SoundThinking (SSTI) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $24.2 million, down 15% year-over-year, mainly due to lower catch-up revenue from contract renewals and a non-renewed contract in Puerto Rico.

• Adjusted EBITDA was approximately -$100,000, compared to $4.5 million in Q1 2025, impacted by SafePointe investment.

• GAAP net loss widened to $7.0 million ($0.54 per share) from $1.5 million ($0.12 per share) in Q1 2025, reflecting higher costs and a $0.5 million restructuring charge.

• Workforce optimization, including a reduction in force affecting about 15 employees, is expected to yield $4 million in annualized savings.

• Full-year 2026 revenue guidance reaffirmed at $109–$111 million (6% growth at midpoint), with Adjusted EBITDA margin of 16–18%.

Financial highlights

• Q1 revenue was $24.2 million, down from $28.3 million in Q1 2025, due to non-recurring prior year catch-up revenues and contract timing.

• Gross profit was $11.3 million (47% margin), down from $16.6 million (59%) year-over-year.

• Operating expenses rose to $18.1 million, up slightly from $17.8 million, driven by higher compensation, R&D, and G&A costs, partially offset by lower sales and marketing expenses.

• Cash and equivalents at quarter-end were $14.2 million, with $36 million available on the line of credit.

• Deferred revenue at March 31, 2026 was $40.4 million, down from $43.9 million at year-end.

Outlook and guidance

• Full-year 2026 revenue guidance of $109–$111 million (5–7% growth) and adjusted EBITDA margin of 16–18% reaffirmed.

• Revenue and profitability expected to be back-end loaded, with significant growth in the second half from large contracts and new solutions.

• ARR expected to rise from $95.4 million at start of 2026 to ~$110 million at start of 2027.

• $4 million in annualized cost savings from workforce and business optimization actions effective Q2.

• Management believes existing liquidity and credit facilities are sufficient for at least the next 12 months.