SoundThinking outlines $111M–$113M 2025 revenue target while advancing AI and critical infrastructure solutions

Earnings Call Insights: SoundThinking, Inc. (SSTI) Q2 2025

MANAGEMENT VIEW

* Ralph A. Clark, President and CEO, opened by stating, "We're pleased to report a solid Q2 marked by continued progress on our transformation into a broader public safety technology company. Our early strategic investments in technology, innovation, talent and market positioning are yielding results." He highlighted Q2 revenue of $25.9 million and noted a sequential decline from Q1, attributed to the timing of large deals such as a $2.5 million CrimeTracer transaction and a 400-unit PlateRanger transaction, both pushed into Q3.
* Clark detailed new deployments, saying ShotSpotter went live in four new cities, including New Orleans and Niteroi, Brazil, as well as expansion in four additional cities and one new security deployment. He shared that the company has a “diversified pipeline of over $37 million for the remainder of 2025.”
* He described a new opportunity following the Midtown New York City shooting, where a major financial institution requested a hybrid ShotSpotter SecureCampus and perimeter-based sniper solution, expected to be marketed for utility substations and critical infrastructure in early Q1 2026.
* Clark emphasized product innovation, citing the completed integration between PlateRanger LPR and CrimeTracer, enabling automated intelligence on vehicles involved in crimes, and noted the adoption of AI coding tools for rapid development.
* He reaffirmed, "We're reaffirming our full year revenue guidance range of $111 million to $113 million and reaffirming our adjusted EBITDA guidance range of 20% to 22%."
* CFO Alan R. Stewart stated, "Revenues were $25.9 million, representing a 4% decrease from the $27 million in the second quarter of 2024. Gross profit was $13.8 million or 53% of revenue, compared to $16.1 million or 60% of revenue for the prior-year period."

OUTLOOK

* Clark reaffirmed the company's full year revenue guidance of $111 million to $113 million and adjusted EBITDA margin guidance of 20% to 22%.
* Stewart reiterated, "We are reaffirming our expectation for our annual recurring revenue, or ARR, to increase from $95.6 million at the beginning of 2025 to approximately $110 million at the beginning of 2026."
* Management stated that guidance does not include any contribution from Chicago and any engagement there would likely contribute to 2026 results.

FINANCIAL RESULTS

* Stewart reported, "Our GAAP net loss was approximately $3.1 million or a loss of $0.25 per basic and diluted share for the quarter. This compares to a net loss of $0.8 million or a loss of $0.06 per basic and diluted share for the prior-year period."
* Operating expenses were $16.7 million, flat compared to the prior-year period, while sales and marketing expenses declined year-over-year. R&D expenses increased to $3.7 million, reflecting higher AI investments.
* Deferred revenue at June 30, 2025, was $43.5 million. The company ended Q2 with $9 million in cash and cash equivalents, with over $16 million as of the call date.
* Stewart highlighted the repurchase of 31,570 shares at an average price of $14.84 and noted $21 million available on the line of credit.

Q&A

* Richard Kenneth Baldry, ROTH Capital Partners, asked about SafePointe pipeline traction. Clark responded that the pipeline is "healthy and growing," particularly in health care and casinos, with targeted efforts in California's AB 2975 market.
* Baldry inquired about international expansion. Clark said deployments in Montevideo and Niteroi are important and, "Brazil, obviously, a very big opportunity. We have some pipeline in Mexico as well."
* Baldry asked about the cash increase. Stewart explained, "A lot of that does have to do with the collection timing though. So it does get a bit lumpy at times, but we do still continue to generate a significant amount of free cash flow."
* Baldry queried revenue visibility for the second half. Stewart said, "We have some things that are already committed... Obviously, Q3 needs to be north of $27 million and Q4 north of that."
* Eric Martinuzzi, Lake Street, inquired about new deployments. Clark noted cities were "struggling with the issue of responding to and investigating gun violence" and highlighted New Orleans as a growth opportunity.
* Martinuzzi questioned the competitive landscape. Clark acknowledged "noise about Flock and their Raven solution," but stated, "We're still feeling really, really good about our competitive position."
* Trevor James Walsh, Citizens, asked about the sniper threat solution. Clark clarified it is "its own implementation" targeting critical infrastructure, and Stewart added, "We're folding it in with the current team...our OpEx is down $1 million from Q1."
* Walsh asked about revenue headwinds from Chicago. Stewart confirmed the $2.8 million impact in Q2 2024 and that the SafePointe contract is included in guidance.
* Jeremy Scott Hamblin, Craig-Hallum, asked about the Chicago RFP. Clark replied, "We really don't know the number on the short-list...it feels like we're making really, really good progress."
* Hamblin queried NYPD contract details. Stewart stated, "The actual dollars...was about $400,000, and it will be about that per quarter."
* Hamblin followed up on the CrimeTracer transaction. Clark responded, "I would conservatively say Q4, but we're working really hard to bring it into Q3."

SENTIMENT ANALYSIS

* Analysts posed targeted questions around pipeline visibility, competitive positioning, and contract timing, with a generally neutral tone, focusing on clarification and future prospects.
* Management maintained a confident and constructive tone, using phrases such as "we feel pretty good about the opportunity," and "we're feeling really, really good about our competitive position." During Q&A, management remained direct and reaffirmed guidance, reflecting consistency with their prepared remarks.
* Compared to the previous quarter, both analyst and management tone remained stable, with management continuing to emphasize confidence in the strategic direction and execution.

QUARTER-OVER-QUARTER COMPARISON

* Guidance for full-year revenue and EBITDA remains consistent between quarters, with no changes to the $111 million–$113 million revenue or 20%–22% adjusted EBITDA margin ranges.
* Q2 revenue declined sequentially from Q1 due to large deals being delayed into Q3, while new city deployments and expansions continued.
* Management expanded commentary on new product integrations, hybrid solutions for critical infrastructure, and AI initiatives, signaling a growing focus beyond core law enforcement clients.
* Analysts’ focus shifted slightly toward cash flow, implementation timelines, and traction in new verticals, while management’s confidence and messaging on growth initiatives remained firm.

RISKS AND CONCERNS

* Clark noted that bookings "did fall short of our internal targets for the quarter, primarily due to the timing of a few large deals."
* The renewal in Puerto Rico is flagged as a risk due to "a new and unexpected requirement to issue a formal RFP...bureaucratic delays prevented us from securing the interim extension prior to the June 30 contract extension date."
* Management addressed political risks in New York, emphasizing contract security and minimal likelihood of termination.
* Stewart highlighted timing risks for large contracts impacting quarterly revenue recognition.

FINAL TAKEAWAY

SoundThinking's Q2 2025 call presented a company maintaining confidence in its strategic trajectory, reaffirming its $111 million–$113 million revenue guidance and adjusted EBITDA margin targets for 2025. Management emphasized progress in AI integration, new product innovations for critical infrastructure, and expanding penetration in new markets. While certain large deals slipped into the next quarter and political or bureaucratic risks remain in key contracts, the company underscored a strong pipeline, stable customer retention, and operational discipline as it continues to scale its SafetySmart platform and pursue new growth verticals.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/ssti/earnings/transcripts]

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