SoundThinking (SSTI) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached a record $27.0 million, up 22% year-over-year, driven by new and existing customer growth, expanded coverage, and contributions from SafePointe and CaseBuilder.

• ShotSpotter expanded into three new cities and four city expansions, remaining the core revenue driver at 69% of total revenues, with robust cross-selling of SafetySmart solutions.

• Strategic partnership with Rekor to launch PlateRanger, expanding into the $3.2 billion global LPR market, with launch set for September 2024.

• Net loss narrowed to $0.8 million ($0.06/share) from $2.7 million ($0.22/share) year-over-year, reflecting improved operating leverage.

• ResourceRouter and CaseBuilder solutions outperformed expectations, with CaseBuilder revenue up 700% year-over-year due to major new contracts.

Financial highlights

• Q2 2024 revenue: $27.0 million, up from $22.1 million in Q2 2023; gross profit: $16.1 million (60% margin), up from $12.7 million (57%).

• Adjusted EBITDA more than doubled to $5.1 million (19% margin) from $2.4 million (11% margin) in Q2 2023.

• GAAP net loss narrowed to $0.8 million ($0.06/share) from $2.7 million ($0.22/share) year-over-year.

• Adjusted net loss was $0.96 million ($0.07/share), improved from $3.5 million ($0.28/share) in Q2 2023.

• Cash and cash equivalents at quarter end: $9.8 million; $7.0 million outstanding on the line of credit, with $18.0 million available.

Outlook and guidance

• FY 2024 revenue guidance reaffirmed at $104–$106 million, with Adjusted EBITDA margin of 18–20%.

• Q3 revenue expected to be sequentially down due to timing of professional services, with Q4 rebounding despite the loss of Chicago contract revenue.

• PlateRanger launch in September 2024 is expected to support entry into the LPR market.

• Confident in achieving 2024 guidance and positioned for profitable growth in 2025 and beyond, despite the non-renewal of the Chicago ShotSpotter contract.

• Existing cash, credit facility, and operating cash flow expected to meet working capital and capital expenditure needs for at least the next 12 months.