SSTI - Earnings call transcript Q3 2017

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Operator

Good afternoon, and welcome to the ShotSpotter’s Third Quarter 2017 Earnings Conference Call. My name is Ben, and I will be your co-ordinator for today’s call.

Joining us for today’s call are ShotSpotter’s CEO, Ralph Clark, and CFO, Alan Stewart. Please note that certain information discussed on the call today will include forward-looking statements about future events and ShotSpotter’s business strategy and future financial and operating performance. These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict and may cause the actual results to differ materially from those stated or implied by those statements. and registration discussed statement risks filings, ShotSpotter’s these its including on of assumptions in are SEC Certain Form-SX. X, this These estimates forward-looking or conference or broadcast, update of reflect statements to of this circumstances and beliefs, ShotSpotter November live events predictions as any call. no statements of the revise reflects obligation XXXX, and Management’s after to date undertakes forward-looking date the

this link call for Finally, in will the recorded like CEO, I’d everyone Please ahead, ShotSpotter’ like section available a to to Ralph to and website I go Relations replay Investor sir. that via Company’s at available remind the made turn the would over Clark. be of call ir.shotspotter.com. now

Ralph Clark

again. our to look the Thanks, questions. a quick last I’m progress numbers you your Operator. will great of going before be It’s give run at to and talking quarter Alan with take through we you all

we of we’ve were to revenue work serve. in this momentum hard the acknowledge revenue I even to which and take year’s expectations. U.S. $XXX,XXX Islands, XXXX of in would which includes that represented discuss and public moment million, with second QX we’re our all we $X.X the $XXX,XXX slightly going collaborating Alan $X.X in grateful a making $X.X report XXXX. revenue work whose call I without Rico sincerely This over Before associated QX XXXX quarter increase operating colleagues the will But Puerto ahead is QX communities customers many accelerated a the last with last our difference like begin, is a posted We fees valued million. in our my XX% passion million of thank revenues and set-up our call. of The your earnings to pleased and accelerated since for our that efforts. I’m from and Virgin

with well York, metrics XX miles, were Lives went Florida, New equally Ohio. customer gross Cincinnati, Go Jacksonville, other encouraging. live in as square including as We Newburgh, our addition, operating In new and Syracuse

had York largest also which, miles City deployments customer as existing has second deployed. our measured San Alabama, Chicago, New Birmingham, by by We the Pablo, the become expansion customer California, way, in and in

I year. miles Our QX bit deployed will will XX was reduction a Puerto little in reflecting new net last service in parse deployed to which represents U.S. for the net square acknowledge speak Islands, Rico to miles in of the of to cessation square more detail, I new quarter do a miles miles XX U.S. the the but live Virgin moment. Alan Islands. a a increase and compared Rico XX% from Virgin This want financials in the and Puerto our from

included communications already agreements, electricity, negotiating the by while Rico water, are region. as have which process other in this focus renewal those expired, renewal agreements delivered We not the and of time, at in infrastructure. classified portion hurricane been point when services in XXXX devastated earlier key been Island’s on that Puerto Maria and rebuilding USVI paid contracts we have of some not and, the Accordingly, have pursuing critical yet

revenue along one-time recognition with accelerated we a set $XXX,XXX in this remaining associated fees result, long-term resulted deferred with This the those of revenue quarter. expenses. original the up a capitalized contracts, of As of the

was largest some of one Puerto customers. our Rico know, As you of

and Chicago, calculus, to shooting the in catalyst easy thinking Texas. in seems the the experiencing our positive incident growth our addressed a needs given shooting to from incidence more improving Vegas, violence to generated and far customers both in does an not be momentum truth, high-profile In more This don’t and for types police these tragic future. violence on strong customers, as there pressing business. in gun church It affect Las the post-hurricane lot the In have know mass really our though we’re of important this events, most been Puerto from limiting these both as in While the miles Maria. it tragedies We goals of if as our cynical is catastrophic Island gun a such consider to the platform. the weather new even authorities, time for Rican intend horrific appropriate coming the line remains at the top customers we that’s recent case. on the quarter, given significantly accelerated re-engage are expanding responsiveness valued

in gun However, the to urban sadly we of for the prepared, chronic problem. frightful also impact of is how the put incident experience. some problems specific that at-risk spotlight type being and on-going one that in intended job is gun fabric but event, active urban to that unchecked so pivot violence on the a on communities Vegas persistent gun diluting address. between underserved the law citizens our and and spotlight this is violence violence. gun of increasingly more of That better that It violence gun of ShotSpotter communities many trust included It is not to shooter violence Certainly, only is the the are enforcement. of the on conversation our Las be

improve the mile is last solution. problems, benefit ShotSpotter to from XXX in is with data gathering that in of the other as most can spoke neighborhoods leaders is been our that and strip and those Vegas all actionable have the their know down where cover shootings. up That that detection were Police’s that in police shootings in ShotSpotter to neighborhoods. Las That’s and of U.S. care taking U.S. XXX PD are Southeast is Jeff central to where Attorney Police response this. stages of implementing around will Las the ultimately announced Chiefs and at just gun crime world Municipal Central as reduction Police gun the systems note over-X,XXX a tipping Chicago’s the in of South system Northeast, become gun CGICs, the growing their approaching a shootings. parts Recently, system element all funding many like police this objective final We violent discussed standard of experience incidents priority to will cities of relations City. neighborhoods incorporate violence the gun crime and requirement in Metro we gunshot General speed help in a the centers and deployed turned incident. are to or Justice Department and Chicago and point, XX% the similar respond detection. jurisdictions. precisely for We to believe he prevent Vegas to a violence. quickly from gunshot in that of As cities Thought transitioning prevent where technology technologies to strategy Chicago Thus new six-square lighting Intel leveraging Sessions which and a Department we prior would fewer solutions is on of our Vegas far, from reduce publicly year. of recently out, much type Las delivering testing the impact is it had positive community reduce in violence at-risk number effectiveness last

XX, to customer to focus ahead our bearing high deliver from on We NPS we in efforts their an on-board an which is are this renewal our annual in are achieved organized in net peak up our order customers rates. investing with survey, recently customer the of score Evidence of and regard success pull, experiences score fruit. guide customer new of a anticipated deliver team, conducted journey, XX NPS market of In promoter XXXX.

safety Last talked a with have quarter efforts IoT called GE bit We also collaborate ShopSpotter to city into with and infrastructure. advanced about their to our I our platform pioneers CityIQ. Current in embed continued smart technology other municipal work

last larger can and and ShotSpotter. efforts closed sensors city Atlanta, have for to we collaborations types capital for successfully and smart make city Georgia footprint perfect forward a steadily city collaborations, we smart installation These moved the streamline these of for with we Power-led just GE ourselves maintenance sense Georgia. achieve of AT&T initiative first deal position our believe investment. through a Our week minimal Through our

are Company. Clearly, will in first, forward positive that Alan to here’s all it give look the our me. detail questions. So, and about I momentum areas performance more of and you feeling our we guidance. on for to results But, do answering your financial

Alan Stewart

good and afternoon, Ralph, you, Thank everyone.

due continued record $X.X think the which I $XXX,XXX for were quarter’s to to year. U.S. revenue hurricanes. deferred XX% related acceleration – ceased of of be from We increase live unfortunate to quarter to revenues of customers million, Rico of fees you of numbers, a will Puerto a effects last ShotSpotter. to a over QX the our grew Islands, Virgin and recent incentive third Approximately revenues see reflects the fees related this success set

$XXX,XXX approximately expense an acoustic to incurred also the impairment the value netbook that hurricanes. by presumed sensor were We destroyed networks of the charge remaining

Our net million. quarter for loss $X.X the was

subscription-based were We keep focus is future. on on foreseeable model our cash a which positive row. customer driving also us growth. quarter and continue flow success, for that operating business believe in trajectory the to in the revenue invest then this We We our will for second positive

is Now, earnings turning reference you our which on to today’s our encourage website. posted we release, financial numbers, to

were in increased from XX% from XX% up mentioned, million the quarter quarter XXXX. I million and third As the the of quarter revenues for year, same to last $X.X second $X

new For existing loss as continued Even driven is revenue Virgin $XXX,XXX to related customer by believe and Rico and from the Islands, the the of related momentum accelerated mileage seeing quarter, customers performance the evidence renewals. expansions are customer increases and Rico to our expanding we with revenue of without the the customers, aside orders, we customer and our Puerto that additional one-time in USVI revenues were U.S. Puerto adoption. QX from

total to was gross the a of customer related the profit $X.X than for revenues expenses, quarter without the was losses. our charge margin revenue. quarter the million After Virgin gross or case the business of the acoustic of impairment continuing the that or revenue lower expenses recognized improvement somewhat networks $X.X for been to U.S. to impact an from deducting because gross were Islands Rico, of lower total operation. This The at than quarter sensor of our Puerto third the Turning of related of associated XX% was margin would XX% XXXX. in million, have hurricanes,

gross would approximately impact, XX%. Excluding this have been our margin

$X the R&D total million $X.X of XXXX to last were the of revenues compared of quarter year. or total third Our XX% of expenses third for million in or XX% quarter revenues

expect be around going forward. a percentage as XX% expenses, R&D revenues, to XX% We of to

the for were expenses QX or success increase million was year. Our efforts. due $X.X for and labor selling to associated customer compared and revenues our marketing or $X.X marketing expenses The expanding costs XX% total with the quarter last and of sales, quarter million selling in XX% of primarily increased to in marketing

be percentage expect We selling to XX% expenses marketing a forward. of and to going around XX% as revenues

quarter year. QX of the XX% XX% of and $X.X to For of of revenues million total compared in revenues or third our XXXX, were administrative general $XXX,XXX expenses or total last

Our a G&A we expenses are increasing as Company. Public as operate

We to G&A percentage XX% our to going forward. of XX% a as around expenses, expect be revenue,

or the period. million or per the third $X.X For year for $X.X quarter prior million to as per totaled share $X.XX compared GAAP loss share net $X.XX

to was the $X.XX per year first million for up outstanding on nine shares XXXX $X.X weighted same loss compared or based months net of on shares through For loss share year-to-date a ago. XX% the GAAP period Net million a average basis. QX, the totaled diluted

comparison, first However, of included call. in the XXXX covered second first was of first the to related preferred the of generated By first warrants for in charge nine quarter for nine $X.X XXXX. the from million months million the XXXX. to year results $X.X our this months for flow $XXX,XXX $X.X earnings charge million approximately Cash we nine of that operations our was months of way months the the stock compared nine

$X.X strong million a million now of outstanding year. expenditures and during maintain nine in Capital $XX.X our sheet are with repaid We for to QX of the have the continue balance months of first cash. debt-free. all debt We been $XX.X million

Islands we reduction of XX new service square Virgin quarter areas, resulted Puerto unfortunate XX XXXX, discontinued in to Due miles. coverage Rico coverage we devastated added Live which third U.S. a those miles. and the hurricane of to the that During Go the

XXXX. result, quarter was As up in the third XX, from of the same for Go miles the a Live new of period XX XXXX net

in the recover are million are and U.S. we new million While deferred we infrastructure that long-term. miles ending the in will added $XX.X revenue, to become hopeful million Puerto Rico $X.X live will which the this deferred short-term $XX.X of happen. and of customers, their which and uncertain Islands QX, with of is went if that once due or million is again $X.X of when quarter Partially revenue, we Virgin

strong on we our gears board, the to see first and our are the quarter As nine for outlook team our both you XXXX, can impressive of from results increasing of numbers the guidance. months the Companywide year, for financial for across revenue our the objectives. Shifting our generated rest third

our Our would revenues for growth range $XX.X $XX $XX.X represent expect $XX for prior to current was and between momentum expected and We approximately fiscal be operational of the million million year revenues XXXX. now to guidance our million based on XXXX million. pipeline over approximately deployments. XX%

many healthy and ability our continue the loss especially and that given rates. largest on predicated Islands fact customers, that, the Our Live full-year Rico may of as with understand Investors guidance Puerto U.S. our Virgin was concerned be maintain to sold new Go to early of We our in until XXXX, already second miles renewal Puerto Rico is customer.

hope if the completes business as depending XXXX other once XX% those expand growth top hurricane from we our any cannot guidance revenue that current factors from based future preliminary XXXX or providing That occur. and on damage, This between beginning in understand we that and at the when existing the such forward-looking customers will materially Virgin regain customers on does year differ revenues and this in are from call. the full Islands summary. Virgin midpoint, Islands recovered this update to figure. ability discussed including results million revenue the said, we Puerto Company the guidance which, guidance is have This financial the estimates. line and Rico the include confident approximately add new for with of Island. not the guidance While are U.S. and deployments to U.S. our predict we represent million, revenue $XX Please at Puerto $XX customers, Rico Actual could statements conditions my mentioned would of

detailed a please by to which plan financial to results, November more reference over XX. Form analysis For XX-Q, file Ralph, we of our you. our

Ralph Clark

Alan. Thanks,

our care. our standard broad Let me innings as unique a close by that customer adoption we’ve this that in saying about We we’re extremely created. in market positive of believe position early we’re space of solution the of

relationships of much, focus forbidding and success to continue will We questions. customer gun violence. customers have our our we judge your success on in level very you by building to, the that strong will now and responding investigating take and and ultimately Thank decreasing

Operator

Thank you.

We will ahead. comes first Please The Richard from Baldry Capital. [Operator ROTH question Instructions] questions go analysts. ShotSpotter’s now of publishing take from

Richard Baldry

hard going to forward in about talk are that is number? to sort XX repeatable, quarter one-time things sustainable there Thanks. is of perspective, Then keep top in that or two I kind Thanks. is, I’ll here. possibly put you that your some then try three? Could one best background any was how think it miles gross if of of that noise quick, there that or repeat

Ralph Clark

take Rich. net it’s the first Sure, This I’ll of probably our quarters With or a part question. respect thanks, is of best miles crack live, Ralph. ever going your XX. at to gross at one

in job to a I quarter. think I very in a sustainable QX are, that had over to this think, doing careful not and customers experience we converting great I be every status, how But of live comment is year. would great on these

Richard Baldry

much you about new to view sort how relies could little you’ve built on visibility has on of XXXX? what into of much And how that sales booked XXXX versus a talk Thanks. much of have us your give deploy, how a you yet bit already is guide

Ralph Clark

next record question. I that know, great think medium-term have we mean, always guess short-term track good sheet of ending that a we I’ll would XXXX said don’t to to I it we a long-term deferred you add visibility medium-term year the excellent our we’ve at look months. over run at another look or… our nine-month revenue, long-term point but the extent call Rich, Sure, there. To revenue, the balance into would anything not you twelve start have lot the we I and that renewals, revenue that with visibility. I Alan, revenue, number on I

Alan Stewart

No, We that, confident working that. feel from guidance in only to are we million other that backlog projects there internally, to revenue on, the than felt to our million say $XX XXXX. comfortable enough the for $XX out and preliminary pretty we put

Richard Baldry

of sales sort heads demand expect, team hit point you’ve pipeline about to talk the the Thanks. the building this that you you think can inflection or the side? on now keep you’ll to many you maybe marketing for think adding up have be how and Then you to added demand

Ralph Clark

hunters position. of In terms public for a our pretty are good I we in think domestic safety,

making our I farmers, or continue experience, are and team, to some is think for what to do. we’ll those limited in so look on-boarding we investments at customer responsible success critical folks, the which more again, the

very to much are think still capability international I add go-to-market planning to sales we some sales. drive

that done We to think no than later but of get done we’ve committed that haven’t early next yet, year. QX I

Richard Baldry

scale Smart thing, the and deployment little a Thanks, shelf off one, deployment and issues up first be? sort is bit now you the hardware sort or about around last that talk much of using – will deal? Is unique first there will Thanks. one AT&T be that back it’s getting can some very GE running? will some City first because there the of What more

Alan Stewart

this Smart is the deployment. This Yes, City is Alan, great first question.

be some the are we it might of things out, as expect with work are by fully We this have deployment challenges we but we’re that we’re it so GE we taking So, the as sides, all using do first using that our standing censors, a roll we learn and that’s through to at. nodes, certainly nodes hope to something as successful first combination on look of we during well a the customers’ will any us that deployment. with Smart

Richard Baldry

a and Thanks, quarter. congrats Okay. on great

Alan Stewart

you. Thank

Ralph Clark

Thanks.

Operator

[Operator time. no questions There at more are this Instructions]

may comments. Investor his If your Relations over ShotSpotter’s Clark contact to ir.shotspotter.com. would question you the to I back turn was taken, closing not like for Mr. call at now team

Ralph Clark

to Great. really everyone We Well, earnings announcement. listen in appreciate much. to thank you dials that our second quarterly very

proud really are second this beat quarter. fact We raise that of our the is and

to putting you Thank to and forward continuing in in very So months looking and down three speaking all again or about heads forward our to with really looking QX work much. you hard so.

Operator

on Thank joining you for us third ShotSpotter’s joining for I today’s you us XXXX thank for call. earnings call. especially quarter

You may now disconnect.

ShotSpotter (SSTI) 13 Nov 172017 Q3 Earnings call transcript