SoundThinking 2025 Q2 Earnings Wider Losses Amid Revenue Decline

SoundThinking (SSTI) reported its fiscal 2025 Q2 earnings on August 13th, 2025. The results showed a revenue decline and significantly wider losses compared to the prior-year period. The company reaffirmed its full-year guidance and highlighted strategic initiatives aimed at long-term growth.

SoundThinking reported total revenue of $25.89 million in the second quarter of 2025, a 4.0% decrease from the $26.96 million recorded in the same period in 2024. The decline was attributed to the non-renewal of a contract with the City of Chicago, though the company remains optimistic about future growth.

The company’s losses widened significantly, with a net loss of $-3.12 million, representing a 314.9% increase from the $-752,000 loss in the prior-year quarter. Earnings per share fell to -$0.24 from -$0.06, marking a 300.0% increase in the per-share loss. The sharp decline in profitability highlights ongoing operational challenges and investment in strategic areas.

SoundThinking’s stock has shown a positive short-term response in the wake of the earnings report. The stock price rose 12.41% during the latest trading day and 13.60% during the most recent full trading week. Month-to-date, the stock edged up 0.86%. Despite the immediate rally, the stock’s long-term trajectory remains tied to the company's earnings performance and market perception.

A review of post-earnings price action over the past three years shows mixed results for a strategy of buying SSTI shares on the date of earnings announcements and holding for 30 days. The overall return over three years was 15.78%, with notable volatility across quarters. While positive surprises, such as those in Q3 2023 and Q3 2024, led to gains of 7.52% and 9.76%, respectively, the Q2 2024 quarter saw a significant 12.34% decline, underscoring the risk of this strategy. The 30-day holding period allowed for partial recovery in most cases but was not immune to market corrections when earnings fell short of expectations. This analysis highlights the importance of timing and risk management in SSTI's earnings-driven trading strategy.

CEO Ralph Clark emphasized the company's transformation into a broader public safety technology provider and noted that early investments in innovation and talent are yielding positive outcomes. He acknowledged the revenue decline but expressed confidence in long-term growth and highlighted the company’s focus on expense management, AI adoption, and client retention. Clark reiterated the company’s long-term financial goals, including achieving a 70% gross margin, 40% Adjusted EBITDA margin, and 15% annual revenue growth.

SoundThinking reaffirmed its FY 2025 revenue guidance of $111.0 million to $113.0 million, representing 10% year-over-year growth at the midpoint. The company also reaffirmed its Adjusted EBITDA margin guidance of 20% to 22%. Looking ahead, the CEO expects to finalize a new software sublicensing contract with the NYPD in Q3 2025 and anticipates receiving catch-up revenue from additional costs. The company also projects an increase in Annual Recurring Revenue (ARR) from $95.6 million at the beginning of 2025 to approximately $110.0 million by the start of 2026.

Additional News
Bitcoin surged to a record high above $124,000 on August 14th, 2025, fueled by favorable U.S. legislation and strong equity markets. This marked a significant milestone for the cryptocurrency, which has seen growing institutional interest. Meanwhile, Nigeria’s telecom regulator urged public cooperation to protect infrastructure, emphasizing the potential economic and national security risks of service disruptions.

In political developments, the Anambra State chapter of the All Progressives Congress criticized Governor Chukwuma Soludo for visiting President Bola Tinubu, insisting it would not safeguard his chances in the upcoming election. The South-West Zonal Executive Committee of the APC dismissed the African Democratic Congress coalition’s chances of unseating Tinubu in the 2027 presidential race.

Nationally, the Federal Government announced a seven-year moratorium on the establishment of new tertiary institutions to address the underutilization of existing ones. The Lagos State Government reiterated its commitment to combating illegal dredging, which has been damaging coastal communities.

These developments reflect the broader economic and political context in which SoundThinking operates, with macroeconomic trends and policy shifts influencing both market sentiment and operational dynamics.