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01/10 15:55
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals a mix of positive and negative factors. While there is optimism about new product launches, market expansion, and AI investments, there are concerns about delayed deals, gross margin declines, and conservative guidance. The Q&A highlights unresolved issues, such as the CrimeTracer deal and Puerto Rico renewal, which contribute to uncertainty. Overall, the sentiment is balanced, leading to a neutral prediction.
Revenue $25.1 million in Q3 2025, a 4% decrease from $26.3 million in Q3 2024. The decrease was due to the absence of the ShotSpotter renewal in Puerto Rico and the delay of a statewide CrimeTracer booking.
Gross Profit $13.6 million or 54% of revenue in Q3 2025, compared to $15.2 million or 58% of revenue in Q3 2024. The decline was attributed to lower revenues and changes in revenue mix.
Adjusted EBITDA $3.5 million in Q3 2025, compared to $4.5 million in Q3 2024. The decrease was due to lower revenues and delays in large contracts.
Operating Expenses $15.7 million or 63% of revenues in Q3 2025, down from $16.3 million or 62% of revenues in Q3 2024. The decline was due to reduced sales and marketing expenses, despite increased R&D expenses for AI investments.
Sales and Marketing Expenses $5.8 million or 23% of total revenue in Q3 2025, compared to $7.2 million or 27% of total revenue in Q3 2024. The reduction was part of cost-cutting measures.
R&D Expenses $4.1 million or 16% of total revenue in Q3 2025, compared to $3.4 million or 13% of total revenue in Q3 2024. The increase was due to investments in AI modeling and tools.
G&A Expenses $5.8 million or 23% of total revenue in Q3 2025, compared to $5.7 million or 22% of total revenue in Q3 2024. The increase was due to compliance efforts with SOX 404(b) requirements.
Net Loss Approximately $2 million or a loss of $0.16 per share in Q3 2025, compared to a net loss of $1.4 million or a loss of $0.11 per share in Q3 2024. The increase in net loss was due to lower revenues and higher compliance costs.
Deferred Revenue $43.9 million as of September 30, 2025, compared to $43.5 million at the end of Q2 2025. The slight increase reflects ongoing customer contracts.
Cash and Cash Equivalents $11.8 million at the end of Q3 2025, compared to $9 million at the end of Q2 2025. The increase was due to operational cash generation and share repurchases.
CrimeTracer Gen3 launch: Scheduled for general availability next week, this platform integrates over 1 billion law enforcement and public records, featuring voice-enabled AI chatbot capabilities, AI document summarization, and enhanced case folder functionality.
SafePointe weapons detection: Gaining momentum due to California's AB 2975 mandate requiring automated weapons detection systems in hospitals by 2027. Multiple pilot programs are underway, and a 26-lane opportunity was booked with a Florida nonprofit hospital.
PlateRanger ALPR technology: Evolved into a comprehensive vehicle intelligence platform with features like smartphone-based plate capture, interdiction analytics, and retrospective search capabilities.
International expansion: Progress in Uruguay deployment, serving as a proof point for broader Latin American opportunities.
Healthcare security market: Growing traction following California's AB 2975 mandate, creating a substantial addressable market.
Sales organization realignment: Steps include refreshing the go-to-market playbook, tightening accountability, and appointing an interim Senior VP of Sales.
AI-driven customer success: Agentic AI application anticipates customer needs, improving renewal predictability and response times.
Drones as first responders: Integration with ShotSpotter alerts for real-time aerial intelligence, demonstrated in Pueblo, Colorado.
Data for Good initiative: Expanded to multiple cities, enabling secure sharing of gunfire and crime data with community groups and public health departments.
Sales Execution Challenges: The company is facing challenges in converting demand into bookings, which has led to lower-than-expected revenues. Efforts to realign the sales organization and improve forecasting and conversion metrics are underway, but these issues have impacted financial performance.
Delayed Contracts and Revenue Recognition: Several large contracts, including CrimeTracer deployment in a new state, ShotSpotter deployment in Brazil, and ShotSpotter renewal in Puerto Rico, have been delayed. These delays have resulted in a revenue shortfall of approximately $6.4 million for 2025.
Governmental Changes and Tariff Impacts: Governmental changes in Brazil and Puerto Rico, as well as tariff-related impacts in Brazil, have created uncertainty and delays in deployments, affecting revenue and operational planning.
Lowered Financial Guidance: The company has reduced its full-year 2025 revenue guidance from $111-$113 million to approximately $104 million and adjusted EBITDA margin guidance from 20%-22% to 14%-15%, reflecting the impact of delayed contracts and sales execution issues.
Operational Cost Pressures: Increased investments in AI modeling and tools, as well as compliance with SOX 404(b) requirements, have added to operational costs, impacting profitability.
CrimeTracer Gen3 Launch: Scheduled for general availability next week, this next-generation investigative platform integrates over 1 billion law enforcement and public records across 2,000+ agencies. Features include voice-enabled AI chatbot capabilities, AI document summarization, and enhanced case folder functionality. Early customer feedback has been positive.
SafePointe Momentum: Following California's AB 2975 mandate, requiring automated weapons detection systems in hospitals by March 2027, there is accelerated interest in SafePointe technology. Multiple pilot programs are underway, and a robust pipeline of opportunities is developing.
Data for Good Initiative: Expanded to multiple cities, enabling secure sharing of gunfire and crime data with community groups and public health departments. This initiative builds community trust and supports holistic public safety solutions.
Drones as First Responders: Progress in integrating drones with ShotSpotter alerts to provide real-time aerial intelligence during gunfire incidents. Demonstrated success in Pueblo, Colorado, with quick recovery of shell casings.
PlateRanger ALPR Technology: Evolved into a comprehensive vehicle intelligence platform with features like smartphone-based plate capture, interdiction analytics, and retrospective search capabilities. Integration with CrimeTracer enhances investigative workflows.
2025 Revenue Guidance: Lowered from $111-$113 million to approximately $104 million due to delays in three major contracts: CrimeTracer deployment in a new state, ShotSpotter deployment in Brazil, and ShotSpotter renewal in Puerto Rico.
2025 Adjusted EBITDA Guidance: Reduced from 20%-22% to 14%-15%, reflecting revenue shortfalls and investments in AI modeling and tools.
2026 Revenue Guidance: Set at $114-$116 million, reflecting expected growth and recovery from delayed contracts.
2026 Adjusted EBITDA Guidance: Set at 18%-20%, indicating improved operational efficiency and growth.
Share Repurchase: We repurchased 160,271 of our shares at an average price of $12.43 for approximately $2 million in the third quarter of 2025. On a year-to-date basis, we have repurchased 225,334 of our shares at an average share price of $13.15 for approximately $3 million.
The earnings call reveals a mix of positive and negative factors. While there is optimism about new product launches, market expansion, and AI investments, there are concerns about delayed deals, gross margin declines, and conservative guidance. The Q&A highlights unresolved issues, such as the CrimeTracer deal and Puerto Rico renewal, which contribute to uncertainty. Overall, the sentiment is balanced, leading to a neutral prediction.
The earnings call presents a mixed picture: while revenue grew by 12%, the GAAP net loss widened significantly. The international expansion and SafePointe opportunities are promising, but the decrease in deferred revenue and cash reserves is concerning. The Q&A reveals optimism in market opportunities and competitive positioning, but management's vague responses on key projects like the Chicago RFP and sniper threat solution add uncertainty. The reaffirmed revenue guidance is positive, but reduced EBITDA margin guidance and cash flow concerns balance out the outlook, leading to a neutral stock price prediction.
The earnings call presents a mixed outlook. Positive elements include record revenue growth, international expansion, and product innovation. However, these are counterbalanced by an EPS miss, tariff impacts, and potential risks from municipal funding and contract delays. The Q&A section reveals positive sentiment towards product pipelines and international opportunities, but management's unclear responses on certain topics raise concerns. The share repurchase is a positive signal, yet the financial health is mixed with improved revenue but a net loss. Overall, the stock price is likely to remain stable, resulting in a 'Neutral' sentiment.
The earnings call presents a mixed picture. While there is strong revenue growth, product innovation, and strategic partnerships, concerns arise from reduced EBITDA guidance, regulatory issues, and competitive pressures. The Q&A reveals a solid pipeline but highlights uncertainties in international expansion and contract discussions. The share repurchase is a positive signal, but the lack of clear guidance on key issues tempers enthusiasm. Overall, the combination of positive and negative factors suggests a neutral stock price movement in the short term.
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