SoundThinking(US:SSTI)2023-05-12 21:36Revenue Performance - For the three months ended March 31, 2023, the company generated revenues of $20.6 million, a decrease from $21.2 million in the same period of 2022, with ShotSpotter sales accounting for approximately 71% of total revenues[85]. - Revenues generated within the United States accounted for $20.2 million, or 98% of total revenues for the three months ended March 31, 2023[86]. - Revenues for Q1 2023 were $20.62 million, a decrease of 3% compared to $21.21 million in Q1 2022, primarily due to a $2.4 million decrease in monthly support contract revenues[123]. Customer and Market Insights - The two largest customers, the City of New York and the City of Chicago, represented 27% and 10% of total revenues for the three months ended March 31, 2023, respectively[85]. - The company had ShotSpotter coverage areas under contract for approximately 1,100 square miles, with 1,034 square miles having gone live as of March 31, 2023, covering over 155 cities and 19 campuses/sites[77]. - The net new "go-live" cities for the first quarter of 2023 were 6, down from 8 in the same period of 2022, indicating a decrease in operational performance[91]. Financial Performance - The company reported a net loss of $(1.8) million for the three months ended March 31, 2023, compared to a net income of $0.4 million in the same period of 2022[86]. - Net loss for Q1 2023 was $1.79 million, compared to a net income of $0.39 million in Q1 2022, marking a significant decline of 563%[123]. - Cash used in operating activities was $1.2 million in Q1 2023, compared to cash provided of $1.3 million in Q1 2022, primarily due to a $9.7 million decrease in deferred revenue[142]. Cost and Expenses - Cost of revenues increased by $1.0 million to $9.24 million in Q1 2023, driven by higher product and personnel costs[125]. - Operating expenses totaled $13.11 million in Q1 2023, an increase of 5% from $12.49 million in Q1 2022, with sales and marketing expenses rising by 5%[123]. - The company anticipates increased costs due to inflation, which may lead to budget shortfalls for customers and delays in contract approvals[101]. Strategic Initiatives - The company has focused on expanding its business through acquisitions, including LEEDS and Forensic Logic, to enhance its suite of solutions[79][80]. - The company plans to invest in research and development to enhance its software solutions and improve functionality, with a focus on data science modeling and user experience[113]. - The company aims to increase its international presence and expand coverage among existing customers, recognizing challenges in the lengthy sales cycle[87][89]. Cash and Financing - Cash and cash equivalents stood at $5.1 million, with accounts receivable of $22.4 million as of March 31, 2023, and an available loan facility of $25 million[131]. - A stock repurchase program was approved for up to $25.0 million, allowing for repurchases in open market transactions[137]. - During Q1 2023, the company repurchased 35,369 shares at an average price of $35.43, totaling approximately $1.3 million[138]. Acquisitions - The acquisition of Forensic Logic in January 2022 was for $31.6 million, including a contingent earnout of up to $20 million based on future revenues[135]. - The acquisition of LEEDS was completed for a total consideration of $21.6 million in cash and $2.0 million in stock, with a contingent earnout of $1.5 million paid in Q1 2023[136]. Market Risk - There were no material changes in market risk during Q1 2023 compared to the previous year[152].