Evolv Technologies' second quarter of 2026 is the clearest demonstration yet that its weapons-detection business can grow fast and lose less money at the same time. Total revenue rose 34 percent to $43.8 million, gross profit climbed 35 percent to $22.0 million, and the net loss narrowed 77 percent, from $40.5 million a year ago to $9.3 million. The stock trades at $5.25, near the bottom of a 52-week range of $4.87 to $8.81, with a market capitalization of roughly $944 million, no trailing price-to-earnings ratio because the company is still unprofitable, and no dividend. The market is pricing this as a company whose story has stalled, while the income statement says the story is accelerating.
Evolv makes artificial-intelligence-powered security scanners, the standing units you see at stadiums, schools, airports, and casinos that screen walk-through traffic for weapons without requiring people to empty their pockets. The business model has shifted from selling hardware outright toward subscription arrangements, which produce recurring revenue that is more visible and more valuable to the company over time. In the second quarter, subscription revenue reached $24.8 million, up 23 percent, and product revenue tripled to $9.1 million as customers bought hardware through the newer purchase-subscription model. Service revenue rose 34 percent to $9.0 million. License fee revenue fell 71 percent to $0.9 million because a distribution agreement expired at the end of 2025 and its revenue is being replaced by higher-margin product sales.
The improvement in the loss is the number that matters most. Operating expenses actually fell 4 percent to $32.5 million, with general and administrative costs down 19 percent as the legal and consulting costs of a prior restatement and investigation normalized, while research and development rose 22 percent and sales and marketing rose 8 percent. Cash flow from operations turned positive, at $8.7 million for the first half of the year against a small outflow a year earlier. The company holds $62.6 million of cash and marketable securities, with $30 million of debt drawn and up to $45 million more available under its credit facility, and its average daily volume of 2.2 million shares means the stock trades with real liquidity.
The risk is that the company still expects to generate net losses for the foreseeable future, and its debt agreement includes covenants tied to minimum annual recurring revenue that step up over time. The current minimum is $108.7 million, and the company says it is in compliance. There is also the shadow of the restatement itself, which cost the company money, management attention, and credibility, and a minimum-earnings covenant that takes effect in June 2027. The investment question is whether the revenue compounding and the cost discipline continue together long enough for the losses to disappear entirely. The second quarter answered that question in the company's favor. Whether the market notices is a separate matter, and at $5.25 the market has not noticed yet.