SoundThinking secures $43M NYPD software deal

FREMONT, Calif. - SoundThinking, Inc. (NASDAQ:SSTI), a company specializing in public safety technology with a market capitalization of $221 million, has confirmed the renewal of its contract with the New York City Police Department (NYPD). The agreement, worth around $43 million, extends over three years and continues the longstanding relationship between the NYPD and TechnoLogic Solutions, LLC, a subsidiary of SoundThinking formerly known as LEEDS, LLC. The company’s stock has shown strong momentum, gaining over 19% in the past week and currently trading near its 52-week high of $17.80.

This partnership, spanning nearly two decades, has provided the NYPD with a tailor-made suite of software applications for various law enforcement activities. The software aids in managing police records, prisoner arraignment, summonses, complaints, arrests, personnel, juvenile apprehension, warrants, property, evidence, command discipline, and medical cases. These applications are currently utilized by over 35,000 active NYPD users. The company has demonstrated solid business fundamentals with revenue growth of 10% and a healthy gross margin of 57%.

Nasim Golzadeh, EVP of Investigative Solutions at SoundThinking, expressed pride in the company’s role in developing tools that bolster the NYPD’s capabilities and enhance public safety in New York City.

SoundThinking, Inc. is recognized for its AI- and data-driven public safety solutions, serving over 300 customers and collaborating with around 2,100 agencies. The company’s portfolio includes ShotSpotter®, an acoustic gunshot detection system; CrimeTracer™, a search engine for law enforcement; CaseBuilder™, an investigation management system; ResourceRouter™, a software for directing patrol and community anti-violence resources; SafePointe®, an AI-based weapons detection system; and PlateRanger powered by Rekor, a solution for automatic license plate recognition.

The renewal of the contract with the NYPD is indicative of SoundThinking’s established reputation as a reliable provider of technology-driven solutions for law enforcement. This announcement is based on a press release statement from SoundThinking, Inc. According to InvestingPro analysis, while the company is currently operating at a loss with negative earnings per share, it maintains a strong market position with multiple positive indicators. For deeper insights into SoundThinking’s financial health and growth prospects, including 12 additional ProTips and comprehensive valuation metrics, explore the detailed Pro Research Report available on InvestingPro.

In other recent news, SoundThinking has reported fourth-quarter earnings for 2024 that missed analyst expectations, with revenue, Adjusted EBITDA, and EPS falling short of FactSet consensus figures. The financial shortfall was primarily due to a $3.5 million impact from delays in two significant contracts with the New York Police Department. Despite this, SoundThinking has increased its financial outlook for 2025, projecting year-over-year margin improvements and a double-digit percentage increase in revenue. In a separate development, SoundThinking has secured a three-year contract to implement its ShotSpotter system in Niterói, Brazil, valued at approximately $1.7 million, marking its return to the Brazilian market.

Analyst firms have maintained positive ratings on SoundThinking’s stock. JMP Securities and Citizens JMP both reiterated their Market Outperform ratings with a $19 price target, citing the company’s strong market position and potential for long-term growth. Cantor Fitzgerald also maintained an Overweight rating with a $20 price target, expressing confidence in the company’s ability to overcome recent financial setbacks. Furthermore, Craig-Hallum raised its price target to $27, maintaining a Buy rating, and highlighted the potential for SoundThinking to regain a significant contract in Chicago, which could lead to substantial financial gains and improved investor sentiment. These developments reflect the ongoing confidence in SoundThinking’s business strategy and growth prospects.

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