Revenues Increase 29% Year-Over-Year to
Company Modifies FY 2022
Company Introduces FY 2023
Third Quarter 2022 Financial and Operational Highlights
- Revenues increased 29% to
$18.8 million from$14.5 million for the same quarter of 2021. - Gross profit increased 28% to
$10.3 million (55% of revenues) from$8.0 million (55% of revenues) for the same quarter of 2021. - GAAP net income was
$4.0 million , compared to GAAP net loss of$949,000 for the same quarter of 2021. - Adjusted EBITDA1 increased 37% to
$3.1 million (16% of revenues), compared to$2.2 million (15% of revenues) for the same quarter of 2021. - Went “live” with 10 new customer logos, including seven Respond cities, two security customers, and one Investigate agency as well as expanded in six Respond cities.
- Healthy balance sheet with
$9.6 million in cash and cash equivalents and approximately$15.0 million available on the company’s line of credit at the end of the quarter. - Narrowed full year 2022 revenue guidance range to
$81 million to$82 million , representing approximately 40% year-over-year growth at the midpoint compared to 2021, and maintained full year 2022 Adjusted EBITDA margin guidance of 19% to 21%. - Introduced full year 2023 revenue guidance of
$94 million to$96 million , representing approximately 17% year-over-year growth at the midpoint compared to full year 2022 revenue guidance, and full year 2023 Adjusted EBITDA margin guidance of 24% to 26%.
1 See the section below titled “Non-GAAP Financial Measures” for more information about Adjusted EBITDA and its reconciliation to GAAP net income.
Third Quarter 2022 Financial Results
Revenues for the third quarter of 2022 increased 29% to
Gross profit for the third quarter of 2022 increased 28% to
Total operating expenses for the third quarter of 2022 were
Net income for the third quarter of 2022 totaled
Adjusted EBITDA for the third quarter of 2022 increased 37% to
At quarter-end, the company had
Common Stock Repurchase Program
In
Financial Outlook
The company narrowed its full year 2022 revenue guidance range to
The company currently expects its ARR to exceed
The company introduced its full year 2023 revenue guidance of
The company has not reconciled its Adjusted EBITDA outlook to GAAP net income due to the uncertainty and variability of interest income, income taxes, depreciation and amortization, stock-based compensation expenses and acquisition related expenses, which are reconciling items between Adjusted EBITDA and GAAP net income. Because the company cannot reasonably predict such items, a reconciliation to forecasted GAAP net income is not available without unreasonable effort. Such items could have a significant impact on the calculation of GAAP net income. For more information, see “Non-GAAP Financial Measures” below.
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 “Safe Harbor Statement” below.
Management Commentary
“We delivered strong financial results across the board in the third quarter, highlighted by 29% revenue growth and solid Adjusted EBITDA and GAAP net income profitability,” said President and CEO
“We enter the fourth quarter with solid bookings and a robust pipeline of new business. We are in the process of executing contracts for over 70 new Respond miles and a significant eight-figure, multi-year Investigate transaction. Additionally, we recently secured a multi-year campus safety agreement with a major university through a new reseller partnership focused on colleges and universities. Collectively, this is the highest level of new miles and bookings we have secured since going public in 2017, giving us solid momentum heading into 2023.”
“The growing demand and constructive funding environment for our platform and services is structural. We believe these factors will enable us to drive robust revenue growth, operating leverage and margin expansion in 2023 and beyond.”
Conference Call
International dial-in: 1-412-542-4180
Conference ID: 10171019
A live audio webcast of the conference call will be available in listen-only mode simultaneously and available for replay here and via the investor relations section of the company’s website at www.shotspotter.com.
Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization.
A replay of the call will be available after
International replay dial-in: 1-412-317-6671
Replay ID: 10171019
Non-GAAP Financial Measures
Adjusted net income (loss): Adjusted net income (loss), a non-GAAP financial measure, represents the company’s net income (loss) before acquisition-related expenses, including adjustments to the company's contingent consideration obligation.
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, stock-based compensation expense and acquisition-related expenses, including adjustments to the company's contingent consideration obligation. 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.
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
The following table presents a reconciliation of adjusted net income (loss) to GAAP net income (loss), the most directly comparable GAAP measure, for each of the periods indicated (in thousands, except share and per share data):
Three Months Ended | Nine Months Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
(unaudited) | (unaudited) | ||||||||||||||
GAAP net income (loss) | $ | 4,033 | $ | (949 | ) | $ | 7,430 | $ | (1,120 | ) | |||||
Less: | |||||||||||||||
Acquisition related expenses | — | — | 101 | 165 | |||||||||||
Change in fair value of contingent consideration | (5,405 | ) | — | (8,842 | ) | — | |||||||||
Adjusted net loss | $ | (1,372 | ) | $ | (949 | ) | $ | (1,311 | ) | $ | (955 | ) | |||
Adjusted net loss per share, basic | $ | (0.11 | ) | $ | (0.08 | ) | $ | (0.11 | ) | $ | (0.08 | ) | |||
Adjusted net loss per share, diluted | $ | (0.11 | ) | $ | (0.08 | ) | $ | (0.11 | ) | $ | (0.08 | ) | |||
Weighted average shares used in computing adjusted net loss per share, basic | 12,167,632 | 11,680,413 | 12,156,980 | 11,634,422 | |||||||||||
Weighted average shares used in computing adjusted net loss per share, diluted | 12,167,632 | 11,680,413 | 12,156,980 | 11,634,422 |
The following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, for each of the periods indicated (in thousands):
Three Months Ended | Nine Months Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
(unaudited) | (unaudited) | ||||||||||||||
GAAP net income (loss) | $ | 4,033 | $ | (949 | ) | $ | 7,430 | $ | (1,120 | ) | |||||
Less: | |||||||||||||||
Interest income | (11 | ) | (8 | ) | (26 | ) | (28 | ) | |||||||
Income taxes | — | — | — | 49 | |||||||||||
Depreciation and amortization | 2,286 | 1,745 | 6,824 | 5,097 | |||||||||||
Stock-based compensation expense | 2,157 | 1,453 | 6,145 | 4,322 | |||||||||||
Acquisition related expenses | — | — | 101 | 165 | |||||||||||
Change in fair value of contingent consideration | (5,405 | ) | — | (8,842 | ) | — | |||||||||
Adjusted EBITDA | $ | 3,060 | $ | 2,241 | $ | 11,632 | $ | 8,485 |
Safe Harbor Statement
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 estimated revenue and Adjusted EBITDA for 2022 and 2023, operating momentum and sales pipeline, the funding environment for the company’s products, the leverage of the company's operating model, and the expectation for revenue growth, operating leverage and margin expansion in 2023 and beyond. Words such as "expect," "anticipate," "should," "believe," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "could," "intend," 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 successfully negotiate and execute contracts with new and existing customers in a timely manner, if at all; the company’s ability to address the business and other impacts and uncertainties associated with the COVID-19 pandemic; the company’s ability to maintain and increase sales, including sales of the company’s newer product lines; 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 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 potential effects of negative publicity; and the company’s ability to maintain and enhance its brand, as well as other risk factors included in the company’s most recent annual report on Form 10-K and quarterly report on Form 10-Q and other
About
Company Contact:
+1 (510) 794-3100
astewart@shotspotter.com
Investor Relations Contacts:
Gateway Investor Relations
+1 (949) 574-3860
SSTI@gatewayir.com
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Revenues | $ | 18,775 | $ | 14,547 | $ | 60,005 | $ | 44,184 | |||||||
Costs | |||||||||||||||
Cost of revenues | 8,473 | 6,520 | 25,130 | 19,137 | |||||||||||
Impairment of property and equipment | — | — | — | 25 | |||||||||||
Total costs | 8,473 | 6,520 | 25,130 | 19,162 | |||||||||||
Gross profit | 10,302 | 8,027 | 34,875 | 25,022 | |||||||||||
Operating expenses | |||||||||||||||
Sales and marketing | 5,357 | 4,018 | 16,727 | 11,881 | |||||||||||
Research and development | 2,409 | 1,703 | 7,570 | 5,156 | |||||||||||
General and administrative | 3,866 | 3,217 | 11,710 | 8,900 | |||||||||||
Change in fair value of contingent consideration | (5,405 | ) | — | (8,842 | ) | — | |||||||||
Total operating expenses | 6,227 | 8,938 | 27,165 | 25,937 | |||||||||||
Operating income (loss) | 4,075 | (911 | ) | 7,710 | (915 | ) | |||||||||
Other income (expense), net | |||||||||||||||
Interest income, net | 11 | 8 | 26 | 28 | |||||||||||
Other expense, net | (53 | ) | (46 | ) | (306 | ) | (184 | ) | |||||||
Total other income (expense), net | (42 | ) | (38 | ) | (280 | ) | (156 | ) | |||||||
Income (loss) before income taxes | 4,033 | (949 | ) | 7,430 | (1,071 | ) | |||||||||
Provision for income taxes | — | — | — | 49 | |||||||||||
Net income (loss) | $ | 4,033 | $ | (949 | ) | $ | 7,430 | $ | (1,120 | ) | |||||
Net income (loss) per share, basic | $ | 0.33 | $ | (0.08 | ) | $ | 0.61 | $ | (0.10 | ) | |||||
Net income (loss) per share, diluted | $ | 0.33 | $ | (0.08 | ) | $ | 0.60 | $ | (0.10 | ) | |||||
Weighted average shares used in computing adjusted net income (loss) per share, basic | 12,167,632 | 11,680,413 | 12,156,980 | 11,634,422 | |||||||||||
Weighted average shares used in computing adjusted net income (loss) per share, diluted | 12,357,136 | 11,680,413 | 12,306,839 | 11,634,422 |
Condensed Consolidated Balance Sheets
(In thousands)
2022 | 2021 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 9,604 | $ | 15,636 | |||
Accounts receivable and contract asset, net | 20,199 | 16,134 | |||||
Prepaid expenses and other current assets | 4,018 | 2,701 | |||||
Total current assets | 33,821 | 34,471 | |||||
Property and equipment, net | 22,027 | 17,390 | |||||
Operating lease right-of-use assets | 3,467 | 2,323 | |||||
23,171 | 2,816 | ||||||
Intangible assets, net | 27,850 | 13,564 | |||||
Other assets | 2,430 | 1,740 | |||||
Total assets | $ | 112,766 | $ | 72,304 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 1,214 | $ | 1,587 | |||
Deferred revenue, short-term | 34,896 | 26,235 | |||||
Accrued expenses and other current liabilities | 9,007 | 6,680 | |||||
Total current liabilities | 45,117 | 34,502 | |||||
Deferred revenue, long-term | 2,073 | 474 | |||||
Other liabilities | 6,354 | 3,513 | |||||
Total liabilities | 53,544 | 38,489 | |||||
Stockholders' equity | |||||||
Common stock | 61 | 58 | |||||
Additional paid-in capital | 150,855 | 132,780 | |||||
Accumulated deficit | (91,355 | ) | (98,785 | ) | |||
Accumulated other comprehensive loss | (339 | ) | (238 | ) | |||
Total stockholders' equity | 59,222 | 33,815 | |||||
Total liabilities and stockholders' equity | $ | 112,766 | $ | 72,304 |
Source:
2022 GlobeNewswire, Inc., source