Conference Transcript for SoundThinking, Inc.'s (SSTI) Q2 2025 Earnings Call
SoundThinking Inc., a leading technology company, has released its Q2 2025 earnings report, revealing a revenue of $25.9 million, a net loss of $3.1 million, and a loss per share of $0.24, all falling short of estimates. The earnings call, currently in progress, is being operated by Diego.
The revenue figure represents a slight decline of 4% compared to Q2 2024, with the ShotSpotter product accounting for approximately 68% of the total. Despite a $2.8 million loss from the non-renewal of a Chicago contract, new NYPD contracts helped bolster revenue.
The net loss for the quarter was significantly larger than in prior periods, missing consensus EPS estimates. Gross margins narrowed as cost of revenues increased, reflecting some cost pressures.
As of Q2, SoundThinking's balance sheet showed cash and cash equivalents of $8.95 million, with accounts receivable and contract assets at $30.7 million. Deferred revenue stood at $43.5 million, and remaining performance obligations totaled $99.9 million. The company had $4 million outstanding on its line of credit and $21 million available borrowing capacity through October 15, 2025.
Management has reaffirmed its full-year revenue guidance of $111 to $113 million and adjusted EVA guidance of 20-22%. The focus remains on expanding penetration in existing and midsize municipal accounts and growing recurring software revenue streams.
The stock performance of SoundThinking Inc. (NASDAQ: SSTI) has declined approximately 14.5% year-to-date as of Q2 results, underperforming the S&P 500, reflecting concerns over earnings misses and ongoing losses.
The general market reception to the earnings has been cautious due to the earnings surprise on the downside and continued quarterly losses. However, the company's strategic emphasis remains on leveraging its ShotSpotter technology and expanding recurring revenue sources to improve future profitability.
The conference call participants include Eric Martinuzzi from Lake Street Capital Markets, LLC, Research Division, Jeremy Scott Hamblin from Craig-Hallum Capital Group LLC, Research Division, Richard Kenneth Baldry from ROTH Capital Partners, LLC, Research Division, and Trevor James Walsh from Citizens JMP Securities, LLC, Research Division. The call is being participated by Alan R. Stewart, CFO & Secretary, and Ralph A. Clark, President, CEO & Director.
It is important to note that the forward-looking statements discussed on the call are subject to risks, uncertainties, and assumptions that may cause actual results to differ materially. These risks, uncertainties, and assumptions are discussed in SoundThinking's SEC filings, including its most recent annual report on Form 10-K and other SEC filings. SoundThinking undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of the call.
[1] Source: SoundThinking Inc. Q2 2025 Earnings Release [2] Source: Yahoo Finance [3] Source: Seeking Alpha Transcript of SoundThinking Inc. Q2 2025 Earnings Call [4] Source: FactSet Earnings Explorer [5] Source: Zacks Investment Research
SoundThinking Inc.'s Q2 2025 earnings report showcases a net loss that surpassed previous periods, indicating a need for careful investing in the company's business to regain profitability. The earnings report emphasizes the ShotSpotter product as a key revenue source, highlighting the importance of further financial investments in product development and expansion.
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