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SI

SOUNDTHINKING, INC. (SSTI)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $28.35M, up 12% YoY, with ~$3.5M catch-up from two delayed NYPD renewals; GAAP EPS was -$0.12 and Adjusted EBITDA was $4.54M (16% margin). Both revenue and EPS beat Wall Street consensus, while EBITDA was impacted by one-time costs (company all-hands ~$0.7M) and higher AI-related cloud spend .
  • Guidance: FY25 revenue reaffirmed at $111–$113M; Adjusted EBITDA margin lowered to 20–22% (from 21–23%) due to tariffs and AI investments; ARR expected to grow from $95.6M (start of 2025) to ~$110M (start of 2026) .
  • Operational catalysts: ShotSpotter went live in four new cities and expanded with one customer; international pipeline highlighted (Brazil, Uruguay, South Africa); SafePointe seeing legislative tailwinds (CA AB 2975) and multiyear bookings momentum .
  • Near-term narrative: Management guided that Q2 revenue will step down before re-accelerating in Q3/Q4; consensus for Q2 may be too high (north of $27M viewed as “a little bit too high”) .

What Went Well and What Went Wrong

What Went Well

  • NYPD contract renewals: two delayed NYPD contracts signed (~$64M total over three years) drove ~$3.5M catch-up revenue; ShotSpotter renewed for three years through 2027, strengthening flagship credibility in the largest U.S. city .
  • SafePointe momentum and regulatory tailwinds: early traction with multiple hospital systems; AB 2975 mandates hospital weapon detection by 2027, creating a sizable addressable opportunity (~400 hospitals, ~4,000 lanes in CA at ~$20k per lane annually) .
  • Platform expansion and international pipeline: CrimeTracer AI features deployed; integration with PlateRanger ALPR; ShotSpotter deployments and expansions in Latin America (Brazil go-live expected; Uruguay doubled footprint) and South Africa opportunity emerging .

What Went Wrong

  • EBITDA margin guide cut: FY25 Adjusted EBITDA margin reduced to 20–22% (from 21–23%) due to tariff costs and increased AI modeling/tools spend (AWS/Azure), tempering profitability expectations .
  • One-time costs and higher cloud usage pressured Q1 EBITDA: company all-hands ($0.7M) and AI bandwidth costs ($0.2M) reduced Q1 EBITDA, leading management to state EBITDA was “a bit lower than consensus” .
  • Q2 revenue cadence softer than some models: management cautioned that Q2 revenue would likely decline sequentially from Q1 (reflecting catch-up in Q1), with acceleration into Q3/Q4, implying some consensus recalibration is needed .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$26.25 $23.41 $28.35
Gross Profit ($USD Millions)$15.22 $11.71 $16.59
Gross Margin (%)58% 50% 59%
GAAP Net Income (Loss) ($USD Millions)$(1.44) $(4.08) $(1.48)
GAAP Diluted EPS ($USD)$(0.11) $(0.32) $(0.12)
Adjusted EBITDA ($USD Millions)$4.49 $1.72 $4.54
Adjusted EBITDA Margin (%)17% 7% 16%

Actual vs. Consensus (Q1 2025)

MetricConsensusActual
Revenue ($USD)$26.91M*$28.35M
EPS ($USD)$(0.145)*$(0.12)
# of Estimates (Revenue / EPS)7 / 4*—

Values marked with * were retrieved from S&P Global.

KPIs and Balance Sheet

KPIQ3 2024Q4 2024Q1 2025
ARR at period start ($USD Millions)—$95.6 (start of 2025) Reaffirmed trajectory to ~$110 at start of 2026
Deferred Revenue ($USD Millions)$49.5 $44.2 $45.4
Cash & Cash Equivalents ($USD Millions)$15.26 $13.18 $11.66
Accounts Receivable & Contract Assets ($USD Millions)$25.86 $25.17 $29.49
Debt ($USD Millions)$4.0 $4.0 $4.0
Share Repurchases284,790 shares for ~$4.0M (Q3) 418,940 shares for ~$6.0M (FY24) 33,493 shares for ~$0.5M (Q1)
ShotSpotter Go-Lives4 new cities + 1 university; 8 expansions (Q3) 3 new cities, 1 university, 7 expansions (Q4) Went live in 4 new cities; 1 expansion (Q1)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$111.0–$113.0 $111.0–$113.0 Maintained
Adjusted EBITDA Margin (%)FY 202521%–23% 20%–22% Lowered
ARR ($USD Millions)Start of 2026~$110.0 ~$110.0 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
AI/Technology InitiativesSafePointe next-gen; SOC2/HIPAA progress Leveraging AI/ML across platform; SafePointe next-gen pilots at top-10 hospital chains CrimeTracer generative AI features; LLMs/agents; integrating ALPR; expanding AI modeling/tools spend Accelerating
Tariffs/MacroLimited direct commentaryMacro headwinds acknowledged; diversification EBITDA margin cut partly due to tariffs; vigilance on municipal budgets; ARPA funds drying Cautious
Product Performance (ShotSpotter)4 new cities + 1 university; 8 expansions NYPD renewal (3 years, ~$21.9M ShotSpotter); Puerto Rico re-established 4 new cities went live; international pipeline (Brazil/Uruguay/South Africa) Positive
SafePointe (Weapon Detection)Next-gen upgrade; pipeline strong; Nvidia edge supply watched Top-10 hospital pilots; multiyear bookings ramp (Q1–Q4) AB 2975 mandates; pricing ~$20k/lane; addressable ~4,000 lanes in CA Expanding
Regional Trends (International)Uruguay expansion; Latin America pipeline; Chicago RFI context Brazil (Niteroi), South Africa (Western Cape), Uruguay expansion; large non-U.S. pipeline Return to Brazil; Spanish/Portuguese references; late 2025/early 2026 timing Building
Regulatory/Legal (Chicago)Chicago RFI; loss of ~$9.2M in 2024; public debate Chicago RFP for multi-year citywide coverage; evaluating bid Bid submitted; outlook excludes Chicago; potential upside if awarded Uncertain/Optionality
R&D ExecutionSOC2/HIPAA; platform integrations Ongoing investment; higher R&D R&D ~$4.1M; AI modeling costs in R&D and COGS; expect near-term stabilization Investment Phase

Management Commentary

  • “Our first quarter revenues grew 12% year-over-year… There was approximately $3.5 million of catch-up revenue in the quarter based on the renewal of 2 delayed contracts with New York City Police Department, including ShotSpotter and Technologic, which totaled $64 million over a 3-year term.” — Ralph Clark, CEO .
  • “We are reaffirming our full year revenue guidance range of $111 million to $113 million, while slightly reducing our adjusted EBITDA guidance range to 20% to 22% to account for the modest impact of the current tariff regime along with investments we're making in AI modeling and tools.” — Ralph Clark, CEO .
  • “Our adjusted EBITDA was a bit lower than consensus estimates as we held our company all hands meeting, which cost over $700,000… and we are investing more in our AI capabilities as well.” — Alan Stewart, CFO .
  • “We are also excited about our early success in penetrating the commercial security market with SafePointe… We remain confident… in our path to achieve our long-term financial targets of 70% gross margin and 40% Adjusted EBITDA margin.” — Press release .

Q&A Highlights

  • Pipeline allocation and coverage: Sales pipelines across products are solid, with particularly strong ResourceRouter and CrimeTracer; targeting 3–4x coverage relative to ACV quotas .
  • SafePointe sales cycle and legislative impact: AB 2975 in CA represents a 2026 ramp, but traction is building in healthcare and gaming; pricing ~$20k per lane per year; multiyear deals and high-margin renewals expected .
  • PlateRanger bookings and revenue: Expect bookings in the “$1M+ range” for 2025 and a significant revenue increase in 2026, with marketing efforts to accelerate adoption .
  • Quarterly cadence: Management suggested Q2 revenue should decline sequentially from the catch-up-heavy Q1; Q2 consensus north of $27M was flagged as “a little bit too high,” with acceleration expected into Q3/Q4 .
  • Margin mechanics: Gross margin expected around ~59% for the year; investments in sensors and AI cloud bandwidth will pressure COGS and OpEx, but overall OpEx should grow less than revenue .

Estimates Context

  • Q1 2025: Revenue beat ($28.35M vs. $26.91M*) and EPS beat (-$0.12 vs. -$0.145*); 7 revenue and 4 EPS estimates contributed to consensus .
  • Revisions outlook: Management indicated Q2 revenue may be below certain models, suggesting consensus reductions are likely; full-year revenue guidance was reaffirmed, while EBITDA margin guidance was cut 100 bps at midpoint .

Values marked with * were retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue/EPS beat in Q1 was aided by ~$3.5M catch-up from NYPD renewals; underlying momentum across ShotSpotter and platform solutions remains intact .
  • FY25 revenue guidance unchanged ($111–$113M), but EBITDA margin trimmed to 20–22%; near-term margins reflect tariffs and AI investment, with long-term targets (70% GM, 40% EBITDA) reiterated .
  • Expect a sequential revenue dip in Q2 due to Q1 catch-up; re-acceleration into Q3/Q4 as SafePointe and international deployments contribute — a setup for estimate and quarterly cadence recalibration .
  • SafePointe has a multi-year legislative tailwind (AB 2975) and attractive economics (~$20k/lane, quicker deployment than ShotSpotter), positioning the company for mix diversification and margin leverage over time .
  • International optionality (Brazil, Uruguay, South Africa) and Chicago RFP provide upside optionality not embedded in 2025 guidance; management’s outlook excludes Chicago, making any award incremental .
  • Operating discipline: Deferred revenue stable at $45.4M; cash $11.7M; continued share repurchases ($0.5M in Q1) signal capital return despite investment cycle .
  • Near-term trading lens: Watch Q2 guide color and SafePointe bookings conversion; monitor Chicago RFP and international go-live timing as catalysts for narrative and estimate revisions .