Third Quarter 2025 Financial and Operational Highlights
Revenues decreased 4% to $25.1 million, compared to $26.3 million for the same quarter of 2024.
Gross profit decreased 10% to $13.6 million (54% of revenues), compared to $15.2 million (58% of revenues) for the same quarter of 2024.
GAAP net loss totaled $2.0 million, compared to GAAP net loss of $1.4 million for the same quarter of 2024.
Adjusted EBITDA1 totaled $3.5 million (14% of revenues), compared to $4.5 million (17% of revenues) for the same quarter of 2024.
Went "live" with ShotSpotter in two new cities and one new university and expanded with two existing customers.
Repurchased 160,271 shares of common stock for approximately $2.0 million as part of an existing share repurchase program.
Achieved a Net Promoter Score of approximately 70 up from 66 for the same period last year.
1 See the section below titled "Non-GAAP Financial Measures and Key Business Metrics" for more information about Adjusted EBITDA and its reconciliation to GAAP net income (loss) and more information about Annual Recurring Revenue (ARR).
Management Commentary
"We continue to advance our mission of helping communities become safer and more resilient through data and technology," said Ralph Clark, President and CEO. "In Q3 we expanded our ShotSpotter footprint, introduced new AI capabilities with our CrimeTracer Gen3 beta release, and saw SafePointe gain traction in healthcare settings following California's AB 2975 mandate. Our Net Promoter Score climbed from 66 to approximately 70—firmly within the world-class category—highlighting the deep trust and satisfaction that drive our exceptional customer retention and recurring revenue base."
"Our third quarter revenues declined by 4% on a year-over-year basis due primarily to the contract delays of a few domestic deployments that we still expect to recognize in the near future. As a result of these delays during the quarter, we are lowering our full year 2025 revenue guidance from $111.0 million to $113.0 million to approximately $104.0 million and lowering our Adjusted EBITDA margin guidance range from 20% to 22% to 14% to 15%."
"While some near-term revenues were delayed by the timing of domestic contracts and an international contract, the underlying strength of our business remains intact," Clark continued. "Our continued investment in applied AI and machine learning is already improving system precision, investigative efficiency, and customer engagement. Combined with industry-leading retention and a growing base of global deployments, these gains position us for renewed top-line growth and margin expansion in 2026 on a differentiated technology platform built on trust and performance."
Third Quarter 2025 Financial Results
Revenues for the third quarter of 2025 were $25.1 million, compared to $26.3 million for the same quarter of 2024. The decrease of $1.2 million in revenues was primarily due to the fact that the third quarter of 2024 included approximately $2.8 million from our contract with the City of Chicago, offset by $1.7 million in new bookings and expansions with existing customers during the third quarter of 2025.
Our revenues for the quarter were lower than expected due to the absence of our ShotSpotter renewal in Puerto Rico, the delay of a statewide CrimeTracer booking we had targeted to close early in the quarter and the delays in several large contracts that we had hoped to have completed prior to the end of the quarter.
Gross profit for the third quarter of 2025 was $13.6 million (54% of revenues), compared to $15.2 million (58% of revenues) for the same period in 2024.
Total operating expenses for the third quarter of 2025 were $15.7 million, compared to $16.3 million for the same period in 2024. Total operating expenses remained relatively flat year over year, even as we invest in AI modeling and tools to enhance the capabilities of our platform product solutions.
Net loss for the third quarter of 2025 totaled $2.0 million or $(0.16) per basic and diluted share (based on 12.8 million basic and diluted weighted-average shares outstanding), compared to net loss of $1.4 million or $(0.11) per basic and diluted share (based on 12.7 million basic and diluted weighted-average shares outstanding) for the same period in 2024.
Adjusted EBITDA for the third quarter of 2025 totaled $3.5 million, compared to $4.5 million in the same period last year.
At quarter end, the company had $11.8 million in cash and cash equivalents, $28.5 million in accounts receivable and contract assets, net, $43.9 million in deferred revenue, $4.0 million in debt related to borrowings to partially fund the SafePointe, LLC acquisition in the third quarter of 2023 and approximately $36.0 million available on its credit facility.
The company repurchased 160,271 shares of its common stock at an average price of $12.43 per share for approximately $2.0 million. On a year-to-date basis, the company has repurchased 225,334 shares of its common stock at an average share price of $13.15 per share for approximately $3.0 million under its existing share repurchase program.
Financial Outlook
The company lowered its full-year 2025 revenue guidance from $111.0 million to $113.0 million to approximately $104.0 million. The company also lowered its Adjusted EBITDA margin guidance range from 20% to 22% to 14% to 15% for the full year 2025.
"We expect to deliver accelerated revenue growth and increased profitability in 2026 and beyond," added Clark. "Our transformation from a domestic ShotSpotter business to a global, diversified SafetySmart platform company is making substantial progress. Our long-term financial targets of 70% gross margin and 40% Adjusted EBITDA margin, while growing topline revenue at 15% per year, are intact as we remain confident in the enduring success of ShotSpotter and accelerating adoption of our broader SafetySmart platform across domestic and international markets."
The company's financial outlook statements are based on current expectations. The preceding statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under "Forward-Looking Statements" below. The company has not reconciled its Adjusted EBITDA outlook to GAAP net income (loss) due to the uncertainty and variability of interest income (expense), income taxes, depreciation and amortization, stock-based compensation expenses, and acquisition-related expenses, including any adjustments to the company's contingent consideration obligation, which are reconciling items between Adjusted EBITDA and GAAP net income (loss). Because the company cannot reasonably predict such items, a reconciliation to forecasted GAAP net income (loss) is not available without unreasonable effort. Such items could have a significant impact on the calculation of GAAP net income (loss). For more information, see "Non-GAAP Financial Measures and Key Business Metrics" below.
Conference Call
SoundThinking will host a live webcast and conference call to discuss the third quarter 2025 earnings at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) on November 12, 2025. Those wishing to participate via the webcast should access the call through the Investor Relations sections of the SoundThinking website at www.soundthinking.com. Those wishing to participate via the telephone may dial in at 1-877-407-8029 (USA) or 1-201-689-8029 (International). The webcast replay will be available through the Investor Relations section of the SoundThinking website.
Non-GAAP Financial Measures and Key Business Metrics
Adjusted Net Income (Loss): Adjusted net income (loss), a non-GAAP financial measure, represents the company's net income (loss) before adjustments to the company's contingent consideration obligation, restructuring expense and loss from disposal of fixed assets.
Adjusted EBITDA: Adjusted EBITDA, a non-GAAP financial measure, represents the company's net income (loss) before interest (income) expense, income taxes, depreciation, amortization and impairment, restructuring costs and losses on restructuring related fixed asset disposals, stock-based compensation expense and adjustments to the company's contingent consideration obligation. Adjusted EBITDA is a measure used by management internally to understand and evaluate the company's core operating performance and trends across accounting periods and in connection with developing future operating plans, making strategic decisions regarding the allocation of capital and considering initiatives focused on cultivating new markets for its solutions. In particular, the exclusion of these expenses in calculating Adjusted EBITDA facilitates comparisons of the company's operating performance on a period-to-period basis.
SoundThinking believes adjusted net income (loss) and Adjusted EBITDA also provide useful information to investors and others in understanding and evaluating its operating results in the same manner as its management and board of directors. For example, SoundThinking adjusts EBITDA for stock-based compensation expense and acquisition-related expenses because such expenses often vary for reasons that are generally unrelated to financial and operational performance in a particular period. Stock-based compensation is utilized by SoundThinking to attract and retain employees with a goal of long-term retention and the alignment of employee interests with those of the company and its stockholders, rather than to address operational performance for any particular period's financial performance measures, in particular net income (loss), or its other GAAP financial results.
The following table presents a reconciliation of GAAP net loss, the most directly comparable GAAP measure, to adjusted net loss, for each of the periods indicated (in thousands, except share and per share data):
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2025
2024
2025
2024
(Unaudited)
(Unaudited)
GAAP net loss
$
(2,044
)
$
(1,440
)
$
(6,648
)
$
(5,101
)
Less:
Restructuring expense
—
—
—
346
Loss on disposal of fixed assets
—
—
—
5
Change in fair value of contingent consideration
—
—
—
(554
)
Adjusted net loss
$
(2,044
)
$
(1,440
)
$
(6,648
)
$
(5,304
)
Net loss per share
$
(0.16
)
$
(0.11
)
$
(0.52
)
$
(0.40
)
Adjusted net loss per share, diluted
$
(0.16
)
$
(0.11
)
$
(0.52
)
$
(0.42
)
Weighted average shares used in computing net loss per share and adjusted net loss per share, basic and diluted
12,760,595
12,688,850
12,707,463
12,750,664
The following table presents a reconciliation of GAAP net loss, the most directly comparable GAAP measure, to Adjusted EBITDA for each of the periods indicated (in thousands):
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2025
2024
2025
2024
(Unaudited)
(Unaudited)
GAAP net loss
$
(2,044
)
$
(1,440
)
$
(6,648
)
$
(5,101
)
Less:
Interest expense, net
(14
)
(7
)
18
176
Income taxes
(158
)
319
