Soundthinking, Inc. ((SSTI)) has held its Q4 earnings call. Read on for the main highlights of the call.
SoundThinking, Inc.’s recent earnings call presented a mixed sentiment, highlighting both positive developments and challenges. The company celebrated a significant full-year revenue growth and international expansion, while also addressing setbacks such as a decline in Q4 revenue and an increased net loss due to delayed contracts.
Full Year Revenue Growth
SoundThinking, Inc. reported a robust full-year revenue growth of 10%, reaching a record $102 million. This growth underscores the strong demand for the company’s public safety and security solutions, marking a significant achievement for the year.
International Expansion
The company made notable strides internationally, launching operations in 20 new cities and five universities. Key international expansions included new city captures in Niterói, Brazil, Nelson Mandela Bay, South Africa, and Montevideo, Uruguay, showcasing SoundThinking’s growing global footprint.
NYPD Contract Renewal
A significant highlight was the successful renewal of a three-year contract with the NYPD, valued at approximately $21.9 million. This contract secures the ShotSpotter service through December 2027, reinforcing SoundThinking’s strong relationship with one of its major clients.
Net Promoter Score Improvement
SoundThinking achieved a world-class net promoter score of 66%, an improvement of 200 basis points from the previous year’s score of 64%. This enhancement reflects increased customer satisfaction and loyalty.
Q4 Revenue Decline
Despite the positive full-year performance, Q4 revenue saw a decline of 10% year-over-year, amounting to $23.4 million. This decrease was primarily due to a $3.5 million delay in contract renewals with the NYPD, highlighting a challenge in the company’s quarterly performance.
Increased Net Loss
The company reported a net loss of approximately $4.1 million for Q4, a significant shift from a net income of $3.6 million in the prior-year period. This loss was largely impacted by delayed contracts, posing a financial challenge for the quarter.
Operating Expense Increase
Operating expenses increased by 22% to $65.7 million, accounting for 64% of revenues for the year, compared to 58% in 2023. This rise in expenses indicates increased operational costs, which the company will need to manage moving forward.
Forward-Looking Guidance
Looking ahead, SoundThinking provided guidance for 2025, anticipating full-year revenue between $111 million and $113 million, representing a 10% year-over-year growth. The company expects to achieve an adjusted EBITDA margin of 21% to 23%. With an annual recurring revenue entering 2025 at $95.6 million and a $50 million ACV pipeline, SoundThinking is optimistic about significant contributions from their SafetySmart platform and international expansion, particularly in Latin America and the Caribbean.
In summary, SoundThinking, Inc.’s earnings call reflected a balanced outlook with both positive achievements and challenges. While the company celebrated strong revenue growth and international expansion, it also faced setbacks in Q4 revenue and net loss. Looking forward, SoundThinking remains optimistic about its growth prospects, driven by strategic initiatives and a solid pipeline.