021 | $ | 9,074 | |||
| Revenue recognized in relation to the beginning of the year contract liability balance (restated) | (6,592) | ||||
| Revenue deferred (restated) | 29,987 | ||||
| Balance at December 31, 2022 (restated) | $ | 32,469 | |||
| Revenue recognized in relation to the beginning of the year contract liability balance (restated) | (17,886) | ||||
| Revenue deferred (restated) | 57,374 | ||||
| Balance at December 31, 2023 (restated) | $ | 71,957 | |||
| Revenue recognized in relation to the beginning of the year contract liability balance | (46,431) | ||||
| Revenue deferred | 59,246 | ||||
| Balance at December 31, 2024 | $ | 84,772 | |||
The following table presents the Company’s components of lease revenue (in thousands):
| Twelve Months Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| (Restated) | (Restated) | ||||||||||||||||
| Revenue from sales-type leases | — | — | 1,123 | ||||||||||||||
| Interest income on lease receivables | 154 | 197 | 224 | ||||||||||||||
| Lease income - operating leases | 65,046 | 36,201 | 17,041 | ||||||||||||||
| Total lease revenue | $ | 65,200 | $ | 36,398 | $ | 18,388 | |||||||||||
The interest income on lease receivables is classified under interest income in the consolidated statements of operations and comprehensive loss. Lease income from operating leases is related to the leased equipment under subscription arrangements and is classified as subscription revenue in the consolidated statements of operations and
comprehensive loss. Revenue related to leases entered into with related parties were $1.1 million, $1.1 million (as restated), and $0.9 million (as restated) during the years ended December 31, 2024, 2023, and 2022, respectively.
Disaggregated Revenue
The following table presents the Company’s revenue by revenue stream (in thousands). Certain prior period amounts have been reclassified to conform to current period presentation:
| Twelve Months Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| (Restated) | (Restated) | ||||||||||||||||
| Product revenue | $ | 6,464 | $ | 22,768 | $ | 29,787 | |||||||||||
| Subscription revenue | 65,046 | 36,201 | 17,041 | ||||||||||||||
| Service revenue | 23,467 | 15,606 | 4,595 | ||||||||||||||
| License fees | 7,181 | 2,963 | — | ||||||||||||||
| Professional services and other revenue | 1,707 | 2,027 | 1,296 | ||||||||||||||
| Total revenue | $ | 103,865 | $ | 79,565 | $ | 52,719 | |||||||||||
The following table presents the Company's revenue by geographical region based on customer location (in thousands):
| Twelve Months Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| (Restated) | (Restated) | ||||||||||||||||
| United States | $ | 99,995 | $ | 77,703 | $ | 51,316 | |||||||||||
| Foreign | 3,870 | 1,862 | 1,403 | ||||||||||||||
| Total revenue | $ | 103,865 | $ | 79,565 | $ | 52,719 | |||||||||||
Commissions
The Company incurs and pays commissions on sales of its products and services. The Company applies the practical expedient for contracts less than one year in duration to expense the commission costs in the period in which they were incurred. Commissions on product sales and services are expensed in the period in which the related revenue is recognized. Commissions on subscription arrangements and maintenance are expensed ratably over the life of the contract. The Company had total deferred assets related to commissions of $13.0 million and $11.6 million (as restated) as of December 31, 2024 and December 31, 2023, respectively. During the years ended December 31, 2024, 2023 and 2022, the Company recognized commission expense of $5.7 million, $5.4 million (as restated) and $4.2 million (as restated), respectively.
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About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.