Company Commitment - SoundThinking, Inc. honors law enforcement officers during National Police Week, reaffirming its commitment to the law enforcement community [1][4] - The company emphasizes the importance of supporting law enforcement through action, providing mission-critical public safety technologies that enhance officer safety and decision-making [3][5] Industry Context - National Police Week serves as a reminder of the sacrifices made by law enforcement, with 148 officers reported to have lost their lives in 2024, contributing to over 24,000 names on the National Law Enforcement Officers Memorial [2] - SoundThinking collaborates with various organizations to support law enforcement, including funding community safety programs and providing emotional support through initiatives like First Responder Therapy Dogs [6] Company Overview - SoundThinking is a leading public safety technology provider, delivering AI- and data-driven solutions to over 300 customers and approximately 2,100 agencies [5] - The company's SafetySmart™ platform includes several advanced technologies such as ShotSpotter®, CrimeTracer™, and SafePointe®, aimed at improving public safety outcomes [5]

Financial Data and Key Metrics Changes - Total revenue for the third quarter was $112.6 million, an increase of $1.8 million or 1.6% year over year [12] - Non-GAAP gross margin was 35.8%, up from 35.1% in the prior year [13] - Record adjusted EBITDA of $14.9 million, up 17% compared to the same period last year [5][15] - Non-GAAP EPS was $0.88, reflecting a 12.8% increase year over year [15] Business Line Data and Key Metrics Changes - North America revenue was $49.4 million, an increase of $5 million or 11% year over year, driven by growth in private networks [12] - International revenues decreased by $3.2 million or 5% to $63.2 million, attributed to a tough year-over-year comparison with APAC's record performance in the previous year [13] - Gross margins improved due to a favorable regional and software mix [14] Market Data and Key Metrics Changes - The mobile service provider market showed strong performance, with good software volumes contributing to improved gross margins [6] - The company maintained its share in the private networks segment in North America and expanded its sales funnel internationally [7] - No cancellations were reported from U.S. Federal government customers despite spending reduction efforts [8] Company Strategy and Development Direction - The company is focused on growing its scale and has seen success with its disciplined operating model [5] - Strategic discussions with U.S. headquartered Fortune 500 companies are ongoing, which may lead to increased business in the U.S. market [10] - The company is working to mitigate tariff impacts through inventory management and optimizing manufacturing locations [11] Management's Comments on Operating Environment and Future Outlook - Management believes the CapEx cycle for U.S. Tier one customers has bottomed out, with expectations for an uptick in demand in the coming quarters [24] - The company is maintaining its annual guidance and expects to meet current consensus estimates for revenue and EBITDA [16] - Management expressed confidence in the demand environment despite macroeconomic uncertainties [66] Other Important Information - The company has approximately $450 million in net operating losses, which will help minimize cash tax payments for the foreseeable future [15] - Operating expenses were managed effectively, remaining flat year over year due to disciplined cost management [49] Q&A Session Summary Question: What factors could swing guidance to the high end versus the low end? - Management indicated that potential pull-ins to avoid tariffs could positively impact results, while maintaining annual guidance [20] Question: What is the outlook for the U.S. Tier one market? - Management believes the CapEx cycle has bottomed and expects an uptick in demand in a couple of quarters [24] Question: Can gross margins continue to improve? - Management noted that while Q3 gross margins were strong, they do not expect further acceleration in Q4 due to macro uncertainties and tariff impacts [27] Question: What is the impact of tariffs on gross margins? - Management estimated a potential impact of 2% to 2.5% on COGS due to tariffs, but does not anticipate earnings leakage [36] Question: What is the outlook for North America and Tier one customers? - Management reported good private network business but noted they are currently between projects with U.S. Tier one customers [32][68] Question: What are the opportunities with large Tier one customers in MDUs? - Management highlighted the trend towards fixed wireless access in apartment buildings, which could drive future backhaul needs [42]