Core Viewpoint - SoundThinking (SSTI) reported a quarterly loss of $0.32 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.02, marking an earnings surprise of -1,500% [1] Financial Performance - The company posted revenues of $23.41 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 12.97%, compared to $26.05 million in the same quarter last year [2] - Over the last four quarters, SoundThinking has surpassed consensus EPS estimates only once and topped consensus revenue estimates two times [2] Stock Performance - SoundThinking shares have increased by approximately 8.7% since the beginning of the year, outperforming the S&P 500's gain of 1.7% [3] Future Outlook - The company's earnings outlook will be crucial for investors, including current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is -$0.14 on revenues of $25.41 million, and for the current fiscal year, it is -$0.22 on revenues of $108.11 million [7] Industry Context - The Security and Safety Services industry, to which SoundThinking belongs, is currently ranked in the top 33% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Core Insights - SoundThinking, Inc. reported a record revenue of $102.0 million for the full year 2024, marking a 10% increase from $92.7 million in 2023, driven by new and expanding customer subscriptions [1][13][16] - The company raised its FY 2025 revenue guidance to a range of $111.0 million to $113.0 million, indicating a projected 10% year-over-year growth at the midpoint [1][17] - Adjusted EBITDA margin guidance for FY 2025 has also been increased to a range of 21% to 23% [1][17] Financial Performance - For Q4 2024, revenues decreased by 10% to $23.4 million compared to $26.0 million in Q4 2023 [7][9] - Gross profit for Q4 2024 was $11.7 million, representing 50% of revenues, down from $15.0 million (58% of revenues) in the same quarter of 2023 [7][10] - The net loss for Q4 2024 was $4.1 million, compared to a net income of $3.6 million in Q4 2023 [11][16] - Adjusted EBITDA for Q4 2024 totaled $1.7 million (7% of revenues), down from $4.8 million (18% of revenues) in Q4 2023 [12][16] Operational Highlights - The company went live with ShotSpotter in 20 new cities and 5 universities in 2024, with 126 new ShotSpotter go-live miles deployed [6][7] - Annual recurring revenue (ARR) at the beginning of 2025 was $95.6 million, with a revenue retention rate of 105%, slightly down from 107% in 2023 [7][17] - Sales and marketing spend per $1.00 of new annualized contract value increased to $0.63 in 2024 from $0.52 in 2023 [7][27] Future Outlook - The company expects ARR to grow to approximately $110.0 million by the beginning of 2026 [1][17] - Management expressed optimism about market positioning and growth potential, particularly through the integration of AI-driven capabilities into their platform [6][8]

Core Insights - SoundThinking, Inc. has announced a multi-year renewal of its partnership with the New York Police Department (NYPD) for the ShotSpotter acoustic gunshot detection system, valued at approximately $21.8 million [2][4]. Company Overview - SoundThinking, Inc. is a leading public safety technology provider that offers AI- and data-driven solutions for law enforcement and security professionals, trusted by over 300 customers and approximately 2,100 agencies [5]. Product Effectiveness - ShotSpotter has been deployed in New York City since 2015 and has proven effective in addressing the issue of unreported gunfire, which can exceed 80% of total instances. The system has helped reduce response times, assist in evidence collection, locate victims, and build trust between law enforcement and underserved communities [3]. Performance Metrics - SoundThinking is contractually obligated to maintain a 90% accuracy rate for gunfire triangulation, with an average monthly accuracy rate of 94% reported in 2024 [3].

Coverage and Market Opportunities - As of December 31, 2020, ShotSpotter had coverage areas under contract for over 810 square miles, with 779 square miles live, across over 110 cities and 12 campuses/sites[18] - The company estimates that the domestic market for its public safety solution consists of approximately 1,400 cities with four or more homicides per 100,000 residents, with an average investment of about $400,000 per year for ShotSpotter Respond[71] - The company has identified an additional market opportunity in smaller cities, which could add several hundred potential customers, each expected to invest between $50,000 to $100,000 per year for ShotSpotter Respond[71] - The international market for ShotSpotter Respond includes around 200 cities in regions such as the European Union and Central America, with an estimated average investment of approximately $1.0 million per year per customer[72] - The company estimates the domestic market for its security solutions includes approximately 5,000 college campuses and airports, with average customer investments of $50,000-$75,000 per year[75] - The market for ShotSpotter Connect is estimated to include around 2,500 cities, with average customer investments of $50,000-$100,000 per year, and potential international customers could invest over $100,000 annually[76] - The company anticipates a significant opportunity to expand internationally, estimating a market of approximately 200 cities outside the U.S. with at least 500,000 residents[80] Technology and Solutions - ShotSpotter's gunshot detection technology enables alerts to be sent within approximately 45 seconds of a gunfire incident being detected[30] - ShotSpotter's intelligent sensors are designed to filter out ambient noise and accurately detect impulsive sounds, ensuring high precision in gunfire detection[37] - The Incident Review Center (IRC) operates 24/7 and can confirm gunfire incidents within seconds, providing precise location data and details about the incident[41] - The ShotSpotter Respond application allows field personnel to receive real-time alerts, including a unique Respond ID number, time of gunfire, and contextual information about the incident[47] - ShotSpotter Connect uses AI-driven analysis to direct officers to patrol areas with the highest predicted crime risk, enhancing community engagement and reducing enforcement bias[59][60] - The company acquired the CrimeCenter investigative case management solution in November 2020, rebranding it as ShotSpotter Investigate, aimed at improving clearance rates for law enforcement agencies[66][69] - The company offers Detailed Forensic Reports (DFRs) that provide comprehensive analysis of shooting incidents, which have been admitted in over 100 criminal prosecutions across various states[51] Public Safety and Community Impact - Approximately 80% of gunshots detected by ShotSpotter's public safety solution are not reported to 911 by residents, highlighting a significant public safety gap[21] - The deployment of ShotSpotter's solutions is expected to improve community trust and engagement while enhancing public safety outcomes[19] - The average homicide clearance rate in the United States was 61% in 2019, indicating a need for improved investigative case management solutions[25] - The average homicide clearance rate in the U.S. over the last five years is 61%, indicating a significant opportunity for the company's solutions to assist law enforcement in solving cases more effectively[67] - In 2020, the company issued over 230,000 gunshot alerts to customers, enabling emergency dispatch centers to respond within 45 seconds of a gunfire incident report[55] Financial Performance and Business Operations - The company has faced challenges due to the COVID-19 pandemic, which has materially affected its business operations[14] - The two largest customers, City of Chicago and City of New York, accounted for 18% and 15% of revenues, respectively, for the year ended December 31, 2020[86] - The company has added over 80 new ShotSpotter Respond customers since transitioning to a subscription model in 2011, with a retention rate exceeding 100%[86] - The company plans to leverage its existing customer base to drive adoption of new products, aiming to increase revenue per customer through complementary technologies[78] - Total revenues generated outside the United States were $0.7 million in 2020, compared to $1.0 million in 2019 and $0.9 million in 2018[119] - As of December 31, 2020, the company had cash and cash equivalents of $16.0 million, consisting entirely of bank deposits[412] Workforce and Diversity - The company employed 157 people as of December 31, 2020, with a total attrition rate of less than 11%[109] - Women represented 27% of the company's employees, while underrepresented minorities accounted for 50%[110] - The company is committed to advancing diversity, equity, and inclusion, with a three-pronged strategy to attract diverse talent and create an inclusive workplace[111] Research and Development - The research and development team focuses on enhancing signal processing algorithms and integrating AI, with 20 employees dedicated to these efforts as of December 31, 2020[93] - The company had 34 issued patents as of December 31, 2020, with expiration dates ranging from 2022 to 2034[105] Competitive Landscape - The company operates in a highly competitive environment, facing direct competition from companies like Alarm.com and Safety Dynamics Inc.[100] - The company does not engage in any hedging strategies to manage foreign currency exchange risks, primarily related to the South African Rand[413] - The company has not experienced material effects from inflation on its business or financial condition[414] COVID-19 Response - The company has implemented significant changes in response to the COVID-19 pandemic, including flexible work hours and additional paid time off[117]