Earnings call transcript Q4 2022

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Operator

Good afternoon, and welcome to ShotSpotter's Fourth Quarter and Full Year 2022 Earnings Conference Call. My name is Joe, and I will be your operator for today's call.

Joining us 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 actual results to differ materially from those stated or implied by these statements. and its discussed S-X. registration risks filings, ShotSpotter's these in included statement of assumptions in are SEC Certain on Form forward-looking statements live of beliefs, the management's obligation the to and statements date predictions update no events These of any or or as after forward-looking ShotSpotter estimates undertakes date reflect February this broadcast, and this call. revise XX, to XXXX, of reflect circumstances

for at recorded replay to like everyone this and remind in made be Investor the available a Finally, section I would the via call that available ir.shotspotter.com. link of will Relations company's website

Now I proceed. ShotSpotter's turn call please CEO, over would to like to Sir, Ralph Clark. the

Ralph Clark

and afternoon, you today. us Good for thank joining

outlook, gratitude QX on by report the company's local I year for I their to XXXX on agencies fiscal expressing journey transformation. to remarkable first law company being start incredible outcomes enforcement lead this in and entrusted my XXXX engaging Before in want a our year fiscal digital

a and complementary in their assembled suite demanding driving more smarter, have of of policing are a effective strategies. efficient, solutions precision platform agencies pursuit powerful We equitable policing that in

discredited Our the attractive opportunity despite increasingly underpenetrated selected police noise remains from but vocal, movement. and headline a some significantly defund

community-focused of success value see investing We continue and police in safety local community our in support public strong buying of outcomes. the their from technology of to to because elected the residents, center and understand better drive officials departments appreciate order that

to financial Turning performance.

$X.X of taken with or increased $XX for million adjusted of miles the We of XXX QX XX% of in Our $X.X year year or XXX% XXXX. compared with increased the million XX% the full to Adjusted revenues. to row. XXXX from prior live year's QX increased year a $XX.X XXXX. the Revenues QX finished million $XX EBITDA revenues second in for million over XX% revenues $XX XX% to XX% to million for or revenues EBITDA million

Virginia. live cities projects took a four at addition In to deployment quarter, and new security in in expansion implemented the we campus five college a

XX contracted not XX-plus being Going over Over will but do from XX both are are These to we be today. Cleveland new the when miles the representing process yet of which, of to the XX in list. miles project of as into include executed, have already XX deployed. be contracted XXXX, added live that awarded, Suffolk projects miles and the County, miles

of who by seen the that One has notable city owns Cape was Smith, Cape which new success our recapture Town. Alderman security South remarkable JP a portfolio go trumpeted publicly been already live Africa, of for international Town, has City

As last the of led recently late and and recovery arrest shooters firearms to spare as of several the ammunition. ShotSpotter week,

ShotSpotter have alerts. to to treated In that with along city Cape challenged led respect Cape ShotSpotter addition, of violence. several Town, to been Western are suburbs a of alerts number those wound to in Cape have government due are successfully gun early an to Town that expansion other the with motivate equally for provincial victims of the gunshot discussions The of

with transactions of year Tier X, our XXXX. XX booked of initiative, miles agreements. miles XX.X% bookings with representing represented X XXX subscription another Overall, over which those of for domestic Tier we was new note strong had performance exceptional Of XX% booked new and the multiyear renewals the

opportunity late with grow XXXX and realized process and penetrate a account increasing to recurring of segment strong are specific our sales in significant business. Coplink the direct in significantly this untapped X-figure view deal, annual QX as $X.X bookings multiyear We X a representing expansion TAM million that also further revenue.

state opportunities ShotSpotter and infrastructure sales, motion product the and brought and in our to upsell acquisition ShotSpotter the pipeline Logic Coplink into integrate federal tightly sales Forensic combination to solution more agency management accelerate to company. order the with of support Respond steps intentional taking success are that customer We X and in

In able SaaS Our as operating an we XXXX, of best-in-class were increases. pricing remain to customer revenue realize results retention company. attrition negative net GAAP

earnings onboarding Promoter our Score success program strategy. in organization, our reported diligent call, customer central Net customer our robust last and customer process our to I As retention are

spend contributed In helping annualized XXXX. worth to promote below $X.XX stickiness, it has drive $X.XX. our a year outcomes that This addition per positive row, value and in of per second a been dollar and for the marketing best-in-class sales sales is also of to spend marketing ACV contract

community-inspired in there demand remain pressure increasing Our deal rising transparent on and fashion. drivers as to a crime is strong the violent cities with

reference alerts did alerts a corresponding The overwhelming XXX published gunshot percent point, over XXX,XXX not have a those XXXX. in As we of call.

any it And agency of criminal respond hobbled to gunfire. have ShotSpotter, investigate and would efforts the to without

gunshot detection deter helps speed Tulsa to order gunfire response and technology criminal and improve to lives in Our the shooters. save

helps investigative complementary case and process Our accelerate investigative solutions improve the closure rates.

ours demand over proven In grapple management shrinking versus increasing effective smarter in and unique levels remain of solutions XXXX. the force our more to create to the great critical scientifically We staffing officers democratizes These factors in function of with services combination services. over-policing. decline without and XXXX address patrol supply below crime are gap for which as patrol agencies technology the for the a a order proven believe they policing between solution and those solutions as opportunity resulted strategies these growing significantly drive resignation, multiplying budgeted X.X% in the police limited their analyst like has

billion funds has only budgetary Rescue funding level, be committed level. not environment also federal to in of detection, the have in House White but local gunshot to and The American Biden at the state constructive, specifically was allocated a public which which and $XX continues at Plan The May been administration press million called including of technology, release out $XXX public safety XXXX. to safety,

Mike Mayor, in funds example, $X detection, a for of allocated ShotSpotter. Duggan, ARP James and For gunshot million which of Police expansion Chief, White, expressly Detroit resulted XX-mile

foreseeable we environment, drive robust near are medium funding and our and very Given term. the the bullish growth these ability to for on demand drivers profitable

the suite We a of high-quality solutions technology depth that breadth proven. have are of proprietary and

competitive in the core And of of from gunshot unchallenged point a view. mostly Tulsa case our detection remain

needs solution of meets buying and as of our our a core to positions us trusted brand Our reputation and provider the market center their these suite solutions the appropriators.

strong growing year ARR, starting approximately large We're booked detection on $XX of with deals, us compressed faster will detail. more million the and in which some footing $XX outline exhibit which lines. a million factors Alan patrol reaffirming international and of the a revenue transactions, pipeline and $XX degree These million a year, give our gunshot for in Tulsa time in and investigative confidence along guidance domestic revenue contractor with management pipeline of growing to

that, call let with turn Alan. And to me over the

Alan Stewart

Thank you, Ralph.

live four I'll university the fourth of Virginia. new fourth quarter one cover and customer, international as new cities, in in highlights was which security for in XXXX In one Town, a we both went South Cape and quarter, whole. Africa a

pleased live that will million, report revenue we city live. XXXX. went actually attrition, net including GAAP compared year bookings price have approximately of response that the We total and of with one investigate three had $XX three with coverage. be also did to of contracts growth negative. We're lose We five new That achieved XX% fourth quarter small revenue yet of for said, expansions not XXXX increases gone also city miles of to the our

year-over-year, this some Forensic increased Logic. as $XX Revenues around thoughts the over Fourth I will came from our details XXXX deployed more fourth the increased for quarter provide share and in million XX% quarter a revenues miles the me then quarter, year. full of guidance quarter increase and on $XX million, had and a Let revenues at of in we XXXX.

Gross was margin last profit fourth quarter as was of of higher than prior-year for XX% delayed year XG of our maintenance expected that or or increase lower $X.X in revenue to Gross XXXX due was XX% slightly that versus grows, completed of $XX.X also million in the the the period. during base revenue fourth we for revenue slightly a the million costs were sensors quarter. than sensor replacement

a the $X.X average period. basis This outstanding on basic per prior-year on loss for or basic basis. both weighted and a and shares of was net on $X both XX.X of a per outstanding million million fourth million on to a a for loss the or loss diluted share loss quarter compares of average net $X.XX weighted outstanding diluted shares million $X.XX share XX.X Our

quarter In similar is and QX reduced due contingent Forensic XXXX, the than Logic a $XXX,XXX our lower slightly were QX in to consideration reduction XXXX to in the for earnout approximately expenses Logic-related originally as and to revenue QX of the the Forensic expected. by related liability

reduced our $X the the contingent projections reduced contingent and net itself our expenses consideration by year income. our over quarter, also increased slightly tax our but ongoing adjustment This for expenses which tax affects in total, by in million reductions consideration for overall these

$X.X was million for increase EBITDA million, quarter a quarter significant the in Adjusted fourth the XXXX. of $X.X the fourth from

by As including to taking GAAP or compensation acquisition-related depreciation, net a and our and loss expenses, taxes, stock-based reminder, adding consideration earnouts. back our contingent amortization, calculated related adjustments interest, adjusted EBITDA to liability is income

period. and fourth for XX% expenses, million for for in fourth of XX% million revenue total or quarter revenue million was prior-year XX% of expense million total $XX.X of fourth were sales quarter versus the or Breaking Our of our operating XXXX. marketing quarter the down $XX.X the revenue or expenses or XX% $X.X revenue versus the of $X.X

products. sales These appropriately and efforts. expand marketing continue to are build important investments continued continue our and for marketing our our capabilities We for to growth well pipeline to are focus of investing sales our all our as we on working and grow

customer maintaining levels low. continue attrition We on of to rates which keep focus high helps satisfaction, our

fourth XX% were XX% $X.X of revenue compared Our for or quarter R&D the total prior-year $X.X or to period. the expenses million revenue for total million of

products. functionality We of of increasing all in to invest our continue the

expenses compared liability the in were million million expenses $X.X to Logic revenue dollars G&A the total consideration $X.X of G&A prior-year were revenue acquisition. XX% reduced million quarter for $XXX,XXX related $X due in total to reduction to of to for Forensic or or contingent absolute the the the period. XX%

an to detection XXXX live to in XXXX. the solutions, customers Our increase was expansion during increase miles The having XXX were added over Forensic and related Logic due XX% our million, results for revenue significant over from gunshot of using $XX revenues year.

our did XXXX million sensor newly of even revenue the contracted concluding for Challenges prior-year profit was miles of or XG chain slowed prevent replacement expansions. million or global us supply $XX.X or Respond versus of down period. XX% the with Gross from deployment the or revenue for $XX.X not XX%

weighted This diluted and basic basis. basis of share XX.X or a $X.X million basic XXXX outstanding on diluted XX.X for was a million income weighted million $X.XX or share million per of million per average the both outstanding shares on for shares net $X.X based income period. weighted a compares on loss average computed $X.XX shares XX.X average to on Our net outstanding and prior-year

Adjusted was XXXX EBITDA increase million XXXX. in the a XX% $XX.X $XX.X for million, from

rate Our revenue at XXXX. in remains the XXX% in essentially XXX% outstanding retention as XXXX, the same

our impressive which as per $XX.X to was Deferred up next of the XXXX for $XX.X sales months of value XXXX. million only versus in million, $X.XX revenue costs annualized at per XX the Additionally, at $X and acquire XX $X.XX dollar contract end stayed in XXXX. December marketing from dollar was of

We the ended of end equivalents cash million cash the $X.X $XX.X and in with versus third QX quarter. million at

no short line it. and or $XX our million outstanding have if available we long-term credit ever of We approximately need on debt

XXXX, $X not $XX.X Logic we Forensic in million Our XXXX. acquired recurring on of after X, significantly annual with million January $XX.X recurring was from was the $XX.X include revenue revenue that started up does additional X, million, The January from XXXX. that million started

Our from of expected The million professional in with division from range, to X start investigate, up the million. connect, go-live sales security expansion revenue our totals following explanation almost Leeds $X we revenue of $XX the $XX guidance. for million the million. million revenue and how To from helpful. over and XXXX increased may make million to Coplink international of more services ARR, pace to difference got a provide be our We to and $XX of miles GAAP is to adding $X.X approximately bit that $XX guidance revenue as GAAP get

EBITDA. guidance providing XXXX also for are our We adjusted

to expect achieved XXXX. the to XXXX in between we our We and EBITDA XX% adjusted EBITDA XX% increase XX% adjusted in from

your Now thoughts, Ralph back for we'll some questions. and take to final happy to then be

Ralph Clark

safety you on positive a to can excited there's globally. having public about communities tell, and our and growing be lot As impact business outcomes in

your I take think to questions. now we're ready

Operator

our And will from Please come question Instructions] go Capital. Brian Ruttenbur Imperial with [Operator ahead. first here

Brian Ruttenbur

much. very Thank Great. you

us walk couple canceled is us is? the and the a what long currently situation. through South a had how was canceled? the was I through walk African So kind before were it there? around going How and history, the of had you opportunity the long how have? it long you How history Just contract of questions and contract you forward how contract Can long long you

Ralph Clark

Yes.

I'll So Ralph. this is start.

some contract, me around So communities Cape we number and expect are that Police I to opportunity contract there, Town, the there there. a And current covering wrong National gunfire correct engaged paid is local a by producing. they city, believe, We're to X-year the is expansion if we're be these the SAPS, in Alan. being Cape Town of that although I'm Force, alerts South respond Africa, and the is for going to with area. This

say there in Our the recall and for want Town, deployment Cape XXXX, four so I I to exact we don't approximately or previous think but years were to I dates, before. XXXX maybe

deployment, a of Town. country technology funded think are Africa, has had although They money. to to we themselves Cape motivate continue initial this of a to service. that And get able funder other could And that portion that been weren't they some there there they in large outside of that leverage the local need the ongoing out funding for ran the and South frankly, deployment, basically cities

Brian Ruttenbur

Town, one on Okay. that. the you just Outside any about other internationally, that follow-up basis? can you talk of pipeline Cape international And have other on

Ralph Clark

Sure.

fairly is So this expansion Bahamas, international. a major which had year, we in

with to a year, Latin land we're and those this going dialogue we of opportunities or going two ongoing expect XXXX. have American one We countries, few that

Brian Ruttenbur

didn't of you're in miles, then I catch And projecting last Great. question, that XXXX. it number and

Ralph Clark

said that. we Yes. think I don't

state that we think miles we of did in is and being I XX currently the XX totaling or are projects already that have under so contract approximately deployed. what process

live with miles we've went square gone miles of those fact, XX gone And in that four just I live, e-mail just In we live we've an XX on that I saying call reported the got another with Detroit. already.

really basis Suffolk in to be to those from formally next There's online another Cleveland. good and add making that the between coming awarded, been days XX we'll to miles progress. we're those So contracted or contractual project have square be and And expect we have yet but a the so, list. County XX

basically to this that be about of XXX going we on pipeline of a miles moment. we're working have particular So as

Brian Ruttenbur

you. Thank Great.

Operator

Our next from question will ahead. with Baldry ROTH MKM. Please come Richard go

Richard Baldry

first order talk from sharp in just receivables fourth quarter? $X.XX Where cash? you about why and look you it's to to in see the it's long-term trends there? your year-over-year, a per And way you'd maybe you be deferred come with likely Can the other When something that Thanks. on at the deploy how growth. $X.XX some revenue or maybe Thanks. deferred be to how on buyback growth share in likely it that significant pretty and generation the your quarter, of to in, cash aggressive spiked

Alan Stewart

Alan. I'll start. This ahead is sure. Yes, go and

well, have now we think, we I where Logic. off, revenue from Forensic are also first ended 'XX, we a comparing versus where deferred

and renewals million ARR have That - you see helps from some it to ARR. $XX last expansions and already. a almost that in over also million went already included said, in amount. our $XX we that we significant year So have

revenue. the that's to So related the deferred offset additional

So significantly. that that's why increased primarily has

terms or what will do cause whether do to In so. any to determine of of do authorization share us buyback, that we kind have we

much being historically market see have when viewing the valuation. past we properly our shares different things I don't We thought forward. wasn't repurchased the in going

Our cash good. is

would of Board to used haven't if something debt. that. We we work going with always consider, It's see that we're to the do and course,

Richard Baldry

the sort 'XX? the that in we drag where And cycle that ease of P&L replacement see somewhere with a would would And was that impact? Thanks. in sensor done, off

Alan Stewart

in see would question. This is thing our biggest Yes. The is again. Alan, CapEx. that Great you

Our that. over related $XX million to CapEx was

had So through majority them and to sensors, did finished X,XXX halfway 'XX. started we the 'XX, replace of in

back actual of per $XX between $X So go million is north $X CapEx our somewhat somewhere million million being to going year. and normal, to

see you'll So improvement there.

Richard Baldry

maybe contracted really Could miles. are the Do starting of pipeline you're you now? pipeline building is in, there contracted a forward? right the speak lot sort Tier that of - there X and still have cities things and Are such in strong has any the visible? Or year soon-to-be-finalized with? like what's less to feel also you why that And going that's with backlog out you Thanks. working a you're that of come it

Ralph Clark

a Well, expanded Corrections on Do in that to I'll that? has particular but because saying we opportunity it's entity. large start you size it's working about start that we'd That past large maybe like, of the a in want with just considerably. fairly on opportunity we're longer than by taken talked Department investigate

that's XX deal line. the this be going Department large bring So fairly to apply, go, Corrections in excited It's to to about. I going big for one so, the expect really next opportunity We're to a a us to a days think, once unleashes, we or talk other in very investigate deal. would across be substantive of we

Alan Stewart

this it's only did. in already And much 'XX. is flat, I about thing, be revenues with going got we We've seen, state a Yes. already adding mentioned, earlier, add too. that's what said, Logic, X-figure to million deal That pretty to as add 'XX. helping they've one Forensic more Alan. That's can in they Ralph as already somewhat another multiyear mentioned $X

to just which X award Forensic a got is also for second Logic as as well. another the figures some of also significant, We contract, well close multiyear

on aspect in we're we see every selling. of a So that and product products our going basically lot every

Richard Baldry

awareness for while should and the little how about new about pipeline last Could your we feel you beyond? and about play question. your a in Could just your opportunities XXXX that the talk of for how the go-to-market you the side, about Maybe those offerings there thinking now for that think you about you have. it's client my off - to been on that organization group, then sort - software

Ralph Clark

Yes.

intentional So tightly year of ShotSpotter early our I I process like mean think we Forensic and still in it's for Logic the organization pretty integrating sales colleagues. us. were terms between very in then this our respective

So more going see year, between organizations. a to we're those lot this integration

the reps ShotSpotter on Forensic sales territory side current carrying Our now are specific quota. Logic

platform on gunshot with of opposed interesting precision an and a on investigate really and technology as We're also gigs solutions. transformation think internal management project as more policing to side acoustic to detection a control ourselves working fairly services data provider

really and us area, really focused quite what makes So that on we're that's excited.

the On some commentary, XXXX we're to XXXX, not wins a frankly, see have we for going Alan's you set XXXX those see can our grow We're to us pipeline the guidance. going in to up marketing that, lot take get side, with And going products. continues are and to visibility to from for But granted. of as beyond. to

on lot a So doing areas think out are super beyond we're work their acoustic compelling really expanding these drive of into set up XXXX. us to other own, growth to is that and gunshot interesting nicely domestic pretty the detection that's going we that for

Richard Baldry

structure? And a is to the for a at your to result long-term impact as onetime terms earnouts of normalize onetime people's most they tax to purposes, the last would that's a trying the that changes look the impact, earnings, not just event, me So of taxes of change a as for your in right?

Alan Stewart

related Yes. This would any is changes correct. to be small there's going that, forward. they Alan. That's If

Richard Baldry

Great. Thanks.

Operator

Capital Please come Group. with Jeremy Our Hamblin question Craig-Hallum ahead. next go from will

Jeremy Hamblin

back results. come on Congrats to Hi, Forensic I the strong deal. the Logic guys. to wanted

as talk basis reduction you Is a detail it tracking a on those of pipeline tracking that quite You expected lower takes opportunity from more contingent a terms thinking year where can it get not on But you in be that. of to little - get noted about longer it deals? or - the earnout just later, through you in than us a you a large expected terms might results is you of just that deal year it's the in to ago? be where revenue some wasn't

Ralph Clark

Yes.

Alan is jump in. Ralph. start and I'll this So

on, is little portion agency, say, I'd learning a been what center, local of we're enforcement, that very they have associated think buying that. different traditional their with we've is buying I Forensic our focused a than policing center law about local bit whereas Logic business their

kind federal real I of state some are the and would But growth them, kind of opportunities opportunities. call much these larger, of

expected, they Tennessee little them. Massachusetts example, already than contributing had and was to definitely to the state for not So acquiring very state revenue, Their contributing therefore, a just prior to on deal this deal with us GAAP bit of came that but police. brought ARR later we large state

California. of year They of in point state view, agency is the There's a to it's an in the That range. But a closed X-figure of recently deal on. multiyear from in kind another deal deal. per ARR state a There's think $XXX,XXX $XXX,XXX California.

the at is chunkier local deals bigger So what come too, oriented think departments, opportunities say, those And pipeline a even along. more, I we those are state we're I see would with the cycles sale much some and might those much seeing level and long police they're bigger. just federal deals than find local but much we in with

Jeremy Hamblin

And contract longer? also are lengths the

Ralph Clark

our Well, core we're finding in because they're what getting multiyear we're contracts. about is the business same

commented about on as new of I years, think think getting I multiyear. much our that five miles as were our number transactions, well of as And we're long multiyear, three transactions. two, renewals both as a as I XX%

I that think there's We've might we really contracts think a have an different about got you it's have the don't But frankly. multiyear do. assumption we the in protection. be fact, - might because same, and I that So view good

there's our those of X,XXX-plus a are so, multiyear If substantial covered portion you across look miles that contracts. or with miles mileage of

Jeremy Hamblin

here? sake, have And kind today, would if let's of been, over basis, kind how for that's pre-COVID see of that say, changed just able - to reference to would you where time it's XX% be

Alan Stewart

can teens talked or pre-COVID, terms when between last XX% first Alan. fantastic. which multiyears, four in year, multiyear. in say and certainly would that say, public, maybe but went years is is the This five about we would in we of not been XX% I Wow. that I have

people several it are for They does technology longer concerning know work? no significantly reasons, mean works. I the it's it increased. So And

that used up now customers up new to to when X- signing sign for year, one for they're X-year contracts. even So

Jeremy Hamblin

Got helpful it. No, that's context.

then for changing operationally gears at either gross but wanted a margins, end noted get It the that's that here, the sounds the sense cycle, or you upgrades, gross benefit post you some to you at a your it, you're be what once think revenue that your margins sensor of get will that sense to taken your fully Just And Are of the kind replacement would time. you that's wanted cycle, given where XX%? like be margin to to you upgrade done? I completed speaking, tracking? gross current looking mix, then anticipate, still looking at

Alan Stewart

of Alan, to some not XG plus Yes. a go-lives. - help normal question. odd of a that the which did only the do was use we This great it's X,XXX we people, because of uses lot a is sensors, Yes, same vendors did almost have little the 'XX we those

increased So which the there cost live, there more margin. was which a per little gross the bit mileage more and COGS, actual cost lower little in going bit a

XX-plus to We of believe several would gross going product. percent. be with three of we get nature software to And new over to and right ones, - the going our XX% see XX-plus to especially it's gross what the margins software or do majority XX% going have the that expect because to margins next closer years are the percent well, our you of are are all now, projects that all closer ultimately,

Jeremy Hamblin

a jump. that's because huge me just let clarify And

close frame like company XXs that's years? the that XX% four in could you you margins gross think you're the total time to upper or So be five

Alan Stewart

four think Yes, you years. should

Jeremy Hamblin

And correct? 'XX, or the you're about XX%-plus XX% talking FY

Alan Stewart

We're than I in expecting 'XX, are to assuming live we mean, XX%, mentioned. we - as did close more we get going miles to in

back the we're going on related to to some We miles. are to costs be of of expecting cut that some able the

So us affect directly - XX% right the up going that will like we're now.

probably going hard to not to to XX% too and be get XX%. us it's So

say in So I should 'XX. expect us to and between somewhere get would XX% you XX%

Jeremy Hamblin

taking Great, those guys. wishes thanks Best year. for this all questions,

Alan Stewart

you. Thank

Operator

Michael ahead. Capital Our next will go question Markets. with come Latimore Please from Northland

Michael Latimore

here. XXXX for results Great Thanks.

prior under a are or that does compare terms miles contract In be the year either talked to of seem like ago? that to about, XXX miles statistic the how February,

Alan Stewart

Yes.

there's is and I we'll this start. going go faster. Alan. and So sooner, live more I'll would ahead say be

when was $X.X think I you in $X.X of about, adding when closer year it probably said, last when million. our GAAP guidance built revenue for So we 'XX, miles, to million about

So going miles significant more a because going faster. we're increase there's a lot we're in live

Michael Latimore

gunshot Respond other for expansions? you How bit And pipeline detection, the grown can look pipeline a for does talk and opportunities wins about new little it the or that year-over-year? has

Ralph Clark

Yes.

really So continues healthiest about it's thing X X, in probably we've ever Tier Tier to Tier that And grow. opportunities. and of mix X X there's the the It's the and a market. Tier it Tier X, the been, excited is we're success seen

Tier our that of book As from I X, United the Tier call, think salesperson came we mentioned on States. miles X, XX% and was one across entire the

go-to-market direct of that in quite expanding kind of selling resources there intentionally is things terms are the we're of one doing So efforts.

to from and We've to four is sales We're adding level. there. business one plan that win XX% at continuing and each another now, to two, have we're going got to sales of be our to already So and the territory reps we're attached reps. rep them go two

just that have basis are of technology. the forward to together and a the Council a quickly think move to in year, on Mayor of guess, fact, Chief this, really kind we make along Tier what three City the of come City added with Police decision In this I a higher-tier for than with we cycles sales. kind new X. booked Is Tier be logos appear easier and Manager, shorter The to X, find sales I

the level funding robust, not is state at I at the the environment mentioning and that also very and but think Mayors federal level. also it local the helps even level, at

allocated stack potential specific detection So we're solution which significant up a gunshot down violent the toward is technology to at available portion those money and on of that's dollars large, crime, seeing of being the for a across address and and budget because board. uptick is the

Michael Latimore

Interesting.

that? it. guidance Got churn revenue the give kind past I'd on a in assumption in And then you that Okay. you did your of give

Alan Stewart

hear question. didn't the I sorry, I'm

Michael Latimore

yes, Revenue, revenue churn.

Alan Stewart

Yes.

always think X% I about better than churn, we've you talked that. and a previously, done

a with the been greater XXXX, couple a broad-based last X.X%. able And we're security GAAP that it's been city customers have than those I think attrition net renew price ARR that negative number - think revenue decided then renewing, fairly But kind not years, not decided it that because less then project year, from actually basis, more XXXX, the was offset that to of one X.XX%. price customers have than a not it's of think $XX,XXX renew. small or from to net on it of didn't city not renewing. those three there's I customers This lost a for execute increases super of along the to that might increases we've of I been And renew. that X.XX% attrition across

Michael Latimore

in forecast have baked And in normal the X% kind you 'XX of the for or...

Alan Stewart

Yes. less that. I it's than think

increases to With X%, get we the and certainly it less we we be what again. price zero now, expect know that right closer than to hopefully

Michael Latimore

for kind kind if there? acquisitions? And the just it. value expectations of what what then kind appetite you're what's looking of Got additional out And - of last, around are

Alan Stewart

start - is go ahead, I'll This Alan, Ralph.

Ralph Clark

ahead. go No,

Alan Stewart

to what say it's to going going say. No, I almost was similar you that to were

We're always two We're And now We to not every It's going strategic company that. that. that - do find got do one have that's staple of looking done something to makes for be something reason absolutely to a consider years. greater to to past integrating but just fully able acquisition. acquisitions that that, would we be type Logic the to also much revenues. a importance year we Forensic If we're about sense on acquire do makes to the that. one company

Michael Latimore

much. very Thanks Great. Okay.

Operator

from come next will Please William Matt Pfau go ahead. Our Blair. with question

Matt Pfau

contract for Thanks wanted If circle my the to fourth remember Great. call, the to that back investigate I taking delayed you cited. to that close I on correctly, questions. in quarter. expected think I last originally you the had earnings

but revenue to any So in on note, I it's in it the included seems wanted delayed your to did like impact what guidance? you relative that have quarter again, had

Alan Stewart

Yes.

already 'XX, be 'XX. I we underway say that that we expected start. and original this is in us gave revenue to producing I'll And for guidance Alan. So had will contract when our for

for some actual would $X So revenue now that. now million, it's the that higher we to reason, originally, because it though, lower around significantly effectively good $X thought got, that we million a be than did of

when plus to get So a figures longer it's and eight signed, we But it's taking multiyear. that get.

affect good So have our delayed, to in it originally did what we a it's expected. bit but yes, it reason a 'XX guidance little versus

Matt Pfau

And last just one then just opportunity. campus it. on Got the for me, Understood.

that's Is in area out you you that with focus there. recent there. it in segment, of a had a You seems that few have seen know the but anything happened? you'd some of more less put had you've sort picking up on, Have a bit that called wins events little I an that interest particularly like now segment? win

Ralph Clark

now these seeing grids try through little trying I to quite substation think things about to to we're on Yes, particularly progress that also But linear we the take frankly. discharges. we're excited campuses. freeway those some the steady bit organizing we're infrastructure make potential themselves another probably protection, continue excited of people are about run weapons a more around And attack to opportunities, of more at

the a near-term and got more opportunity would protection. space that of that there excited are the with but opportunities about. probably us, say stuff in we've we're is infrastructure I campus lot there, on So pressing opportunities working And for we're pretty freeways security

Alan Stewart

Alan. this comment. just one I add would Yes, is

terms three said and Ralph focus everything importance Just true. add is did in more universities We of though.

down. slowing not it's So

to well as focus highways. on we the we are see interest there, the still expect grow We things seeing still continue as other like to and that

Matt Pfau

would Okay. who's what about contracting the then for And the those - versus through deals? infrastructure, those cities? And be state those the highways,

Ralph Clark

Yes.

done to in infrastructure, state-oriented respect And go tend deals. conversations at any utility With have that companies. we those particular we kind but a we enterprises, how ourselves highways, of those of having those to of So will don't be know be to case deals yet, organize run about can the market. take we're commercial

Matt Pfau

Thank you.

Operator

Erik JMP Our ahead. with next Please question will Suppiger come Securities. go from

Erik Suppiger

questions. the taking for Thanks Yes.

that XX%. us investigate, had the contribution moving those think margins you slipped QX what In you 'XX? in a what then to margins anticipating contribution assume some deals into sense that of you kind also about into EBITDA range for the talked fiscal up XX% gross expanding we was I QX. had you're Can from renewals And Can still that type into QX? slipped QX, in towards that give addition

Alan Stewart

Yes.

get to is for terms can it they're a gets this to from start always that then of up. February, be will or Alan. in quarterly be we and now thousand QX. picked caught There's some if - renewal, So have delays We hundred We Ralph, add, those. don't in we couple that January you delay dollars If could it other that a Certainly, shift will did December I'll there or a million have too. get ones of up renewals. that until I anywhere happens, $X.X waiting and QX. mean even

So that will nature is that a be bit little always there. is and lumpy something in

our several next question, EBITDA XX% still think To as margin answer are expecting gross EBITDA. to will products software go our up year And X-ish from be that years the to 'XX. your for second adjusted XX% to we are There grow. continues one, this to reasons I we XX% absolutely, the continue XX% in go to that. Number at adjusted believe

our If now we looked this actually and our lower year, terms you than at in look in even quarter every OpEx. we're QX right basically were of a overall OpEx took

categories, to So continue appropriately we're the we revenue. ton to add a going to add need continue in grow certain to of OpEx we don't but as

adjusted towards contributes and that flows that to of continuing all So EBITDA grow.

Erik Suppiger

can parse you're the Then the organic least out 'XX you that 'XX? at growth expecting inorganic in in parse contribution out Okay. fiscal or

Alan Stewart

probably a say, had Well, this this more at is than everything we've again. organic it's year. all point, Alan since would yes, I

going is So expected in from XX% the that all perspective, $XX-plus growth to the organic. be million entire

Erik Suppiger

good. you. Very Okay. Thank

Operator

session. this At our concludes this time, question-and-answer

If your SSTI@gatewayir.com. by may closing back taken, Mr. Relations contact I'd to team e-mailing Investor the call for ShotSpotter's remarks. Clark question turn not was like his over to you now

Ralph Clark

question. Awesome. joining And for call. thank you, the Great Great. everyone,

incredibly vertical space. growing you this market in we're vibrant about and with excited We're pleased can position XXXX. our very As tell,

we people, and reputation the most able have we the We have to the our have amongst to the plan. product, we buying processes, be the execute centers brand have to importantly,

to that, the chatting forward over all several with with very so next you looking you much, and And days. thank

Operator

Thank for on us joining much The very concluded. now conference you today's call. has

You may now lines. disconnect your

ShotSpotter (SSTI) 22 Feb 232022 Q4 Earnings call transcript