SoundThinking (SSTI) Q4 2025 Earnings Transcript

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Date

Tuesday, March 3, 2026 at 4:30 p.m. ET

Call participants

• President and Chief Executive Officer — Ralph A. Clark
• Chief Financial Officer — Alan R. Stewart

Takeaways

• Full-year revenue -- $104.1 million, representing a 2% increase, with growth offset by $9 million of non-renewed Chicago revenue replaced by other product sales.
• Q4 revenue -- $24.8 million, up 6%, reflecting sustained sales momentum in key offerings.
• Annual recurring revenue (ARR) -- Exited at $95.4 million, with management targeting ~15% growth, or $14.6 million, net of $3.1 million anticipated 2026 attrition.
• ShotSpotter segment ARR -- $67.6 million at year-end, with potential $8.3 million addition targeted, including $2.7 million Puerto Rico renewal and $5.6 million new/expansion ARR; Chicago and sniper solution ARR excluded.
• Crime Tracer ARR -- $8.1 million, with $3.1 million incremental ARR expected, including $2.5 million from 18 new agencies in a state currently experiencing execution delay.
• PlateRanger ARR -- $1.5 million targeted by year-end, following new customer conversions from pilot deployments.
• SafePoint bookings -- $1.6 million in bookings from 11 customers in 2025, with $800,000 booked in Q4 from six customers and $4 million in ARR targeted for 2026.
• Q4 adjusted EBITDA -- $1.3 million, down versus $1.7 million due to delayed Crime Tracer and Puerto Rico renewals.
• Full-year adjusted EBITDA -- $12.6 million compared to $14.4 million, reflecting lower Chicago ShotSpotter revenue and increased investments.
• Q4 gross profit -- $12.6 million (51% margin), up from $11.7 million (50% margin).
• GAAP net loss -- Q4 loss of $2.8 million ($0.22 per share); full-year loss of $9.4 million ($0.74 per share).
• Operating expenses -- Full-year $65.4 million (63% of revenue), down 1% from $65.7 million; Q4 $15.1 million (61% of revenue), down from $15.5 million.
• Cash and cash equivalents -- Ended year with $15.8 million, rising above $16 million after annual bonus payouts.
• Share repurchases -- 225,334 shares bought for approximately $3 million at $13.15 average per share.
• Revenue retention rate -- 99% for 2025, lowered by Chicago’s non-renewal.
• 2026 revenue guidance -- Reduced to $109 million to $111 million, down from prior $114 million to $116 million, due to Crime Tracer and Puerto Rico contract delays.
• Adjusted EBITDA margin guidance -- Lowered to 16%-18% (from 18%-20%) to account for contract delays and increased AI investment.
• Sales efficiency -- Sales and marketing spend per dollar of new annualized contract value decreased to $0.56 from $0.63, indicating improved efficiency.
• Global sales leadership -- Kirk Arthur appointed Senior VP of Global Sales, accelerating execution and pipeline discipline.
• Sales team expansion -- New hires include Manuel Nilan as VP of Sales for SafePoint and Bruno Bolorino as Vice President in Brazil for international momentum.

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Risks

• Alan R. Stewart stated, "We are reducing our full-year revenue guidance range from $114,000,000 to $116,000,000 to $109,000,000 to $111,000,000. This decrease is primarily attributable to delays in two expected bookings and deployments. The timing of closure is still unknown."
• Delayed Crime Tracer deployment across approximately 18 state agencies, representing approximately $2.5 million expected revenue, now uncertain in timing.
• ShotSpotter renewal in Puerto Rico, valued at approximately $2.7 million in ARR, also delayed with recognition dependent on contract execution.
• Alan R. Stewart said, "We are reducing our full-year adjusted EBITDA margin guidance range from 18% to 20% to 16% to 18% to take into account the delay of these large contract executions as well as the investments that we continue to make in our AI modeling and tools."

Summary

SoundThinking (NASDAQ:SSTI) reported a modest 2% annual revenue increase to $104.1 million, reflecting resilience despite Chicago contract losses, and set 2026 revenue guidance notably lower due to timing of large, delayed bookings. Management highlighted an expected inflection in ARR, projecting 15% growth led by its SafetySmart platform components and discussing robust bookings momentum in SafePoint and multi-product sales strategy. The company’s leadership expansion, particularly in global sales and SafePoint business, along with a board-initiated operational efficiency review, signal an organizational pivot for execution and cost control amid delayed contract revenue. Operating margins, adjusted EBITDA, and cash flow are expected to remain under near-term pressure until delayed contracts close. Management conveyed confidence in future recurring revenue and product expansion across new customer sectors.

• Management said, "We are in a wait-and-see posture." on the Chicago contract, while reiterating that New York’s three-year ShotSpotter agreement remains "fully intact" with "no proposed reductions, no carve-outs, no structural changes."
• SoundThinking is launching a perimeter-based sniper gunshot detection solution targeting utility substations, with initial pilots aimed at utility customers. Stated revenue potential is not assumed for 2026.
• SafePoint growth is concentrated in healthcare customers seeking frictionless weapons detection, and over 50% of current customers are in this vertical; management noted significant hospital network expansion opportunity.
• International growth focus includes expected new deployments in Brazil, Uruguay, and South Africa, with a sales leadership hire in Brazil to capture market share where "has a lot of gun violence, and we are doing quite well."

Industry glossary

• Annual recurring revenue (ARR): The annualized value of contracted recurring revenue from subscription-based solutions, excluding one-time or non-recurring revenues.
• Adjusted EBITDA: A non-GAAP financial measure reflecting earnings before interest, taxes, depreciation, amortization, impairment, restructuring, stock-based compensation, and acquisition-related expenses.
• ALPR (Automatic license plate recognition): Technology that automatically reads and identifies vehicle license plates for law enforcement and security purposes.
• CJIS (Criminal Justice Information Services): An FBI division providing centralized databases and data aggregation for federal, state, and local law enforcement agencies.
• RFP (Request for proposal): A formal process by which organizations solicit bids for specific solutions or services.

Full Conference Call Transcript

With that, I will now turn the call over to Ralph A. Clark. Thank you.

Ralph A. Clark: Thank you, Operator. Good afternoon, everyone, and thank you for joining us. I will begin with high-level commentary on the quarter and the year, along with an update on our near-term outlook and strategic progress. Alan will then walk through the financials in more detail and provide guidance before we open up the line for questions. Let me start with some important context. The overall market for public safety solutions is constructive and growing. I am incredibly proud of our team for executing through some of the headwinds we encountered in 2025. Despite some of those challenges, we delivered record full-year revenue of $104,100,000, representing a 2% increase over 2024.

We accomplished that while maintaining double-digit adjusted EBITDA margin profitability and while, importantly, making critical growth investments that we believe position us for the future. We went live with ShotSpotter in 10 new cities, two universities, and expanded with 11 current customers in 2025. Additionally, we saw solid acceleration of our SafePoint business with $1,600,000 of bookings from 11 customers, which we anticipate taking live in the first half of this year. We are exiting 2025 with ARR of $95,400,000, and we believe we are positioned to grow that ARR base by approximately 15%, or $14,600,000, net of approximately $3,100,000 of ARR attrition in 2026. This puts us on a path to enter 2027 with $110,000,000 of ARR.

I will walk you through the expected ARR build toward the end of my commentary but will highlight now that while the corresponding GAAP revenue should ultimately follow, that ARR growth is expected to lag because a meaningful portion of our ARR bookings are expected in the second half of the year. Let me step back and frame what we are building here at SoundThinking, Inc., and why we are so confident in our future within the public safety and security SaaS market. A big part of what we do is deploy connected physical infrastructure: acoustic sensors for gunshot detection through ShotSpotter, visual sensors for vehicle intelligence through PlateRanger, and passive magnetic field sensors for concealed weapons detection through SafePoint.

These devices operate in the real world, generating mission-critical data. What differentiates us is the unique data we are able to capture at the physical layer and the AI-based algorithms we apply against that data. Our models detect, validate, and publish actionable signals—gunshots, vehicles of interest, concealed weapons—while filtering out the noise in real time and at scale. While we have been working on innovating and improving our ShotSpotter solution for decades, we have become more intentional recently to apply our prior learnings with new data aggregation and AI tools to our other connected device solutions. Strategically, these solutions become embedded infrastructure for our customers.

As we deploy more devices, we aggregate more data, which improves our AI models and increases value over time. Because our alerts are integrated directly into customer workflows, from dispatch to investigation to emerging tools like drones as first responders, our systems become operationally embedded. This creates meaningful switching friction and drives strong retention. The result is a durable recurring revenue base that is both profitable today and, we believe, will compound over the long term and create real long-term value. Our 2026 ARR growth is expected to come primarily from four major solutions comprising the SafetySmart platform. First, ShotSpotter, which is our flagship offering and is still the leading acoustic gunshot detection solution in the market.

We currently serve over 170 customers comprising over 1,100 square miles and exited 2025 with $67,600,000 of ARR. We believe we can add approximately $8,300,000 of additional ARR, including the $2,700,000 of ARR recapture of Puerto Rico, plus approximately $5,600,000 of ARR from other new domestic and international customers, including expansions. This ARR growth does not include Chicago nor any ARR from our recently launched perimeter-based sniper solution, which is focused on critical infrastructure protection of utility substations and corporate campuses, with the potential to cover U.S. Embassy and forward operating base deployments. We believe these opportunities represent additional upside.

Second, we are very pleased with the market reception of our Crime Tracer Gen 3 solution, launched late last year at IACP. Crime Tracer is a highly differentiated data aggregation business representing over 1,000,000,000 cross-jurisdictional CJIS records combined with Thomson Reuters CLEAR. That scale and breadth of data create a powerful foundation for investigative intelligence. With Gen 3, we are applying generative AI into that data environment to enable investigators and analysts to find what they are looking for more naturally, surface relevant connections that result in investigative leads faster, and help deliver justice to victims of crime. We are very excited about local law enforcement across all task force collaborations to address gang violence and organized retail theft rings.

Crime Tracer exited 2025 with $8,100,000 of ARR, and we estimate that we will add approximately another $3,100,000 of ARR, including the $2,500,000 of ARR from the execution of Crime Tracer across approximately 18 agencies within a new state, which has been delayed but which we believe will happen no later than Q3 of this year. Third, our connected vehicle intelligence ALPR solution, PlateRanger, which is powered by our partnership with Rekor, is gaining solid traction following its launch last year.

Given the recent controversy around a certain LPR vendor that has received a lot of well-documented attention, we believe this opens up a significant opportunity for new entrants like ourselves who take security and data governance as first principles versus an afterthought. We are modestly targeting $1,500,000 of new ARR from PlateRanger this year. And last but not least, SafePoint. We continue to see strong momentum as we believe the market is recognizing that SafePoint is not just another weapons detection system but that it is a fundamentally different architecture.

Unlike legacy checkpoint-based systems that rely on active screening and create friction, SafePoint operates passively and discreetly in the natural flow of ingress and egress, leveraging advanced sensor fusion and AI to detect concealed weapons without slowing people down. We believe that frictionless experience helps drive higher adoption, stronger customer satisfaction, enhanced visitor dignity, and real operational scalability. We are in the early innings here, as leveraging passive sensor weapons detection by harnessing advanced AI capabilities is new and innovative. As we refine deployments and expand our sales capacity, we believe SafePoint is uniquely positioned at the intersection of physical security and AI in what we call physical-world AI.

We are encouraged by the tight product-market fit demonstrated with Q4 2025 bookings of approximately $800,000 across six customers that all have the capacity for potential expansion. Our model estimates that SafePoint could contribute another $4,000,000 of ARR in 2026. The balance of our overall ARR increase would come from our other products. An important element in our ability to deliver on our growth strategy is having the right team in place. To that end, we have taken steps to bolster our sales execution capabilities by adding several new leaders with proven experience scaling successful go-to-market functions and driving durable, profitable growth. We have welcomed Kirk Arthur as our new Senior VP of Global Sales.

Kirk brings a unique combination of commercial GovTech sales leadership he honed at Microsoft combined with his executive leadership roles in public safety at the U.S. Secret Service. We are thrilled to have him join our leadership team. It is important to note that we operated at less than our full potential in 2025 without a permanent Senior VP of Global Sales. So Kirk's arrival is a meaningful step forward in strengthening execution, accountability, and pipeline discipline across the organization. In addition, Manuel Nilan has joined us as VP of Sales and the Sales Leader for our SafePoint business. Manny has a long and successful career of bringing new innovative security solutions to market.

We now have a fully built-out SafePoint sales team in place, which is something we did not have in place a year ago. Lastly, we have added Bruno Bolorino as Vice President in Brazil to help expand and accelerate our momentum in that key market. Importantly, Kirk's leadership also frees up Gary Bunyard, who did an outstanding job serving as Interim Senior VP of Sales for Q4 2025. He will now be able to focus on key large strategic opportunities, including pursuing the contract renewal with Puerto Rico, advancing a significant SafePoint potential opportunity with a global top five healthcare system, and potentially engaging Chicago based on their RFP response.

And speaking of Chicago, as we previously shared, the formal evaluation process has been completed, and we believe the recommendation has been transmitted to the appropriate procurement channels. At this stage, the matter sits with the city's administrative process. We remain confident in the strength of our response and the technical, operational, and financial merits of our proposal. Importantly, we believe nothing about the underlying need for acoustic gunshot detection technology has changed, given the formal line item budget approval for gunshot detection. We continue to be respectful while the formal RFP is active. And while timing is ultimately outside of our control, we believe the fundamentals of performance, outcomes, and officer safety speak for themselves.

We are in a wait-and-see posture. On New York, we are pleased to see that the recently released fiscal year 2027 budget framework leaves our current three-year agreement with NYPD fully intact. There were no proposed reductions, no carve-outs, no structural changes to the program. ShotSpotter remains embedded in the city's public safety architecture, and it grows as NYPD integrates ShotSpotter with drones as first responders and crime gun intelligence. This is notable. New York is one of the most scrutinized policing environments in the world, and if there were any operational concerns, budget pressures, or appetite for change, we believe you would see it reflected here first. Instead, what you see is continuity.

Our system continues to do what it is designed to do, which is to provide rapid actionable intelligence to officers in the field. The city's budget signals steady support; from our perspective, there is nothing unusual to interpret here. This is simply the steady execution of a longstanding partnership. Now to guidance. We know from experience that recognized GAAP revenue timing can fluctuate based on procurement cycles, deployment schedules, the cadence of bookings, and budget headwinds, which is why we are adjusting our full-year revenue guidance to $109,000,000 to $111,000,000. But to be clear, we believe annual recurring revenue reflects the 2026 inflection point in the underlying compounding economic engine of our business.

As we move into 2026, there are three items of focus for us. First, anticipated ARR growth. Approximately 15% growth in our net ARR reflects expanding adoption and renewed momentum. Second, introducing customers to more solutions within our platform and focused integration with complementary solutions. Multi-product customers represent a larger opportunity than a single-product deployment. We are increasingly leading with workflow outcomes, not point solutions. Third, operating discipline. We are investing where the returns are strongest, particularly in growth areas like SafePoint and operational levers made possible by agentic AI capabilities. As we continue to allocate resources toward our highest return opportunities, we are also focused on ensuring the organization is operating as effectively as possible.

In that context, the Board and management team are undertaking a review of the business to identify opportunities to drive efficiency across the organization. Our objective is to create shareholder value and ensure the company is well positioned in any market environment. We will provide updates as the review progresses. I will now turn the call over to Alan R. Stewart for the financial results.

Alan R. Stewart: Thank you, Ralph, and good afternoon, everyone. In spite of the challenges mentioned by Ralph, our 2025 results had many positives. Our financial performance reflects the success of our ongoing strategic initiatives, the growth of our largest products, and operational efficiency measures, which support our commitment to deliver value to our shareholders. In the fourth quarter, revenues were $24,800,000, representing a 6% increase over the prior-year period. Gross profit was $12,600,000, or 51% of revenue, versus $11,700,000, or 50% of revenue, for the prior-year period. Our adjusted EBITDA was $1,300,000, compared to $1,700,000 in the prior-year period.

Our adjusted EBITDA decrease was directly related to the delayed contracts from an anticipated deployment of Crime Tracer in a new state and our ShotSpotter renewal in Puerto Rico. As a reminder, adjusted EBITDA, a non-GAAP financial measure, is calculated by taking our GAAP net income or loss and adjusting out interest income or expense, income taxes, depreciation, amortization and impairment, restructuring costs and losses, including related fixed asset disposals, stock-based compensation expenses, and acquisition-related expenses, including adjustments to our contingent consideration obligations. Our operating expenses were $15,100,000, or 61% of revenue, versus $15,500,000, or 66% of revenue, in the prior-year period.

Breaking down our expenses, sales and marketing expense in the fourth quarter was $6,500,000, or 26% of total revenue, compared to $6,500,000, or 28% of total revenue, in the prior-year period. Our R&D expenses were $4,000,000, or 16% of total revenue, compared to $3,500,000, or 15% of total revenue, in the prior-year period. G&A expenses for the quarter were $4,500,000, or 18% of total revenue, compared to $5,500,000, or 24% of total revenue, for the prior-year period. Our GAAP net loss was approximately $2,800,000, or a loss of $0.22 per basic and diluted share for the quarter, based on 12,700,000 basic and diluted weighted average shares outstanding.

This compares to a net loss of $4,100,000, or $0.32 per basic and diluted share, based on 12,600,000 basic and diluted weighted average shares outstanding for the prior-year period. Turning to our full-year 2025 results, revenues were a record $104,100,000, representing a 2% increase over the $102,000,000 achieved in 2024. It should be noted that 2024 included approximately $9,000,000 of revenue related to Chicago that was not renewed but replaced by growth of other product sales across the company. This Chicago revenue reduction also affected all 2025 profitability measures. Gross profit was $56,600,000, or 54% of revenue, versus $57,900,000, or 57% of revenue, for the prior year.

Our adjusted EBITDA was $12,600,000, compared to the $14,400,000 we achieved in the prior year. Operating expenses decreased 1% to $65,400,000, or 63% of revenue, versus $65,700,000, or 64% of revenue, in 2024. Breaking down our expenses, sales and marketing expense in 2025 was $26,100,000, or 25% of total revenue, compared to $28,100,000, or 28% of total revenue, in the prior year. Our R&D expenses were $15,900,000, or 15% of total revenue, compared to $13,900,000, or 14% of total revenue, in the prior year. G&A expenses for the year were $23,200,000, or 22% of total revenue, compared to $23,900,000, or 23% of total revenue, for the prior year.

As a reminder, we expect our G&A expenses to grow less than our revenue on a percentage basis as our company grows. Our GAAP net loss was approximately $9,400,000, or a loss of $0.74 per basic and diluted share for the year, based on 12,700,000 basic and diluted weighted average shares outstanding. This compares to a net loss of $9,200,000, or $0.72 per basic and diluted share, based on 12,700,000 basic and diluted weighted average shares outstanding for the prior-year period. Deferred revenue as of 12/31/2025 was $43,900,000, in line compared to the $43,900,000 at the end of the third quarter 2025.

Revenue retention rate for 2025 achieved 99%, reduced due to the non-renewal of our Chicago ShotSpotter contract in 2024. Our sales and marketing spend per dollar of new annualized contract value was $0.56, compared to $0.63 in 2024. We ended the year with $15,800,000 in cash and cash equivalents versus $11,800,000 at the end of 2025. We repurchased 225,334 of our shares at an average price of $13.15, approximately $3,000,000 throughout 2025. Our current cash balance is greater than $16,000,000 even after paying our annual company cash bonuses in February. We currently have approximately $36,000,000 available on our line of credit, as we have approximately $4,000,000 in debt outstanding, all on our line of credit.

Now, turning to our guidance for the full year of 2026, we are reducing our full-year revenue guidance range from $114,000,000 to $116,000,000 to $109,000,000 to $111,000,000. This decrease is primarily attributable to delays in two expected bookings and deployments, which the timing of closure is still unknown, so we thought it appropriate to reduce the revenue expansion until they are executed. The first relates to Crime Tracer. We had anticipated execution across approximately 18 agencies within the new state, representing approximately $2,500,000 in revenue. While this deployment has been delayed, we remain confident it will proceed in the near future. The second relates to our ShotSpotter renewal in Puerto Rico.

When executed, this contract is expected to add approximately $2,700,000 in ARR, but similar to the Crime Tracer rollout in the new state, we are not clear on the timing of the contract execution. In total, these two items represent over $5,000,000 in revenue that was originally expected to be recognized in 2025 and throughout 2026. Even if recognition of revenue is delayed, provided these contracts are executed in 2026, they should significantly increase our ARR at the end of the year. It is also important to note that approximately 70% of the revenue related to these two items mentioned above will flow through to adjusted EBITDA.

While we believe these are temporary setbacks, we remain optimistic about the long-term value of these potential contracts and our ability to execute well if and when they get booked. We continue to monitor these developments closely. We are reducing our full-year adjusted EBITDA margin guidance range from 18% to 20% to 16% to 18% to take into account the delay of these large contract executions as well as the investments that we continue to make in our AI modeling and tools that we are incorporating in our products and our internal operational use. As we look to 2026, we remain focused on execution and long-term value creation.

We are encouraged by our pipeline visibility for the rest of 2026, the strong renewal rate of our customer base, expanding strategic partnerships and integrations, increasing momentum into 2026, and our ability to generate consistent cash flow while investing for future accelerated growth. Overall, we are pleased with the progress we have made on each of our strategic initiatives and operational performance of the business. With that, we will now open for questions. Operator, will you please open the line for the Q&A?

Operator: Thank you. At this time, we will conduct our question-and-answer session. Your first question comes from Alex Latimore with Northland Capital Markets. Please state your question.

Alex Latimore: Hey, guys. Alex Latimore here on for Mike Latimore. I appreciate the color in the quarter here; the ARR breakdown is very helpful for me. I had one question here on SafePoint. Can you discuss which verticals are currently most prominent in the pipeline for SafePoint?

Ralph A. Clark: Yes, thank you for the question. Can you hear me okay?

Alex Latimore: Yes.

Ralph A. Clark: Great. This is Ralph. I would say that the primary vertical for us where we have had a lot of success has been the healthcare vertical, because they really do value the passive nature of our weapons detection system that allows for full ingress and egress without having a checkpoint or any kind of friction. That is really the vertical that we are leaning in on most, although we do have some other opportunities in other verticals, in corporate verticals as an example.

Alex Latimore: Thanks, Ralph. I also was curious on the status of your CaseBuilder deployment, I believe, in the NYPD corrections department. If you could give any insights there, that would be very helpful.

Ralph A. Clark: Great. This is Ralph again. Thank you for that. We are continuing to make really good progress in lighting up new applications to support new use cases at the New York City Department of Correction deployment. We also have a fairly significant Department of Correction deployment in Orleans Parish as well. That is moving along very nicely for us.

Alex Latimore: Awesome. And then one final question: what level of attrition are you assuming for ShotSpotter this year?

Alan R. Stewart: Yes. This is Alan. I will go ahead and address that. At this point, we are expecting total attrition of about $3,000,000, as Ralph mentioned. We would expect that probably a half to two-thirds of that would be related to ShotSpotter, only because we are getting ready for continued customers having some budget challenges. So far, we have been working through most of those and getting positive results, but it is best for us to be appropriate for a larger portion of that to come from budget issues.

Alex Latimore: Awesome. Ralph, Alan, thank you for the time. Thank you for taking my questions.

Operator: Your next question comes from Trevor Walsh with Citizens. Please state your question.

Trevor Walsh: Great. Hey, Ralph and Alan, thanks for taking the questions. Ralph, maybe for you, can you elaborate a little bit more on the comments you made at the end of your prepared remarks around the Board review? Is it essentially just taking a closer look at cost-saving measures and where you can be more efficient from that perspective? Maybe just give a little bit more detail there; that would be great.

Ralph A. Clark: Yes. I think it is a good governance practice to have the Board engage with the senior leadership team to really pressure test whether we are appropriately looking at opportunities to drive greater efficiencies. We are now over a 300-plus employee organization. We have made some critical investments in AI. We are seeing some positive benefits from agentic AI and think that is going to drive a lot more productivity. I think the Board has appropriately engaged with us to see if there is more that can be gained from that. So more to come. It is still in the very early stages, but more to come.

Just know that we are going to be putting our heads together and asking the question: can we do things more efficiently?

Trevor Walsh: Got it. Okay. Great. Thanks, Ralph. Maybe just staying with you, and then I have one last follow-up for Alan. I think there was a new disclosure, or at least a new theme, around the use case for sniper gunshot in, I guess, an embassy or more foreign-deployed type of environment.

I am just curious if that commentary is related to actual opportunities that are in flight, and that would seem—obviously you have some international capabilities around ShotSpotter proper—so I am wondering, are you just pairing that use case with boots on the ground go-to-market-wise that are already doing that international business, or will this be a new motion with bodies that will, from a headcount perspective, more fully pursue that opportunity?

Ralph A. Clark: Sure. Great question. Just to step out for everyone that may not have caught that the way that you caught it: we continue to innovate around our ShotSpotter technology solution. The team did a really good job developing a new use case and new technology architecture that now allows us to do perimeter-based, sniper-based types of gunshot detection. Principally, that means we are not just relying on muzzle blast, but we are also relying on the supersonic snap of a bullet passing by a sensor where you can co-locate the sensor along with the intended target. Our initial thoughts are to focus on utility substations.

We know that those utility substations have been subject to attack as a part of bringing down the electric grid. Having a perimeter-based solution around protecting that substation so that the utility firm can be notified if someone was firing inside that perimeter into the substation seems like a natural use case. We are doing this through SoundThinking Labs. We are not expecting or do not have any revenue allocated to this, although we are aggressively looking and resourcing ourselves with a little bit of sales motion to go get some early trial customers within the substation utility market. In terms of forward operating bases and embassies, that would be a next-layer type of thing.

That is not our primary focus right now. Our primary focus is to get this up and running and deployed with a couple of utility companies this year and see where it goes from there.

Trevor Walsh: Got it. Thanks, Ralph. Super helpful. Alan, last one for you. I am just trying to bridge some of the comments that you both made specific to SafePoint. I think you had said there was $1,500,000 in bookings, either in the quarter or maybe for the full year for SafePoint, but then you expect $4,000,000 in total for net new in fiscal 2026. So I guess, two-part question: can you help me bridge the $1,600,000 actually in bookings that you said? What was the average duration around that contract? I am just trying to understand what that looks like from an ARR perspective in 2025, moving to the potential for $4,000,000 in 2026. Does that make sense, Alan?

Alan R. Stewart: It does. That makes perfect sense and is a great question. I think the biggest thing to take away is, if you look at what we did for the entire year versus how things are ramping up and what we did with the $800,000 in Q4, you can see the things that we have done investing in the product and how we are selling it. We will be adding more capability in terms of the sales team as well, where that $800,000 in Q4 we are expecting to be similar or greater as we go into each quarter in 2026. In terms of adding $4,000,000 of ARR, we feel pretty confident about that.

As Ralph mentioned earlier, over half of our customers are in the healthcare sector, and many of those are already saying, “We really like what you are doing; we are going to expand to this.” Some of those healthcare agencies have not just 10 or 20 hospitals—some of them have 100. We are feeling very positive about what we are doing in terms of setting expectations with the customer and improving the product deployment. Although it does take some time to deploy those once we book them, we believe that we will be able to hit the ARR increase that we have talked about.

Trevor Walsh: Got it. Perfect. Thanks, folks. Appreciate the questions.

Operator: Your next question comes from El Niebuhr with Lake Street Capital Markets. Please state your question.

El Niebuhr: Hey, guys. Thanks for taking my questions. Wondering if you could comment on how things have changed with sales reps only selling the ShotSpotter or the PlateRanger rather than the whole platform at once.

Ralph A. Clark: This is Ralph. Thank you for that question. I will start, and Alan can jump in and add and correct as appropriate. The first thing I would state is that we have a specialized, dedicated team to essentially sell SafePoint. It is comprised and led by Manny, who I just mentioned on the call here. He joined us as our VP of Sales for SafePoint. Currently, he has three direct sales executives reporting to him, along with a pre-sales engineer. It is a very tight, focused unit—Manny leading four individuals to go drive SafePoint business, which is very security oriented.

When you go to our public safety side of the business, it gets a little bit more complex, but I will try to simplify it by stating that we have a number of field sales territory reps that are responsible for selling the full product suite. Increasingly, you are going to see us tighten that up with the bundle. Think in terms of a ShotSpotter bundle with PlateRanger, or PlateRanger bundled with Crime Tracer. They basically own geographies, and they are developing new relationships with new customers as well as having conversations about expanding our footprint within existing customer relationships.

On top of those folks, we have an overlay, and that is where we have a little bit more specialization with respect to the solution. You find someone that is really smart about Crime Tracer, as an example, or CaseBuilder, or ShotSpotter, or PlateRanger. That is the overlay organization that works collaboratively with our field sales organization. That is all led by our new Senior VP of Global Sales, Kirk Arthur, who just joined us. He also has some operations capability in his organization as well.

These are the folks that are primarily responsible for renewal activities and proposal development when we are responding to RFPs and the like, and he works collaboratively with our customer success organization, which is led by our Senior VP, Larry, who is leading the customer success organization.

El Niebuhr: Thanks. That was really helpful.

Ralph A. Clark: Okay. Thanks.

El Niebuhr: And then, switching to the international segment, how did that trend in the quarter? And can you comment at all on what you expect the international revenue to grow in 2026?

Alan R. Stewart: This is Alan. I will go ahead and start, and Ralph can add or correct as well. Although things did go a little slower than we thought in 2025, it has picked up. We have several things that we are expecting in 2026, but by the end of the year, there will probably be three new deployments in three separate countries. We are deployed in all three of those right now, so it is a bit of expansion that we are expecting, and very positive in terms of what we are doing. It is also why we hired a new Sales VP directly in Brazil.

Brazil is a very large potential customer and country for us that has a lot of gun violence, and we are doing quite well. The Niteroi deployment there—Uruguay has already expanded once; we are expecting possibly another one—and then some more deployment in South Africa.

El Niebuhr: Perfect. Thank you. I will hop back in queue.

Operator: Thank you. Your next question comes from Jeremy Hamblin with Craig-Hallum. Please state your question.

Jeremy Hamblin: Great. Thanks for taking the questions, guys. I just want to start by reconciling Q4 a little bit. The EBITDA came in quite a bit below the guidance issued in November, and I wanted to understand—was that because gross margins were light of expectation? You also cut pretty aggressively in G&A, so I wanted to marry where the roughly $2,500,000 discrepancy lay. Then in thinking about the improvement for 2026, you have about a $6,000,000 revenue improvement but almost a $5,000,000 improvement in EBITDA. I would like to understand the drivers of that.

Alan R. Stewart: Sure. This is Alan. I will give you the focus areas that might be important to understand. We had expected to get Puerto Rico and the new Crime Tracer deal earlier than we have. A portion of that would have been included in Q4; that did not happen. I would say the other thing is, when we look at things across the board, you have some costs certainly related to stock-based comp and things like that ultimately affect our adjusted EBITDA. You can see that our stock-based comp actually went down, as well as going down in the actual operating expenses. G&A went from $5,500,000 in Q4 last year down to $4,500,000 this year—$1,000,000 less.

We are doing more things we believe to be appropriate in terms of how we are spending to make sure that we are doing the investment the right way, which is what Ralph answered in one of the earlier questions about things that we evaluate on how we are doing them. How does that look going into 2026? What you could expect is similar things for us in terms of looking at ways we could be more efficient. Hopefully, as we are seeing SafePoint specifically increase and ShotSpotter possibly increase in miles versus last year, you will see the revenue going up without the operating expenses actually going up too much other than what we have already mentioned.

Hopefully that answers your question, Jeremy.

Jeremy Hamblin: Yes, that is helpful. So G&A—should we be thinking about that as something that may be closer to flat on a year-over-year basis as you make decisions around what you need to drive the organization? Presumably, $4,500,000 in Q4 is a bit of a depressed level. As you noted, maybe SBC got reversed or was lighter than normal. I wanted to see if you could clarify that a little bit as we think to 2026.

Alan R. Stewart: Yes. That is a great follow-up question. I would just talk about years: in 2024, G&A was $24,000,000, and 2025 was down to $23,200,000. I would expect that it may be slightly higher than $23,200,000 as we go into 2026 as revenue grows, but possibly not much at all. We are expecting G&A to grow less than as a percentage of revenue. Our goal would be to control as many things as we can. Sometimes there are things we cannot control, like legal costs, etc. Other than that, things that we can control should keep our G&A relatively flat.

Jeremy Hamblin: Got it. Then one to follow up on PlateRanger. You noted fairly significant events that are occurring in the ALPR space. It seems like there is tremendous opportunity to potentially gain some contracts. We have seen some other firms that have already flipped contracts. I wanted to understand progress that you are making with that product line and how far down the line you are with potential deals that you might be able to win, whether they are new deals for municipalities that do not have this type of service already or potentially wins that you might be able to take away from the vendor.

Alan R. Stewart: Sure. This is Alan. I will go ahead and start; Ralph can add or correct as well. The good news is we had several pilots starting in the second half of last year. We have already converted five of those to actual customers, which is good. We have another four or five that we are working on to convert to actual customer contracts. From a revenue perspective, having no revenue at all in 2025, we believe we can get to that $1,500,000 in ARR by the end of the year. The sooner we can get those converted, the higher the revenue will be.

Jeremy Hamblin: Got it. Thanks so much for taking my questions. Best wishes.

Operator: Thank you. We have reached the end of the question-and-answer session. I will now turn the call back over to Ralph A. Clark for closing remarks.

Ralph A. Clark: Thank you very much, and thank you, everyone, for joining us today. I want to express my sincere gratitude to our shareholders for your continued support as we navigated through what was a fairly transformative year. Your partnership has been instrumental in enabling us to make the strategic investments and organizational additions that position us so well for future growth. The trust that you have placed in our team and our vision to become the leading public safety technology partner for communities and enterprises nationwide drives us forward. To our clients, I also want to say thank you for choosing SoundThinking, Inc. as your strategic partner in public safety and security operations.

SoundThinking, Inc. remains committed to making communities safer through technology, transparency, and innovation that address real-world public safety challenges. As we look ahead into 2026, I am energized by the opportunities before us and confident in our ability to deliver on our commitments to deliver shareholder value. Thank you all, and have a great evening.

Operator: Thank you. This concludes today’s call. All parties may disconnect. Have a good day.

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