SoundThinking Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 12, 2025

Key Takeaways

  • Negative Sentiment: Our Q2 revenue of $25.9M met expectations but declined sequentially and bookings fell short due to the timing of key deals shifting into Q3.
  • Positive Sentiment: We ended Q2 with a robust $37M+ pipeline for 2025 and expanded ShotSpotter deployments in four new cities, signaling strong market adoption and diversification.
  • Negative Sentiment: Bureaucratic delays in Puerto Rico forced us to suspend service and revenue recognition until a formal RFP process concludes, posing short-term headwinds.
  • Positive Sentiment: We advanced our technology suite with drone-enabled first responder integrations, AI-native development and a seamless PlateRanger–CrimeTracer integration to boost investigative capabilities.
  • Positive Sentiment: We reaffirmed full-year guidance of $111M–$113M in revenue, 20%–22% adjusted EBITDA margin and expect ARR to grow to ~$110M in 2026.
AI Generated. May Contain Errors.
Earnings Conference Call
SoundThinking Q2 2025
00:00 / 00:00

There are 7 speakers on the call.

Operator

Good afternoon, and welcome to Thinking's Second Quarter twenty twenty five Earnings Conference Call. My name is Diego, and I will be your operator for today's call. Joining us are Sound Thinking's CEO, Ralph Clark and CFO, Alan Stewart. Please note that certain information discussed on the call today will include forward looking statements for our future events and SoundThinking's business strategy and future financial and operating performance. These forward looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict and may cause actual results to differ materially from those stated or implied by those statements.

Operator

These risks, uncertainties and assumptions are discussed in Sound Thinking's SEC filings, including its most recent annual report on Form 10 ks and other SEC filings. These forward looking statements reflect management's beliefs, estimates and predictions as of the date of this live broadcast, 08/12/2025, and SoundThinking undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances after the date of this call. In addition, our comments on the call today contain references to non GAAP financial measures such as adjusted EBITDA and key business metrics such as annual recurring revenue. Non GAAP measures should be viewed in addition to and not as an alternative for the company's reported GAAP results. A reconciliation of these non GAAP measures to their most directly comparable GAAP measures as well as definitions of the key business metrics referenced and management's reasons for including the non GAAP measures and key business metrics referenced may be found in the press release.

Operator

Finally, I would like to remind everyone that this call will be recorded and made available for replay via a link available in the Investor Relations section of the company's website at ir.soundthinking.com. With that, I'll now turn the call over to Ralph.

Speaker 1

Good afternoon, and thank you for joining Sound Thinking's Q2 twenty twenty five earnings call. I'll start by providing some high level commentary on our financial results and then share exciting updates about our strategic investment and growth initiatives. We're pleased to report a solid Q2 marked by continued progress on our transformation into a broader public safety technology company. Our early strategic investments in technology, innovation, talent and market positioning are yielding results. We remain focused on building sustainable growth, operational execution and delivering measurable impact for our company, our customers and communities.

Speaker 1

Our second quarter revenues were in line with our expectations at $25,900,000 representing a sequential decline from the boosted Q1 of this year. During the second quarter, we took ShotSpotter Live in four new cities, including New Orleans Methune, Massachusetts Victorville, California and Niteroi, Brazil, along with expanding in four additional cities and adding one new security deployment. And While GAAP revenue met expectations this quarter, our bookings did fall short of our internal targets for the quarter, primarily due to the timing of a few large deals, including a significant $2,500,000 Crime Tracer transaction and a 400 unit Plate Ranger transaction that was pushed into Q3. That said, we were pleased to close a marquee 20 lane SafePoint transaction combined with ShotSpotter Secure Campus that was sold to an historically black college university. We have a healthy diversified pipeline of over $37,000,000 for the remainder of 2025, which continues to grow beyond domestic ShotSpotter targeted toward traditional law enforcement customers.

Speaker 1

In fact, because of the recent tragic Midtown New York City shooting, we were approached by a major financial institution to provide a ShotSpotter secure campus deployment. It was very important to them to work with a best in class acoustic gunshot detection system used and positively referenced by NYPD. We have taken this opportunity to propose adding a perimeter based sniper solution that we're in the process of perfecting for the utility substation market in early Q1 twenty twenty six. The result will be a hybrid wide area acoustic gunshot detection solution providing a dome of protection of several blocks beyond the headquarters location combined with a perimeter based solution which can detect and alert on inbound sniper fire directed at specific ingress egress points at the building. This effectively will be providing the best of both worlds.

Speaker 1

We believe this corporate security opportunity along with the critical infrastructure opportunity represented by utility substations, indices and forward operating basis are a significant growth in TAM extension for our demonstrated capability in gunshot detection. Our overall customer attrition is outperforming expectations underscoring the effectiveness of our retention initiatives and the value our solutions deliver to our customers. However, our renewal in Puerto Rico still merits close attention due to a new and unexpected requirement to issue a formal RFP in lieu of a standard contract extension that had enjoyed strong support from the new incoming administration. Puerto Rico committed to and is in the process of issuing an interim extension to continue the ShotSpotter service through the RFP process, but bureaucratic delays prevented us from securing the interim extension prior to the June 30 contract extension date. This unfortunately has forced us to suspend service and revenue recognition until we can get the formal contract extension in place.

Speaker 1

On the innovation and integration front, we've made solid progress partnering with several drone providers as we enable a unique drone as first responder capability in response to ShotSpotter alerts. The integration ensures that drones can be automatically dispatched to the exact location of a gunfire incident, delivering real time aerial intelligence to officers on the ground, such as identifying victims who need an EMS intervention along with providing valuable situational awareness to arriving officers. The combination of ShotSpotter and drones extends the value of ShotSpotter by delivering a powerful use case demanded by forward leaning law enforcement agencies. Additionally, we have recently completed an integration between our PlateRanger LPR solution and CrimeTracer, our industry leading investigative solution. Now any license plate or vehicle information associated with a crime can be automatically passed to Crime Tracer that will initiate a Gentex search across the largest CJIS database in the country to associate that vehicle with people, addresses and past crimes.

Speaker 1

It's a huge step forward for the investigators to be able to quickly get actionable intelligence from the powerful combination of our safety smart products. And we believe it far exceeds the Flock OS capabilities in this area. I will add that this capability was completed in onetwenty at the time using AI coding tools and is emblematic of the huge productivity gains we are seeing as we embrace our journey in becoming an AI native company. We also continue to make meaningful progress in Q2 on the weapons detection space. As mentioned earlier, Safeguard scored a large campus transaction at an HBCU along with some selected expansion lanes with casino customers.

Speaker 1

Importantly, we continue to make progress in the sizable healthcare vertical, which is expected to get even a further boost from California's AB 2,975 statute, which mandates weapon screen capability at state hospitals to address workplace violence. A quick note on the New York political landscape. The recent primary win by Assembly member Zohran Mamdani has triggered some understandable questions, but I want to be perfectly clear on three points. First and most importantly, we're in year one of a three year citywide contract that has two additional option years with NYPD. And while the NYPD contract does have termination for convenience clauses like most municipal contracts, the potential litigation costs and reputational damage makes a termination highly unlikely short of the city going into extreme financial distress.

Speaker 1

Second, NYPD's operational footprint and priorities are distinct and data driven and because of their professional standing, NYPD maintains strong autonomy in operational decision making and public safety infrastructure that helps them save lives, which enlists broad based support across many communities. And finally, unlike the Chicago situation during the peak of the defund the police fad, there does not appear to be any specific political agenda pushing for a full scale rollback of police technology tools like ShotSpotter. We'll continue to focus on execution and we believe our ability to deliver lifesaving alerts and critical crime intelligence helps us to be well positioned independent of any political outcome. Now let me close by addressing the status of the Chicago gunshot detection RFP, which we bid on in April. We're gaining real traction in what we believe is one of the most consequential public safety RFPs in the country.

Speaker 1

We've cleared multiple competitive firms from being shortlisted to completing oral presentations and we've now been invited to the live demo phase, frankly a process that we invented over ten years ago. This is a critical opportunity for us to showcase how far ahead we are in terms of accuracy, reliability, functionality and real world performance at scale. And while no formal decision has been made, we are entering the next phase with growing confidence and a strong belief that our technology is unmatched and aligned with the city of Chicago stated needs as reflected in their RFP. I would like to reiterate that our current outlook does not include any contribution from Chicago. Any potential engagement with Chicago, if it were to happen, would most likely contribute to 2026 results.

Speaker 1

As we move into the remainder of 2025, we'll continue to focus on driving deeper penetration in existing customer accounts, expanding to mid size and smaller municipalities and growing our non ShotSpotter Safety Smart recurring software revenue, all the while delivering operational leverage as we scale. We're reaffirming our full year revenue guidance range of 111,000,000 to $113,000,000 and reaffirming our adjusted EBITDA guidance range of 20% to 22%. I will now turn the call over to Alan to discuss our financial results for the second quarter twenty twenty five as well as guidance for the full year 2025 in detail. We'll then be happy to take your questions.

Speaker 2

Thank you, Ralph, and good afternoon, everyone. As Ralph mentioned, we are pleased with our second quarter twenty twenty five results and they are primarily consistent with our expectations. Our financial performance reflects our ongoing strategic initiatives, operational efficiency measures and our commitment to delivering value to our shareholders. Revenues were 25,900,000 representing a 4% decrease from the $27,000,000 in the 2024. Note that our revenue was only 4% lower than second quarter of last year, which included approximately $2,800,000 in revenue loss for the non renewal of our contract with the City of Chicago as we continue to grow in all of our Safety Smart platform solutions.

Speaker 2

We did execute two NYPD contracts in the first quarter, which added approximately $3,500,000 of catch up revenue in that quarter. Gross profit was $13,800,000 or 53% of revenue compared to $16,100,000 or 60% of revenue for the prior year period. Gross margin was lower as expected primarily related to additional maintenance of existing ShotSpotter deployments and expenses related to licensing of software for the NYPD as well as an expected delay of the execution of the associated sub licensing of the new NYPD contract of approximately $1,000,000 per year. We expect to enter into the new contract in the 2025 and also anticipate receiving catch up revenue related to the additional cost of the revenues that were expensed in the 2025. Our adjusted EBITDA was $3,400,000 compared to $5,100,000 in the 2024, reflecting the delayed contract just mentioned above and the increase in the cost of revenues related to the additional maintenance as well as investments in enhancing our AR capabilities that Ralph discussed.

Speaker 2

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 on related fixed asset disposals, stock based compensation expenses and adjustments to our contingent consideration obligations. Our operating expenses were $16,700,000 or 65% of revenues compared to $16,700,000 or 62% of revenues in the 2024. Our operating expenses for the second quarter declined from 2025, but were relatively flat compared to the 2024 even as we invest in AI modeling and tools to enhance the capabilities of our SafePoint platform solution. We also had a $600,000 adjustment in the fair value of contingent consideration related to the SafePoint acquisition, which reduced second quarter twenty twenty four operating expenses. As a reminder, we expect operating expenses will continue to grow less than the revenue growth rate even with our additional costs.

Speaker 2

Breaking down our expenses. Sales and marketing expense in the second quarter were reduced to $6,500,000 or 25% of total revenue compared to $7,300,000 or 27% of total revenue for the prior year period. Our R and D expenses were $3,700,000 or 14% of total revenue compared to $3,500,000 or 13% of total revenue in the prior year period, reflecting our increased expenses related to our AI investments. G and A expenses for the quarter were $6,500,000 or 25% of total revenue compared to $5,900,000 or 22% of total revenue for the prior year period. G and A expense increases were primarily related to additional internal and external efforts associated with compliance with our SOX four zero four requirements.

Speaker 2

As a reminder, we expect our G and A expenses to grow less than our revenue on a percentage basis as our company grows. Our GAAP net loss was approximately $3,100,000 or a loss of $0.25 per basic and diluted share for the quarter based on 12,700,000.0 basic and diluted weighted average shares outstanding. This compares to a net loss of $800,000 or a loss of $06 per basic and diluted share based on 12,800,000.0 basic and diluted weighted average shares outstanding for the prior year period. Deferred revenue as of 06/30/2025 was largely in line at $43,500,000 compared to $45,400,000 at the end of Q1 twenty twenty five. We ended the second quarter with $9,000,000 in cash and cash equivalents compared to $11,700,000 at the end of first quarter twenty twenty five.

Speaker 2

As of today, our cash balance is over $16,000,000 We repurchased 31,570 of our shares at an average price of $14.84 for approximately $1,500,000 in the 2025. Currently, have approximately $21,000,000 available on our line of credit as we have approximately $4,000,000 in debt outstanding all on our line of credit. As we enter the 2025, we remain focused on execution and long term value creation. We are encouraged by our pipeline visibility for the back half of the year, the strong renewal rate of our customer base, expanding strategic partnerships and integrations and our ability to generate consistent cash flow while investing for growth. Now turning to our guidance for the full year 2025.

Speaker 2

We are reaffirming our full year revenue guidance of 111,000,000 to $113,000,000 We are also reaffirming our full year 2025 adjusted EBITDA margin guidance range of 20% to 22%, taking into account potential costs associated with tariff changes and the investments that we are making in AI modeling and tools that we are incorporating in our products and internal operational use. Finally, we are reaffirming our expectation for our annual recurring revenue or ARR to increase from $95,600,000 at the 2025 to approximately $110,000,000 at the 2026. As a reminder, this guidance is in spite of the loss of approximately $9,700,000 in annual revenue from the non renewal of the contract with the City of Chicago in 2024. Overall, we are pleased with the progress we have made on each of our strategic initiatives and operational performance of the business. We are now ready to take your questions.

Speaker 2

Operator, will you please open the line?

Operator

Thank you. And at this time, we will conduct our question and answer session. And your first question comes from Richard Baldry with ROTH Capital Partners. Please state your question. So I'm curious if you

Speaker 3

could talk about the Safepoint pipeline. I think you upgraded sort of the go to market packaging around that a quarter or two ago to finalize that. Has the market responded to that? How do we think about the traction there?

Speaker 1

Yes, this is Ralph Rich. Thanks for asking that question. The SafePoint pipeline continues to be healthy and grow, focus on the verticals that we're targeting our resources toward primarily healthcare, but also casinos as well. We're really keen around the opportunities in the State of California with the AB 2,975 initiative there and have been doing some really interesting spade work with respect to getting engaged in that marketplace specifically. So we feel pretty good about the opportunity there for Safepoint.

Speaker 3

And then can you maybe talk a little bit about sort of international, you've hit on that in some prior quarters, how that's looking, developing, rolling out or building pipeline out there?

Speaker 1

Yes. So we're very excited about the recent developments in South America with our Montevideo opportunity there that's already expanded, doubled its footprint there recently being deployed in Niteroi. Brazil is also very important to us in terms of expanding the opportunities in Brazil. I would say Brazil obviously very big opportunity. We have some pipeline in Mexico as well.

Speaker 1

I think there's opportunities for us to expand our footprint in South Africa as well. But certainly having those reference sites in Latin America, South America is very important for us to continue to grow our business there in Latin America.

Speaker 3

And the post quarter cash stepped up pretty substantially. Is that just seasonal receivable collections? Is there something else we should be thinking about?

Speaker 2

Yes, this is Alan. And it is over $16,000,000 as of today. So we continue to generate a significant amount of cash. A lot of that does have to do with the collection timing though, so it does get a bit lumpy at times. But we do still continue to generate a significant amount of free cash flow.

Speaker 3

Then last for me. At the midpoint of your revenue guidance, it looks like you'd be up in the range of, call it, dollars 2,000,000 a quarter sequentially in the second half. How much of that would be go get, you still got to go close the contract and then deploy it versus what you think is essentially backlog? Sort of how much visibility do you have into that second half sequential reacceleration? Thanks.

Speaker 2

Yes. So this is Alan. I'll start and then Ralph can add it correct. We have some things that are already committed to us by the sales team to get us pretty close to the numbers where we're talking about. Obviously, Q3 needs to be north of 27% and Q4 north of that.

Speaker 2

One of the challenges might be some of the timing. We have some very large potential contracts. The timing of those can affect those, but ultimately we're feeling really good about being able to get to that guidance and producing exactly what we are saying we can do.

Speaker 3

Great. Thanks.

Operator

Thank you. And your next question comes from Eric Martinuzzi with Lake Street. Please state your question.

Speaker 4

Yes. With the exception of the Nittoroy deployment in Q2, I was just curious if there are any themes common amongst the three new cities and the one new university that you signed up in Q2?

Speaker 1

No, not really. I mean it's kind of all the same. These are cities that are struggling with the issue of responding to an investigating gun violence and we know we have a preeminent solution out there that's detecting and alerting on gunfire that we know gets not reported 80% of the time in most communities. We're obviously really excited about New Orleans. New Orleans is a really big opportunity for us.

Speaker 1

I think the Chief down there, Superintendent Kirkpatrick is a first rate law enforcement executive. We know she's going to do her organization and do great things out there. And we're hoping that that is going to help us be able to expand even more in the kind of that Southeast, Southern, Eastern part of The United States. But generally speaking, these are kind of all the same thing. It's all about trying to get in front of the issue of gun violence that unfortunately continues to persist in too many of our cities and communities.

Speaker 4

As far as competitive landscape, any competitor popping up in that you're beating consistently or is it kind of ad hoc?

Speaker 1

Yes. So I'll jump in and Alan jump in and correct as appropriate. I mean, we do hear some noise about and their Raven solution. We don't see them directly very much to be perfectly honest. I think it's the type of thing that we're a proven technology provider at scale.

Speaker 1

And so we're still feeling really, really good about our competitive position. We've done a number of things that we didn't actually get a chance to chat about in this earnings call around continuing to perfect the ShotSpotter solution. I'll maybe just spend a second talking about our new sensor platform, which is really sophisticated that now allows us not only to do time of arrival, which we've been known to do. That's how we do the location accuracy. But now because we have multiple sensors, previous generation sensors maybe had two microphones on it.

Speaker 1

These new ones have like more than six or so microphones. So now we can do some really cool things around angle of arrival in addition to time of arrival, which gives us a great deal of precision. And then frankly also kind of sets us up for the thing that we talked a little bit about on this call around a perimeter based solution to do more sniper acoustic gunshot detection where you're looking at the kind of bullet kind of coming into a specific area you're trying to protect. So slightly different than wide area acoustic detection technology and we think that's going to open up a pretty interesting TAM opportunity for us to protect critical infrastructure like substations, headquarters of large financial institutions groups as it turns out, indices, forward operating basis and the like. So we're pretty excited about kind of moving that technology forward commercially and hopefully get some success on that if not later this year, certainly early twenty twenty six.

Speaker 4

Great. Thanks for taking my questions.

Operator

And your next question comes from Trevor Walsh with Citizens. Please state your question.

Speaker 5

Hey, Ralph. Thanks for taking the questions. Just to maybe piggyback a little bit on that last topic of the new solution you have coming out around the sniper type of threat. Is that something that needs to piggyback off of existing infrastructure for ShotSpotter within the city or within the area? Or can that be its own self contained type of deployment with all the same type of timelines, etcetera, that we would expect from a normal deployment of ShotSpotter?

Speaker 1

Yes, it's its own implementation. And frankly, don't imagine that our traditional public safety customers would be running toward this particular solution. I think this is much more of a specific use case around kind of critical infrastructure protection. So there the buying centers are most likely very different than our traditional law enforcement buying centers. So as I mentioned earlier focusing in on utility companies which we know are at risk of having these armed attacks to kind of take down the electric grid.

Speaker 1

That's a key target for us along with embassies. Maybe there's some commercial property campuses and like certainly we have this one particular opportunity in New York City with a very large financial institution group headquarters there that originally came to us because they weren't aware of a sniper based solution. They came to us around our traditional ShotSpotter deployment. But when we're talking to them about the work we're doing with this perimeter based solution, We got them pretty kind of excited about kind of giving them a two for one, a hybrid solution that has both, I'll call it the wide area detection capability or dome of protection and then very specific sniper based perimeter solution that could detect incoming sniper based fire that you would use to protect your major ingress egress points.

Speaker 5

Great, super helpful. Thanks Ralph and actually tees up my next question maybe for Alan as just a quick follow-up on that same topic. Given that it's a 26 priority or maybe a more 26 type of influence, I guess, around the model, are you anticipating any additional sales teams or kind of motions, headcount additions effectively to kind of go after that opportunity? Or can you just fold that in with the current team kind of as is?

Speaker 2

That's an excellent question. And we're folding it in with the current team. In fact, we've already done the majority of all the work to develop the solution already using the current team. And I think that's also it's a great question to talk about sort of how we're doing on our OpEx. And our OpEx is down $1,000,000 from Q1.

Speaker 2

And we're expecting our OpEx not just on the sales and marketing R and D for development stuff to stay flat, pretty much flat throughout Q3 and Q4 for the rest of the year. So we don't need to add a significant amount of capability to do that and we don't expect the cost to be more than we're already incurring.

Speaker 5

Great. Thanks, Alan. Maybe just a couple more then quickies for me and then I'll pass the line. Just did you say 2,800,000 revenue headwind in the quarter associated with the city of Chicago? And then secondarily for that large SafePoint implementation, is that I would imagine the kind of rev rec from that will probably to proceed a little bit later in the year as you get to deployment.

Speaker 5

So is that factored into the guide? Or is that going to be upside once you get that project in particular up and running? Yes.

Speaker 2

So this is Alan again. The Chicago, we did mention the $2,800,000 that was in the 2024 revenue. The fact that we only went down 4% is because we added almost $2,000,000 of revenue from other of our solutions in our Safety Smart platform. In terms of the actual SafePoint, what we didn't really give you more details on was was actually about a $2,000,000 booking related to that, but it's a multiyear type of a booking. So that is going to produce revenue for the next couple of years.

Speaker 2

But we have other things in our pipeline that we hope to see very similar things.

Speaker 1

Yes. But if I can add just an excellent point, Alan, to answer the question. That's very much in our guide. You wouldn't count that as upside. We're expecting that and that's in our guide for the year.

Speaker 1

Correct.

Speaker 5

Got it. Okay. Thanks, gents. Appreciate it. I'll pass the line.

Operator

Your next question comes from Jeremy Hamblin with Craig Hallum Capital Group. Please state your question.

Speaker 6

Thanks for taking the questions. And want to start by coming back to the Chicago RFP and just understanding the potential timing of when you think you might hear back from the city. You mentioned the shortlist. Can you remind us how many companies are on that shortlist at this point? I think five or six.

Speaker 6

But any more color you might be able to share on when you expect to hear back on that one?

Speaker 1

Yes. So thanks Jeremy. This is Ralph. So we really don't know the number on the shortlist. We do believe I think there were eight or so respondents to the RFP.

Speaker 1

Suspicion is, again, we don't know this for a fact, but it feels like they have pulled that list down to maybe half, maybe four or so, but that's to be determined, guess. We don't have a definitive point of view on that. And with respect to timing, does feel like we're kind of getting to the end of the process, kind of certainly being notified that we made the shortlist and then being invited to participate in our oral presentation, which we did, I think about a month or so ago and now being invited to participate in a live fire demonstration that will take place sometime in the month of September. It feels like they're getting they need to be able to make a decision. But again, they haven't been explicit with us about what the exact timing looks like, but it does feel like we're making really, really good progress.

Speaker 6

Great. That's super helpful color. And then I just want to make sure to understand the details here around the NYPD contract in the sub licensing, the catch up revenue and the expenses associated with it. Alan, can you just remind us here of the dollars that were deployed in terms of expense costs? And then how do you recapture some of that here in Q3?

Speaker 2

Sure. Yes. The actual dollars, and this would have gone into COGS, was about $400,000 and it will be about that per quarter. The actual revenue is slightly lower. It's only about $250,000 per quarter, But that is because what we did is this used to be a solution that was provided by another vendor that we are now providing it, and we're actually saving what we're giving them is about 23% commission, which was over $3,000,000 a year, which we now no longer have to pay.

Speaker 2

So even though it looks like it might be losing a little bit in the actual subscription, overall, we're saving significantly across the board and the entire income statement.

Speaker 6

Got it. And then I want to come back to the teaser there on the Crime Tracer. I think you mentioned that you have a little bit of a push out in terms of deployment that you expect to get. I think you said $2,500,000 booking. Can you give us an update on is that something that you expect to come here in Q3?

Speaker 6

Or is that something that might get pushed to Q4?

Speaker 1

Yes. I would conservatively say Q4, but we're working really hard to bring it into Q3. It's identified need. There's budget for it. There's certainly a lot of movement taking place and kind of go through the bureaucratic process to kind of execute a deal.

Speaker 1

The ARR is approximately $2,400,000 If I said $2,500,000 I actually meant to say 2,400,000.0 Hopefully, I said 2,400,000.0 And it's a deal very similar to what you've seen us do on a statewide basis, both in the state of Tennessee, as well as the state of Massachusetts with Massachusetts State's police. But you can think of it as a very large kind of coverage area kind of aggregating a bunch of CGS data for an entity, not quite a state, but something close to a state that they're going to be using in a really interesting Intel based way. So we're pretty excited. We think this opportunity is replicatable across some other opportunities as well. There's I think public acknowledgment that the state of New York is looking at something similar to this that I think a lot of people are around trying to wait for an RFP coming out of the state of New York for kind of a similar kind of Intel based solution that Crimetracer can address.

Speaker 6

Great. Thanks. Thanks so much for the color and taking the questions.

Operator

Thank you. And we have reached the end of the question and answer session. I will now turn the call over to Ralph Clark for closing remarks.

Speaker 1

Great. Thank you very much. And thank you to everyone who joined us today and thank you to my Sound Thinking colleagues, our clients and our partners for your support. Sound Thinking remains committed to making communities safer through technology, transparency and collaboration. We're clearly focused on maximizing shareholder value and appreciate your time and support of the company.

Speaker 1

I'd also like to encourage each and every one of you to read our fourth annual ESG report if you haven't done so already. We have it published we published it in June and it's available on our Investor Relations website. So thank you very much again.

Operator

This concludes today's conference. All parties may disconnect. Have a good day.

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