Executive Summary

Q4 2024 underwhelmed on reported results due to ~$3.5M of delayed NYPD renewals: revenue $23.4M (-10% y/y), gross margin 50% (vs 58% y/y), GAAP EPS $(0.32), Adjusted EBITDA $1.7M (7%) . Management stressed delays were administrative (registration) rather than demand-related and have since largely been resolved or are expected imminently .
Despite the Q4 timing impact, FY 2024 delivered record revenue of $102.0M (+10% y/y) and management raised FY 2025 guidance to $111–$113M revenue and 21–23% Adjusted EBITDA margin (from $107–$109M and 19–21% previously) .
Strategic wins underpin the outlook: a three-year ~$21.9M NYPD ShotSpotter renewal through Dec-2027, a new Chicago RFP for city-wide gunshot detection (company evaluating a response), and growing international activity (e.g., Brazil, South Africa, Uruguay) .
Near-term stock catalysts: confirmation of the remaining NYPD registration, Chicago RFP outcome, SafePointe pilot conversions (healthcare vertical) and ARR progress toward ~$110M at the start of 2026 from $95.6M entering 2025 .

What Went Well and What Went Wrong

What Went Well

Raised 2025 outlook: “We are raising our 2025 revenue guidance range to $111.0 million to $113.0 million… We are also raising our 2025 Adjusted EBITDA margin guidance range to 21% to 23%” .
NYPD multi‑year renewal and momentum: “successfully executed a 3‑year contract renewal of approximately $21.9 million securing the ShotSpotter service for NYPD through December of 2027” . International pipeline strengthened with new city captures and expansions (e.g., Niterói, Nelson Mandela Bay, Montevideo) .
Platform progress and AI: Management emphasized integrating “AI-driven capabilities” across the SafetySmart platform; SafePointe advanced with 3D camera integration and SOC2/HIPAA, helping land pilots at two top‑10 hospital chains .

What Went Wrong

Q4 timing-driven miss optics: Revenue fell to $23.4M (from $26.0M y/y), gross margin compressed to 50% (from 58%), and GAAP EPS swung to $(0.32) from $0.28–$0.29 y/y due to ~$3.5M delayed NYPD renewals and continued service delivery without revenue recognition .
Higher operating expense optics y/y: Q4 opex rose to $15.5M vs $10.6M y/y; the prior-year quarter benefited from a $4.8M reduction in contingent consideration (Forensic Logic/SafePointe) .
Chicago loss still a drag and funding noise: Chicago contract ended in Q4 2024; while a new city-wide RFP was issued (evaluating response), the loss weighs on y/y comparisons; management also noted ARPA funds are drying up, requiring creative funding (e.g., state-level programs) .

Financial Results

Quarterly performance (sequential view)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($M)	$27.0	$26.3	$23.4
GAAP EPS ($)	$(0.06)	$(0.11)	$(0.32)
Gross Margin (%)	60%	58%	50%
Adjusted EBITDA ($M)	$5.1	$4.5	$1.7
Adjusted EBITDA Margin (%)	—	17%	7%
Cash & Equivalents ($M)	$9.8	$15.3	$13.2
Deferred Revenue ($M)	$49.4	$49.5	$44.2

Q4 year-over-year

Metric	Q4 2023	Q4 2024
Revenue ($M)	$26.0	$23.4
Gross Profit ($M)	$15.0 (58%)	$11.7 (50%)
GAAP EPS ($)	$0.29 basic; $0.28 diluted	$(0.32)
Adjusted EBITDA ($M)	$4.8	$1.7

Full-year

Metric	FY 2023	FY 2024
Revenue ($M)	$92.7	$102.0
Gross Profit ($M, %)	$52.7 (57%)	$57.9 (57%)
GAAP Net Income (Loss) ($M)	$(2.7)	$(9.2)
Adjusted EBITDA ($M)	$14.3	$14.4
Revenue Retention Rate (%)	107%	105%
ARR at start of year ($M)	$95.4 (Jan 1, 2024)	$95.6 (Jan 1, 2025)

Additional Q4 balance sheet and operating items

Accounts receivable & contract assets: $25.2M; debt: $4.0M; ~$21.0M available on credit facility .
Deferred revenue breakdown: $38.4M short-term; $5.8M long-term .

KPIs and operating highlights

KPI	Period	Value
“Go‑live” activity	Q4 2024	3 new cities, 1 new university, 7 expansions
ShotSpotter miles deployed	FY 2024	126 new miles; ~30 recaptured in Puerto Rico
Bookings (net new + renewals)	FY 2024	$75.7M ACV; 59% multiyear
2025 qualified ACV pipeline	As of YE 2024	~$50M; ~62% nondomestic ShotSpotter
Net Promoter Score	FY 2024	66 (up from 64)

Notes on non‑GAAP: Adjusted EBITDA excludes interest, taxes, D&A, stock‑based comp, acquisition-related expenses and contingent consideration revaluation; reconciliations provided in exhibits .

Guidance Changes

Metric	Period	Previous Guidance	Previous Source	Current Guidance	Current Source	Change
Revenue ($M)	FY 2025	$107–$109	Q3’24 8‑K	$111–$113	Q4’24 8‑K	Raised
Adjusted EBITDA Margin (%)	FY 2025	19%–21%	Q3’24 8‑K	21%–23%	Q4’24 8‑K	Raised
ARR ($M)	Start of 2026	—	—	~ $110 by start of 2026	Q4’24 8‑K	New disclosure

Management also reiterated confidence in 2025 growth even excluding Chicago’s ~$9.7M 2024 revenue headwind .

Earnings Call Themes & Trends

Topic	Q2 2024 (Q‑2)	Q3 2024 (Q‑1)	Q4 2024 (Current)	Trend
AI/technology across platform	Detailed ML usage in ShotSpotter; AI roadmap for SafePointe (3D camera; object classification)	Enhanced AI‑driven software/hardware; SOC2/HIPAA in process for SafePointe	“Integration of AI‑driven capabilities” central to 2025 plan	Increasing emphasis
Chicago	Non‑renewal factored; service to end late Sep; formal termination in Nov	Confidence in growth despite loss	New city‑wide RFP issued; evaluating response	Stabilizing/Opportunity
NYPD	Expect renewal at ~90+ square miles at similar pricing	—	Two renewals delayed; one signed/registered; second in NYC registration; 3‑year ~$21.9M renewal	Resolved/Positive
SafePointe	Pipeline strong; sales delayed pending 3D camera; Sept feature release	AI upgrades underway; certifications progressing	Q4 bookings >$3M; pilots at two top‑10 hospital chains; contributes to 2025 guide	Improving
International	Opportunities in Brazil/South Africa; expanding outside U.S.	Montevideo expansion (Uruguay)	New cities (e.g., Niterói), Puerto Rico recapture; pipeline 62% nondomestic	Expanding
Funding/macro	—	—	ARPA funds drying; shift to state support (NJ, NY) and private funding creativity	Monitored

Management Commentary

“Innovation and consistent execution… enabled us to achieve record revenue of $102.0 million for the full year 2024 despite having to delay approximately $3.5 million in revenues from being recognized in the fourth quarter” .
“We are raising our 2025 revenue guidance range to $111.0 million to $113.0 million… We are also raising our 2025 Adjusted EBITDA margin guidance range to 21% to 23%” .
On NYPD renewal: “successfully executed a 3‑year contract renewal of approximately $21.9 million … through December of 2027” .
On Chicago: “Chicago issued a formal RFP for gunshot detection technology to potentially cover the entire city… we are… evaluating a potential response” .
On AI and platform: plan to “continue innovating… particularly through the integration of AI‑driven capabilities” to deliver more actionable insights . NPS improved to 66 from 64, underscoring customer advocacy .

Q&A Highlights

Chicago RFP/strategy: Management encouraged by the RFP but still “evaluating” a bid; emphasized leadership at scale in gunshot detection .
SafePointe contribution to 2025: Bookings ramped each quarter in 2024 (Q1 ~$0.5M, Q2 ~ $1.0M, Q3 >$1.0M, Q4 >$3.0M); some contribution is embedded in raised FY25 revenue guidance .
Funding landscape: ARPA funding drying; management is pivoting with customers to state programs (e.g., NJ, NY) and private sources to sustain adoption .
ARR composition: From ~$96M to ~$110M by start of 2026, with $8–$9.5M of incremental growth expected from gunshot detection, balance from other products .
SafePointe verticals: Focus on healthcare and gaming (low‑friction detection), plus select corporate sites; pilots in two top‑10 hospital chains underway .

Estimates Context

S&P Global consensus estimates (EPS, revenue) were unavailable at time of access due to a data provider rate limit; as a result, comparison versus Street estimates is not included. Values would normally be retrieved from S&P Global and anchored for “beat/miss” analysis; future updates should incorporate this once access is restored. Values retrieved from S&P Global.*

Key Takeaways for Investors

Timing vs demand: Q4 underperformance was driven by administrative delays on two NYPD renewals (~$3.5M), not underlying demand; one contract has since been signed/registered and the other is in NYC registration .
Guidance momentum: FY25 revenue and margin guidance both raised, supported by ARR base ($95.6M entering 2025) and visibility into renewals/expansions and SafePointe contributions .
Contracts as catalysts: The executed NYPD 3‑year renewal (~$21.9M) and the outcome of the Chicago city‑wide RFP represent the most material near‑term narrative drivers .
Mix and diversification: International expansion (62% of 2025 ACV pipeline) and broader platform adoption (ResourceRouter, CaseBuilder, PlateRanger, SafePointe) reduce reliance on any single municipality .
Profit path: Management targets 21–23% Adj. EBITDA margin in FY25; watch gross margin re‑acceleration post‑NYPD registration and SafePointe scale effects after hospital pilots .
Cash/deferred revenue: Cash of $13.2M, deferred revenue of $44.2M, and $21M of credit capacity provide flexibility to execute while navigating government funding timing .
Risk checks: Municipal funding shifts (post‑ARPA), potential publicity/policy risk, and large‑city renewals remain watch‑items; management is leaning into state‑level funding and multi‑year bookings (59% of FY24 bookings) to mitigate .

SOUNDTHINKING, INC. (SSTI)·Q4 2024 Earnings Summary