SSTI - Earnings call transcript Q4 2024

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Operator

Good afternoon, and welcome to Sound Thinkings Fourth Quarter and Full Year 2024 Earnings Conference Call. My name is Diego, and I will be your operator for today's call.

Joining us are sound thinking 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 Sound thinking's business strategy and future financial and operating performance. materially only that are and are actual to are uncertainties to may statements or results assumptions stated and difficult differ forward-looking predictions those subject and risks, cause implied These by those statements. from to predict

risks management's these to discussed are predictions revise this date after thinking of obligation beliefs, including estimates assumptions of SEC S-X. These call. in on broadcast, the registration undertakes and to statement statements XXXX February and the this Form thinking's forward-looking circumstances filings, of update Certain Sound this sound statements reflect and or reflect live XX, of or forward-looking any no events as date

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

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

Ralph Clark

us XXXX our providing our we questions. Good commentary financial in for initiatives. you results Sound and year-end on with joining afternoon, results by then will Al before start strategic for financial more I'll XXXX . along QX take and an everyone, some our detail Call. QX update today Thinkings's key your on thank review high-level Earnings

isolated XXXX year for financial some and successfully it Sound we is operational Thinking was the headwinds. and of in through pushed progress books a measurable strategic, even as

approximately $X.X prior or in been York a have decreased XX% New contract NYPD to million, of by due year-over-year million XXXX. revenue on renew we QX to due $XX.X working that Our Department QX contracts expiration to to delay Police City with to X primarily

XX and is command political to delay is next This and staff. City's in and signed X XX its through in currently the recent NYPD February, well-documented personnel York distractions expected related and the to and the this of contracts registered city some One New be days. the was in process working way turnover formally directly the registration to formal signed of other

grew security ever-increasing by be as million footprint that, and the very live. for this record XX our safety to X across recognized Despite is pipeline and law and outcomes million. agreements. In booked $XXX we strong We're pleased live $XX.X our XX% enforcement We demands MotoVadeo-Uraguay. of new reflection full new and a in safety the of public Safety doubling expansions respond renewal to and ACV subscription-based Overall, cities, universities, solutions XXXX security new in communities accountable our and bookings organizations city we XXX Africa to growth delivering took momentum, in XX the XX% accountable and Niteroi still the bookings revenue went South in net believe demand XXXX, an year including miles more with to in expansion agencies protect. Smart and and representing those to Brazil, ShotSpotter Nelson International new Bay, Mandela multiyear XXXX We captures ShotSpotter in responsive they are serve platform a public with

ShotSpotter large sales testament a a untapped believe of U.S. and our international the momentum of effectiveness outside is to market virtually the in

recent Brazil. opportunities We on be the to in Caribbean building and future soon in collective new and American expect cities international Uruguay markets, in to see Bahamas, our Latin successes

in XX We mile this square Puerto were deployment of to year. also pleased approximately QX Rico ShotSpotter very in reestablish our

on communities compelling the need opportunities we miles other given island. grow believe there gun and ShotSpotter XX Here, beyond Puerto the too, may and Rico current have addressing in responding the cities to in the footprint to square be violence

formal to in a RFP In a Chicago November. ShotSpotter technology Chicago very development, operationally service formal late contract in April. up week a concluded detection of due recent our city X this entire in a the September formal As are held X-year in was miles XXX last submissions termination issued term cover for extensions. with bid square a for gunshot reminder, potentially with Conference X-year to

evaluating the of potential lives. the a speed that a response need, has would process we're time While positive saving in detection the line that communities testament only compressed note to we and the Chicago is, detection also RFP on not but gunshot the in and compelling of fact, gunshot impact

NYPD X-year indicative And we $XX.X renewal extends provide. securing our ShotSpotter of service and of to close NYPD XX partnership value customer. the for of as approximately our earlier, are our mentioned a have successfully largest million years the contract XXXX. December is long-term ShotSpotter ShotSpotter thrilled currently relationship at services to The renewal through is of executed and scale

in and discussed the to our is technological capabilities execute what public to Investor in we Day, scale at our ability us proven marketplace. XXXX drive safety As differentiates

launched chains chains. multimillion-dollar in other uniquely competitively once past we generation XXXX, with X platform platform investments successfully billings SafePoint Our our will status their both with for in XX success XD to of a the Detection on corporate are making which is advanced be pilot integration X about positioned separate early in that compliance hospitals. and top added drive United the road and camera optimize these we leveraging chains and to order capabilities stage, institutions, hospitals factors The security chains and critical that recent X AI/ML solutions. enhanced including various Safety advanced hopeful We're securing States features offering locations. while leveraging wins intentional solutions HIPAA hospital Smart in Weapons positioned included in we're we're we moved number ACV to SocX contract the the hospital very and map pilot and In based of next when our hospital were System, adopter next-gen excited the SafePoint

efficient, fuel in and fashion. is XXX% whole fit value, operations. that has comprehensive public positive be grow sales approximately both the tool safety by category the product XXXX patrol real-time is customer Early strong impact within delivering traction. of to equitable this impact enhances challenge. has a the to very market and and tool, that very effective an is and excited Resource complex police is can the XXXX the in fact pioneering division management been is The operations outcomes research on largest pipeline. a leading Our believe million objective field. in in management Resource and patrol ASP typically of router information on agency's accessible provides patrol from only continuing a public that ensuring about and router in portions actionable department and transparent patrol $X We market data-driven new represents in patrol supported XXXX router budget growth that relevant an officer the easily and enabled feedback strong We're safety and

or Ranger highly our We XXXX, offerings. offering seamless offerings, to rollout automatic recognition the Safety we announced be platform. to with integration strategic with nonsound-thinking is Plate collaborative into license integrate Smart our Plate respect solution, believe In also fully with our along plate of with co-branded for differentiated Smart approach our other our to our with integrated Systems Ranger, which partnership the ALPR Recourse Safety

more are progressing still early year the our partnership, discussing progresses. on and well, this forward the to in While with as we look we days

new In have launches enhancements terms market our strengthened positioning, initiatives, our of strategic ongoing and offerings. product

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

XXXX notable XX-plus X:X in As since to industry. customers, of processed nonrenewals, world considered a over to a compared over year-to-date, has only ShotSpotter and added executed a or renewals ratio expansions which class non-renewals. of reminder, It's XXX any XX XX renewals score over to effectively also annualized company higher the is XX is new

on growth recurring $XX.X well to believe approximately nondomestic build annual of As XXXX million of pipeline for had of or qualified XXXX in across we platform. efforts. that our our pipeline, XXXX We're ShotSpotter intentional Chicago that successful entering pipeline with of our We to beyond. diversification XXXX XX% funnel the $XX Smart activities pipeline revenue, generation nonrenewal despite November year-end signaling ACV XXXX, XXXX. making was continue revenue our top we investments in given Approximately in of of demand and are ARR, positioned drive to Safety million

are year $XXX revenue to full representing million to As our million, such, $XXX guidance growth. increasing approximately we XX% year-over-year

revenue full XX%. range to last to Chicago to forma from from our XXXX year adjusted we margin also have If grow include increasing EBITDA it XXXX, been XX%. to the would guidance year XXXX XX% revenue pro were to We're our

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

of in summary, achievements productive Thinking, our Sound and moving grit in was our forward purpose. showcasing collective and a for In transformative year highlighted Milestone by XXXX the

financial our forward. about challenges the of very some to are growth strategies market immune constructive and we across respect not and are moving proactive opportunities conditions, we're While with to strategic the

guidance excellence, our and over with now and committed in XXXX leadership. for to financial the as results to innovation detail. impact. We for remain the passion market pleased as a more I'll to call public Alan our quarter turn on unrelenting XXXX through safety We're making our well advancing discuss operational financial fourth performance, full and positive product year

Alan Stewart

Thank quarter you, year-end fourth Ralph, and our good with results. pleased afternoon, and We're XXXX everyone.

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

record $XX million, $XX.X quarter, million representing the of fourth a fourth quarterly XX% XXXX. decrease the in In the were over revenues quarter

and the has working through and mentioned, is of amount. Police million all contract an delay second next with by in the signed already New Ralph impacted City's expected renewal the financial One York the the primarily approximately process ShotSpotter our New were due of XX registration and same contract X Department, As quarterly way to reflecting currently formal to for contracts delayed been our awarded revenue days. its York $X.X XX of reduction results renewal,

or Safety solutions, period. also healthily. are Bookings of was profit XX% multiyear contracts million or which Smart of year for our of $XX growing million some revenue the are all XX% prior Gross $XX.X versus of revenue of platform

compared $X.X fourth XXXX. was adjusted million EBITDA Our of $X.X in the to million quarter

was Our delayed adjusted directly to related contracts. EBITDA decrease

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

Our Sales and line with in marketing our the million total of $X.X the XXXX. or operating XX% to the value of fair $XX.X XXXX million including the XX% of to change related million were quarter revenues our expenses of million of or quarter $X.X revenues compared year total expense in or consideration prior revenue down fourth revenue, or in $X.X in Breaking was million of after $XX.X expenses. versus in XX% fourth acquisitions XX% period.

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

than expect less basis a our As grow G&A a our to reminder, revenue our on grows. we expenses company percentage as

related loss $X.XX per $X.X a and Our basic or The was based basic operating increased we the on income adding shares average perform and a share at the diluted $X.XX period. XX.X outstanding weighted G&A diluted $X.X prior continue delay on $X.XX approximately of million loss expense or services diluted net of loss associated basic $X.X contract to the revenue. to and shares diluted compares based shares and the quarter, renewals to customers and per COGS in net weighted outstanding. million as basic XX.X million for million also approximately This share the without a XX.X the average of per million of for year was million request the

contract matching a XX% the we $XXX achieved to primarily guidance delays, to Gross our to Having and increase NYPD in $XXX.X of continue results. increase in million adding provide cost over million associated $XX.X of XX% due the million have or million revenue profit prior $XX.X goods versus renewal not a in sold customer XX% delays a XXXX the without as for record the revenue the services XXXX. the $X.X Revenues original was the Turning renewal at expanding Gross revenue revenues or contract had for was in profit new over full by we of approximately request of revenue, XXXX. also the representing year revenue The revenue. were to expense expect the was period. $XX.X million impacted subscriptions. million customer

we million million, XXXX. the $XX.X Our adjusted EBITDA $XX.X line was achieved with in in

or associated million consideration revenues SafePoint a the $XX.X million expenses continued We adjustment of in XXXX or XX% increased XXXX. $X.X and of operating Our of $XXX,XXX million XX% acquisitions. Logic Forensic XX% revenues to and in XXXX versus had $XX with in

year SafePoint of XXXX. expense In months addition, in full XXXX included X for operating expenses included a versus of owning

We in increase XXXX also business. had continue in we other to our as an costs grow

sales revenue, our of expenses, prior $XX.X period. in was million Breaking the and total marketing in down million year expense compared to total or XXXX of revenue XX% with or $XX line XX%

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

company than less a our on reminder, expect grows. our basis our a revenue As we percentage expense as to grow G&A

a loss based on net million the revenue on delay million loss form basic $X.X The period. year increased and for diluted services. compares net weighted the loss the diluted per also of and diluted continue approximately and in shares the per This approximately to shares GAAP loss to or outstanding XX.X basic or year XX.X a million for to the of average diluted weighted $X.XX basic $X.XX shares was $X.X prior related outstanding. of Our year the basic average $X.X for share and million was as we based million

Revenue our XXXX. dollar $XX.X retention million was at annualized XXXX per of as marketing line XXX% achieved and end value XXXX, $X.XX XXXX. XXXX to and in revenue in to spend in compared new for of Deferred QX sales to compared $X.XX at XX, rate December compared the largely $XX.X XXX% contract million of was

have much year for approximately the throughout all of the XXXX. of versus million at average the XXXX. our we of an we Currently, cash our ended at $XX.XX $X in our and on in the $X.X at that have higher XXX, had million approximately price QX $XX.X with line end million on XXXX million outstanding, than We shares $XX.X approximately end $XX of and credit. of We million repurchased we $X debt as million cash XXX line available of credit equivalents

our the of turning to XXXX. year Now guidance for full

are We revenue full $XXX range $XXX million. guidance our to increasing year million to

margin in to and XX%. approximately business guidance increasing guidance XX% our year XXXX of our loss of reflects full experiencing loss updated the also adjusted We are EBITDA in are spite in strength we $X.X the to the Chicago range momentum XXXX. This the contract of million for

are the Overall, initiatives the of strategic and performance we have made our we with operational of pleased progress on business. each

questions. With happy for open will line the Q&A. that, you open Operator, the now call for we're to please

Operator

[Operator Instructions] Trevor Our Walsh question JMP. first with comes Citizens from

Trevor Walsh

were just the new maybe you, in around when a for on you bid of putting the were maybe the kind sounded maybe I Ralph, heard kind confirm just maybe of you're there. replying Chicago prior you how it like versus kind that that the explain fence engagements if giving you that update around RFP correctly, thinking of city about with Can engagement that. kind within of or maybe

Ralph Clark

you Sure. for Yes. question. Thank that

the extraordinarily our first think Chicago say to that we're thing I actually system. encouraged still an But detection are RFP response. evaluating would is for we I a potential issue gunshot see

about we're we in can the proven solution the been a that made I we with best marketplace haven't are gunshot very detection yet. where at fact are that's . formal confident you But scale, that assure has extraordinarily We Chicago. and decision that the

Trevor Walsh

it. Got

a quick then, Alan, for And just you. X Okay. maybe

of just for where is given in chains some the guidance that the they're in that multimillion Is XX? to sales cycle? out hospital the Or dollar about talked still at related You included with opportunities SafePoint.

Alan Stewart

important great $X QX, right was bit a it the Thank that. close SafePoint Yes. over million. QX QX little $X.X question. quarter, a now, Well, about that I and we've was each think for you $X That's over it's in million know more $X a QX was was bookings. little to in million. to million in gotten

Now bookings. multiyear these are bookings

talking to what they be but all an So aren't of of we're necessarily indicator going that's about. sort revenue, annual

some that increased are of for we to guidance, gave we So expecting 'XX. contribute the the guidance revenue to revenue those

Operator

question next Street Lake comes Capital. your And with Goldfarb from Bruce

Unknown Analyst

results. Are federal from government, those about your efforts? there? pipeline you or on disruption Any exposure Congratulations anticipating nervous any

Ralph Clark

Yes.

for then is thanks I'll So and start Alan This Ralph. that question. in as appropriate. jump

issues, I there sentiment to overall a really drivers think are that that's to ago. that probably the that that understaffing and and We've public maybe safety foremost. respect be is continues with understand. something years agencies. Understaffing receptive very last for a positive. second and policing probably really a to couple agencies third And multiplier. couldn't we're demand important we of first force seen is technology the it's have X said the shifted And important as to a point dramatically are to strong has leveraging challenge seeing And

back of we point, I to to very around of of funding well sources, kind have that's creative from means that, private issues are example try both backdrop are and which sector where a from. at question drivers. and of being do watching extraordinarily to that. So the we've go being the your funded the seen state that mean, beginning see New Jersey other budgets success we expect along our funds state be ARPA up, budgets to some to level as that that offsetting kind customers think, are increasingly I level, of initiatives moving to is as great We or what kind carefully the demand know the

sure work of in with light resources fact think understaffed more communities. example, work they be to local taking able to the another agencies where York with are is residents they state of their of protecting they're to much need the the make that kind have to New that responsibilities I they on

around So But ARPA would think attention got it's a not say. DOGE something impact. mitigate that paying impact, we're so that It's approaches more we've creative issue. much It's I we close to. can an help some

Operator

Markets. [Operator Mike our question with Capital comes next And Northland from Instructions] Latimore

Mike Latimore

incremental of your of how ARR that guidance how come of year, from Yes, detection terms you rough would the gunshot would in range category? can much the of much -- for a the give growth

Alan Stewart

to Alan. is be going ultimately increase. the which million, This from XX this $XXX point, would it's Sure. say Yes. we at around the around to, a is going significant I think

you will be the the some positive million We $X other it between other $X.X start international we've also somewhere detection, and to is is from around of coming that get. that expect expect. the gunshot we somewhere which the of Historically, rest including had and products, of if there. The million growth maybe would what is

Mike Latimore

And Great. Yes. detection weapon the area. then SafePoint on

would You that be detection. weapon for sort the Or couple where -- there health highlighted of seeing wins. care couple Is of #X a verticals top a of couple what here, the nice momentum? vertical you're are

Ralph Clark

where our vertical probably recognize out corporate Yes. that we're kind large is The of weapons detection, which particular some City Thanks couple we're unique on in manner, of the are versus wanting again, solutions. be financial to but both issue Because, walk you gaming our there. question. do health some that New gaming in low the centers. and financial are care deployed through to you York And a very for type institutions, health in an a solution have centers to lobby, were sites focused already X and could care, verticals if in world-class of friction very their doing other institutions it third very selected

Operator

time. remarks. the There closing Ralph back are hand at this no to for I'll floor Clark questions further

Ralph Clark

partners support, our thank Great. for into you you all heading against colleagues, thinking that clients XXXX we my and really believe growth this to strong to very us XXXX. of and for priorities your joined strategic our innovation execution everyone and momentum us defined sound gives and consistent Thank achievements today,

with to and simple questions in to want value. Thank be Soundthinking. you continued your We your focused joining on us maximizing great an you shareholder I for outstanding forward sharing today We and and you, the have and call. continue thank We company earnings of all for quarters. to interest this a coming will investment have look our in appreciate day. progress on

Operator

today's Thank call. disconnect. concludes parties day. may you. All a This Have good

ShotSpotter (SSTI) 25 Feb 252024 Q4 Earnings call transcript