SSTI · SoundThinking, Inc.

SoundThinking's Q1 2026 results reflect a challenging quarter with revenue declining 15% year-over-year to $24.2 million, primarily due to the absence of $3.5 million in catch-up revenue from NYPD contract renewals that benefited Q1 2025 and the non-renewal of a ShotSpotter contract in Puerto Rico. Gross profit fell 32% to $11.3 million, with gross margin contracting to 47% from 59%, driven by lower revenue volume and continued cost pressures. Operating expenses remained relatively flat at $18.1 million, as higher employee-related compensation and $1.6 million in restructuring charges were offset by reduced sales and marketing spend. The restructuring, part of a workforce optimization initiative, is expected to generate approximately $4 million in annualized savings. GAAP net loss widened to $7.0 million from $1.5 million, and Adjusted EBITDA turned negative at -$0.1 million versus $4.5 million in the prior year. Despite the weak quarter, management reaffirmed full-year 2026 revenue guidance of $109 million to $111 million (approximately 6% year-over-year growth at the midpoint) and Adjusted EBITDA margin of 16% to 18%. The company also reiterated its expectation for ARR to grow from $95.4 million at the beginning of 2026 to approximately $110 million at the start of 2027. Management highlighted momentum in drone-as-first-responder integrations (now live in 16 cities), the launch of SafetySmart Field Agent, and accelerating SafePointe go-lives in healthcare, with monthly recurring revenue more than doubling during the quarter. The company remains confident in its full-year outlook even without a ShotSpotter contract renewal in Chicago, as it awaits the outcome of the current RFP process. The balance sheet remains solid with $14.2 million in cash, $21.9 million in receivables, and $40.4 million in deferred revenue, providing a foundation for the expected ramp through the year.