SoundThinking, Inc. Reports First Quarter 2026 Financial Results
Rhea-AI Summary
SoundThinking (Nasdaq:SSTI) reported Q1 2026 revenue of $24.2 million, down 15% year over year, mainly due to $3.5 million of catch-up revenue in Q1 2025 and $0.5 million from a Puerto Rico contract not currently renewed.
Gross profit was $11.3 million (47% margin). GAAP net loss widened to $7.0 million, and Adjusted EBITDA was negative $0.1 million. The company ended the quarter with $14.2 million in cash and $36.0 million available on its credit facility.
SoundThinking reaffirmed 2026 revenue guidance of $109–$111 million (about 6% growth at the midpoint), Adjusted EBITDA margin guidance of 16–18%, and expects ARR to rise from $95.4 million to about $110.0 million by early 2027.
AI-generated analysis. Not financial advice.
Positive
- 2026 revenue guidance reaffirmed at $109–$111 million, ~6% YoY growth at midpoint
- 2026 Adjusted EBITDA margin guidance maintained at 16%–18%
- ARR expected to grow from $95.4 million to ~$110.0 million by early 2027
- Quarter-end liquidity: $14.2 million cash and $36.0 million available on credit facility
- Workforce optimization expected to deliver about $4 million in annualized savings
- Deferred revenue of $40.4 million supports visibility into future revenue
- SafePointe healthcare monthly recurring revenue more than doubled during the quarter
- Drone-as-first-responder integrations now live in 16 cities
Negative
- Q1 2026 revenue fell 15% year over year to $24.2 million
- Gross profit declined 32% to $11.3 million, margin down to 47% from 59%
- GAAP net loss widened to $7.0 million from $1.5 million year over year
- Adjusted EBITDA fell to -$0.1 million from $4.5 million in Q1 2025
- Operating expenses increased to $18.1 million, including $1.6 million restructuring costs
- Approximately $0.5 million prior-period revenue from Puerto Rico contract not currently renewed
- 2026 outlook assumes no ShotSpotter contract renewal in Chicago, with RFP outcome still pending
News Market Reaction – SSTI
On the day this news was published, SSTI gained 0.76%, reflecting a mild positive market reaction. Argus tracked a peak move of +3.8% during that session. Argus tracked a trough of -6.0% from its starting point during tracking. Our momentum scanner triggered 13 alerts that day, indicating notable trading interest and price volatility. This price movement added approximately $659K to the company's valuation, bringing the market cap to $87.37M at that time.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
SSTI is down 8.22% while key software peers are mixed: DUOT (-1.3%), AEYE (-7.12%), HIT (+2.67%), EXFY (+2.7%), SVCO (+0.57%). Momentum scanner flags only one peer (MRT, +0.98%), and in the opposite direction. This points to a stock-specific move driven by SSTI’s earnings, not a broad sector rotation.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Mar 03 | Q4/FY25 earnings | Positive | -18.9% | Record 2025 revenue and updated 2026 guidance with targeted margin improvement. |
| Nov 12 | Q3 2025 earnings | Negative | -14.1% | Revenue and gross profit declines plus lowered full‑year 2025 guidance and margins. |
| Aug 12 | Q2 2025 earnings | Positive | +15.8% | Reaffirmed 2025 guidance and ARR growth despite revenue decline and higher losses. |
| May 13 | Q1 2025 earnings | Positive | -1.4% | Double‑digit revenue growth helped by NYPD catch‑up revenue and stronger EBITDA. |
| Feb 25 | Q4/FY24 earnings | Positive | +23.6% | Record 2024 revenue and higher 2025 guidance with strong ARR expectations. |
Earnings releases often produce large moves for SSTI, with several prior reports showing double‑digit swings both up and down. Negative or mixed results and guidance cuts have previously coincided with sharp selloffs, while cleaner growth stories have seen strong rallies.
Over the last five earnings cycles, SoundThinking has moved between growth and slowdown narratives. In Q4 2024 and full‑year results (news_id 816975), revenue grew to $102.0M with raised 2025 guidance and the stock reacted strongly higher. Through 2025, Q1–Q3 earnings (news_id 854196, 892782, 934928) showed modest revenue declines, margin pressure, and multiple guidance reductions, and the stock often sold off. The 2025 Q4/full‑year 2025 report (news_id 1021900) delivered record revenue but minimal growth and led to another sharp decline, setting the backdrop for today’s weaker Q1 2026 report.
Historical Comparison
In the past five earnings releases, SSTI’s average move was about 1.01%, with several double‑digit swings. Today’s -8.22% reaction to Q1 2026 results fits the pattern of sharp downside moves when growth and margins disappoint.
Across FY 2024 to Q4 2025, SSTI moved from double‑digit annual growth and raised guidance toward slower growth, guidance cuts, and margin pressure. The current Q1 2026 earnings continue that trajectory with revenue contraction but reaffirmed 2026 guidance and ARR growth targets.
Market Pulse Summary
This announcement highlights a weak Q1, with revenue down to $24.2M, gross margin compressing to 47%, and GAAP net loss widening to $7.0M. At the same time, management reaffirmed FY 2026 revenue guidance of $109.0M–$111.0M and an Adjusted EBITDA margin target of 16%–18%, alongside an ARR goal of about $110.0M by early 2027. Investors may watch upcoming quarters for evidence that cost savings, recurring revenue growth, and product momentum can restore margins and support those targets.
Key Terms
adjusted ebitda financial
annual recurring revenue (arr) financial
gaap financial
stock-based compensation expense financial
non-gaap financial measures financial
AI-generated analysis. Not financial advice.
Revenues Decreased
Company Reaffirms FY 2026 Revenue Guidance Range of
Company Reaffirms Expectation for ARR1 to Increase from
FREMONT, Calif., May 14, 2026 (GLOBE NEWSWIRE) -- SoundThinking, Inc. (Nasdaq: SSTI), a leading public safety technology company, today reported financial results for the first quarter ended March 31, 2026.
First Quarter 2026 Financial and Operational Highlights
- Revenues decreased
15% to$24.2 million , compared to$28.3 million for the same quarter of 2025. - Gross profit decreased
32% to$11.3 million (47% of revenues), compared to$16.6 million (59% of revenues) for the same quarter of 2025. - GAAP net loss totaled
$7.0 million , compared to GAAP net loss of$1.5 million for the same quarter of 2025. - Adjusted EBITDA1 totaled negative
$0.1 million (0% of revenues), compared to$4.5 million (16% of revenues) for the same quarter of 2025. - Went “live” in one new city and one new customer.
1 See the section below titled “Non-GAAP Financial Measures and Key Business Metrics” for more information about Adjusted EBITDA and its reconciliation to GAAP net loss and more information about Annual Recurring Revenue (ARR).
Management Commentary
“Our first quarter results reflect the structural shape of our year and the deliberate investments we are making to position SoundThinking for durable, profitable growth,” said President and CEO Ralph Clark. “Q1 is, by design, typically our most cost-concentrated and lightest revenue quarter of the year, with deployments, renewals, and expansions building through the year. With approximately
“We are encouraged by the momentum we are seeing across our public safety and commercial security offerings. Drone-as-first-responder integrations are now live in 16 cities, we have launched SafetySmart™ Field Agent — our AI-powered user experience for the SafetySmart™ platform — and SafePointe® go-lives in healthcare are accelerating, with monthly recurring revenue more than doubling during the quarter. Supported by a strong recurring revenue base, a growing multi-product pipeline, and improving visibility as the year progresses, we remain confident in our ability to execute and drive sustainable, long-term value for shareholders.”
First Quarter 2026 Financial Results
Revenues for the first quarter of 2026 were
Gross profit for the first quarter of 2026 was
Total operating expenses for the first quarter of 2026 were
Net loss for the first quarter of 2026 totaled
Adjusted EBITDA for the first quarter of 2026 totaled negative
At quarter end, the company had
Financial Outlook
The company reaffirmed its full-year 2026 revenue guidance range of
“We are reaffirming our full-year outlook and believe we are well positioned to deliver improved performance as we move through 2026, even without a ShotSpotter contract renewal in Chicago,” added Mr. Clark. “We await the outcome of the current gunshot detection RFP process that remains underway, and believe our submission represents a comprehensive and compelling proposal. Our long-term financial targets of
The company’s financial outlook statements are based on current expectations. The preceding statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under “Forward-Looking Statements” below. The company has not reconciled its Adjusted EBITDA outlook to GAAP net loss due to the uncertainty and variability of interest income (expense), income taxes, depreciation and amortization, stock-based compensation expenses, and any acquisition-related expenses, which are reconciling items between Adjusted EBITDA and GAAP net loss. Because the company cannot reasonably predict such items, a reconciliation to forecasted GAAP net loss is not available without unreasonable effort. Such items could have a significant impact on the calculation of GAAP net loss. For more information, see “Non-GAAP Financial Measures and Key Business Metrics” below.
Conference Call
SoundThinking will hold a conference call today May 14, 2026 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss these results and provide an update on business conditions.
SoundThinking management will host the presentation, followed by a question-and-answer period. Those wishing to participate via webcast should access the call through SoundThinking’s Investor Relations website at https://ir.soundthinking.com/. Those wishing to participate via telephone may dial in at 1-877-407-8029 (USA) or 1-201-689-8029 (International). The replay will be available via webcast through SoundThinking’s Investor Relations website.
Non-GAAP Financial Measures and Key Business Metrics
Adjusted EBITDA: Adjusted EBITDA, a non-GAAP financial measure, represents the company’s net income (loss) before interest (income) expense, income taxes, depreciation, amortization and impairment, restructuring and related expense and stock-based compensation expense. Adjusted EBITDA is a measure used by management internally to understand and evaluate the company’s core operating performance and trends across accounting periods and in connection with developing future operating plans, making strategic decisions regarding the allocation of capital and considering initiatives focused on cultivating new markets for its solutions. In particular, the exclusion of these expenses in calculating Adjusted EBITDA facilitates comparisons of the company’s operating performance on a period-to-period basis.
SoundThinking believes Adjusted EBITDA also provides useful information to investors and others in understanding and evaluating its operating results in the same manner as its management and board of directors. For example, SoundThinking adjusts EBITDA for stock-based compensation expense because such expenses often vary for reasons that are generally unrelated to financial and operational performance in a particular period. Stock-based compensation is utilized by SoundThinking to attract and retain employees with a goal of long-term retention and the alignment of employee interests with those of the company and its stockholders, rather than to address operational performance for any particular period’s financial performance measures, in particular net loss, or its other GAAP financial results.
The following table presents a reconciliation of GAAP net loss, the most directly comparable GAAP measure, to Adjusted EBITDA for each of the periods indicated (in thousands):
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| GAAP net loss | $ | (7,005 | ) | $ | (1,484 | ) | ||
| Less: | ||||||||
| Interest expense, net | (24 | ) | 12 | |||||
| Income taxes | 29 | 100 | ||||||
| Depreciation, amortization and impairment | 2,840 | 2,507 | ||||||
| Stock-based compensation expense | 2,479 | 3,404 | ||||||
| Restructuring and related expense | 1,586 | — | ||||||
| Adjusted EBITDA | $ | (95 | ) | $ | 4,539 | |||
Annual Recurring Revenue (ARR): ARR is calculated for a year based on the expected GAAP revenue for the year from contracts that are in effect on January 1st of such year, assuming all such contracts that are due for renewal during the year renew as expected on or near their renewal date, and including contracts executed during the year after January 1st, but for which GAAP revenue recognition starts January 1st of the year. ARR is used by management internally to provide a clearer picture of its sustainable revenue base. SoundThinking believes ARR provides useful information to investors and others in understanding and evaluating growth of its recurring services because recurring revenue is particularly relevant for businesses operating under a subscription model, where customer retention and contract renewals play a significant role in long-term financial performance.
Forward-Looking Statements
This press release and earnings call referencing this press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the company’s guidance for revenue and Adjusted EBITDA for 2026, the company's expectations for the increase in its ARR, its long-term financial targets, the company’s growth opportunities ahead, ability to drive profitable growth and build upon existing contracts and partnerships, including in the United States and internationally, the company’s expectation of annualized savings from its workforce optimization, the company’s expectations for meaningful operating leverage, operating momentum, sales pipeline, the outcome of the Chicago gunshot detection RFP process, the enduring success of ShotSpotter and accelerating adoption of the company’s SafetySmart platform. Words such as “expect,” “anticipate,” “should,” “believe,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “could,” “intend,” or variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the company’s control. The company’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: the company’s ability to enter into new contracts or renew its contracts with key customers and the timing of such entry or renewal; the company’s ability to successfully negotiate and execute contracts with new and existing customers in a timely manner, if at all; the company’s ability to maintain and increase sales, including sales of the company’s newer product lines and through expansion into new vertical markets; the availability of funding for the company’s customers to purchase the company’s solutions; the complexity, expense and time associated with contracting with government entities; the company’s ability to maintain and expand coverage of existing public safety customer accounts and further penetrate the public safety market; the potential effects of negative publicity; the company’s ability to sell its solutions into international and other new markets; the lengthy sales cycle for the company’s solutions; changes in federal funding available to support local law enforcement; the company’s ability to deploy and deliver its solutions; the company’s ability to maintain and enhance its brand; and the company’s ability to address the business and other impacts and uncertainties associated with macroeconomic factors, including tariffs and trade measures, as well as other risk factors included in the company’s most recent annual report on Form 10-K and other SEC filings. These forward-looking statements are made as of the date of this press release and are based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Except as required by law, the company undertakes no duty or obligation to update any forward-looking statements contained in this press release and the earnings call referencing this press release as a result of new information, future events or changes in its expectations.
About SoundThinking, Inc.
SoundThinking, Inc. (Nasdaq: SSTI) is a leading public safety technology company that delivers AI- and data-driven solutions for law enforcement, civic leadership, and security professionals. SoundThinking is trusted by more than 300 customers and has worked with approximately 2,100 agencies to drive more efficient, effective, and equitable public safety outcomes. The company’s SafetySmart™ platform includes ShotSpotter®, the leading acoustic gunshot detection system; CrimeTracer™, the leading law enforcement search engine; CaseBuilder™, a one-stop investigation management system; ResourceRouter™, software that directs patrol and community anti-violence resources to help maximize their impact; SafePointe®, an AI-based weapons detection system; and PlateRanger powered by Rekor, a leading ALPR solution. SoundThinking has been designated a Great Place to Work® company.
Company Contact:
Alan Stewart, CFO
SoundThinking, Inc.
+1 (510) 794-3100
astewart@soundthinking.com
Investor Relations Contacts:
Ankit Hira
Solebury Strategic Communications for SoundThinking, Inc.
+1 (203) 546 0444
ahira@soleburystrat.com
| SoundThinking, Inc. Condensed Consolidated Statements of Operations (In thousands, except share and per share data) (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | $ | 24,178 | $ | 28,349 | ||||
| Costs | ||||||||
| Cost of revenues | 12,483 | 11,718 | ||||||
| Impairment of property and equipment | 435 | 37 | ||||||
| Total costs | 12,918 | 11,755 | ||||||
| Gross profit | 11,260 | 16,594 | ||||||
| Operating expenses | ||||||||
| Sales and marketing | 6,500 | 7,259 | ||||||
| Research and development | 4,405 | 4,065 | ||||||
| General and administrative | 6,676 | 6,474 | ||||||
| Restructuring expense | 535 | - | ||||||
| Total operating expenses | 18,116 | 17,798 | ||||||
| Operating loss | (6,856 | ) | (1,204 | ) | ||||
| Other expense, net | ||||||||
| Interest expense, net | 24 | (12 | ) | |||||
| Other expense, net | (144 | ) | (168 | ) | ||||
| Total other expense, net | (120 | ) | (180 | ) | ||||
| Loss before income taxes | (6,976 | ) | (1,384 | ) | ||||
| Provision for income taxes | 29 | 100 | ||||||
| Net loss | $ | (7,005 | ) | $ | (1,484 | ) | ||
| Net loss per share, basic and diluted | $ | (0.54 | ) | $ | (0.12 | ) | ||
| Weighted-average shares used in computing net loss per share, basic and diluted | 12,857,891 | 12,648,370 | ||||||
| SoundThinking, Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) | ||||||||
| March 31, 2026 | December 31, 2025 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 14,242 | $ | 15,797 | ||||
| Accounts receivable and contract assets, net | 21,852 | 28,570 | ||||||
| Prepaid expenses and other current assets | 4,138 | 4,225 | ||||||
| Total current assets | 40,232 | 48,592 | ||||||
| Property and equipment, net | 18,429 | 18,816 | ||||||
| Operating lease right-of-use assets | 1,751 | 1,904 | ||||||
| Goodwill | 34,213 | 34,213 | ||||||
| Intangible assets, net | 28,376 | 29,335 | ||||||
| Other assets | 2,724 | 2,894 | ||||||
| Total assets | $ | 125,725 | $ | 135,754 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 3,663 | $ | 3,789 | ||||
| Accrued expenses and other current liabilities | 7,954 | 9,578 | ||||||
| Line of credit | 4,000 | 4,000 | ||||||
| Deferred revenue, short-term | 36,948 | 40,035 | ||||||
| Total current liabilities | 52,565 | 57,402 | ||||||
| Deferred revenue, long-term | 3,402 | 3,845 | ||||||
| Deferred tax liability | 1,386 | 1,359 | ||||||
| Operating lease liabilities, net of current portion | 764 | 976 | ||||||
| Total liabilities | 58,117 | 63,582 | ||||||
| Stockholders' equity | ||||||||
| Common stock: 12,953,943 and 12,825,960 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively | 64 | 64 | ||||||
| Additional paid-in capital | 188,600 | 186,115 | ||||||
| Accumulated deficit | (120,723 | ) | (113,718 | ) | ||||
| Accumulated other comprehensive loss | (333 | ) | (289 | ) | ||||
| Total stockholders' equity | 67,608 | 72,172 | ||||||
| Total liabilities and stockholders' equity | $ | 125,725 | $ | 135,754 | ||||
