SoundThinking (SSTI) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $26.3 million, up 10% year-over-year, driven by new customers, expanded coverage, and cross-selling; ShotSpotter represented 65% of total revenue.

• Net loss for Q3 2024 narrowed to $1.4 million from $1.9 million in Q3 2023; Adjusted EBITDA increased 5% to $4.5 million.

• Strong demand for public safety technology, with the SafetySmart Platform and new product launches, including PlateRanger ALPR, driving innovation.

• ShotSpotter expanded into four new cities, one university, and eight existing cities; over 85 new customers and 50+ expansions since 2020.

• Strategic partnerships, notably with Rekor Systems, and international growth, including expansion in Uruguay, contributed to platform capabilities.

Financial highlights

• Q3 2024 revenue: $26.3 million (up 10% year-over-year); year-to-date revenue: $78.6 million (up 18%).

• Gross profit for Q3 2024 was $15.2 million (58% margin), up from $13.8 million (57%) in Q3 2023; gross margins expected to approach 60% in Q4.

• Adjusted EBITDA rose 5% year-over-year to $4.5 million (17% margin).

• Cash and equivalents increased to $15.3 million, even after $4 million in share repurchases.

• Deferred revenue at quarter-end was $49.5 million, reflecting strong bookings and contract wins.

Outlook and guidance

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

• 2025 revenue projected at $107–$109 million, with Adjusted EBITDA margin rising to 19–21%.

• Q4 revenue expected to exceed $26 million, despite a $1.2 million impact from the Chicago contract loss.

• Chicago contract non-renewal (~$8.5 million annual revenue loss) already factored into guidance.

• Management expects continued growth from new customer acquisitions, expanded deployments, and cross-selling.