SSTI - Earnings call transcript Q3 2024

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Operator

Good afternoon, and welcome to SoundThinking's Third Quarter 2024 Conference Call. My name is Shamali, and I will be your operator for today's call.

Joining us are SoundThinking CEO, Ralph Clark; and CFO, Alan Stewart.

Please note that certain information discussed on the call today will include forward-looking statements for our future events and SoundThinking'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 those statements. and this discussed S-X. registration risks SEC the these including filings, statement of assumptions in are SoundThinking's 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 SoundThinking estimates undertakes date reflect November 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.soundthinking.com. link of will Relations company's website

With that, the over to I'll Ralph. now turn call

Ralph Clark

as everyone, and quarter financial discuss provide afternoon, appreciate the today Call. share our an joining us results, We the strategic for our outlook update and for remainder today SoundThinking's you progress taking Good of to and year. we you XXXX our time operational Earnings thank third QX the on for us join

to XX% with We're pleased third $XX.X year. the period from million, quarter last up revenues same report a strong up

year-to-date same For the an of representing increase reported million, $XX.X from we last XX% year. period period, the

SafetySmart The is technology public continues the to need uniquely a growth opportunity we believe for positioned. compelling solutions and be safety platform

public of As the charge. are we evolve, to are the just we technology landscape safety keeping continues not leading but pace,

and ALPR AI recent strategic leverage SafetySmart the solution, platform enforcement PlateRanger learning rollout the tools operations. now enhance co-branded that law our Following X our partnerships with and technologies Rekor of offers data-driven to Systems machine

incidents engagement; our improve patrol system improves police to and officer streamlines platform and In gunfire addition that gunshot which to market-leading engine detection operations low-friction productivity investigative PlateRanger, and detection includes records enforcement for is ShotSpotter, to solution. law ResourceRouter, billion that system and accelerate patrol search SafePointe, which lives; save proven CaseBuilder, SafetySmart the management discrete to response has platform case close AI-based investigations; weapons our our largest is criminal lastly, collaboration over tool justice X help and CrimeTracer, that help the cases; to our management

proposition unified a in they under ability safety empowering law public believe deliver measurable, value public SafetySmart scalable holistic safety lies enforcement its strategy experience, gaining deliver offering unique platform and secure traction, SafetySmart is a effective We to our The platform. one efficient, platform's our and communities comprehensive outcomes partners suite solutions in the to of serve. client equitable

Our QX. in live flagship expanded in in and new university cities X went offering X cities X as well current ShotSpotter as

smart went We with over safety new solutions. also other XX and for booked platform live our customers

a in testament reliability to effectiveness safety. ongoing our the penetration is of Our solutions and market enhancing public

new new in expectations which staffing have have very the strong implementations QX currently the router, for the agencies and market. projects we're of resource We demand shortages. go-lives. We're project pipeline around X this track is this above ResourceRouter and Domestically, in year, expected miles live expansion XXX including in on to our pleased current X cities see for resonating ResourceRouter performing year. we go-live many go also queue exceed structural in challenges QX staff ShotSpotter to X answers the with

that we're once And operational are opportunity. The plate into look at the following more Our the strategic forward of traction is solutions highlight vehicle TAM in our the partnership is and early is launch billion in another integrate PlateRanger platform and year the with a license by pipeline build, XX% growing on September also Rekor strength quarter growing solution while of It to to recognition XXXX. excited updates targets underway. we of days, fully still $X.X CAGR. the we SafetySmart sharing PlateRanger the an attractive

of then of force go-live in solution, be XX by at the Elimination and approximately year-over-year. that hearing help million We the the use types other within City operational maintenance quarter began application recognizing ARR first in and corrections New on York trial to for leadership a PREA management DOC on improve case earlier delivery divisions major subscription-based and use divisions Rate Council X,XXX% followed their of successful implementation Prism efficiencies The case on comprehensive X of October the expectations compliance the of $X its recently PREA, will quarter third revenue our testified App, DOC. these CaseBuilder, grew the investigations. or with the

Parish to into Orleans pipeline headed continue have As healthy also in September a CaseBuilder opportunities went expected, we live of with new XXXX. and

to us Department expected very Our of the California create for successful one of divisions opportunities agency. in Justice within deployment is further CaseBuilder of

deployed our CrimeTracer, currently to successfully the leveraging CrimeTracer. customers adding new X customers investigative with search engine, was XXX-plus

conviction our make investments continue of during our significant the the innovation detection increasingly compliance. reflects advanced maintain end, To solutions. quarter, Gen's and who We're Next We expect been along actively which our our of security we and base a our features platform third to customers the complex performance SafePointe Next installed waiting announced SOCX next-gen customers. of the customer improve new and the Gen, to and commitment new for called to meeting needs to and have weapons to current major HIPAA to availability securing upgrade migrating system that with

in of to front, recently strides detection the expand doubling operational continue X-year Uruguay footprint the the significant a gunshot an highlighted capital which XX of with its by Interior Ministry of current city. announced the we square in represents Montevideo kilometers, coverage ShotSpotter's additional On agreement make to

York Office the provides the moved last Information it their Bureau, or renewal Technology to X-year the Budget, Management technologic that OMB. and ITB, final New way and support contract have New has onto Both by controller's major ShotSpotter and on made successfully City's NYPD's ShotSpotter week, through as division with on-premises work contracts of sits We X including late City approval, we that have well learned And York office. with NYPD, and NYPD's ERP maintenance system. enhancements of in process ongoing the performed as services critical renewals our professional

solutions executed leadership support from confident strong criticality has NYPD are the it the the year-end. of contracts and in office, by mayor's Given will we both that these be

of in ShotSpotter later Chicago in Mayor on beyond late with month. our termination concluded to are negotiation service City formal operationally contract service XXXX overall will the reminder, strong extending and the the the between There this the month this a continues As debates ongoing budget Comprehensive Council occur city's civic that range themselves the entering September $X.X and over process. be of the support have that press veto-proof Residents business the from help continuing defray voters coalition data ShotSpotter in of were as who strongly Council. to support a of XX% or ShotSpotter. Chicago local that support revealed community million use majority Chicago's well polling as all cost to recently organized City

to detect, Lab requirements Crime an intending that a exact Chicago statistically Solutions". saves RFI the on soliciting such this positive bids city ability and locate addition, gunfire very safety as Responder "First the that approximately recent month later the lives within community Technology the RFI per XX to estimated strong data. due In for positional XX reimagine with ShotSpotter by has then University alert of details from deployment In the meantime, part, year. seconds published came study Chicago In

many timestamp in Chicago also calls operationally for among include same are that reported XXXX. RFI of the capabilities Coincidentally, the the since these gunfire forensic incident. demonstrated addition, snippet a requirements to ShotSpotter of the In alert has

and initiatives market our In product strategic our position, have launches of strengthened terms standing.

to market expertise landscape growth dynamic technological new our leveraging seize and opportunities. are the on We insights navigate and

percentage up Our the Score X innovations resulted force of strategic our year's are has moving Promoter behind product excellence, Net partnerships XX%, in last XX%. and points world-class driving which operational another from

class world a is a any As score reminder, of or considered in XX industry. higher

since to which added executed annualized expansions, averages versus only nonrenewals new annualized per XX nonrenewals, is to effectively year. over to It and XXXX compared XXX the company over XX-plus per year-to-date, processed notable, renewals XXX has renewals ShotSpotter year XX X customers,

XXXX nonrenewal maintaining we As factored in already at to a revenue, margin. to $XXX Chicago's EBITDA XX% our reminder, and XX% guidance, budget been adjusted which million has are $XXX XXXX million with into

in and diversified profitable positioned confident believe and to into our well are guidance are XXXX beyond. we drive and growth We

ALTR remain have to enhance safety strategic your to us support. you time innovative partnerships about I for continued reseller and expansion, efficiency. ahead excited summary, for and committed extremely solutions positioned continued that want initiatives, In We're public the thank opportunities and trust. growth community and our and operational delivering product

quarter I'll call over the guidance now for the Alan year. turn and the to for to our financial results discuss

Alan Stewart

Thank and with We're good pleased everyone. you, Ralph, quarter afternoon, our results. third

the shareholders. strong success and value reflects our Our efficiency performance financial our our operational to initiatives, to strategic commitment measures of delivering ongoing

of a already revenues quarter XXXX. of multiyear our customer all of million, in of cross-selling, also existing were the expansion and million customers, CrimeTracer solutions, CaseBuilder from growing by Revenues and Newport News, platform $XX which ResourceRouter are third Bookings were representing coverage including solutions XX% implemented which complement increase driven additional ShotSpotter new the $XX.X areas, added solutions. quarter third SafetySmart some The to contracts, are healthily. our of of

Gross profit million million the XX% versus revenue was XX% quarter for XXXX $XX.X or year third or period. of the revenue, of for prior $XX.X of

margins quarters. XX% in QX, in previous have year be to gross that expect we higher the We the ending near indicated

$X.X Our million, $X.X third adjusted the from year million. up EBITDA was up from quarter of last approximately X% to

related was to in increase EBITDA adjusted growth Our solutions. revenue all

costs and consideration disposals, a our depreciation, including net income interest financial taking contingent our out compensation stock-based expenses the and As measure, adjusting fixed or non-GAAP adjustments asset losses, a is EBITDA, amortization expenses, by reminder, acquisition-related income to adjusted income, obligations. loss calculated GAAP taxes, including related on restructuring and and impairment,

expenses. our to Turning

third versus XXXX. or Our of quarter revenues were XX% operating or million of revenues for XX% $XX.X third of expenses million in quarter the the $XX.X

approximately related adjustment Logic Third $XXX,XXX quarter an our for consideration acquisition. XXXX Forensic had contingent to

for or our total were or revenue year of expense quarter the XX% to marketing million, expenses. compared prior Sales for $X.X period. total of down million and third Breaking revenue $X.X XX% the

year million to third of revenue, Our G&A for million $X.X the million were revenue for total quarter $X.X the $X.X quarter million, or or XX% to total R&D XX% of line with XX% revenue compared for expenses compared in expenses the of period. year the or total XX% period. $X.X of prior or revenue were prior total

included quarter our to expenses out G&A third consideration the of contingent change the reduction Forensic In the year, the the $XXX,XXX in related of expectations. related approximately value an Logic fair last earn to

less a our on G&A basis revenue company our our We expenses to grow than percentage expect grows. as

and a basic cash in of per $X.X second million million QX based cash net and compares average $X.X million, diluted a XXXX. or repurchased Our we GAAP our of on of of all million quarter net $XX.X shares end was is have and XXX,XXX the end debt to shares credit $X.X loss XX.X outstanding. of loss second XXXX. average for approximately, diluted for weighted a only, quarter We loss quarter The outstanding, of loss shares ended the even we $XX.X the quarter or of This of million $X.XX the million. million as and after $X.XX an on basic million line of the million based $XX our the Currently, the shares basic in at price the million credit. diluted our at equivalents prior and approximately diluted available higher out of $XX.X than $X end of we largely to quarter for revenue the balance versus on of at with compared approximately million end weighted cash line respectively, have year the of $XX outstanding, $X at period. Deferred line shares was per basic XX.X on at approximately in

Now guidance. turning to

million revenue year For to full the we're full XXXX, guidance $XXX $XXX range million. our year at maintaining

We be contract approximately end is the that $X.X million expected the will to it on million revenues of of are QX, loss included loss expecting from Chicago after in over XX. which the $XX November even QX

XXXX year EBITDA to XX% at guidance adjusted full our maintaining are XX%. margin We

approximately to of million For of from a our loss range $XXX our loss the to XXXX Chicago even guidance, with to the we're million. contract, revenue of increase expecting $X.X a million $XXX

for of strategic are Q&A. EBITDA for expecting a and are call made now with to performance adjusted you that, Operator, the of we questions. on increase XX%. our range happy business. With the to the the open call also initiatives We progress please will the our pleased XX% open we're Overall, have to to we

Operator

Our ROTH the Capital. from first Instructions] Baldry [Operator question line of comes Richard with

Richard Baldry

able you you run do is RFI if unique in fairly RFI of shown group? curious, an Or up specific characteristics? the to with The Chicago have compete of that never fairly I'm sort those specificity, on side. other feel that into vendors any kind of

Ralph Clark

Yes.

it and seen So chance us. familiar the we've or quite similar a had to to RFIs RFI, dissect RFPs. does look We've

I twice. think New case, successfully in is agency the from won and that particular one there bid on RFP in we Jersey

RFI, that the not do is but of by listed an were RFP. encouraged that pretty we're So requirements list understand in that RFI, this

to So on ideas. they're basically trying get input

where process is whole Chicago. that's in so that And

Richard Baldry

a into on think Any drill early now year one you looking to and you've pipeline could upgrade SafePointe the heading minute about out out close is into for market. a or upgrade on And got in the the sort of How it. Got XXXX? deals? the feedback that major of

Ralph Clark

Yes.

So to continues the grow It pipeline looks and very strong. build.

people to are the contactless additional keen platform providing features think we're really next-gen and capabilities I on weapons detection. and

And close to deals in we're So with number excited. with to of at SafePointe. pretty a there's into back the wind we're QX that our going looking respect XXXX

business and it's how So we're pretty with developing. pleased that

Richard Baldry

for detection? building that so for When XXXX your you weapons legacy sort for that. And change SafePointe for of on ShotSpotter, your guidance, year-to-year detection, either does about of sort much think offering and how gunshot assume go-lives

Alan Stewart

Yes.

expecting to add that well XXX We're Alan, once of the So some this in be correct. plus, we still miles have. that [indiscernible] higher might ShotSpotter our than around we international opportunities and is be Ralph, as

side. So the on that's ShotSpotter

On that terms are be QX, over -- of that SafePointe alone. that north the as added, over are in important. I million $X the in million in Ralph for SafePointe think multiyear, but some and those mentioned, $X.X QX, in some We really about QX is you That's And side. to in QX. strong bookings, of already pipeline stats give clear, just To there.

help bookings going ShotSpotter, solutions revenue So but helping when adding and at we grow, it's look continue across which other the our we grow. not diversification to our have guidance, are just board is significant that the to

Richard Baldry

for me. last And

the On growth something you what most contracts challenge growth the larger you friction sort for could side, than that to would any were to segment? of they're common are of see SafePointe ramp, things that of be earlier that to come Are expected? as components off-the-shelf through custom

Ralph Clark

Yes.

Ralph. So this is

AI the of at a has the the being There's the supply looking Part we a edge bit beginning camera constraints XXXX. at box chipset. to will the little some -- that solution is around some open work We think in next-gen done SafePointe at are of NVIDIA supply that constraint potential of up includes connected that's edge. XD some

those at of our projections up, shipped have sufficient for XXXX remainder a So the quantity ramp fine that increase to support for significantly we in fairly year. But of that we're currently we're ramps for getting of in kind to as go-lives this next-gen kind we of see looking think to And But it have to meet supply that be the there. fairly mind we SafePointe. closely. we'll are going

Operator

from comes Street. of with line question next the Our Eric Martinuzzi Lake

Eric Martinuzzi

to XXXX. in wanted the just the up million impact on I you the what Chicago Yes. actual XXXX revenue guide, But XXXX? is annualized. based know size contribution expected I on $X.X said

Alan Stewart

Yes.

in this about is So is The 'XX $X.X Alan. revenue million. actual

and the some million we because January of February recognized less So the in definitely year. -- $X.X have we it's did we this we revenue before got than million that contract $X.X

Eric Martinuzzi

elongation, the more give further education just on specifically it Has flexed constituent elongation was was that the Okay. cycle comments? impacting much was sales deliberation And pipeline about one in all? due Any ShotSpotter. things conversion, Or really can and you talked pretty color QX there? the you it quarter captured that last that of us is at to

Ralph Clark

this Yes, is Ralph.

cycles it's government of a buying interesting, for But offsetting it to side still public kind more XX is on where closed that, the commercial think It's kind in cycles public of with given safety SafePointe much center it QX. different sales of kind the I we're ShotSpotter. We're stabilized. looking versus to months sales seeing kind much security XX side. of respect was at which pretty

dollars expectation lot cycles of of happening by that defined the cycles the across on mix as to it. we associated the budget because going portfolio now the kind on is kind like say, sales defined ShotSpotter. And So see to things has of is kind we and put I or in category would with be these things a of side with PlateRanger something SafePointe still we're PlateRanger it middle of encouraged a kind quicker, sales pretty XX-month XX-

I space think the well. pretty ALPR people pretty much understand

Operator

Trevor the with of from next Citizens Walsh JMP. Our line Instructions] question [Operator comes

Trevor Walsh

piggybacking of give could bit Just and/or time the the type SafePointe as ShotSpotter timing actually us those a pipeline take flow, a guess, a a those revenues Ralph flowing how I If context similar 'XX you questions. sense the from strong, couple similar from could but of just kind like to Alan, it's sort seen understand off of looks is the last of Or some and us kind give of sort sense in you to win going deploy? of it the in where commentary PlateRanger just rec -- do to deals I you those once in of little of of that kind of rev what of maybe Is you've the kind what deals? deals? to see guide, perspective? you the

Alan Stewart

Okay.

and So like We're we is When a contract customers provided takes the much is to answer to contract things the signed as a can after a we that with about months as live. for short X X for get finding X cycle shorter weeks go to get go-live. signed, ShotSpotter, ready we until SafePointe. X normally low go, it

are faster that's the revenue in gotten already going SafePointe come I over would. mentioned, million get and and ShotSpotter to actually we've bookings what a bookings, we in $X a this So help the as than in year. when little Those achieve

Trevor Walsh

heading we kind side a Can modeling above forward? about that maybe of next into looked kind expectation XXXX of where seeing preliminary as us Great. the of just That's nice, around of guide, that you're going give helpful. some EBITDA think from house. of leverage around sense you And then kind also kind year of the

Alan Stewart

is Yes. again. Alan This Sure.

one, the the acquisitions of are them, some still said several well. on. acquisitions, in couple investing. The we've still quarters, investing. things as other So last we're technology Number profitability the going as actual that we're grows we did, with there as revenue are And of new grows

to starting that. see we're So

If each what $X going one already, of in you counting almost just about bookings those. We're 'XX. that them, million talk X had have in additional to 'XX. $X PlateRanger having grow not even we've in helps us is And of million

going that's So to help.

some quite costs thought, appropriate, had add to and we a some as also actually reductions going bit well. that little small, that's but were We

a EBITDA are down going and the going is expenses improve. That's going to is little to adjusted actual revenue So how go categories. those grow, bit to in costs

Trevor Walsh

it. appreciate for last maybe I for And one Great. Ralph, one me, you.

out product maybe release month, ago City guys put study a You you of conjunction Oakland with last just a efficacy. press actually, months around now couple a the of did around in

of of there? study Just type of rationale revised kind maybe questioning of some of of PR that getting -- you Just kind or that. of is tool just the put kind purpose city of that curious wondering of ahead doing other or of where kind the, potential the I what for of of being political kind the new see of guess, part kind your strategic playbook out more was kind overall

Ralph Clark

very much question. that for you question. Thank Yes. It's a great Yes.

lot the provides and scenes delivered as detection of we're law acoustic the ShotSpotter trying technology agency enforcement first them to story be to efficacy gun about crime. So value that helping their tell getting by intentional the around agency a a our responder more partners gunshot

gunshot XX% XX% unreported. response. like -- if important goes really gunfire incidents ShotSpotter, no an for of it's be that detection fundamentally, have people wasn't think to And would technology acoustic these understand would I that criminal it

these and now responding They're to finding care And that to first to police get these are so events. their or to fast seeing improved engagement a able victims save getting They're victims community quickly recovering because enabling see they're very these response precisely and responders communities quick, lives evidence. trauma centers scenes. to we're

it lost shuffle the And gets in sometimes.

day, data City with narrative story of meetings Oakland we from, it. There's value bit So little our is the of that noise around the say, council a of the do it Oakland. We're The proud Council, there. a and decision think, And but approval Council attention is a developing what fact activists, able unanimous get would made activists coming got that at kind we're dissenting we group vote partners -- facts out to But from Oakland. to helping fairly I them the almost a gathering to in were with appropriate large get small trying we city the us only people in and be small worked and trying the challenge end of well in by of for of were loud front to of that group and City agency progressive kind of the one should like paying those those ShotSpotter. why really very place city.

a playbook hopefully, renewal So line come agencies across that's their to things the tell places good that harbinger other of better. of well, within with story helping as getting that

Operator

the the question-and-answer over We comments. the have to back Ralph call reached session. And I'll end of turn closing for now Clark

Ralph Clark

pleased to thank us colleagues, summary, performance with are you my you XXXX. and today, support. partners quarter's who Thank the to heading we for their for our clients and excited opportunities into SoundThinking everyone and In joined

We your and focused We in you today you. continue coming interest to for appreciate look and to maximizing on on insightful We for progress have earnings quarters. investment us with forward continued and we'll call. outstanding in you sharing this value. Thank an joining company shareholder SoundThinking. questions all your the Thank our be

Operator

And concludes may and this Thank today's participation. time. for this you conference, lines disconnect at your you your

ShotSpotter (SSTI) 12 Nov 242024 Q3 Earnings call transcript