SoundThinking(US:SSTI)2021-02-27 22:32Financial Data and Key Metrics Changes - Q4 2020 revenue was $12.6 million, representing a 16% year-over-year growth from $10.9 million in Q4 2019 [7][20] - Full year 2020 revenue was $45.7 million, up over 12% from $40.8 million in 2019 [21] - Adjusted EBITDA for Q4 2020 was $3.1 million, compared to $3.2 million in Q4 2019, while full year adjusted EBITDA increased to $11.9 million, up 28% from $9.4 million in 2019 [22] - GAAP net loss for Q4 was $220,000, or a loss of $0.02 per share, while full year GAAP net income was $1.2 million, or $0.11 per share [26][27] Business Line Data and Key Metrics Changes - The company ended 2020 with $46.3 million in annual recurring revenue in its core ShotSpotter business [8] - Revenue retention rate for the year was 107%, compared to 111% in 2019 [19] - The company managed GAAP revenue attrition to less than $500,000 in 2020, despite pandemic-related budget pressures [11] Market Data and Key Metrics Changes - The company engaged with over 110 cities, alerting on 234,000 gunshot activations in 2020, indicating a material increase in gun violence from 2019 [12] - The company added 6 cities in the Tier 4 and Tier 5 market segments, demonstrating the viability of its services in underpenetrated markets [13] Company Strategy and Development Direction - The company aims to expand its product portfolio with the launch of ShotSpotter Investigate, targeting a broader suite of precision policing solutions [15][29] - The company is focused on maintaining strong customer loyalty and reducing customer creation costs, which stood at $0.51 per dollar of revenue [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the domestic pipeline and the potential recovery of international markets, particularly in South Africa and Latin America [29] - The company reaffirmed its revenue guidance for 2021 at $58 million to $60 million, expecting LEEDS to contribute approximately $10 million in revenue [17][27] Other Important Information - The company ended Q4 2020 with $16 million in cash and cash equivalents, down from $28.7 million at the end of Q3 2020 [27] - Deferred revenue at the end of Q4 was $24.6 million, compared to $20.6 million at the end of Q3 2020 [27] Q&A Session Summary Question: Update on in-person deployments on campuses - Management is actively engaging in security opportunities on college and corporate campuses, particularly in areas with gun violence concerns [34] Question: Thoughts on potential M&A opportunities - Management is currently focused on integrating the LEEDS acquisition and is not actively seeking additional M&A opportunities at this time [36] Question: Factors affecting deployment backlog - Management indicated that the deployment pace is expected to improve in 2021 compared to 2020, with a strong pipeline in place [42] Question: Awareness of potential churn in renewals - Management is cautiously estimating attrition could rise to 3% to 4% in 2021, reflecting ongoing municipal budget challenges [43] Question: Impact of LEEDS on operating expenses - Management noted that LEEDS contributed less than half of the revenue in Q4, with additional amortization costs expected throughout 2021 [45] Question: Sales cycles for smaller cities - Management reported shorter sales cycles for Tier 4 and Tier 5 cities, indicating a strategic focus on these markets [47] Question: Contribution of LEEDS to revenue - Management confirmed that the $10 million contribution from LEEDS is primarily from existing contracts, with no new customer sales expected in 2021 [56]