Core Viewpoint - SoundThinking, Inc. (SSTI) shares experienced a significant increase of 7.2% in the last trading session, closing at $7, following a period of 27.1% loss over the past four weeks, indicating a potential turnaround in investor sentiment [1][2]. Group 1: Company Performance - The recent rally in SSTI's stock is primarily attributed to optimism regarding revenue growth from New York City, supported by two three-year contract renewals with the New York City Police Department [2]. - SSTI is projected to report a quarterly loss of $0.12 per share, reflecting a year-over-year improvement of 62.5%, with expected revenues of $24.63 million, marking a 5.2% increase from the same quarter last year [3]. - The consensus EPS estimate for SSTI has remained unchanged over the last 30 days, suggesting that the stock's price movement may not sustain without trends in earnings estimate revisions [4]. Group 2: Industry Context - SSTI operates within the Zacks Security and Safety Services industry, where Alarm.com Holdings (ALRM) also resides, having closed the last trading session up by 3.9% at $48.22, despite a -10.6% return over the past month [4]. - Alarm.com's consensus EPS estimate for its upcoming report has remained stable at $0.66, representing a year-over-year change of 13.8%, and it also holds a Zacks Rank of 3 (Hold) [5].

Core Viewpoint - SoundThinking, Inc. is enhancing its sales leadership by appointing Kirk Arthur as Senior Vice President of Global Sales and Manuel Nylen as Vice President of Sales for SafePointe, aiming for accelerated growth in public safety, security, and enterprise markets [1][2]. Group 1: Leadership Appointments - Kirk Arthur will lead the global sales and solutions organization, focusing on go-to-market strategy, revenue execution, and customer engagement [3]. - Manuel Nylen will oversee sales for SafePointe, targeting expansion in healthcare, gaming, corporate campuses, and other security-sensitive environments [3]. Group 2: Leadership Backgrounds - Kirk Arthur has extensive experience in public service and enterprise technology, previously serving at Microsoft and the United States Secret Service, where he led initiatives in government modernization and electronic crimes [4]. - Manuel Nylen has a strong background in security technology sales, having held leadership roles at Milestone Systems and BriefCam, where he focused on revenue growth and channel partnerships [5]. Group 3: Company Growth Strategy - The appointments come at a crucial time for SoundThinking, as the company aims to scale its SafetySmart™ platform across various markets [2][6]. - Arthur emphasizes the significant market potential and innovative solutions that SoundThinking offers, aiming to enhance public safety profiles [6]. - Nylen describes SafePointe as a transformative solution in security, utilizing AI to improve weapons detection without traditional checkpoints [6]. Group 4: Company Overview - SoundThinking, Inc. is a leading public safety technology company providing AI- and data-driven solutions for law enforcement and security professionals, trusted by over 300 customers and approximately 2,100 agencies [9]. - The company's SafetySmart™ platform includes various solutions such as ShotSpotter, CrimeTracer™, CaseBuilder™, ResourceRouter™, SafePointe, and PlateRanger powered by Rekor [9].

Core Insights - SoundThinking has opened a new Alert Review Center (ARC) in downtown Orlando, FL, which will serve as a centralized operational hub for its SafePointe alert review operations, creating nearly 30 public-safety jobs in the region [1][3]. Group 1: Company Operations - The ARC will support SafePointe, an AI-enabled weapons detection system, by allowing trained reviewers to analyze alerts in real time, providing timely and accurate information for safety operations in various public spaces [2][3]. - The facility is located in 1,872 square feet of office space in the Regions Bank Tower, demonstrating SoundThinking's long-term commitment to the downtown Orlando area through a three-year renewable lease [4]. Group 2: Employment and Economic Impact - The consolidation of previously remote roles into the downtown facility is expected to contribute to the growth of the technology and public-safety workforce in the region, with nearly 30 full-time employees anticipated once hiring is complete [3]. - The decision to establish the ARC in downtown Orlando is seen as a boost to the local ecosystem of innovative employers, reinforcing the area's appeal for companies looking to grow and collaborate [5]. Group 3: Company Background - SoundThinking, Inc. (Nasdaq: SSTI) is a leading public safety technology company that provides AI- and data-driven solutions for law enforcement and security professionals, trusted by over 300 customers and approximately 2,100 agencies [7].

Core Insights - SoundThinking, Inc. will have its CFO Alan Stewart participate virtually in the 28th Annual Needham Growth Conference on January 15, 2026, providing an opportunity for investors to engage with management [1]. Company Overview - SoundThinking, Inc. is a leading public safety technology provider that offers AI- and data-driven solutions for law enforcement, civic leadership, and security professionals [2]. - The company serves over 300 customers and has collaborated with approximately 2,100 agencies to enhance public safety outcomes [2]. - SoundThinking's SafetySmart™ platform includes several key products: - ShotSpotter, an acoustic gunshot detection system - CrimeTracer™, a law enforcement search engine - CaseBuilder™, an investigation management system - ResourceRouter™, software for directing patrol and anti-violence resources - SafePointe, an AI-based weapons detection system - PlateRanger powered by Rekor, an automatic license plate recognition solution [2]. - The company has been recognized as a Great Place to Work [2].

Financial Performance - Revenues for the three months ended September 30, 2025, were $25.1 million, a decrease of 4% compared to $26.3 million for the same period in 2024, with ShotSpotter representing approximately 65% of total revenues[92] - For the nine months ended September 30, 2025, revenues increased by 1% to $79.3 million from $78.6 million in 2024, with ShotSpotter accounting for 63% of total revenues[93] - The City of New York accounted for 30% of total revenues for the nine months ended September 30, 2025, while the City of Chicago did not renew its contract in November 2024[93] - Revenues generated within the United States accounted for 97% of total revenues for the three months ended September 30, 2025, down from 99% in 2024[94] - Revenues for Q3 2025 were $25.1 million, a decrease of 4% from $26.25 million in Q3 2024, primarily due to a $2.8 million contract with the City of Chicago in 2024[136] - Revenues for the nine months ended September 30, 2025, increased by $0.7 million to $79.3 million, primarily driven by $4.4 million in new bookings and $3.5 million in catch-up revenue from contract renewals[144][145] Net Loss and Expenses - The company reported a net loss of $2.0 million for the three months ended September 30, 2025, compared to a net loss of $1.4 million for the same period in 2024[96] - The company reported a net loss of $2.044 million in Q3 2025, compared to a net loss of $1.44 million in Q3 2024, marking a 42% increase in losses[136] - Operating loss increased by 53% to $6.2 million, reflecting higher operating expenses despite a decrease in sales and marketing expenses[144][148] - The accumulated deficit increased to $110.9 million as of September 30, 2025, from $104.3 million at the end of 2024[96] Operating Expenses - Cost of revenues increased by $0.4 million to $11.229 million, primarily due to product costs related to software licensing for the NYPD and maintenance activities for ShotSpotter deployments[138] - Gross profit for Q3 2025 was $13.634 million, representing 54% of revenues, down from 58% in Q3 2024[136] - Operating expenses totaled $15.69 million in Q3 2025, a decrease of 4% from $16.263 million in Q3 2024, with sales and marketing expenses decreasing by $1.4 million[136] - Research and development expenses increased by $0.7 million to $4.097 million, driven by investments in enhancing AI capabilities[140] - Cost of revenues rose by $2.9 million to $35.0 million, with significant contributions from $1.0 million in IT costs for AI enhancements and $0.8 million in maintenance costs[144][146] - Research and development expenses increased by $1.5 million to $11.9 million, driven by consulting and IT expenses related to AI capabilities[144][149] Cash Flow and Financial Position - Net cash provided by operating activities fell by $18.3 million to $4.8 million, attributed to slower collections and a decrease in deferred revenue[165][167] - As of September 30, 2025, cash and cash equivalents totaled $11.8 million, with accounts receivable at $28.5 million and available borrowing capacity of $36.0 million under the credit facility[156] - The company expects existing cash and credit facilities to meet working capital needs for at least the next 12 months despite negative working capital[157][158] Strategic Initiatives - The company introduced new products such as ResourceRouter and CrimeTracer, and expanded its offerings through the acquisition of SafePointe, targeting new markets including healthcare due to California's AB 2975 mandate[98] - The company plans to expand its international presence and pursue opportunities in Latin America, recognizing the need for additional resources and management attention[99] - The company completed the acquisition of SafePointe for $25.6 million, funded by $11.4 million in cash and $11.2 million in stock[160] Market Risks - The company’s market risk exposure is primarily due to fluctuations in interest rates, foreign exchange rates, and inflation[176] - There were no material changes in the company's market risk during the nine months ended September 30, 2025, compared to the previous disclosures[177] - The company anticipates that rising costs from inflation may lead to budget shortfalls for customers, potentially delaying contract approvals[112] Contractual and Operational Metrics - As of September 30, 2025, the company had 178 cities and 22 campuses/sites under contract, covering over 1,088 square miles, with 1,075 square miles already live[87] - The net new "go-live" cities and universities for the three months ended September 30, 2025, were 3, while for the nine months, it was 7, compared to 15 in the same period of 2024[100] - The impairment of property and equipment increased significantly by 339% to $237,000 in Q3 2025, compared to $54,000 in Q3 2024[136] Accounting Policies - As of September 30, 2025, there have been no material changes to the company's critical accounting policies and estimates from those disclosed in the 2024 Annual Report on Form 10-K[173]

Core Insights - SoundThinking, Inc. reported worse-than-expected Q3 financial results, with losses of 16 cents per share compared to the analyst consensus estimate of 6 cents per share [1] - Quarterly sales were $25.100 million, missing the analyst consensus estimate of $27.953 million [1] - The company cut its FY2025 sales guidance from a range of $111 million-$113 million to $104 million [2] Financial Performance - Q3 losses were reported at 16 cents per share, missing expectations [1] - Sales for the quarter were $25.100 million, below the expected $27.953 million [1] Guidance Update - FY2025 sales guidance was revised down from $111 million-$113 million to $104 million [2] Company Developments - The company is focused on enhancing community safety through data and technology, with recent expansions in its ShotSpotter footprint and new AI capabilities [3] - The Net Promoter Score increased from 66 to approximately 70, indicating strong customer satisfaction and retention [3] Market Reaction - Following the earnings announcement, SoundThinking shares fell by 19.6%, trading at $6.78 [3] Analyst Ratings - Cantor Fitzgerald analyst maintained an Overweight rating but lowered the price target from $20 to $16 [6] - Citizens analyst also maintained a Market Outperform rating while reducing the price target from $19 to $16 [6]

Core Insights - SoundThinking, Inc. reported worse-than-expected Q3 financial results, with losses of 16 cents per share compared to the analyst consensus estimate of 6 cents per share [1] - Quarterly sales were $25.100 million, missing the analyst consensus estimate of $27.953 million [1] - The company cut its FY2025 sales guidance from a range of $111 million to $113 million down to $104 million [2] Financial Performance - The reported quarterly losses were significantly higher than expected, indicating potential challenges in revenue generation [1] - The sales figure of $25.100 million reflects a shortfall against market expectations, suggesting weaker demand or operational issues [1] Management Commentary - CEO Ralph Clark emphasized the company's commitment to enhancing community safety through data and technology, highlighting recent advancements such as the expansion of ShotSpotter and the introduction of new AI capabilities [3] - The company's Net Promoter Score improved from 66 to approximately 70, indicating strong customer satisfaction and retention [3] Market Reaction - Following the earnings announcement, SoundThinking shares experienced a significant decline of 19.6%, trading at $6.78 [3] Analyst Ratings - Cantor Fitzgerald analyst Jonathan Ruykhaver maintained an Overweight rating but lowered the price target from $20 to $16 [6] - Citizens analyst Trevor Walsh also maintained a Market Outperform rating while reducing the price target from $19 to $16 [6]

Core Insights - SoundThinking (SSTI) reported a quarterly loss of $0.16 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.07, marking an earnings surprise of -128.57% [1] - The company generated revenues of $25.1 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 9.28% and down from $26.25 million a year ago [2] - SoundThinking shares have declined approximately 36.4% year-to-date, contrasting with the S&P 500's gain of 16.4% [3] Company Performance - Over the last four quarters, SoundThinking has not surpassed consensus EPS estimates and has only topped revenue estimates once [2] - The current consensus EPS estimate for the upcoming quarter is $0.02 on revenues of $29.25 million, while for the current fiscal year, it is -$0.47 on revenues of $111.27 million [7] Industry Context - The Security and Safety Services industry, to which SoundThinking belongs, is currently ranked in the top 20% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact SoundThinking's stock performance [5]

Financial Data and Key Metrics Changes - The company's Q3 2025 revenues were $25.1 million, a 4% decrease from $26.3 million in Q3 2024, primarily due to delays in significant contracts [16][17] - Gross profit was $13.6 million, or 54% of revenue, compared to $15.2 million, or 58% of revenue in the prior year [17] - Adjusted EBITDA was $3.5 million, down from $4.5 million in Q3 2024, with a revised full-year revenue guidance lowered from $111-$113 million to approximately $104 million [15][21] Business Line Data and Key Metrics Changes - The company expanded its ShotSpotter technology into two new cities and one university, but faced challenges in converting demand into bookings [4][5] - SafePoint technology gained momentum due to California's AB 2975 mandate, with multiple pilot programs underway [9] - The upcoming launch of Crime Tracer Gen 3 is expected to enhance the company's offerings significantly [8] Market Data and Key Metrics Changes - The company reported strong customer retention, with a net promoter score (NPS) of plus 70, indicating high customer satisfaction [6] - International expansion efforts showed promise, particularly with deployments in Uruguay and Brazil [4][34] Company Strategy and Development Direction - The company is focusing on realigning its sales organization and improving sales execution to convert a strong pipeline into bookings [5][15] - Strategic initiatives include enhancing AI capabilities and expanding into healthcare security markets [7][9] - The company aims to deepen penetration into existing accounts and expand into mid-sized municipalities [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged temporary setbacks in sales execution but remains optimistic about long-term growth prospects [15][23] - The company expects to see operational improvements in Q4 2025 and into 2026, with a revenue guidance of $114-$116 million for 2026 [21][23] Other Important Information - The company repurchased 160,271 shares at an average price of $12.43, totaling approximately $2 million in Q3 2025 [20] - Deferred revenue as of September 30, 2025, was $43.9 million, consistent with the previous quarter [20] Q&A Session Summary Question: Why is the margin guidance lower for 2026 compared to 2025? - Management indicated that the lower margin guidance is due to conservatism in revenue expectations and potential delays in key contracts [25] Question: What is the expected revenue for Q4 2025? - Management expects Q4 revenue to be relatively flat compared to Q3, with ongoing delays impacting bookings [28] Question: How is the sales cycle for SafePoint compared to ShotSpotter? - The sales cycle for SafePoint is shorter, around 12 months, while ShotSpotter typically takes 12-18 months due to more complex decision-making processes [35] Question: What is the status of the Chicago Gunshot Detection RFP? - Management is optimistic about the RFP process, noting that there is a line item in the mayor's budget for gunshot detection technology [56] Question: Will there be catch-up payments for the Puerto Rico contract? - Management indicated that catch-up payments are unlikely as the service has been turned off, and costs may increase for the renewal [52][53]

Financial Performance - Revenues for Q3 2025 decreased by 4% to $25.1 million, down from $26.3 million in Q3 2024[6] - Gross profit for Q3 2025 was $13.6 million, representing 54% of revenues, compared to $15.2 million or 58% of revenues in Q3 2024[6] - GAAP net loss for Q3 2025 totaled $2.0 million, compared to a net loss of $1.4 million in Q3 2024[10] - Adjusted EBITDA for Q3 2025 was $3.5 million, or 14% of revenues, down from $4.5 million or 17% of revenues in Q3 2024[10] - Revenues for Q3 2025 were $25.1 million, a decrease of 4.4% compared to $26.25 million in Q3 2024[26] - Gross profit for Q3 2025 was $13.634 million, down from $15.217 million in Q3 2024, reflecting a gross margin of 54.2%[26] - Operating loss for Q3 2025 was $2.056 million, compared to a loss of $1.046 million in Q3 2024[26] - Net loss for Q3 2025 was $2.044 million, or $0.16 per share, compared to a net loss of $1.440 million, or $0.11 per share in Q3 2024[26] Guidance and Future Outlook - The company lowered its full-year 2025 revenue guidance from $111.0 million to approximately $104.0 million[13] - Adjusted EBITDA margin guidance for 2025 was also lowered from 20%-22% to 14%-15%[13] - The company expects to deliver accelerated revenue growth and increased profitability in 2026 and beyond[14] - Long-term financial targets include a gross margin of 70% and an Adjusted EBITDA margin of 40%, with a revenue growth target of 15% per year[14] Shareholder Actions - The company repurchased 160,271 shares of common stock for approximately $2.0 million during the quarter[12] Customer and Market Engagement - The company has over 300 customers and has collaborated with approximately 2,100 agencies to enhance public safety outcomes[23] - The company’s SafetySmart platform includes several advanced solutions, such as ShotSpotter and CrimeTracer, aimed at improving law enforcement efficiency[23] Workplace Culture - SoundThinking has been recognized as a Great Place to Work, indicating a positive workplace culture[23] Research and Development - Research and development expenses for Q3 2025 were $4.097 million, an increase from $3.413 million in Q3 2024[26] Assets and Liabilities - Total current assets increased to $46.103 million as of September 30, 2025, up from $43.528 million at the end of 2024[28] - Total liabilities decreased to $60.885 million as of September 30, 2025, from $64.394 million at the end of 2024[28] Customer Satisfaction - The company achieved a Net Promoter Score of approximately 70, up from 66 in the same period last year[6]