随着SafePointe获得医疗保健动力，SoundThinking重申1.11亿美元-1.13亿美元的收入指引

Earnings Call Insights: SoundThinking, Inc. (SSTI) Q1 2025

Management View

• Ralph Clark, Chief Executive Officer, opened by stating SoundThinking is “off to a strong start in 2025, delivering disciplined growth and expanding our platform and data aggregation capabilities to help position SoundThinking as a clear leader in the public safety technology space.” He highlighted 12% revenue growth year-over-year to $28.3 million, driven by new sales and renewals, including $3.5 million in catch-up revenue from renewed New York City Police Department contracts. Clark pointed to the three-year ShotSpotter renewal by NYPD as evidence of customer trust, emphasizing, “this renewal with one of our largest and longest-standing customers... speaks volumes about the sustained value and operational reliability of our gunshot detection platform in America’s largest city.”
• Clark indicated international expansion, referencing a soon-to-be-live deployment in Niteroi, Brazil, and a “robust and growing” international pipeline. He noted that “any potential reengagement with Chicago would represent pure upside,” since current outlook excludes Chicago.
• Clark described advances in CrimeTracer, including new generative AI features and integration with PlateRanger’s ALPR data, which he said is “foundational to move into building a truly multimodal investigative intelligence platform.”
• The SafePointe solution was spotlighted as a “seismic shift in health care security’s policy,” with the passage of California Assembly Bill 2975 requiring hospitals to deploy weapon detection systems by 2027. Clark stated, “the now mandated and addressable opportunity is significant,” and sees SafePointe as a “category-defining solution in this space.”
• Clark expressed continued focus on growth but noted vigilance around “lingering headwinds, especially those related to municipal funding and budgets.”
• Clark reaffirmed full year revenue guidance of $111 million to $113 million and reduced adjusted EBITDA guidance to 20%-22%, citing “the modest impact of the current tariff regime, along with investments we are making in AI modeling and tools in AWS.”
• Alan Stewart, Chief Financial Officer, stated, “Our strong financial performance reflects the success of our ongoing strategic initiatives, operational efficiency measures and our commitment to delivering value to our shareholders.”

Outlook

• Management reaffirmed full year revenue guidance of $111 million to $113 million and reduced full year 2025 adjusted EBITDA margin guidance to 20%-22% due to potential tariff cost impacts and ongoing investments in AI modeling and AWS tools.
• Stewart reiterated ARR expectations: “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.”
• Clark clarified that the guidance does not include potential revenue from any new Chicago contract.

Financial Results

• Revenues reached $28.3 million, a 12% increase from $25.4 million in the prior year’s first quarter, with $3.5 million catch-up revenue from NYPD contract renewals.
• Gross profit was $16.6 million, representing 59% of revenue, unchanged from the prior year period.
• Adjusted EBITDA was $4.5 million, up from $3 million in the previous first quarter, affected by delayed contracts, an all-hands meeting expense over $700,000, and increased AI-related costs.
• Operating expenses were $17.8 million (63% of revenues), compared to $17.5 million (69% of revenues) in Q1 2024.
• GAAP net loss was approximately $1.5 million, or a loss of ($0.12) per share, compared to a net loss of $2.9 million, or ($0.23) per share, in the prior-year period.
• Deferred revenue was $45.4 million at quarter end, cash and equivalents were $11.7 million, and share repurchases totaled $504,000 for the quarter.

Q&A

• Richard Baldry, ROTH Capital, asked about pipeline management across product lines. Clark responded each product “has its own pipeline metrics,” with strong coverage in ResourceRouter and CrimeTracer, aiming for “3x to 4x coverage based on the annual contract value quotas.”
• Baldry inquired about SafePointe’s revamp and customer feedback. Clark shared “success across the board, particularly in the health care vertical,” noting proof-of-concept deployments at major healthcare chains, with one active and another expected in Q2.
• Aditya Dagaonkar, Northland Capital, asked about PlateRanger bookings. Stewart said bookings are expected “in the 1 million-plus range” for the year, with a “significant increase in revenue into next year.”
• Dagaonkar asked about Puerto Rico expansion. Stewart noted ongoing talks for a “multiyear extension renewal” and potential expansion beyond the current 30 miles.
• Trevor Walsh, Citizens, questioned the SafePointe sales cycle post-California legislation. Clark described 2026 as the main opportunity but emphasized current traction in other regions and verticals.
• Walsh also asked about NYPD contract renewal impact on margins. Stewart explained costs such as the all-hands meeting and AI investments, noting “had those not occurred, then the adjusted EBITDA would have been significantly higher.”
• Eric Martinuzzi, Lake Street, asked about revenue progression after the $3.5 million Q1 catch-up. Stewart said Q2 revenues would likely be lower, with increases into Q3 and Q4 as SafePointe ramps up.
• Martinuzzi inquired about gross margin guidance. Stewart confirmed it should “stay around” 59% for the year, with incremental costs from sensor deployment and AI investments.
• Jeremy Hamblin, Craig-Hallum, asked about the scale of the SafePointe opportunity in California. Clark estimated “about 400 hospitals” with an average of “10 egress -- ingress -- egress points,” a “4,000-lane opportunity.”
• Hamblin requested comparative pricing. Clark stated SafePointe is “charging about $20,000 per year per lane,” with high-margin multiyear deals and a compelling total cost of ownership versus competitors.
• Hamblin asked about international timing. Clark said international sales cycles are long, but “when the deals happen, they happen in fairly big ways,” citing Brazil and Uruguay as growth points.
• Hamblin asked about R&D trends. Stewart said the $4 million run rate is “primarily for the personnel that are helping us with the AI algorithms,” with some costs expected to decrease slightly but remain below revenue growth.

Sentiment Analysis

• Analysts focused on pipeline strength, SafePointe’s healthcare traction, and margin impacts, showing a neutral to slightly positive tone, while probing for clarity on guidance and revenue progression.
• Management maintained a confident and optimistic tone in prepared remarks, emphasizing growth and platform expansion, but adopted a more measured approach when discussing cost impacts and guidance adjustments during Q&A, with phrases like “we believe” and “we are hoping.”
• Compared to the previous quarter, the overall tone was slightly more cautious about headwinds such as municipal funding and cost increases, but management’s confidence in core growth strategies remained steady.

Quarter-over-Quarter Comparison

• Guidance for full-year revenue remained at $111 million to $113 million, consistent with the previous quarter, but adjusted EBITDA margin guidance was lowered from 21%-23% to 20%-22% due to tariff and AI investment costs.
• The SafePointe opportunity received heightened emphasis following new California legislation, marking a shift toward healthcare security verticals.
• Analysts continued to focus on product pipeline and margin dynamics, with more detailed questions on international expansion and legislative impacts versus the prior quarter’s emphasis on contract delays and Chicago RFP.
• Key metrics improved quarter-over-quarter: revenue increased, adjusted EBITDA rose, and net loss narrowed, while management’s tone shifted from highly optimistic to a more vigilant approach regarding external headwinds.

Risks and Concerns

• Management highlighted “lingering headwinds, especially those related to municipal funding and budgets.”
• Risk mitigation strategies include “doubling down on our customer success and engagement efforts, adding a grant writing resource and modeling higher levels of attrition.”
• Analysts raised concerns about cost inflation from AI investments and the impact of one-time expenses on margins, as well as the length and uncertainty of international sales cycles.

Final Takeaway

SoundThinking’s first quarter 2025 results demonstrate disciplined revenue growth and operational leverage, supported by major contract renewals and strategic advances in AI-driven solutions. The company is reaffirming its revenue targets for the year while adjusting EBITDA margin expectations to reflect new investment and cost realities. Significant opportunities are developing in the healthcare security space through SafePointe, especially in light of new California legislation, and international expansion remains a key focus. Management remains confident in its growth strategy while actively monitoring external risks and maintaining a proactive approach to customer engagement and cost management.

Read the full Earnings Call Transcript