SoundThinking, Inc. Reports First Quarter 2025 Financial Results
- Revenue grew 12% YoY to $28.3 million
- Net loss improved to $1.5 million from $2.9 million YoY
- Adjusted EBITDA increased to $4.5 million (16% of revenues) from $3.0 million (12%) YoY
- Expanded to 4 new cities and grew with 1 existing customer
- Strong cash position with $11.7 million in cash and $21.0 million available credit facility
- Reduced FY 2025 Adjusted EBITDA margin guidance from 21-23% to 20-22%
- Operating expenses remained high at $17.8 million
- Uncertainty around Chicago ShotSpotter contract renewal
- $4.0 million in debt from SafePointe acquisition
Insights
SoundThinking delivered solid Q1 growth but reduced EBITDA guidance shows profitability challenges despite revenue momentum.
SoundThinking posted 12% revenue growth to
The company maintained its
The narrowing net loss (
Their ARR metric (
The company's expansion beyond gunshot detection into commercial security with SafePointe represents a promising TAM expansion opportunity, though execution in this competitive market remains unproven. The ongoing share repurchase program (
Balance sheet indicators remain reasonable with
Revenues Increased
Company Reaffirms FY 2025 Revenue Guidance Range of
Company Reaffirms Expectation for ARR1 to Increase from
FREMONT, Calif., May 13, 2025 (GLOBE NEWSWIRE) -- SoundThinking, Inc. (Nasdaq: SSTI), a leading public safety technology company, today reported financial results for the first quarter ended March 31, 2025.
First Quarter 2025 Financial and Operational Highlights
- Revenues increased
12% to$28.3 million , compared to$25.4 million for the same quarter of 2024. - Gross profit increased
11% to$16.6 million (59% of revenues), compared to$14.9 million (59% of revenues) for the same quarter of 2024. - GAAP net loss totaled
$1.5 million , compared to GAAP net loss of$2.9 million for the same quarter of 2024. - Adjusted EBITDA1 totaled
$4.5 million (16% of revenues), an improvement compared to$3.0 million (12% of revenues) for the same quarter of 2024. - Went “live” in four new cities and expanded with one existing customer.
- Repurchased 33,493 shares of common stock for approximately
$0.5 million as part of an existing$25 million share repurchase program.
1 See the section below titled “Non-GAAP Financial Measures and Key Business Metrics” for more information about Adjusted EBITDA and its reconciliation to GAAP net income (loss) and more information about Annual Recurring Revenue (ARR).
Management Commentary
“I am pleased with our strong performance to start 2025 as our first quarter revenues grew
“We continue to focus on advancing our offerings while making strategic investments in innovative machine learning and AI technologies in order to provide more value to the end markets we serve. We are seeing validation of our strategic approach in the marketplace, and believe our technology innovations continue to extend our leadership position. The public safety and commercial security landscape continues to evolve, and we believe SoundThinking is resiliently positioned to lead that evolution through technology innovation and trusted partnerships with our customers. We remain confident in our strategies, vision and in our path to achieve our long-term financial targets of
First Quarter 2025 Financial Results
Revenues for the first quarter of 2025 were
Gross profit for the first quarter of 2025 was
Total operating expenses for the first quarter of 2025 were
Net loss for the first quarter of 2025 totaled
Adjusted EBITDA for the first quarter of 2025 totaled
At quarter end, the company had
The company repurchased 33,493 shares of its common stock at an average price of
Financial Outlook
The company reaffirmed its full-year 2025 revenue guidance range of
“We expect to deliver both revenue growth and increased profitability in 2025, even without a ShotSpotter contract renewal in Chicago,” added Clark. “We await the outcome of the current gunshot detection RFP process that is underway, and believe our submission represents a comprehensive and compelling proposal. Our long-term financial targets of
The company’s financial outlook statements are based on current expectations. The preceding statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under “Forward-Looking Statements” below. The company has not reconciled its Adjusted EBITDA outlook to GAAP net income (loss) due to the uncertainty and variability of interest income (expense), income taxes, depreciation and amortization, stock-based compensation expenses, and acquisition-related expenses, including adjustments to the company’s contingent consideration obligation, which are reconciling items between Adjusted EBITDA and GAAP net income (loss). Because the company cannot reasonably predict such items, a reconciliation to forecasted GAAP net income (loss) is not available without unreasonable effort. Such items could have a significant impact on the calculation of GAAP net income (loss). For more information, see “Non-GAAP Financial Measures and Key Business Metrics” below.
Conference Call
SoundThinking will hold a conference call today May 13, 2025 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss these results and provide an update on business conditions.
SoundThinking management will host the presentation, followed by a question-and-answer period.
U.S. dial-in: 1-877-407-8029
International dial-in: 1-201-689-8029
Conference ID: 13752871
A live audio webcast of the conference call will be available in listen-only mode simultaneously and available for replay via the investor relations section of the company’s website at www.soundthinking.com.
Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization.
A replay of the call will be available after 7:30 p.m. Eastern time on the same day through Tuesday, May 27, 2025.
U.S. replay dial-in: 1-877-660-6853
International replay dial-in: 1-201-612-7415
Replay ID: 13752871
Non-GAAP Financial Measures and Key Business Metrics
Adjusted EBITDA: Adjusted EBITDA, a non-GAAP financial measure, represents the company’s net income (loss) before interest (income) expense, income taxes, depreciation, amortization and impairment, restructuring costs and losses on restructuring related fixed asset disposals, stock-based compensation expense and acquisition-related expenses, including adjustments to the company's contingent consideration obligation. Adjusted EBITDA is a measure used by management internally to understand and evaluate the company’s core operating performance and trends across accounting periods and in connection with developing future operating plans, making strategic decisions regarding the allocation of capital and considering initiatives focused on cultivating new markets for its solutions. In particular, the exclusion of these expenses in calculating Adjusted EBITDA facilitates comparisons of the company’s operating performance on a period-to-period basis.
SoundThinking believes adjusted net income (loss) and Adjusted EBITDA also provide useful information to investors and others in understanding and evaluating its operating results in the same manner as its management and board of directors. For example, SoundThinking adjusts EBITDA for stock-based compensation expense and acquisition-related expenses because such expenses often vary for reasons that are generally unrelated to financial and operational performance in a particular period. Stock-based compensation is utilized by SoundThinking to attract and retain employees with a goal of long-term retention and the alignment of employee interests with those of the company and its stockholders, rather than to address operational performance for any particular period’s financial performance measures, in particular net income (loss), or its other GAAP financial results.
The following table presents a reconciliation of GAAP net loss, the most directly comparable GAAP measure, to Adjusted EBITDA for each of the periods indicated (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| GAAP net loss | $ | (1,484 | ) | $ | (2,909 | ) | ||
| Less: | ||||||||
| Interest expense, net | 12 | 122 | ||||||
| Income taxes | 100 | 114 | ||||||
| Depreciation and amortization | 2,470 | 2,538 | ||||||
| Stock-based compensation expense | 3,404 | 2,927 | ||||||
| Impairment of property and equipment | 37 | 252 | ||||||
| Adjusted EBITDA | $ | 4,539 | $ | 3,044 | ||||
Annual Recurring Revenue (ARR): ARR is calculated for a year based on the expected GAAP revenue for the year from contracts that are in effect on January 1st of such year, assuming all such contracts that are due for renewal during the year renew as expected on or near their renewal date, and including contracts executed during the year after January 1st, but for which GAAP revenue recognition starts January 1st of the year. ARR is used by management internally to provide a clearer picture of its sustainable revenue base. SoundThinking believes ARR provides useful information to investors and others in understanding and evaluating growth of its recurring services because recurring revenue is particularly relevant for businesses operating under a subscription model, where customer retention and contract renewals play a significant role in long-term financial performance.
Forward-Looking Statements
This press release and earnings call referencing this press release contains "forward-looking statements" within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the company’s expectations for its estimated revenue and Adjusted EBITDA, including revenue growth and increased profitability, for 2025, the company's expectations for the increase in its ARR, its long-term financial targets, the company’s growth opportunities ahead, ability to drive profitable growth and build upon existing contracts and partnerships, including in the United States and internationally, operating momentum, sales pipeline, and accelerating adoption of the company’s SafetySmart platform. Words such as "expect," "anticipate," "should," "believe," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "could," "intend," or variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the company’s control. The company’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: the company’s ability to successfully negotiate and execute contracts with new and existing customers in a timely manner, if at all; the company’s ability to maintain and increase sales, including sales of the company’s newer product lines; the availability of funding for the company’s customers to purchase the company’s solutions; the complexity, expense and time associated with contracting with government entities; the company’s ability to maintain and expand coverage of existing public safety customer accounts and further penetrate the public safety market; the potential effects of negative publicity; the company’s ability to sell its solutions into international and other new markets; the lengthy sales cycle for the company’s solutions; changes in federal funding available to support local law enforcement; the company’s ability to deploy and deliver its solutions; the company’s ability to maintain and enhance its brand; and the company’s ability to address the business and other impacts and uncertainties associated with macroeconomic factors, including tariffs and trade measures, as well as other risk factors included in the company’s most recent annual report on Form 10-K and other SEC filings. These forward-looking statements are made as of the date of this press release and are based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Except as required by law, the company undertakes no duty or obligation to update any forward-looking statements contained in this press release and the earnings call referencing this press release as a result of new information, future events or changes in its expectations.
About SoundThinking, Inc.
SoundThinking, Inc. (Nasdaq: SSTI) is a leading public safety technology company that delivers AI- and data-driven solutions for law enforcement, civic leadership, and security professionals. SoundThinking is trusted by more than 300 customers and has worked with approximately 2,100 agencies to drive more efficient, effective, and equitable public safety outcomes. The company’s SafetySmart™ platform includes ShotSpotter®, the leading acoustic gunshot detection system; CrimeTracer™, the leading law enforcement search engine; CaseBuilder™, a one-stop investigation management system; ResourceRouter™, software that directs patrol and community anti-violence resources to help maximize their impact; SafePointe®, an AI-based weapons detection system; and PlateRanger powered by Rekor, a leading ALPR solution. SoundThinking has been designated a Great Place to Work®company.
Company Contact:
Alan Stewart, CFO
SoundThinking, Inc.
+1 (510) 794-3100
astewart@soundthinking.com
Investor Relations Contacts:
Ankit Hira
Solebury Strategic Communications for SoundThinking, Inc.
+1 (203) 546 0444
ahira@soleburystrat.com
| SoundThinking, Inc. Condensed Consolidated Statements of Operations (In thousands, except share and per share data) (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | 28,349 | $ | 25,410 | ||||
| Costs | ||||||||
| Cost of revenues | 11,718 | 10,271 | ||||||
| Impairment of property and equipment | 37 | 252 | ||||||
| Total costs | 11,755 | 10,523 | ||||||
| Gross profit | 16,594 | 14,887 | ||||||
| Operating expenses | ||||||||
| Sales and marketing | 7,259 | 7,112 | ||||||
| Research and development | 4,065 | 3,560 | ||||||
| General and administrative | 6,474 | 6,830 | ||||||
| Total operating expenses | 17,798 | 17,502 | ||||||
| Operating loss | (1,204 | ) | (2,615 | ) | ||||
| Other expense, net | ||||||||
| Interest expense, net | (12 | ) | (122 | ) | ||||
| Other expense, net | (168 | ) | (58 | ) | ||||
| Total other expense, net | (180 | ) | (180 | ) | ||||
| Loss before income taxes | (1,384 | ) | (2,795 | ) | ||||
| Provision for income taxes | 100 | 114 | ||||||
| Net loss | $ | (1,484 | ) | $ | (2,909 | ) | ||
| Net loss per share, basic and diluted | $ | (0.12 | ) | $ | (0.23 | ) | ||
| Weighted-average shares used in computing net loss per share, basic and diluted | 12,648,370 | 12,770,988 | ||||||
| SoundThinking, Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) | ||||||||
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 11,657 | $ | 13,183 | ||||
| Accounts receivable and contract assets, net | 29,491 | 25,464 | ||||||
| Prepaid expenses and other current assets | 3,770 | 4,881 | ||||||
| Total current assets | 44,918 | 43,528 | ||||||
| Property and equipment, net | 19,724 | 20,131 | ||||||
| Operating lease right-of-use assets | 1,665 | 1,878 | ||||||
| Goodwill | 34,213 | 34,213 | ||||||
| Intangible assets, net | 32,228 | 33,182 | ||||||
| Other assets | 3,561 | 3,861 | ||||||
| Total assets | $ | 136,309 | $ | 136,793 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 3,706 | $ | 3,442 | ||||
| Accrued expenses and other current liabilities | 7,025 | 10,216 | ||||||
| Line of credit | 4,000 | 4,000 | ||||||
| Deferred revenue, short-term | 39,930 | 38,401 | ||||||
| Total current liabilities | 54,661 | 56,059 | ||||||
| Deferred revenue, long-term | 5,507 | 5,832 | ||||||
| Deferred tax liability | 1,377 | 1,361 | ||||||
| Operating lease liabilities, net of current portion | 920 | 1,142 | ||||||
| Total liabilities | 62,465 | 64,394 | ||||||
| Stockholders' equity | ||||||||
| Common stock: 12,666,101 and 12,634,485 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | 64 | 64 | ||||||
| Additional paid-in capital | 179,924 | 177,021 | ||||||
| Accumulated deficit | (105,782 | ) | (104,298 | ) | ||||
| Accumulated other comprehensive loss | (362 | ) | (388 | ) | ||||
| Total stockholders' equity | 73,844 | 72,399 | ||||||
| Total liabilities and stockholders' equity | $ | 136,309 | $ | 136,793 | ||||
FAQ
What were SoundThinking's (SSTI) Q1 2025 revenue and earnings?
What is SoundThinking's (SSTI) revenue guidance for full-year 2025?
How many new cities did SoundThinking's ShotSpotter expand to in Q1 2025?
What is SoundThinking's (SSTI) long-term financial target?
What was SoundThinking's (SSTI) Adjusted EBITDA for Q1 2025?
