Shares of Evolv Technologies Holdings, Inc. (NASDAQ: EVLV) surged 5.42% in after-hours trading on Tuesday following the release of its first-quarter 2025 financial results, which exceeded analyst expectations and demonstrated significant progress towards profitability.

The security technology company, specializing in AI-based solutions, reported total revenue of $32.0 million for Q1 2025, marking a substantial 44% increase from $22.2 million in the same period last year. This figure comfortably beat the analyst consensus estimate of $27.94 million. Evolv's bottom line also showed improvement, with a reported adjusted loss of $0.02 per share, narrower than the $0.08 loss per share in Q1 2024 and better than the analyst expected loss of $0.04 per share.

A key highlight of the earnings report was Evolv's achievement of positive Adjusted EBITDA of $1.7 million in Q1 2025, compared to a loss of $10.4 million in the first quarter of 2024. This marks a significant milestone in the company's path to profitability. Additionally, Evolv reported strong growth in Annual Recurring Revenue (ARR), which rose to $106.0 million, representing a 34% increase from $79.2 million at the end of Q1 2024.

Looking ahead, Evolv provided an optimistic outlook for 2025, projecting full-year revenue between $125 million and $130 million. This guidance surpasses the current analyst consensus of $124.3 million. The company also expects to maintain positive Adjusted EBITDA for the full year 2025, with margins in the low to mid-single digits, and anticipates generating positive free cash flow in the fourth quarter of 2025.

John Kedzierski, President and Chief Executive Officer of Evolv Technology, commented on the results, stating, "I am pleased with our solid first quarter results and the foundation we're building for continued growth and operational excellence. This performance represents a meaningful step in rebuilding a consistent track record of execution."

The strong financial performance, coupled with management's positive outlook, appears to have boosted investor confidence, driving the after-hours stock price increase. As Evolv continues to expand its customer base and improve its operational efficiency, investors will likely be watching closely to see if the company can maintain its growth trajectory and deliver on its profitability goals for the remainder of 2025.