SoundThinking Q2 Earnings Call Highlights

Revenue and guidance declined: Second-quarter revenue fell to $23.9 million from $25.9 million, while the company lowered 2026 revenue guidance to $99 million–$100 million from $109 million–$111 million due to delayed deployments, project timing and slower ShotSpotter sales conversions. Profitability improved sequentially but remains pressured: SoundThinking reported a $4.8 million GAAP net loss, while adjusted EBITDA was positive $1.2 million. Workforce optimization and AI initiatives are expected to generate about $4 million in annualized savings, though full-year adjusted EBITDA margin guidance was reduced to 8%–9%. Customer retention and CrimeTracer growth provided offsets: The company secured more than $23 million in multi-year renewals and signed a Texas Anti-Gang Program CrimeTracer contract worth approximately $2.5 million in annual recurring revenue, despite funding challenges and slower ShotSpotter sales execution. SoundThinking NASDAQ: SSTI reported second-quarter 2026 revenue of $23.9 million, down from $25.9 million a year earlier, while lowering its full-year revenue outlook as deployment delays, project timing and slower ShotSpotter sales conversion weighed on its expectations. The company recorded a GAAP net loss of $4.8 million, or $0.37 per diluted share, compared with a net loss of $3.1 million, or $0.24 per diluted share, in the prior-year quarter. Adjusted EBITDA, a non-GAAP measure, was positive $1.2 million, compared with $3.4 million a year earlier and an approximately $100,000 loss in the first quarter. CEO Ralph Clark said the sequential improvement in adjusted EBITDA reflected the company’s workforce and business optimization actions, including increased use of artificial intelligence across internal operations. SoundThinking expects the initiatives to produce approximately $4 million in annualized savings, although it recorded about $900,000 in restructuring-related costs during the quarter. SoundThinking reduced its 2026 revenue guidance to $99 million to $100 million from its prior range of $109 million to $111 million. The company had generated about $48 million in revenue during the first half and now expects a second-half step-up, though management characterized the outlook as more conservative given longer sales cycles and delayed deployments. CFO Alan Stewart said nearly $3 million of the reduced outlook stemmed from delays in professional-services work at TechnoLogic Solutions and with the New York City Department of Correction. Those projects are booked and budgeted but are expected to shift primarily into 2027 rather than represent lost revenue. The company also reduced expected 2026 revenue by about $2 million because SafePointe deployments have taken longer than anticipated. SoundThinking said SafePointe bookings and its hospital pipeline remain strong, but revenue is recognized when systems go live. Larger enterprise deployments involving 10 to 20 lanes require coordination with customer construction schedules, credentialing, IT networks and multi-site rollout plans. Management also removed an expected Puerto Rico ShotSpotter contract recapture, previously worth nearly $1.5 million in the outlook, from its 2026 guidance. Clark said the company is pursuing another procurement path as the state-level project has been delayed alongside other post-hurricane initiatives. SoundThinking reduced its full-year adjusted EBITDA margin guidance to 8% to 9%, reflecting the lower revenue outlook. It continues to expect annual recurring revenue to rise from $95.4 million at the start of 2026 to more than $100 million entering 2027. ShotSpotter Sales Execution and Fundi...