SoundThinking(SSTI) - 2025 Q1 - Quarterly Report

Financial Performance - Revenues for the three months ended March 31, 2025, were $28.3 million, a 12% increase from $25.4 million in the same period of 2024[84] - The company had a net loss of $1.5 million for Q1 2025, an improvement from a net loss of $2.9 million in Q1 2024[85] - Revenues for Q1 2025 increased by $2.9 million to $28.3 million, a 12% increase compared to Q1 2024's $25.4 million[124] - The net loss for Q1 2025 was $1.5 million, a 49% improvement from the net loss of $2.9 million in Q1 2024[124] Revenue Sources - ShotSpotter accounted for approximately 58% of total revenues in Q1 2025, down from 69% in Q1 2024[84] - The City of New York was the largest customer, contributing 37% of total revenues for Q1 2025[84] - The company generates annual subscription revenues primarily from the deployment of ShotSpotter on a per-square-mile basis[92] - The increase in revenues was largely attributed to approximately $3.5 million in catch-up revenue from two contract renewals with the New York City Police Department[125] Expenses and Costs - Cost of revenues rose by $1.2 million, primarily due to a $0.7 million increase in product costs and a $0.5 million increase in personnel costs[126] - Operating expenses totaled $17.8 million, accounting for 63% of revenues, a decrease as a percentage compared to 69% in Q1 2024[124] - Research and development expenses increased by $0.5 million, driven by a $0.2 million rise in consulting expenses related to SafePointe[128] - General and administrative expenses decreased by $0.4 million, mainly due to reduced legal and consulting costs[129] Cash Flow and Liquidity - Cash and cash equivalents stood at $11.7 million, with accounts receivable totaling $29.5 million as of March 31, 2025[132] - The company has cash and cash equivalents, available credit facility, and cash flow from operations sufficient to meet working capital and capital expenditure requirements for at least the next 12 months[133] - As of March 31, 2025, the company had $21.0 million available under its credit facility, with $4.0 million outstanding on the line of credit[139] - Net cash used in operating activities for the three months ended March 31, 2025, was $0.1 million, a decrease of $5.1 million compared to net cash provided of $5.0 million during the same period in 2024[142] Investments and Acquisitions - Recent acquisitions include SafePointe in August 2023 and Technologic Solutions in May 2023, aimed at enhancing product offerings[79][77] - The company completed the acquisition of SafePointe for a total purchase consideration of $25.6 million, including $11.4 million in cash and 549,579 shares valued at $11.2 million[136] - Investing activities used $0.9 million in the three months ended March 31, 2025, primarily for investments in property and equipment[144] Stock and Credit Facilities - The company repurchased 33,493 shares at an average price of $15.04 per share for approximately $0.5 million during the three months ended March 31, 2025[138] - The company’s available credit facility was increased to $25.0 million in November 2022, with an expiration date extended to October 15, 2025[139] - The company’s stock repurchase program allows for up to $25.0 million in common stock repurchases, with $12.9 million remaining available as of March 31, 2025[137] Market Presence and Future Plans - As of March 31, 2025, the company had coverage areas under contract for ShotSpotter in 177 cities and 21 campuses/sites[75] - The company had 247 SafePointe lanes under contract as of March 31, 2025[75] - Net new "go-live" cities and universities were 4 in Q1 2025, down from 9 in Q1 2024[90] - The company plans to expand its international presence and increase sales of security solutions to drive future growth[86] - The company anticipates increased costs due to inflation impacting customer budgets and contract approvals[102] Deferred Revenue and Compliance - The company experienced a decrease of $7.5 million in deferred revenue due to the termination of a contract with the City of Chicago[142] - The company is subject to certain restrictive and financial covenants under the Umpqua Credit Agreement and is in compliance as of March 31, 2025[139]