Revenues Increased 24% to a Record
Company Introduces FY 2024
Fourth Quarter 2023 Financial and Operational Highlights
- Revenues increased 24% to
$26.0 million , compared to$21.0 million for the same quarter of 2022. - Gross profit increased 26% to
$15.0 million (58% of revenues), compared to$11.9 million (57% of revenues) for the same quarter of 2022. - GAAP net income totaled
$3.6 million , compared to GAAP net loss of$1.0 million for the same quarter of 2022. - Adjusted EBITDA1 totaled
$4.8 million (18% of revenues), an improvement compared to$4.3 million (20% of revenues) for the same quarter of 2022. - Went “live” in six new cities as well as expanded with two current cities and one corporate customer.
- Secured a phase one
$13.5 million CaseBuilder contract with theNew York City Department of Corrections . - Launched
ShotSpotter inMontevideo, Uruguay , representing the company's third international deployment.
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).
Full Year 2023 Financial and Operational Highlights
- Revenues increased 14% to a record
$92.7 million , compared to$81.0 million in 2022. - Gross profit increased 13% to
$52.7 million (57% of revenues), compared to$46.8 million (58% of revenues) in 2022. - GAAP net loss totaled
$2.7 million , compared to GAAP net income of$6.4 million in 2022. - Adjusted EBITDA2 totaled
$14.3 million (15% of revenues), compared to$15.9 million (20% of revenues) in 2022. - Annual recurring revenue2 starting on
January 1, 2024 was$95 .4 million, compared to$79.7 million onJanuary 1, 2023 . - Sales and marketing spend per
$1.00 of new annualized contract value2 was$0.52 , compared to$0.40 in 2022. - Went “live” with 155 new miles, representing 25 new cities as well as expanded with 16 current cities, two universities and one corporate customer.
Acquired SafePointe, LLC (SafePointe), an AI-based weapons detection technology company, which expanded SoundThinking’s SafetySmart™ platform while increasing the company's total addressable market and commercial enterprise buying centers.- Released second annual Environmental, Social, and Governance (ESG) Report, emphasizing commitment to engaging law enforcement with technology solutions for positive public safety outcomes.
2 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), annual recurring revenue and sales and marketing spend per
Management Commentary
“Our record quarterly revenue in the fourth quarter capped a successful year for SoundThinking,” said President and CEO
“In 2023 we rebranded to SoundThinking, encapsulating the strategic shift we are making to focus on our SafetySmart™ platform. We believe our platform, enhanced by the recent addition of SafePointe, offers a robust suite of public safety and enterprise security tools that will ultimately make our communities and gathering spaces safer. We’ve seen increased adoption of our solutions in 2023 compared to 2022, including a
“Overall, with our leading solutions and passionate commitment to customer success, we believe we are well-positioned to execute in 2024. We’ve built strong relationships with customers across
Fourth Quarter 2023 Financial Results
Revenues for the fourth quarter of 2023 were
Gross profit for the fourth quarter of 2023 was
Total operating expenses for the fourth quarter of 2023 were
Net income for the fourth quarter of 2023 totaled
Adjusted EBITDA for the fourth quarter of 2023 totaled
At quarter end, the company had
Full Year 2023 Financial Results
Revenues in 2023 increased 14% to
Gross profit in 2023 increased 13% to
Total operating expenses in 2023 increased 38% to
Net loss in 2023 totaled
Adjusted EBITDA for 2023 totaled
Financial Outlook
The company introduced its full year 2024 revenue guidance range of
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 “Safe Harbor Statement” 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, 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 hold a conference call today
SoundThinking management will host the presentation, followed by a question-and-answer period.
International dial-in: 1-201-389-0879
Conference ID: 13744205
A live audio webcast of the conference call will be available in listen-only mode simultaneously and available for replay via the investor relations section of the company’s website at www.soundthinking.com.
Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization.
A replay of the call will be available after
International replay dial-in: 1-412-317-6671
Replay ID: 13744205
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 acquisition-related expenses, including adjustments to the company's contingent consideration obligation.
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, stock-based compensation expense and acquisition-related expenses, including 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 income (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 Ended | Year Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
GAAP net income (loss) | $ | 3,643 | $ | (1,045 | ) | $ | (2,718 | ) | $ | 6,385 | ||||||
Less: | ||||||||||||||||
Acquisition-related expenses | (97 | ) | — | 767 | 101 | |||||||||||
Change in fair value of contingent consideration | (4,763 | ) | (312 | ) | (5,686 | ) | (9,154 | ) | ||||||||
Adjusted net loss | $ | (1,217 | ) | $ | (1,357 | ) | $ | (7,637 | ) | $ | (2,668 | ) | ||||
Adjusted net loss per share, basic and diluted | $ | (0.10 | ) | $ | (0.11 | ) | $ | (0.61 | ) | $ | (0.22 | ) | ||||
Weighted average shares used in computing adjusted net loss per share, basic and diluted | 12,736,747 | 12,215,697 | 12,425,132 | 12,171,609 | ||||||||||||
The following table presents a reconciliation of Adjusted EBITDA to GAAP net income (loss), the most directly comparable GAAP measure, for each of the periods indicated (in thousands):
Three Months Ended | Year Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
GAAP net income (loss) | $ | 3,643 | $ | (1,045 | ) | $ | (2,718 | ) | $ | 6,385 | ||||||
Less: | ||||||||||||||||
Interest (income) expense, net | 112 | (19 | ) | 48 | (45 | ) | ||||||||||
Income taxes | 561 | 1,167 | 1,204 | 1,167 | ||||||||||||
Depreciation and amortization | 2,626 | 2,375 | 10,752 | 9,199 | ||||||||||||
Stock-based compensation expense | 2,710 | 2,137 | 9,982 | 8,282 | ||||||||||||
Change in fair value of contingent consideration | (4,763 | ) | (312 | ) | (5,686 | ) | (9,154 | ) | ||||||||
Acquisition-related expenses | (97 | ) | — | 767 | 101 | |||||||||||
Adjusted EBITDA | $ | 4,792 | $ | 4,303 | $ | 14,349 | $ | 15,935 | ||||||||
Annual Recurring Revenue (ARR): ARR is calculated for a year based on the expected GAAP revenue for the year from contracts that are in effect on
Revenue Retention Rate: We calculate our revenue retention rate for each year by dividing the (a) total revenues for such year from those customers who were customers during the corresponding prior year by (b) the total revenues from all customers in the corresponding prior year. For the purposes of calculating our revenue retention rate, we count as customers all entities with which we had contracts in the applicable year. Revenue retention rate for any given period does not include revenues attributable to customers first acquired during such period. We focus on our revenue retention rate because we believe that this metric provides insight into revenues related to and retention of existing customers. If our revenue retention rate for a year exceeds 100%, this indicates a low churn and means that the revenues retained during the year, including from customer expansions, more than offset the revenues that we lost from customers that did not renew their contracts during the year.
Sales and Marketing Spend per
Safe Harbor Statement
This press release contains "forward-looking statements" within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding the company’s expectations for its estimated revenue and Adjusted EBITDA for 2024, ability to drive profitable growth and build upon existing contracts and partnerships, including in
About
Company Contact:
+1 (510) 794-3100
astewart@soundthinking.com
Investor Relations Contacts:
+1 (949) 574-3860
SSTI@gateway-grp.com
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended | Year Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues | $ | 26,045 | $ | 20,998 | $ | 92,717 | $ | 81,003 | ||||||||
Costs | ||||||||||||||||
Cost of revenues | 10,993 | 9,088 | 39,874 | 34,218 | ||||||||||||
Impairment of property and equipment | 42 | — | 114 | — | ||||||||||||
Total costs | 11,035 | 9,088 | 39,988 | 34,218 | ||||||||||||
Gross profit | 15,010 | 11,910 | 52,729 | 46,785 | ||||||||||||
Operating expenses | ||||||||||||||||
Sales and marketing | 7,379 | 5,689 | 26,959 | 22,416 | ||||||||||||
Research and development | 3,242 | 2,456 | 12,138 | 10,026 | ||||||||||||
General and administrative | 4,751 | 4,040 | 20,557 | 15,750 | ||||||||||||
Change in fair value of contingent consideration | (4,763 | ) | (312 | ) | (5,686 | ) | (9,154 | ) | ||||||||
Total operating expenses | 10,609 | 11,873 | 53,968 | 39,038 | ||||||||||||
Operating income (loss) | 4,401 | 37 | (1,239 | ) | 7,747 | |||||||||||
Other income (expense), net | ||||||||||||||||
Interest income (expense), net | (112 | ) | 19 | (48 | ) | 45 | ||||||||||
Other income (expense), net | (85 | ) | 66 | (227 | ) | (240 | ) | |||||||||
Total other income (expense), net | (197 | ) | 85 | (275 | ) | (195 | ) | |||||||||
Income (loss) before income taxes | 4,204 | 122 | (1,514 | ) | 7,552 | |||||||||||
Provision for income taxes | 561 | 1,167 | 1,204 | 1,167 | ||||||||||||
Net income (loss) | $ | 3,643 | $ | (1,045 | ) | $ | (2,718 | ) | $ | 6,385 | ||||||
Net income (loss) per share, basic | $ | 0.29 | $ | (0.09 | ) | $ | (0.22 | ) | $ | 0.52 | ||||||
Net income (loss) per share, diluted | $ | 0.28 | $ | (0.09 | ) | $ | (0.22 | ) | $ | 0.52 | ||||||
Weighted-average shares used in computing net income (loss) per share, basic | 12,736,747 | 12,215,697 | 12,425,132 | 12,171,609 | ||||||||||||
Weighted-average shares used in computing net income (loss) per share, diluted | 12,856,219 | 12,215,697 | 12,425,132 | 12,317,707 | ||||||||||||
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
2023 | 2022 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 5,703 | $ | 10,479 | ||||
Accounts receivable and contract asset, net | 31,572 | 30,957 | ||||||
Prepaid expenses and other current assets | 3,902 | 3,225 | ||||||
Total current assets | 41,177 | 44,661 | ||||||
Property and equipment, net | 21,028 | 21,988 | ||||||
Operating lease right-of-use assets | 2,315 | 3,240 | ||||||
33,728 | 22,971 | |||||||
Intangible assets, net | 36,938 | 27,318 | ||||||
Other assets | 3,328 | 2,570 | ||||||
Total assets | $ | 138,514 | $ | 122,748 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 3,031 | $ | 1,633 | ||||
Line of credit | 7,000 | — | ||||||
Deferred revenue, short-term | 41,071 | 41,907 | ||||||
Accrued expenses and other current liabilities | 8,798 | 9,965 | ||||||
Total current liabilities | 59,900 | 53,505 | ||||||
Deferred revenue, long-term | 812 | 1,813 | ||||||
Deferred tax liability | 949 | 685 | ||||||
Other liabilities | 2,096 | 5,800 | ||||||
Total liabilities | 63,757 | 61,803 | ||||||
Stockholders' equity | ||||||||
Common stock | 64 | 62 | ||||||
Additional paid-in capital | 170,139 | 153,573 | ||||||
Accumulated deficit | (95,118 | ) | (92,400 | ) | ||||
Accumulated other comprehensive loss | (328 | ) | (290 | ) | ||||
Total stockholders' equity | 74,757 | 60,945 | ||||||
Total liabilities and stockholders' equity | $ | 138,514 | $ | 122,748 |
Source:
2024 GlobeNewswire, Inc., source