Summary of SoundThinking (SSTI) Conference Call Company Overview - **Company Name**: SoundThinking, formerly known as ShotSpotter - **Ticker Symbol**: SSTI - **Industry**: Public safety technology, focusing on AI and data-driven solutions for law enforcement and security professionals [1][2] Core Business and Growth Strategy - **Unique Platform**: SoundThinking offers a SafetySmart platform that includes various applications aimed at enhancing law enforcement productivity [3] - **Revenue Diversification**: Initially, ShotSpotter accounted for 100% of revenues; now it represents 65%, with expectations to drop to 35% as new solutions are introduced [5] - **Revenue Figures**: - 2024 Revenue: $102 million with 14% adjusted EBITDA - 2025 Projected Revenue: $111 to $113 million with 20% to 22% adjusted EBITDA [6] Product Offerings - **ShotSpotter**: Acoustic gunshot detection technology, crucial for real-time alerts to law enforcement [11] - **ResourceRouter**: AI-based patrol management solution to optimize resource deployment [19] - **CaseBuilder**: Integrated case management tool for detectives, improving case closure rates [20] - **CrimeTracer**: Search and analytics tool with access to over 1 billion police records [21] - **SafePointe**: Weapons detection technology aimed at commercial security [23] - **PlateRanger**: Automatic license plate reader technology [4] Market Opportunity - **Total Addressable Market (TAM)**: Significant growth potential in public safety technology, particularly in concealed weapons detection and international markets [4][29] - **International Expansion**: Recent sales in Latin America (Uruguay and Brazil) with pricing leverage of 3-4 times domestic rates [8][35] Financial Metrics - **Customer Acquisition Cost**: $0.63 per dollar of annual contract value, indicating strong unit economics [7] - **Retention Rates**: High net revenue retention and gross retention rates, supported by a strong Net Promoter Score (NPS) [6][10] - **Long-term Financial Goals**: Targeting 15% top-line revenue growth, 70% gross margin, and 40% adjusted EBITDA over the next few years [29][30] Operational Insights - **Service Level Agreement (SLA)**: 90% SLA with 97% effectiveness in alert accuracy, including false positives and location accuracy [16][17] - **Cost Management**: Anticipated flat costs in goods sold while revenue increases, leading to improved gross margins [28][30] Customer Engagement - **Product Bundling**: Approximately 30 customers utilize more than one solution, with some using up to four [33] - **Strategic Relationships**: Building long-term relationships with law enforcement agencies to enhance service delivery and customer loyalty [10] Additional Considerations - **Acquisitions**: Four acquisitions in the last six years, with no immediate plans for further acquisitions but remaining open to opportunities [30] - **Cash Flow**: Generated $16 million in free cash flow last year, with a focus on maintaining a strong balance sheet [29] This summary encapsulates the key points from the SoundThinking conference call, highlighting the company's strategic direction, product offerings, financial performance, and market opportunities.

Core Insights - SoundThinking has released its fourth annual Environmental, Social, and Governance (ESG) Report, emphasizing its commitment to advancing public safety through responsible technology use [1][2] - The report highlights the company's mission to enhance law enforcement efficiency and equity in community safety outcomes [2][3] Group 1: Public Safety Technology and Community Safety - SoundThinking's SafetySmart™ platform integrates specialized software and data to assist law enforcement in protecting communities, enabling rapid and precise responses to gunfire incidents [4] - The technology supports efficient investigative work and helps agencies optimize resources for improved public safety outcomes [4] Group 2: Social Impact - The report emphasizes SoundThinking's collaboration with local organizations to promote community safety initiatives, positively impacting individuals in the communities served [5] - The company is expanding its Data for Good program, providing non-policing organizations with essential data and tools to address crime and violence root causes [5] Group 3: Governance, Transparency, and Trust - The ESG Report outlines SoundThinking's governance structure, focusing on diversity, equity, and inclusion [6] - The company has enhanced its security framework and established AI governance roles to ensure responsible technology development, demonstrating a commitment to stakeholder trust [6] Group 4: Environmental Sustainability - SoundThinking is dedicated to minimizing its environmental footprint through sustainable practices, including energy-efficient product design and e-waste management [7] - The company applies its technology expertise to environmental protection efforts, such as preserving marine ecosystems in the Coral Triangle [7] Group 5: Company Overview - SoundThinking, Inc. is a leading public safety technology provider, delivering AI- and data-driven solutions for law enforcement and civic leadership [10] - The company serves over 300 customers and has collaborated with approximately 2,100 agencies to enhance public safety outcomes [10]

Group 1 - SoundThinking, Inc. will participate in the UBS SMID-Cap Multisector Virtual Conference on June 24, 2025, offering one-on-one and small group meetings with investors [1] - The company is recognized as a leading public safety technology provider, delivering AI- and data-driven solutions for law enforcement and security professionals [2] - SoundThinking serves over 300 customers and has collaborated with approximately 2,100 agencies to enhance public safety outcomes [2] Group 2 - The company's SafetySmart™ platform includes several key products: ShotSpotter, CrimeTracer™, CaseBuilder™, ResourceRouter™, SafePointe, and PlateRanger powered by Rekor [2] - SoundThinking has been designated as a Great Place to Work Company, indicating a positive work environment [2] - Contact information for company representatives is provided for investor relations and inquiries [3]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 12% year over year, reaching $28.3 million in Q1 2025, driven by solid new sales and renewal activity [4][15] - Adjusted EBITDA grew 50% year over year to $4.5 million, highlighting operational leverage and a profitable growth strategy [4][17] - GAAP net loss was approximately $1.5 million, or a loss of $0.12 per share, compared to a net loss of $2.9 million in the prior year [19] Business Line Data and Key Metrics Changes - The renewal of two contracts with the New York City Police Department contributed approximately $3.5 million in catch-up revenue [4][16] - The company went live with four new cities and one expansion in the quarter, indicating growth in the ShotSpotter deployment [5] - Resource Router is currently deployed in over 20 agencies, more than double its installed base in less than 18 months [10] Market Data and Key Metrics Changes - The company is seeing strong demand for its capabilities in the public safety technology space, particularly in healthcare and casino verticals [11][25] - The international ShotSpotter pipeline is robust, with a new deployment in Niteroi, Brazil, marking a return to a strategically important market [5][67] - The company expects accelerated traction with ShotSpotter internationally in the second half of 2025 and early 2026 [6] Company Strategy and Development Direction - The company is focused on expanding its platform and data aggregation capabilities to position itself as a leader in public safety technology [3] - The introduction of SafePoint aligns with new legislation in California requiring hospitals to deploy weapon protection systems by 2027, creating a significant market opportunity [11][12] - The company is investing in AI capabilities to enhance its product offerings and operational efficiency [18][71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of their offerings and the differentiated value they bring to customers, particularly in light of recent contract renewals [7][8] - The company remains vigilant about headwinds related to municipal funding and budgets but believes it is well-positioned to drive revenue and ARR growth for 2025 [13][21] - Full-year revenue guidance is reaffirmed at $111 million to $113 million, with adjusted EBITDA margin guidance slightly reduced to 20% to 22% [20][21] Other Important Information - The company ended Q1 2025 with $11.7 million in cash and cash equivalents, significantly higher than the $5.7 million at the end of 2023 [20] - The company repurchased 33,493 shares at an average price of $15.04 for approximately $504,000 in Q1 2025 [20] Q&A Session Summary Question: How does the company manage the pipeline across its broader suite of tools? - Management indicated that each product solution has its own pipeline metrics, with a solid pipeline across the platform, particularly in Resource Router and Crime Tracer [23] Question: What early feedback has been received on the revamped SafePoint product? - Management reported success in the healthcare vertical, with proof of concept deployments underway in major healthcare chains [25][26] Question: Are meaningful bookings expected from Plate Ranger this year? - Management indicated a significant amount of pipeline exists, with actual bookings expected to be around $1 million, with revenue anticipated to increase next year [29][30] Question: What is the expected sales cycle for SafePoint given the 2027 requirement? - Management noted that the opportunity for SafePoint is more of a 2026 opportunity, with traction being made in other markets [38][40] Question: How does the company view the impact of the New York contracts on gross margins? - Management explained that additional expenses in Q1 impacted adjusted EBITDA, but the New York contracts contributed positively to the bottom line [42][44] Question: What is the estimated number of facilities required to comply with the new California law? - Management estimated about 400 hospitals in California would need to comply, translating to approximately 4,000 lanes needing protection [56][58] Question: What is the pricing model for SafePoint compared to traditional solutions? - Management stated that SafePoint charges about $20,000 per year per lane, which is competitive compared to traditional solutions [60] Question: What are the international expansion plans? - Management highlighted ongoing discussions for expansion in Brazil and other Latin American countries, with a focus on significant pricing leverage in international markets [66][68]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 12% year over year, reaching $28.3 million in Q1 2025, driven by solid new sales and renewal activity [4][14] - Adjusted EBITDA grew 50% year over year to $4.5 million, highlighting operational leverage and a profitable growth strategy [4][15] - GAAP net loss was approximately $1.5 million, or a loss of $0.12 per share, compared to a net loss of $2.9 million in the prior year [18] Business Line Data and Key Metrics Changes - The renewal of two contracts with the New York City Police Department contributed approximately $3.5 million in catch-up revenue [4][15] - The company went live with four new cities and one expansion in Q1, with a robust international ShotSpotter pipeline [5] - Resource Router is currently deployed in over 20 agencies, more than double its installed base in less than 18 months [10] Market Data and Key Metrics Changes - The company expects accelerated traction with ShotSpotter internationally in the second half of 2025 and early 2026 [6] - The California Assembly Bill 2975 mandates hospitals to deploy weapon protection systems by 2027, creating a significant market opportunity [11][12] - The company anticipates annual recurring revenue (ARR) to increase from $95.6 million at the beginning of 2025 to approximately $110 million at the beginning of 2026 [20] Company Strategy and Development Direction - The company is focused on expanding its platform and data aggregation capabilities to position itself as a leader in public safety technology [3] - Investments are being made in AI capabilities, particularly for the Crime Tracer and SafePoint solutions [17][12] - The company is taking risk mitigation efforts to address potential headwinds related to municipal funding and budgets [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of their offerings and the differentiated value they bring to cities like Chicago [6] - The company remains vigilant about headwinds but believes it is well-positioned to drive revenue and ARR growth for 2025 [13] - Management reaffirmed full-year revenue guidance of $111 million to $113 million, while slightly reducing adjusted EBITDA guidance to 20% to 22% [19][20] Other Important Information - The company ended Q1 with $11.7 million in cash and cash equivalents, compared to $13.2 million at the end of Q4 2024 [19] - The company repurchased 33,493 shares at an average price of $15.04 for approximately $504,000 in Q1 2025 [19] Q&A Session Summary Question: How does the company manage the pipeline across its broader suite of tools? - Management indicated that each product solution has its own pipeline metrics, with a solid pipeline across the platform, particularly in Resource Router and Crime Tracer [22][23] Question: What early feedback has been received on the revamped SafePoint product? - Management noted success in the healthcare vertical, with proof of concept deployments underway in major healthcare chains [24][25] Question: Will there be meaningful bookings from Plate Ranger this year? - Management expects bookings to be in the $1 million range, with significant revenue increases anticipated next year [28][29] Question: What is the expected sales cycle for SafePoint given the 2027 requirement? - Management indicated that the opportunity for SafePoint is more of a 2026 opportunity, with traction being made in other markets [37][38] Question: How should revenue progression be viewed for Q2? - Management suggested a reduction in Q2 revenue, with expectations for growth in Q3 and Q4 as investments begin to pay off [48] Question: What is the annualized cost of SafePoint compared to traditional solutions? - Management stated that SafePoint charges about $20,000 per year per lane, offering a compelling solution compared to traditional methods [59][60] Question: What are the international opportunities and timing for expansion? - Management highlighted excitement about returning to Brazil and ongoing discussions for expansion in other Latin American countries [66][68]

Core Viewpoint - SoundThinking has integrated PlateRanger into its SafetySmart platform, enhancing public safety capabilities and enabling law enforcement agencies to improve investigative workflows and outcomes [2][4]. Integration and Technology - The integration of PlateRanger, an advanced license plate recognition solution, with ShotSpotter and CrimeTracer allows law enforcement to combine real-time gunshot detection data with vehicle identification and cross-jurisdictional insights [3][5]. - The Rekor Public Safety Network (RPSN) facilitates secure data sharing across jurisdictions, enhancing investigative speed and interoperability while respecting data ownership [6][7]. Benefits to Law Enforcement - The integration provides enhanced investigations by linking gunfire events with suspect vehicle data, allowing for more comprehensive follow-up [5]. - Multi-agency collaboration is improved through integrated systems that enable data sharing, helping to uncover connections between incidents [7]. - The commitment to open standards allows for seamless integration with existing systems, differentiating SoundThinking in the market [7]. Market Impact - SoundThinking serves over 175 ShotSpotter customers and approximately 2,100 CrimeTracer agencies, providing access to more than 1 billion records, thus expanding its market footprint [8].

Financial Data and Key Metrics Changes - Q4 2024 revenue decreased by 10% year-over-year to $23.4 million, primarily due to a $3.5 million delay in contract renewals with the NYPD [6][24] - Full year 2024 revenue grew by 10% to a record $102 million, reflecting strong demand for public safety solutions [7][29] - Adjusted EBITDA for Q4 was $1.7 million, down from $4.8 million in Q4 2023, attributed to delayed contracts [25] - Full year 2024 adjusted EBITDA was $14.4 million, consistent with $14.3 million in 2023 [31] Business Line Data and Key Metrics Changes - ShotSpotter went live in 20 new cities and five new universities in 2024, booking $75.7 million in net new and renewal subscription-based ACV, with 59% being multi-year agreements [8][18] - The SafetySmart platform saw significant growth, with a 100% increase in average selling price (ASP) from 2023 to 2024 [14] Market Data and Key Metrics Changes - Approximately 62% of the 2025 qualified ACV pipeline is from non-domestic ShotSpotter, indicating successful diversification efforts [19] - The company ended 2024 with $13.2 million in cash and cash equivalents, significantly higher than $5.7 million at the end of 2023 [36] Company Strategy and Development Direction - The company is focused on leveraging advanced AI/ML capabilities to optimize solutions and enhance the SafetySmart platform [13] - Strategic partnerships, such as with Rekor Systems for the PlateRanger ALPR solution, are aimed at strengthening market positioning [16] - The company is committed to advancing public safety and maximizing shareholder value through innovation and execution of strategic growth priorities [21][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for public safety solutions despite challenges related to budget constraints and the drying up of ARPA funds [50][52] - The company is optimistic about revenue growth in 2025, increasing guidance to $111 million to $113 million, representing approximately 10% year-over-year growth [20][37] Other Important Information - The company reestablished a 30-square-mile ShotSpotter deployment in Puerto Rico and is exploring further expansion opportunities [10] - The NYPD contract renewal of approximately $21.9 million secures service through December 2027, highlighting the long-term partnership [12] Q&A Session Summary Question: Update on Chicago RFP - Management is encouraged by Chicago issuing an RFP for gunshot detection but is still evaluating a response [41] Question: SafePointe multimillion-dollar opportunities - Some of the SafePointe bookings are expected to contribute to the revenue guidance for 2025, with increasing quarterly bookings [44] Question: Pipeline disruption from federal government efforts - Management noted strong demand drivers for policing and public safety, while monitoring budget issues related to ARPA funds [50][52] Question: ARR guidance and gunshot detection growth - Expected incremental growth from gunshot detection is projected to be between $8 million and $9.5 million [56] Question: Top verticals for SafePointe weapon detection - Key verticals include healthcare, gaming centers, and selected corporate sites, focusing on low-friction weapons detection solutions [60]