SoundThinking, Inc. Reports Fourth Quarter and Full Year 2025 Financial Results
Rhea-AI Summary
SoundThinking (Nasdaq: SSTI) reported record full year 2025 revenue of $104.1 million, a 2% increase versus 2024, and updated 2026 guidance to $109.0M–$111.0M with Adjusted EBITDA margin guidance of 16%–18%. ARR is expected to rise from $95.4M to about $110.0M by start of 2027.
Q4 revenue was $24.8M with GAAP net loss of $2.8M and Q4 Adjusted EBITDA of $1.3M. Management cited sales timing headwinds and pipeline strength while prioritizing margin improvement and efficiency.
AI-generated analysis. Not financial advice.
Positive
- Record revenue of $104.1M in 2025
- Guidance: ARR expected to increase to ~$110.0M by Jan 1, 2027 (≈15% increase)
- 2026 Adjusted EBITDA margin guidance tightened to 16%–18% (up from 12% in 2025)
Negative
- Adjusted EBITDA declined 12% YoY to $12.6M in 2025 (from $14.4M)
- Gross margin fell 300 bps to 54% in 2025 from 57% in 2024
- Loss of ~$9M of Chicago revenue reduced 2025 topline compared to 2024
News Market Reaction – SSTI
On the day this news was published, SSTI declined 18.90%, reflecting a significant negative market reaction. Argus tracked a trough of -6.8% from its starting point during tracking. Our momentum scanner triggered 6 alerts that day, indicating moderate trading interest and price volatility. This price movement removed approximately $20M from the company's valuation, bringing the market cap to $84.41M at that time.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
SSTI is up 6.58%. Several software peers are also positive today (e.g., AEYE +6.33%, SVCO +3.99%, DUOT +3.12%, EXFY +2.41%), but the momentum scanner did not flag a sector-wide move.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Nov 12 | Q3 2025 earnings | Negative | -14.1% | Revenue decline and reduced FY 2025 guidance with lower margins. |
| Aug 12 | Q2 2025 earnings | Positive | +15.8% | Modest revenue decline but reaffirmed FY 2025 growth and margin guidance. |
| May 13 | Q1 2025 earnings | Positive | -1.4% | Double‑digit revenue growth and better losses alongside revised margin outlook. |
| Feb 25 | FY 2024 earnings | Positive | +23.6% | Record FY 2024 revenue and higher FY 2025 revenue and EBITDA guidance. |
| Nov 12 | Q3 2024 earnings | Positive | -7.4% | Solid revenue and gross profit growth with reaffirmed FY 2024 guidance. |
Earnings have produced mixed reactions: strong gains on upbeat outlooks but also selloffs despite revenue growth or reaffirmed guidance.
Over the last several earnings cycles, SoundThinking has oscillated between growth and guidance resets. FY 2024 results and outlook drove a strong positive move, while Q3 2025 weakness and lowered guidance triggered a sharp selloff. Earlier in 2025, Q1 and Q2 updates combined double‑digit or modest growth with evolving margin and revenue targets, leading to both rallies and pullbacks. Today’s FY 2025 report with record $104.1M revenue and updated 2026 guidance fits into this pattern of the stock reacting sensitively to forward-looking metrics.
Historical Comparison
Over the last five earnings releases, SSTI’s average move was 3.32%. Today’s 6.58% reaction is larger than typical but still within a historically observed range for earnings days.
Earnings updates have shifted from high-growth, higher-margin guidance in FY 2024 toward more modest FY 2025–2026 revenue targets, while maintaining a focus on growing ARR and improving profitability over time.
Market Pulse Summary
The stock dropped -18.9% in the session following this news. A negative reaction despite record FY 2025 revenue would have fit prior patterns where the stock sold off on earnings even when top-line trends were solid. Past quarters saw down moves following guidance reductions or margin compression, with an average earnings-day move of about 3.32%. In such a scenario, focus would likely have centered on the lowered 2026 targets, evolving profitability metrics, and customer concentration risks highlighted in recent filings as potential drivers of renewed caution.
Key Terms
adjusted ebitda financial
gaap financial
annual recurring revenue financial
revenue retention rate financial
non-gaap financial
AI-generated analysis. Not financial advice.
Full Year 2025 Revenues Increased
Company Updates Full Year 2026 Revenue Guidance Range to
FREMONT, Calif., March 03, 2026 (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, 2025.
Fourth Quarter 2025 Financial and Operational Highlights
- Revenues increased
6% to$24.8 million , compared to$23.4 million for the same quarter of 2024. - Gross profit increased
8% to$12.6 million (51% of revenues), compared to$11.7 million (50% of revenues) for the same quarter of 2024. - GAAP net loss totaled
$2.8 million , compared to GAAP net loss of$4.1 million for the same quarter of 2024. - Adjusted EBITDA1 totaled
$1.3 million (5% of revenues), compared to$1.7 million (7% of revenues) for the same quarter of 2024. - Went “live” with ShotSpotter in 1 new city and 4 expansions with current 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 2025 Financial and Operational Highlights
- Revenues increased
2% to a record$104.1 million , compared to$102.0 million in 2024. - Gross profit decreased
2% to$56.6 million (54% of revenues), compared to$57.9 million (57% of revenues) in 2024. - GAAP net loss totaled
$9.4 million , compared to GAAP net loss of$9.2 million in 2024. - Adjusted EBITDA2 totaled
$12.6 million (12% of revenues), compared to$14.4 million (14% of revenues) in 2024. - Annual recurring revenue2 starting on January 1, 2026 was
$95.4 million , compared to$95.6 million on January 1, 2025. Revenue retention rate2 was99% , related to the loss of the Chicago ShotSpotter contract in 2024, compared to105% in 2024. - Sales and marketing spend per
$1.00 of new annualized contract value2 was$0.56 , compared to$0.63 in 2024. - Went “live” with ShotSpotter in 10 new cities, 2 universities and 11 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
“2025 was a transitional year for SoundThinking,” said President and CEO Ralph Clark. “Despite encountering some headwinds, we delivered record full year revenue of
“While the delay of a few new contracts and key contract renewals impacted results, underlying demand for our solutions remains strong and converting that demand into bookings remains a top priority. We are entering 2026 with a realigned sales organization, refreshed go-to-market strategies and healthy pipeline expansion across both existing and new markets. As we move forward, we remain focused on executing against our strategic growth priorities to enter into new vertical expansion markets, grow our recurring revenue base and improve margins to expand our leadership position as an integrated public safety technology platform. Consistent with our focus on creating value, we are also reviewing the business to identify opportunities to drive efficiencies across the organization.”
“We are confident in our ability to drive growth, reduce costs and deliver increasing value for our customers and shareholders.”
Fourth Quarter 2025 Financial Results
Revenues for the fourth quarter of 2025 were
Gross profit for the fourth quarter of 2025 was
Total operating expenses for the fourth quarter of 2025 were
Net loss for the fourth quarter of 2025 totaled
Adjusted EBITDA for the fourth quarter of 2025 totaled
At quarter end, the Company had
Full Year 2025 Financial Results
Revenues in 2025 increased
Gross profit in 2025 decreased
Total operating expenses in 2025 decreased
Net loss in 2025 totaled
Adjusted EBITDA for 2025 totaled
Financial Outlook
The Company is lowering its full year 2026 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 March 3, 2026 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. Those wishing to participate via webcast should access the call through SoundThinking’s Investor Relations website at https://ir.soundthinking.com/. Those wishing to participate via telephone may dial in at 1-877-407-8029 (USA) or 1-201-689-8029 (International). The replay will be available via webcast through SoundThinking’s Investor Relations website.
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 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, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| GAAP net loss | $ | (2,772 | ) | $ | (4,079 | ) | $ | (9,420 | ) | $ | (9,180 | ) | ||||
| Less: | ||||||||||||||||
| Restructuring expense | 197 | (10 | ) | 197 | 336 | |||||||||||
| Loss on disposal of fixed assets | — | 18 | — | 23 | ||||||||||||
| Change in fair value of contingent consideration | — | — | — | (554 | ) | |||||||||||
| Adjusted net loss | $ | (2,575 | ) | $ | (4,071 | ) | $ | (9,223 | ) | $ | (9,375 | ) | ||||
| Net loss per share, basic and diluted | $ | (0.22 | ) | $ | (0.32 | ) | $ | (0.74 | ) | $ | (0.72 | ) | ||||
| Adjusted net loss per share, basic and diluted | $ | (0.20 | ) | $ | (0.32 | ) | $ | (0.73 | ) | $ | (0.74 | ) | ||||
| Weighted-average shares used in computing net loss per share and adjusted net loss per share, basic and diluted | 12,748,874 | 12,589,833 | 12,717,901 | 12,710,236 | ||||||||||||
The following table presents a reconciliation of Adjusted EBITDA to GAAP net loss, the most directly comparable GAAP measure, for each of the periods indicated (in thousands):
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| GAAP net loss | $ | (2,772 | ) | $ | (4,079 | ) | $ | (9,420 | ) | $ | (9,180 | ) | ||||
| Less: | ||||||||||||||||
| Interest (income) expense, net | 1 | (22 | ) | 19 | 154 | |||||||||||
| Income taxes | 85 | 111 | 113 | 778 | ||||||||||||
| Depreciation, amortization and impairment | 2,593 | 2,699 | 10,282 | 10,673 | ||||||||||||
| Restructuring expense | 197 | (10 | ) | 197 | 336 | |||||||||||
| Loss on disposal of fixed assets | — | 18 | — | 23 | ||||||||||||
| Stock-based compensation expense | 1,148 | 3,000 | 11,445 | 12,128 | ||||||||||||
| Change in fair value of contingent consideration | — | — | — | (554 | ) | |||||||||||
| Adjusted EBITDA | $ | 1,252 | $ | 1,717 | $ | 12,636 | $ | 14,358 | ||||||||
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 2026, the Company's expectations for the increase in its ARR, ability to drive profitable growth, enter into new vertical expansion markets and build upon existing contracts and partnerships, including in the United States and internationally, the potential entry into and renewal of customer contracts, including execution of the delayed contracts, the timing of such entry or 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 2026 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 enter into new contracts or renew its contract with key customers and the timing of such entry or 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 and through expansion into new vertical markets; 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 subsequent 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, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | 24,789 | $ | 23,411 | $ | 104,127 | $ | 102,031 | ||||||||
| Costs | ||||||||||||||||
| Cost of revenues | 12,050 | 11,511 | 47,055 | 43,542 | ||||||||||||
| Impairment of property and equipment | 124 | 193 | 434 | 605 | ||||||||||||
| Total costs | 12,174 | 11,704 | 47,489 | 44,147 | ||||||||||||
| Gross profit | 12,615 | 11,707 | 56,638 | 57,884 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Sales and marketing | 6,520 | 6,523 | 26,100 | 28,138 | ||||||||||||
| Research and development | 3,958 | 3,484 | 15,866 | 13,925 | ||||||||||||
| General and administrative | 4,469 | 5,515 | 23,207 | 23,894 | ||||||||||||
| Change in fair value of contingent consideration | — | — | — | (554 | ) | |||||||||||
| Restructuring expense | 197 | (10 | ) | 197 | 336 | |||||||||||
| Total operating expenses | 15,144 | 15,512 | 65,370 | 65,739 | ||||||||||||
| Operating loss | (2,529 | ) | (3,805 | ) | (8,732 | ) | (7,855 | ) | ||||||||
| Other income (expense), net | ||||||||||||||||
| Interest income (expense), net | (1 | ) | 22 | (19 | ) | (154 | ) | |||||||||
| Other expense, net | (157 | ) | (185 | ) | (556 | ) | (393 | ) | ||||||||
| Total other expense, net | (158 | ) | (163 | ) | (575 | ) | (547 | ) | ||||||||
| Loss before income taxes | (2,687 | ) | (3,968 | ) | (9,307 | ) | (8,402 | ) | ||||||||
| Provision for income taxes | 85 | 111 | 113 | 778 | ||||||||||||
| Net loss | $ | (2,772 | ) | $ | (4,079 | ) | $ | (9,420 | ) | $ | (9,180 | ) | ||||
| Net loss per share, basic and diluted | $ | (0.22 | ) | $ | (0.32 | ) | $ | (0.74 | ) | $ | (0.72 | ) | ||||
| Weighted-average shares used in computing net loss per share, basic and diluted | 12,748,874 | 12,589,833 | 12,717,901 | 12,710,236 | ||||||||||||
| SoundThinking, Inc. Consolidated Balance Sheets (In thousands except share and per share data) (Unaudited) | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 15,797 | $ | 13,183 | ||||
| Accounts receivable and contract asset, net | 28,570 | 25,464 | ||||||
| Prepaid expenses and other current assets | 4,225 | 4,881 | ||||||
| Total current assets | 48,592 | 43,528 | ||||||
| Property and equipment, net | 18,816 | 20,131 | ||||||
| Operating lease right-of-use assets | 1,904 | 1,878 | ||||||
| Goodwill | 34,213 | 34,213 | ||||||
| Intangible assets, net | 29,335 | 33,182 | ||||||
| Other assets | 2,894 | 3,861 | ||||||
| Total assets | $ | 135,754 | $ | 136,793 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 3,789 | $ | 3,442 | ||||
| Accrued expenses and other current liabilities | 9,578 | 10,216 | ||||||
| Line of credit | 4,000 | 4,000 | ||||||
| Deferred revenue, short-term | 40,035 | 38,401 | ||||||
| Total current liabilities | 57,402 | 56,059 | ||||||
| Deferred revenue, long-term | 3,845 | 5,832 | ||||||
| Deferred tax liability | 1,359 | 1,361 | ||||||
| Operating lease liabilities, net of current portion | 976 | 1,142 | ||||||
| Total liabilities | 63,582 | 64,394 | ||||||
| Stockholders' equity | ||||||||
| Common stock: 12,825,960 and 12,634,485 shares issued and outstanding as of December 31, 2025 and 2024, respectively | 64 | 64 | ||||||
| Additional paid-in capital | 186,115 | 177,021 | ||||||
| Accumulated deficit | (113,718 | ) | (104,298 | ) | ||||
| Accumulated other comprehensive loss | (289 | ) | (388 | ) | ||||
| Total stockholders' equity | 72,172 | 72,399 | ||||||
| Total liabilities and stockholders' equity | $ | 135,754 | $ | 136,793 | ||||
