SoundThinking(SSTI) - 2024 Q4 - Earnings Call Transcript

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 2024 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% representing 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 was 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 increased its full year 2025 revenue guidance to $111 million to$113 million, representing approximately 10% year-over-year growth [20][37] Other Important Information - The company had a net loss of approximately $9.2 million for the year, compared to a net loss of$2.7 million in the prior year, largely due to contract renewal delays [34] - The revenue retention rate for 2024 was 105%, slightly down from 107% in 2023 [35] Q&A Session Summary Question: Update on Chicago RFP - Management is encouraged by Chicago issuing an RFP for gunshot detection but is still evaluating their response [41] Question: SafePointe multimillion-dollar opportunities - Some of the SafePointe bookings are expected to contribute to the revenue guidance for 2025, with increasing bookings each quarter [44] Question: Pipeline disruption from federal government efforts - Management noted strong demand drivers for public safety solutions and is monitoring budget issues closely, particularly regarding ARPA funds [52] Question: ARR guidance and gunshot detection category growth - Expected incremental growth from the gunshot detection category 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]