SoundThinking, Inc. Reports Fourth Quarter and Full Year 2024 Financial Results
Rhea-AI Summary
SoundThinking (SSTI) reported record revenues of $102.0 million for FY 2024, marking a 10% increase from 2023. However, Q4 2024 saw a revenue decline of 10% to $23.4 million, impacted by $3.5 million in delayed contract renewals.
The company reported a full-year GAAP net loss of $9.2 million, compared to a $2.7 million loss in 2023. Annual recurring revenue (ARR) stood at $95.6 million at the start of 2025, with a revenue retention rate of 105%.
For FY 2025, SoundThinking has raised its guidance, projecting revenues of $111.0-113.0 million (10% YoY growth at midpoint) and increased Adjusted EBITDA margin to 21-23%. The company expects ARR to reach approximately $110.0 million by early 2026.
Operational highlights include ShotSpotter going live in 20 new cities, 5 universities, and 24 expansions with existing customers during 2024.
Positive
- Record annual revenue of $102.0M, up 10% YoY
- Raised FY2025 revenue guidance to $111-113M
- Increased Adjusted EBITDA margin guidance to 21-23%
- Strong expansion with 20 new cities and 24 customer expansions
- 105% revenue retention rate
Negative
- Q4 revenue declined 10% YoY to $23.4M
- Full-year net loss increased to $9.2M from $2.7M in 2023
- Q4 gross margin decreased to 50% from 58% YoY
- Operating expenses increased 22% YoY
- Sales and marketing spend per $1.00 of new contract value increased to $0.63 from $0.52
News Market Reaction
On the day this news was published, SSTI gained 23.61%, reflecting a significant positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Full Year 2024 Revenues Increased
Fourth quarter and 2024 financial results were affected by the delay of approximately
Company Raises FY 2025 Revenue Guidance Range to
FREMONT, Calif., Feb. 25, 2025 (GLOBE NEWSWIRE) -- SoundThinking, Inc. (Nasdaq: SSTI) (“SoundThinking” or the “Company”), a leading public safety technology company, today reported financial results for the fourth quarter and fiscal year ended December 31, 2024.
Fourth Quarter 2024 Financial and Operational Highlights
- Revenues decreased
10% to$23.4 million , compared to$26.0 million for the same quarter of 2023. - Gross profit decreased
22% to$11.7 million (50% of revenues), compared to$15.0 million (58% of revenues) for the same quarter of 2023. - GAAP net loss totaled
$4.1 million , compared to GAAP net income of$3.6 million for the same quarter of 2023. - Adjusted EBITDA1 totaled
$1.7 million (7% of revenues), compared to$4.8 million (18% of revenues) for the same quarter of 2023. - Went “live” with ShotSpotter in 3 new cities, 1 new university and 7 expansions with existing customers.
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).
Full Year 2024 Financial and Operational Highlights
- Revenues increased
10% to a record$102.0 million , compared to$92.7 million in 2023. - Gross profit increased
10% to$57.9 million (57% of revenues), compared to$52.7 million (57% of revenues) in 2023. - GAAP net loss totaled
$9.2 million , compared to GAAP net loss of$2.7 million in 2023. - Adjusted EBITDA2 totaled
$14.4 million (14% of revenues), compared to$14.3 million (15% of revenues) in 2023. - Annual recurring revenue2 starting on January 1, 2025 was
$95.6 million , compared to$95.4 million on January 1, 2024. Revenue retention rate2 was105% , compared to107% in 2023. - Sales and marketing spend per
$1.00 of new annualized contract value2 was$0.63 , compared to$0.52 in 2023. - Went “live” with ShotSpotter in 20 new cities, 5 universities and 24 expansions with current customers.
2 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), annual recurring revenue, revenue retention rate and sales and marketing spend per
Management Commentary
“Innovation and consistent execution against our strategic growth priorities enabled us to achieve record revenue of
“I am enthusiastic about our market positioning and growth potential in both domestic and international markets across our differentiated SafetySmart Platform. In 2024, ShotSpotter went live in 20 new cities and 5 universities and we deployed 126 new ShotSpotter go-live miles, approximately 30 of which were a recapture of Puerto Rico. In 2025 thus far, we announced a three-year contract renewal valued at approximately
“Looking forward in 2025, we plan to continue innovating and executing against our strategic and financial growth priorities to deliver meaningful value for our stakeholders, particularly through the integration of AI-driven capabilities. By incorporating AI and data-driven solutions into our platform, we aim to enhance efficiency and provide even more actionable insights to the agencies and the communities those agencies serve. Our sales pipeline is encouraging and I am pleased that we are starting the year with strong momentum. ARR is starting the year at
Fourth Quarter 2024 Financial Results
The fourth quarter 2024 financial results were affected by the delay of approximately
Revenues for the fourth quarter of 2024 were
Gross profit for the fourth quarter of 2024 was
Total operating expenses for the fourth quarter of 2024 were
Net loss for the fourth quarter of 2024 totaled
Adjusted EBITDA for the fourth quarter of 2024 totaled
At quarter end, the Company had
Full Year 2024 Financial Results
The full year 2024 financial results were affected by the delay of approximately
Revenues in 2024 increased
Gross profit in 2024 increased
Total operating expenses in 2024 increased
Net loss in 2024 totaled
Adjusted EBITDA for 2024 totaled
Financial Outlook
The Company is raising its full year 2025 revenue guidance range to
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 “Safe Harbor Statement” 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 February 25, 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: 13751116
A live audio webcast of the conference call will be available in listen-only mode simultaneously and available for replay here and via the investor relations section of the Company’s website at https://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 March 11, 2025.
U.S. replay dial-in: 877-660-6853
International replay dial-in: 1-201-612-7415
Replay ID: 13751116
Non-GAAP Financial Measures and Key Business Metrics
Adjusted Net Income (Loss): Adjusted net income (loss), a non-GAAP financial measure, represents the Company’s net income (loss) before acquisition-related expenses, including adjustments to the Company's contingent consideration obligation, restructuring expense and loss from disposal of fixed assets.
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 income (loss), the most directly comparable GAAP measure, to adjusted net loss, for each of the periods indicated (in thousands, except share and per share data):
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| GAAP net income (loss) | $ | (4,079 | ) | $ | 3,643 | $ | (9,180 | ) | $ | (2,718 | ) | |||||
| Less: | ||||||||||||||||
| Acquisition-related expenses | — | (97 | ) | — | 767 | |||||||||||
| Restructuring expense | (10 | ) | — | 336 | — | |||||||||||
| Loss on disposal of fixed assets | 18 | — | 23 | — | ||||||||||||
| Change in fair value of contingent consideration | — | (4,763 | ) | (554 | ) | (5,686 | ) | |||||||||
| Adjusted net loss | $ | (4,071 | ) | $ | (1,217 | ) | $ | (9,375 | ) | $ | (7,637 | ) | ||||
| Net loss per share, basic | $ | (0.32 | ) | $ | 0.29 | $ | (0.72 | ) | $ | (0.22 | ) | |||||
| Net loss per share, diluted | $ | (0.32 | ) | $ | 0.28 | $ | (0.72 | ) | $ | (0.22 | ) | |||||
| Adjusted net loss per share, basic and diluted | $ | (0.32 | ) | $ | (0.10 | ) | $ | (0.74 | ) | $ | (0.61 | ) | ||||
| Weighted-average shares used in computing net (loss) income per share and adjusted net (loss) income per share, basic | 12,589,833 | 12,736,747 | 12,710,236 | 12,425,132 | ||||||||||||
| Weighted-average shares used in computing net (loss) income per share and adjusted net (loss) income per share, diluted | 12,589,833 | 12,856,219 | 12,710,236 | 12,425,132 | ||||||||||||
The following table presents a reconciliation of Adjusted EBITDA to GAAP net income (loss), the most directly comparable GAAP measure, for each of the periods indicated (in thousands):
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| GAAP net income (loss) | $ | (4,079 | ) | $ | 3,643 | $ | (9,180 | ) | $ | (2,718 | ) | |||||
| Less: | ||||||||||||||||
| Interest (income) expense, net | (22 | ) | 112 | 154 | 48 | |||||||||||
| Income taxes | 111 | 561 | 778 | 1,204 | ||||||||||||
| Depreciation, amortization and impairment | 2,699 | 2,626 | 10,673 | 10,752 | ||||||||||||
| Restructuring expense | (10 | ) | — | 336 | — | |||||||||||
| Loss on disposal of fixed assets | 18 | — | 23 | — | ||||||||||||
| Stock-based compensation expense | 3,000 | 2,710 | 12,128 | 9,982 | ||||||||||||
| Change in fair value of contingent consideration | — | (4,763 | ) | (554 | ) | (5,686 | ) | |||||||||
| Acquisition-related expenses | — | (97 | ) | — | 767 | |||||||||||
| Adjusted EBITDA | $ | 1,717 | $ | 4,792 | $ | 14,358 | $ | 14,349 | ||||||||
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.
Revenue Retention Rate: We calculate our revenue retention rate for each year by dividing the (a) total revenues for such year from those customers who were customers during the corresponding prior year by (b) the total revenues from all customers in the corresponding prior year. For the purposes of calculating our revenue retention rate, we count as customers all entities with which we had contracts in the applicable year. Revenue retention rate for any given period does not include revenues attributable to customers first acquired during such period. We focus on our revenue retention rate because we believe that this metric provides insight into revenues related to and retention of existing customers. If our revenue retention rate for a year exceeds
Sales and Marketing Spend per
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 for 2025, the Company's expectations for the increase in its ARR, ability to drive profitable growth and build upon existing contracts and partnerships, including in the United States and internationally, the potential renewal of the customer contract with New York Police Department and the timing of such renewal, and the Company’s plan to continue innovating and executing against its strategic and financial growth priorities to deliver meaningful value to its stakeholders, the Company's expectations of benefits through integration of AI-driven capabilities, operating momentum, sales pipeline, revenue growth, operating leverage and margin expansion in 2025 and beyond. 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 renew its contract with New York Police Department and the timing of such renewal; 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, 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. Consolidated Statements of Operations (In thousands except share and per share data) (Unaudited) | ||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenues | $ | 23,411 | $ | 26,045 | $ | 102,031 | $ | 92,717 | ||||||||
| Costs | ||||||||||||||||
| Cost of revenues | 11,511 | 10,993 | 43,542 | 39,874 | ||||||||||||
| Impairment of property and equipment | 193 | 42 | 605 | 114 | ||||||||||||
| Total costs | 11,704 | 11,035 | 44,147 | 39,988 | ||||||||||||
| Gross profit | 11,707 | 15,010 | 57,884 | 52,729 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Sales and marketing | 6,523 | 7,379 | 28,138 | 26,959 | ||||||||||||
| Research and development | 3,484 | 3,242 | 13,925 | 12,138 | ||||||||||||
| General and administrative | 5,515 | 4,751 | 23,894 | 20,557 | ||||||||||||
| Restructuring expense | (10 | ) | - | 336 | - | |||||||||||
| Change in fair value of contingent consideration | - | (4,763 | ) | (554 | ) | (5,686 | ) | |||||||||
| Total operating expenses | 15,512 | 10,609 | 65,739 | 53,968 | ||||||||||||
| Operating income (loss) | (3,805 | ) | 4,401 | (7,855 | ) | (1,239 | ) | |||||||||
| Other income (expense), net | ||||||||||||||||
| Interest income (expense), net | 22 | (112 | ) | (154 | ) | (48 | ) | |||||||||
| Other expense, net | (185 | ) | (85 | ) | (393 | ) | (227 | ) | ||||||||
| Total other expense, net | (163 | ) | (197 | ) | (547 | ) | (275 | ) | ||||||||
| Income (loss) before income taxes | (3,968 | ) | 4,204 | (8,402 | ) | (1,514 | ) | |||||||||
| Provision for income taxes | 111 | 561 | 778 | 1,204 | ||||||||||||
| Net income (loss) | $ | (4,079 | ) | $ | 3,643 | $ | (9,180 | ) | $ | (2,718 | ) | |||||
| Net income (loss) per share, basic | $ | (0.32 | ) | $ | 0.29 | $ | (0.72 | ) | $ | (0.22 | ) | |||||
| Net income (loss) per share, diluted | $ | (0.32 | ) | $ | 0.28 | $ | (0.72 | ) | $ | (0.22 | ) | |||||
| Weighted-average shares used in computing net income (loss) per share, basic | 12,589,833 | 12,736,747 | 12,710,236 | 12,425,132 | ||||||||||||
| Weighted-average shares used in computing net income (loss) per share, diluted | 12,589,833 | 12,856,219 | 12,710,236 | 12,425,132 | ||||||||||||
| SoundThinking, Inc. Consolidated Balance Sheets (In thousands except share and per share data) (Unaudited) | ||||||||
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 13,183 | $ | 5,703 | ||||
| Accounts receivable and contract asset, net | 25,170 | 30,700 | ||||||
| Prepaid expenses and other current assets | 5,175 | 3,902 | ||||||
| Total current assets | 43,528 | 40,305 | ||||||
| Property and equipment, net | 20,131 | 21,028 | ||||||
| Operating lease right-of-use assets | 1,878 | 2,315 | ||||||
| Goodwill | 34,213 | 34,213 | ||||||
| Intangible assets, net | 33,182 | 36,938 | ||||||
| Other assets | 3,861 | 3,909 | ||||||
| Total assets | $ | 136,793 | $ | 138,708 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 3,442 | $ | 3,031 | ||||
| Line of credit | 4,000 | 7,000 | ||||||
| Deferred revenue, short-term | 38,401 | 41,265 | ||||||
| Accrued expenses and other current liabilities | 10,216 | 8,521 | ||||||
| Total current liabilities | 56,059 | 59,817 | ||||||
| Deferred revenue, long-term | 5,832 | 812 | ||||||
| Deferred tax liability | 1,361 | 1,226 | ||||||
| Other liabilities | 1,142 | 2,096 | ||||||
| Total liabilities | 64,394 | 63,951 | ||||||
| Stockholders' equity | ||||||||
| Common stock: 12,634,479 and 12,761,448 shares issued and outstanding as of December 31, 2024 and 2023, respectively | 64 | 64 | ||||||
| Additional paid-in capital | 177,021 | 170,139 | ||||||
| Accumulated deficit | (104,298 | ) | (95,118 | ) | ||||
| Accumulated other comprehensive loss | (388 | ) | (328 | ) | ||||
| Total stockholders' equity | 72,399 | 74,757 | ||||||
| Total liabilities and stockholders' equity | $ | 136,793 | $ | 138,708 | ||||
FAQ
What caused SoundThinking's (SSTI) Q4 2024 revenue decline?
What is SoundThinking's (SSTI) revenue guidance for 2025?
How many new deployments did SoundThinking's (SSTI) ShotSpotter achieve in 2024?
What is SoundThinking's (SSTI) expected ARR growth from 2025 to 2026?
