SoundThinking NASDAQ: SSTI reported second-quarter 2026 revenue of $23.9 million, down from $25.9 million a year earlier, while lowering its full-year revenue outlook as deployment delays, project timing and slower ShotSpotter sales conversion weighed on its expectations.
The company recorded a GAAP net loss of $4.8 million, or $0.37 per diluted share, compared with a net loss of $3.1 million, or $0.24 per diluted share, in the prior-year quarter. Adjusted EBITDA, a non-GAAP measure, was positive $1.2 million, compared with $3.4 million a year earlier and an approximately $100,000 loss in the first quarter.
CEO Ralph Clark said the sequential improvement in adjusted EBITDA reflected the company’s workforce and business optimization actions, including increased use of artificial intelligence across internal operations. SoundThinking expects the initiatives to produce approximately $4 million in annualized savings, although it recorded about $900,000 in restructuring-related costs during the quarter.
Guidance Reduced as Revenue Timing Shifts
SoundThinking reduced its 2026 revenue guidance to $99 million to $100 million from its prior range of $109 million to $111 million. The company had generated about $48 million in revenue during the first half and now expects a second-half step-up, though management characterized the outlook as more conservative given longer sales cycles and delayed deployments.
CFO Alan Stewart said nearly $3 million of the reduced outlook stemmed from delays in professional-services work at TechnoLogic Solutions and with the New York City Department of Correction. Those projects are booked and budgeted but are expected to shift primarily into 2027 rather than represent lost revenue.
The company also reduced expected 2026 revenue by about $2 million because SafePointe deployments have taken longer than anticipated. SoundThinking said SafePointe bookings and its hospital pipeline remain strong, but revenue is recognized when systems go live. Larger enterprise deployments involving 10 to 20 lanes require coordination with customer construction schedules, credentialing, IT networks and multi-site rollout plans.
Management also removed an expected Puerto Rico ShotSpotter contract recapture, previously worth nearly $1.5 million in the outlook, from its 2026 guidance. Clark said the company is pursuing another procurement path as the state-level project has been delayed alongside other post-hurricane initiatives.
SoundThinking reduced its full-year adjusted EBITDA margin guidance to 8% to 9%, reflecting the lower revenue outlook. It continues to expect annual recurring revenue to rise from $95.4 million at the start of 2026 to more than $100 million entering 2027.
ShotSpotter Sales Execution and Funding Challenges
Clark said ShotSpotter was the more disappointing component of the quarter, with both bookings and go-lives below expectations. He cited the wind-down of American Rescue Plan Act funding, slower federal funding flows to municipalities, more budget scrutiny and increasingly politicized local decisions surrounding gunshot-detection technology.
“ShotSpotter sales cycles are elongating at the same time our sales team is underperforming,” Clark said. He told analysts the company sees both external factors and internal sales-execution issues, including “sales hygiene” that could help improve deal conversion.
Clark pointed to a 10-square-mile deal signed in the fourth quarter of 2025 that has not yet gone live, as well as a Cape Town opportunity that was canceled after SoundThinking had been awarded the tender because of political developments in South Africa. The company is also using an outside contracting resource to help customers develop funding strategies.
Despite those challenges, management emphasized renewal activity and customer retention. During the period, SoundThinking closed more than $23 million in total contract value across multi-year renewals, including a five-year ShotSpotter renewal in Albuquerque and renewals in Worcester, Massachusetts; Richland County, South Carolina; Macon-Bibb, Georgia; Peoria, Illinois; and Fayetteville, North Carolina.
- SoundThinking secured a two-year CrimeTracer renewal with Massachusetts State Police.
- Detroit extended its 38-square-mile ShotSpotter deployment for nine months while it proceeds through an RFP process expected to conclude in early 2027.
- Erie, Pennsylvania, returned as a customer after its prior deployment lapsed because of funding challenges, with a six-square-mile deployment targeted for later in August.
- Cambridge, Massachusetts, reinstated ShotSpotter for an initial 90-day evaluation period after previously withdrawing from the Boston-area coverage arrangement. SoundThinking said it would restore coverage at no cost during that period.
CrimeTracer Contract and Chicago Developments
The company also announced a new multi-year CrimeTracer contract with the Texas Anti-Gang Program, or TAG, valued at approximately $2.5 million in annual recurring revenue. The Texas agreement is SoundThinking’s fourth statewide CrimeTracer deal, following Tennessee, Massachusetts and Utah. Clark said the phase-one deployment could potentially expand to triple its initial user footprint if it demonstrates early success.
In Chicago, Clark said the city’s Acoustic Gunshot Detection RFP, issued in February 2025, remains ongoing and could extend as late as February 2027. SoundThinking’s guidance assumes no contribution from a renewed Chicago ShotSpotter contract.
The company noted that Chicago’s City Council added a nonbinding referendum to the November ballot asking voters about bringing gunshot detection back to the city. Clark also said four of approximately nine declared mayoral candidates have publicly included restoring gunshot detection in their policy platforms.
Expenses, Balance Sheet and Outlook
Total operating expenses were $16.2 million, down from $16.7 million a year earlier. Sales and marketing expense declined to $5.9 million from $6.5 million, while research and development expense rose to $4 million from $3.7 million as the company invested in SafetySmart platform enhancements and AI-enabled products such as SafetySmart Field Agent.
As of June 30, SoundThinking had $6.4 million in cash and cash equivalents, $24.5 million in accounts receivable and contract assets, approximately $36 million in deferred revenue, and $4 million outstanding on its credit facility. The company said it had about $36 million of remaining borrowing capacity and $93.1 million of contractually committed revenue.
Clark said management had reset its targets to a level it believes the company can achieve. “Our renewal and retention wall has held firm, and we did win our fourth statewide CrimeTracer deal,” he said, adding that SoundThinking is focused on returning to growth while maintaining a leaner operating base.
About SoundThinking (NASDAQ:SSTI)
SoundThinking, Inc, a public safety technology company that provides transformative solutions and strategic advisory services for law enforcement and civic leadership. Its SafetySmart Platform, an integrated suite of data-driven tools that enable law enforcement and community violence prevention and health organizations to be efficient in public safety outcomes. It offers ShotSpotter, an acoustic gunshot detection system; CrimeTracer, a law enforcement search engine; CaseBuilder, an investigation management system; and ResourceRouter, a software that directs patrol and community anti-violence resources to help maximize their impact.
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