ShotSpotter (SSTI) – 2Q17 Earnings Recap
For those who are not aware, ShotSpotter is a recent IPO that offers a subscription-based service that utilizes proprietary, patented technologies that combine real-time acoustic data with advanced location determination algorithms to precisely determine the time and location of active gunfire in urban areas.
Yesterday, after the close, ShotSpotter reported Q2 earnings where it said revenues increased 28% Q/Q and 48% Y/Y while gross margins increased to 54%, up from 41% in Q1 and 38% a year ago. In addition, the company also raised guidance and added 44 net new “go-live” square miles of coverage during the quarter.
CEO Ralph Clark said “go-live” square miles is a new quarterly metric the firm added which represents the square miles covered by deployments that were approved by customers during the quarter, both from initial and expanded customers.
Mr. Clark would also speak on the outlook for the company, saying, “We are still in the early stages of penetrating our market. There are approximately 1,600 domestic and international cities, and 6,800 college campuses, train stations and airports that could benefit from ShotSpotter’s solutions, representing approximately $1.4 billion in potential annual subscription revenues. We believe we are well positioned to capitalize on the strong market opportunity in front of us.”
In an August 8th note from Roth Capital where they reiterated their Buy rating and $18 price target, they commented on additional deployments the company has been seeing.
First, they were positive on a recent double-arrest in Louisville, Kentucky involving guns, drugs and cash at a ShotSpotter-determined gunfire scene where police rapidly found shell casings to gain permission to search a house. Louisville’s deployment was noted as only two months old (a win Roth was unaware of), covering six square miles and having a gunfire alert rate as high as 58/week.
Second, New York City recently announced that by year-end it will expand SSTI’s coverage to 69 square miles from 54 currently. To be even more specific, the NYPD announced that the ShotSpotter program will expand to Fort Greene and Washington Heights by the end of the summer. According to NYPD Deputy Commissioner of Information Technology, Jessica Tisch, “It’s contributed to faster response times to 911 calls or to incidents of shots fired.”
Finally, according to the company’s Investor Relations page, they will speaking at the Liolios Gateway Conference from September 6th – 7th in San Francisco, California.
