SoundThinking (SSTI) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 2025 increased 12% year-over-year to $28.3 million, driven by new sales and $3.5 million in catch-up revenue from NYPD contract renewals.

• Adjusted EBITDA rose 50% year-over-year to $4.5 million (16% margin), reflecting operational leverage and profitable growth.

• Net loss narrowed to $1.5 million ($0.12 per share), improved from $2.9 million loss ($0.23 per share) in Q1 2024.

• Expanded platform capabilities and cross-selling, with strong adoption of AI-enhanced solutions like CrimeTracer and ResourceRouter.

• SafePoint/SafePointe positioned for growth due to new California legislation mandating weapons detection in hospitals and early traction in commercial security.

Financial highlights

• Q1 2025 revenue: $28.3 million, up from $25.4 million in Q1 2024.

• Gross profit: $16.6 million (59% margin), up from $14.9 million, margin steady year-over-year.

• Adjusted EBITDA: $4.5 million, up from $3.0 million in Q1 2024; impacted by a $700,000 one-time all-hands meeting expense.

• GAAP net loss: $1.5 million ($0.12 per share), improved from $2.9 million loss ($0.23 per share) in Q1 2024.

• Deferred revenue at quarter-end: $45.4 million; cash and equivalents: $11.7 million; $4.0 million in debt outstanding.

Outlook and guidance

• Reaffirmed full-year 2025 revenue guidance of $111–$113 million, 10% growth at midpoint.

• Adjusted EBITDA margin guidance reduced to 20–22% due to tariffs and increased AI investments.

• Annual recurring revenue (ARR) expected to grow from $95.6 million to ~$110 million by early 2026.

• Guidance excludes any potential upside from a new Chicago contract.

• Long-term targets: 70% gross margin, 40% Adjusted EBITDA margin, 15% annual revenue growth.