SoundThinking Inc. reported third‑quarter 2025 results that fell short of expectations, with revenue of $25.1 million and a net loss of $0.16 per share, compared with a consensus estimate of a loss between $0.06 and $0.12 per share. The quarter’s revenue was 4 % lower than the $26.3 million reported in Q3 2024, and the net loss widened from $0.11 per share in the prior year. The miss is largely attributable to delayed domestic contracts and a lack of new bookings, which reduced top‑line growth while the company continued to invest in AI‑driven product enhancements.
Revenue decline was driven by slower performance in the core ShotSpotter segment, where contract delays in a few domestic deployments pushed recognition back into the next quarter. While the SafePointe weapons‑detection line gained traction in healthcare settings—bolstered by California’s AB 2975 mandate—the overall mix shift and the absence of new high‑margin contracts contributed to the 4 % year‑over‑year drop.
In response to the earnings miss, management lowered full‑year 2025 revenue guidance from $111–$113 million to $104 million and trimmed adjusted EBITDA margin guidance from 20–22 % to 14–15 %. The revisions signal management’s concern that the contract delays and slower new‑booking pace will persist, while still maintaining confidence in the company’s long‑term growth trajectory.
Gross profit fell to 54 % of revenue from 58 % in Q3 2024, reflecting higher cost of sales and the impact of ongoing AI investments. Operating expenses declined year‑over‑year, indicating disciplined cost management, but the margin contraction underscores pricing pressure and the need to balance investment with profitability.
Despite the financial shortfall, SoundThinking’s Net Promoter Score rose to approximately 70 from 66, a level that places the company in the world‑class category. The improvement in customer satisfaction suggests that the recurring revenue base remains strong, providing a foundation for future recovery.
CEO Ralph Clark emphasized that the company remains focused on expanding its SafetySmart platform and accelerating revenue growth in 2026. He noted that while some near‑term revenues were delayed by the timing of domestic contracts and an international contract, the underlying strength of the business remains intact, and the company expects to deliver accelerated growth and increased profitability in the coming years.
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