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spk00: Good afternoon and welcome to ShotSpotter's second quarter 2021 earnings conference call. My name is Anastasia and I will be your operator for today's call. Joining us are ShotSpotter's CEO Ralph Clark and CFO Alan Stewart. Please note that certain information discussed on the call today will include forward-looking statements about future events in ShotSpotter's business strategy and future financial and operating performance These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict and may cause the actual results to differ materially from those stated or implied by those statements. Certain of these risks and assumptions are discussed in ShotSpotter's SEC filings, including its registration statement on Form S-1. These forward-looking statements reflect management's beliefs, estimates, and predictions as of the date of this live broadcast, August 10, 2021, and ShotSpotter undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Finally, I would like to remind everyone that this call will be recorded and made available for replay via a link available in the Investor Relations section of the company's website at ir.shotspotter.com. Now I would like to turn the call over to ShotSpotter's CEO, Ralph Clark. Sir, please proceed.
spk08: Good afternoon, and thank you for joining us today. I hope everyone is doing well. As usual, I'll start with a quick overview of the quarter and our operational outlook before Alan details the quarterly results. We will then take your questions. We're very pleased with our second quarter results, reporting revenue in line with our expectations of $14.6 million, up 30% from Q2 of 2020. During the quarter, we went live with ShotSpotter Respond with one multi-unit security customer, two new cities, and three expansions. We also went live with three ShotSpotter Connect deployments and have built a very strong pipeline of prospects for ShotSpotter Investigate that we expect to go beta before year end. We believe our cross-solution sales momentum is confirmation that our precision policing platform and positioning is resonating with market demand. Quarterly adjusted EBITDA was $2.9 million compared to $3.4 million last year. The decrease was largely due to unbudgeted marketing and legal spend associated with addressing a defund the police variant intended to falsely smear the efficacy of our real-time acoustic gunshot detection and post-incident forensic services. Although distracting, this misguided effort for now appears to have had little to no impact on our short-term to medium-term revenue growth prospects. However, we intend to vigorously defend our long-term brand reputation and are carefully evaluating our strategic options, including legal actions going forward. Our field engineering and customer success teams are fully booked with over 13 Respond new customer and expansion projects in the process of being deployed and onboarded in the second half of this year. This includes a number of Tier 1 and Tier 2 expansions that demonstrate the value our customers experience with our solutions in helping them address violent crime. We're also incredibly grateful to renew our partnership with Chief Paul Newtigate, the Chief of Police in Virginia Beach. Chief Newtigate was previously the Assistant Chief of Police in Cincinnati and was both an artful user and ardent net promoter of ShotSpotter in the Ohio region. where we now have seven deployments, including Cleveland, Ohio. Strong partnerships do matter. I'm equally thrilled to report that we experienced zero customer or mileage attrition for ShotSpot or Respond. In net of price increases and discounts, we anticipate coming in at approximately 1% gap revenue attrition, which is lower than our original estimate of 3% to 4% for the year. This is a powerful testament to the stickiness of our solutions and how customers come to depend on the value of our services once we are formally engaged. Our deal cadence is picking up and our sales cycles are contracting due to the perfect confluence of three powerful and what we believe to be sustained themes. Number one, violent crime is measurably increasing in a large number of cities ranging from small to large and in between. Many of you have probably seen both local and national press coverage on the gun violence issue. As a company, we have participated in a number of academic and policy-maker convenings on the subject of increased violent crime. ShotSpot is at the forefront of this critical issue as a leading solutions provider directly engaged with an on-the-ground nexus. We see the real-world impact of violent crime playing out daily in 800 miles of acoustic gunshot detection coverage in over 100 cities. We have published 40% more gunfire alerts in the first half of this year compared to the 99,000 gunshots for the same period last year. Number two, we believe we've reached a viral tipping point given our early and consistent and demonstrable success in working with police departments. We help police implement precision policing strategies that forward-leaning police departments are seeking and residents are demanding. Communities want police to better respond to, prevent, and reduce violent crime, but without over-policing. The market is taking note of our work in places like NYPD and Pittsburgh, and even newer deployments that have registered early successes like Harris County, Houston, Detroit, and Memphis. Number three, we're experiencing a robust funding environment driven by direct federal funding to cities through the $350 billion American Rescue Act. a return to congressional earmarks, and a public endorsement of gunshot detection from the Biden administration. We've already tracked five earmarks calling for acoustic gunshot detection projects totaling $3 billion that have been secured in the House CJIS Appropriations Bill, including an earmark request from the Democratic Chair of the CJIS Appropriations Committee, Representative Hartwright of Pennsylvania. We were equally surprised and delighted to hear President Biden formally and publicly endorse the idea that federal dollars to cities could and should be used to implement gunshot detection. After the President's comments, the White House doubled down on that endorsement and released a public memo which highlighted Syracuse's plan to spend $4 million in American Rescue Plan aid, with a portion of that dedicated to reactivating and expanding their shot spotter response system. This was followed by an in-person visit to Chicago PD by Attorney General Garland and Senator Durbin to view one of the precincts where ShotSpotter was prominently featured as a part of their strategic decision support center platform. This type of credibility stamp of approval from the Oval Office establishes gunshot detection as a viable category in a similar fashion to the way the Obama administration took steps to legitimize body-worn cameras. It appears that our federal lobbying initiatives are finally bearing fruit, making the timing of our new Washington, D.C. office prescient. We were excited to host a formal opening in July of our D.C. office that included an official ribbon-cutting ceremony and remarks by Washington, D.C. Mayor Muriel Bowser and our Chief of Metro Police Robert Conte. The opening was attended by many other policymakers and influencers, as well as local and national press. Our DC satellite office adds more capacity and resiliency to our incident review center operations and allows us to have closer contact for briefings and training sessions with our East Coast and Caribbean law enforcement partners and prospects. In addition, we now share close proximity with many key organizations that share our objective to aggressively combat gun violence. These institutions include Police Executive Research Forum, or PERF, International Associations of Chiefs of Police, IACP, National Organization of Black Law Enforcement Executives, NOBLE, ATF, along with the Department of Homeland Security, the National Police Foundation, of course, appropriators and their staffers in Congress. Our lead colleagues continue to focus on the maintenance and support of the on-prem version of our case management solution, along with professional services projects within NYPD. They were quite busy in delivering on their professional services commitments in Q1 and have been gearing up and planning in Q2 for another set of professional services projects for the second half of 2021 and early 2022. These projects are based on a number of anticipated work orders making their way through NYPD's procurement process, which we expect to be formally approved and funded later this month. We're bullish on achieving at least $10 million in GAAP revenue from leads for the year based on the ongoing revenue from maintenance and support, combined with the pending new work orders for professional services. We've been encouraged by the strong positive response we've had with ShotSpotter Investigate. We recently announced our partnership with Anti-Trafficking International, or ATI, to help them speed up and improve the cross-jurisdictional investigative process with human trafficking. This is the first of several deployments we expect to operationalize later this year. We have a dedicated quota carrying sales resource for Investigate and are likely to add at least one more later this year. In addition, we're investing in further enhancing Investigate's capabilities to expand in broader investigative use cases that grow our TAM opportunity. As a result of our performance this quarter and continued forward momentum, we are reaffirming our full year 2021 revenue guidance of $60 to $61 million, representing a 32% revenue growth from 2020 to 2021 at the midpoint. And while we're not formally establishing revenue guidance for 2022, we believe next year will be very strong, given the improving demand environment for our core ShotSpotter response solution, including its stronger retention, along with the increased upsell of our ShotSpotter Connect offering and our growing confidence in the prospects for ShotSpotter Investigate. I'll now turn it over to Alan, and I look forward to taking your questions later. Thank you, Ralph. we're pleased with our performance in the second quarter. As Ralph mentioned, we added two new response cities and one security customer this quarter while seeing no city attrition. We also had three city expansions and achieved strong revenue growth of 30% compared to the second quarter of 2020. Losing those cities to attrition continues the trend of keeping our actual attrition low, similar to what we experienced in 2020. With this ongoing success, we expect that our 2021 revenue interest will be close to only 1%, similar to last year's excellent results. Early feedback on our third quarter deployments is also positive, with the addition of new city customers and expansions already underway. Let me provide more details on the quarter, and then I will share some thoughts around the balance of the year. Second quarter revenues were in line with the expectations at $14.6 million, a 30% increase over the $11.3 million in the second quarter of 2020. Revenue increased as our deployed miles are up year over year, along with revenue contribution from our leads acquisition. Gross profit for the second quarter of 2021 was $8.3 million, or 57% of revenue, versus $6.9 million, or 61% of revenue for the prior year period. Gross margin was a bit lower as a result of slightly lower gross margins on the professional services provided by our leads team. Adjusted EBITDA for the second quarter was $2.9 million, a decrease from the $3.4 million in the second quarter of 2020. As a reminder, adjusted EBITDA is calculated by taking our gap net income or net loss and adding back interest, taxes, depreciation, amortization, and stock-based compensations. As Ralph mentioned, the primary reason for our lower adjusted EBITDA and our net loss for the quarter is primarily related to the increased costs that we're experiencing in our marketing and legal costs related to address negative publicity generated by certain entities and organizations opposing the efficacy of the ShotSpotter solutions. Now turning to our expenses. Our operating expenses for the second quarter were $8.5 million, or 58% of revenue, versus $6 million or 53% of revenue in the second quarter of 2020. As expected, in addition to the operating expense increases related to marketing and legal, we also had costs associated with personnel expansion and incremental expenses associated with leads. Breaking down our expenses, sales and marketing expense for the second quarter was $3.9 million or 27% of total revenue versus $2.3 million or 21% of total revenue for the prior year period. Our sales and marketing teams continue to build our sales pipeline and expand our marketing efforts. We continue to focus on maintaining high levels of customer satisfaction, which helps keep our attrition rates low. During the quarter, we also added sales capacity for our Investigate product to position this segment for expected growth in 2022. Our R&D expenses for the second quarter were $1.7 million or 12% of total revenue compared to $1.4 million or 12% of total revenue for the prior year period. We continue to invest in increasing the functionality of all of our products. G&A expenses for the quarter were $2.8 million or 19% of total revenue compared to $2.3 million or 21% of total revenue for the prior year period. The increase in G&A expenses in absolute dollars were primarily related to the increased legal and public relations expenses mentioned above. Our net loss for the second quarter was a loss of $250,000, or a loss of two cents per share on 11.6 million average shares outstanding on both a basic and diluted basis. This compares to adjusted net income of $866,000, or eight cents per share based on 11.4 million basic and 7 cents per share based on 11.7 million diluted weighted average shares outstanding for the prior year period. There were no acquisition-related expenses during this quarter. Deferred revenue at the end of the quarter was $19.8 million versus $25 million at the end of Q1 2021. We ended the quarter with $15.6 million in cash and cash equivalents versus $10.9 million at the end of the first quarter. During the quarter, we repurchased 12,585 shares for approximately $500,000. We have no short or long-term debt outstanding, and as previously discussed, we possess a $20 million line of credit to improve our financial flexibility. Turning to our full 2021 outlook, our revenue guidance remains at $60 to $61 million. Please note that the midpoint of our new guidance reflects 32% year-over-year growth. We also expect that we will be profitable for the full year of 2021. Now back to Ralph for some final thoughts, and then we'll be happy to take your questions. Thank you, Alan. As you can see, there's a lot to be excited about here. We continue to be inspired in our work of bringing precision policing solutions to market. Policing is undergoing a fundamental transformation, and we're grateful to be a positive force in that journey. We're now ready to take your questions.
spk00: Thank you. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. We will pause for a moment as callers join the queue. The first question comes from Will Power with Baird. Please go ahead.
spk03: Hey, guys. Thanks for taking the question. This is Charlie Ehrlich on for Will. Thanks for all the color on the macro environment and the federal stimulus. I'd love if you could just talk a little bit about that thing from federal stimulus to state and local governments and how you're thinking about that in terms of whether that's going to be you're already seeing a benefit from that in the numbers or if that's more of a future benefit. Thanks.
spk08: Yeah, so thank you for that question. This is Ralph and I'll start and Alan jump in to add on. We're really encouraged by what we're seeing on the federal stimulus side. As I mentioned in my prepared remarks, we're seeing it come through two basic themes. There's the Rescue Act funds that's going directly to cities, which is quite encouraging. There's no additional steps that a city has to take in order to get access to that funding. And there's also the return of earmarks, which we're seeing some really interesting early successes in. Certainly seeing that progress happen on the House side. There's some things that are working their way through the Senate side that we're pretty encouraged about. But in addition to the funding, I think we can't underestimate the validation that someone from the White House podium kind of commented specifically on the value that acoustic gunshot detection can bring to these communities that are suffering from ongoing persistent gun violence is extremely powerful. So I don't want to leave that out in answering the funding question in the macro economic or the macro environment question.
spk03: Yeah, thanks for that color. And then also just last question for me. Could you talk a little bit about the pipeline for response? Maybe what the pipeline looks like now versus what it looked like six months ago and maybe a year ago?
spk06: Sure. This is Alan.
spk08: I'll just cover a couple of things. Yeah, sure. So basically, if you remember at the Analyst Day, we talked about going live in about 90 miles for this year. We still believe we're going to beat that. In fact, it'll be over 100 miles. So that's tied to the pipeline. The pipeline is as strong as it's ever been and continues to grow. Some of the funding that Ralph mentioned in terms of government is also helping.
spk06: adding new people to our pipeline. Great. Thanks very much.
spk05: The next question comes from Richard Baldry with Roth Capital. Please go ahead. Richard Baldry, your line is live.
spk01: Thanks. Could you maybe address a little more specifically this defund the police environment, the propaganda that's sort of being pushed out against you and what your responses have been to date, what type of magnitude of legal responses or avenues you think you have to push back?
spk08: Yeah, thank you for that question, Richard. So we definitely have made some very public statements around kind of pushing back on kind of the two themes that were coming out there. One is what we consider to be a challenged analysis of shot spotter efficacy, both from real-time gunshot alerts as well as forensic reports. We pushed back on that. We commissioned an independent analysis of that study that I think pointed out very clearly that the study was flawed. conflating the issue of no reports filed to no gunshots happening, which is pretty ridiculous. And the more, I guess, hurtful, salacious pushback we're having around the idea that we're collaborating with law enforcement agencies to manufacture false evidence as a part of court proceedings is completely ridiculous. And we've pushed back on that fairly aggressively, stating that that couldn't be further from the truth. And really what they're implying or explicitly stating is that we'd be involved in some criminal activity, which is just completely outrageous. I don't think I want to say anything about that at this point in time. We're clearly evaluating all of our options, including legal options, to kind of take this on. And we're prepared to do whatever we have to do to protect our brand equity.
spk01: And, you know, moving over to the financial side again, the company's seasonality has tended to be stronger in historically Q2s, Q4s. You know, that pattern's changing now. Could you talk about how the second half seasonality, sequential up-down sort of should play given, you know, the more moving parts you've got with leads internally now?
spk08: Sure. This is Alan. I'll start and then Ralph, please add. I think the biggest thing between Q1 and Q2 is really tied to some of the professional services that we mentioned that after our acquisition of leads and our Q1 call is very lumpy. So for example, what we got in professional services revenue Q1 was about $750,000 more than what we got in professional services for Q2. But while Ralph also mentioned that Q2 During Q2, we were working on additional purchase orders and work orders that, by the way, have even come in just literally today that are going to help ramp up the professional services again going into the second half of the year. So we see that although that is lumpy, that is something that does affect some of the revenue quarter to quarter. Historically, we would normally see some changes and increase in revenue going into a flat from Q2 to Q3, which is probably not going to be the case this time. We expect it to be higher. And then an increase in Q4, which we also do expect will happen this year, too, for revenue.
spk06: Great. Thanks.
spk04: Congrats on the quarter.
spk06: Thank you.
spk00: The next question comes from Jeremy Hamblin with Craig Helm Capital Group. Please go ahead.
spk04: Thanks. And I want to follow up first on the cost impact of kind of fighting this public battle here on the efficacy of the service and products. One, what was the cost impact in Q2? And then secondly, what do you expect the cost impact to be in Q3. I'm assuming all that falls into GNA. Can you clarify, Alan?
spk06: Sure. Yeah.
spk08: And just we have not identified exactly how much it was, but you can assume it's about $400,000 in costs, which is legal and public relations efforts against the opposition. We do expect that to continue. As Ralph mentioned, we will defend ourselves appropriately so going forward. So we can't really tell you exactly when it's going to end or what the dollars are going to be, only that we're going to do it appropriately, not overspend, but spend where we should be spending on that.
spk04: Got it. That's helpful. And then in terms of the gross margin run rate with leads, a pretty decent portion of your overall revenue increase, Is it fair to assume that that kind of gross margin run rate is going to be in that 57% range? Yeah, it's Alan again.
spk08: Great question. The one thing that's important to understand about the professional services is we may have the revenue changing significantly quarter to quarter, but we have generally about the same number of people that are there waiting for or getting ready to perform on the next work order. So the cost quarter to quarter stays fairly the same. When the revenue drops down for that particular quarter, cost of goods sold might go down for that aspect of it. To answer your question directly, we do expect overall the gross margin to be in the north 50% for the company overall, and increasing above that into the out years.
spk04: That's helpful. And then just another item of context. So encouraged by the confidence around the new mileage growth, I think it sounds like you have increased confidence that you're going to hit 100 new miles added this year. Can you give a cumulative year to date? I know you're not breaking out the quarterlies anymore, but can you provide a cumulative number so that we can have some context of the expectation of second half ads versus first half ads? Because I think I heard in the script that, did you say you had like 13 cities or something like that that are either looking at new contracts or contract expansions for the second half?
spk08: Yeah, our project managers are fully booked working on currently 13 projects, and we would expect to have some projects added over the next six months or so that will probably end up going live into early 2022. But I think we just leave it at, you know, we're highly confident around getting past 100 miles go live for this year, for 2021. We have a lot of visibility into it.
spk04: But no context for, you know, Is that, you know, kind of split 50-50? I mean, my guess would be that it's more back half-weighted than front half-weighted. Is that a fair assumption?
spk08: Yeah, so this is Ralph again. I would say that it is, yeah, it is more back-end loaded. But I would say back-end loaded even in terms of the timing of it happening into kind of Q4 maybe versus Q3. Or, you know, not in early Q3, but more like late Q3, early Q4. which is why it doesn't necessarily translate to uplift, a significant uplift to GAAP revenue. So ahead on miles in terms of go live, slightly I would say behind on timing, more back-end loaded than front-end loaded.
spk04: Great, and then a last follow-up is, I can't recall a time where we had that type of presidential endorsement of the product. that definitely caught our attention but I wanted to get a sense of you know inbound calls and I believe that happened in you know about three weeks ago or so but can you give us a sense Ralph on the types of inbound calls whether or not that's accelerated since that public endorsement of the product Just as, again, some helpful context in terms of what that potentially could change on the trajectory of the business over the next couple of years.
spk08: Sure. So I would definitely say that our sales motion is very different today than it has been since the time I've been at the company. We're certainly getting many more inbound calls as opposed to us reaching out. I think we're spending less time kind of educating folks on the cost of ignoring or not responding to criminal gunfire. I think the prospects already kind of understand that, and they're kind of showing up with a prepared mind and a disposition to take action, not necessarily, you know, acoustic gunshot detection action, but definitely they're feeling compelled to act to do something because the uptick in gun violence is real. I mean, it's not imaginary. At all, so that's that's really changed the, um. The, uh, I would say again, the sales motion, uh, why we're thinking the cell cycles are collapsing. You combine that. Of course, uh, with the robust funding environment, and then kind of this oval office, uh, endorsement. Um, from the Biden administration, and then even kind of locally when, uh, your attorney general kind of shows up with a senator really viewing. an acoustic gunshot detection deployment in Chicago, asking questions about it, you know, seeing it visually and experiencing it viscerally, it makes for a very different environment. I'll just add lastly that I think our successes in other agencies is taking note. I think we have many more net promoters today than we had last year and certainly two years ago. And I think those net promoters are making a difference because now people can look at their colleagues and see the success that they've had implementing acoustic gunshot detection with good operational processes in a strategy.
spk04: Thanks for all that color. Congrats and best wishes.
spk06: Thank you. Thank you.
spk00: The next question comes from Brian Ruttenberg with Imperial Capital. Please go ahead.
spk07: Yes, thank you very much. First question is number of cities added. I didn't see that. I think in the first quarter you talked about six new cities added. I know that you're not necessarily giving a lot of quarterly information. Can you talk about the cities you have right now versus where you were last quarter?
spk06: Yeah, this is Alan.
spk08: And we mentioned that we added two new cities. We added one new security customer as well, and we also expanded in three cities as well. Great. I just didn't catch that. Thank you so much. And I don't want to leave out ShotSpot or Connect, actually. I have to say we went live with three ShotSpot or Connect because this is much more than acoustic gunshot detection. It really is a full suite of solutions, which is today acoustic gunshot detection and patrol management with ShotSpot or Connect, very important. and sometime in the very near future, ShotSpot or Investigate.
spk07: Okay. Were those the Connect ads, the three that you had in the period, were they from existing locations you're already in?
spk08: Yeah, so they're upsells. They're upsells to existing customer relationships we have with Acoustic Gunshot Detection. Okay. Yep. Right.
spk07: I didn't know if they were new relationships, so they're selling into existing relationships, which makes sense. Let me move on to a macro question on the federal stimulus. You talk about Rescue Act funds and the return of earmarks. Can you give us some dollar amounts around either the Rescue Act funds that you can address or the return of earmarks that you're addressing?
spk08: Yeah, so this is Ralph, and Alan, jump in here, but we've identified $4 million of earmarks that are, excuse me, I'm sorry, I misstated that. I think it was $3 million of earmarks that we've identified on the House side. The Senate is still working through their process, through their appropriations process. We know there's a number of asks out there. On the, on the Senate side, so we're pretty encouraged to kind of go from 0 to 3Million dollars on the house. There'll be some corresponding figure on the Senate and hopefully we'll get a full appropriations bill pass and we'll see that funding go directly to those agencies. It's hard to handicap really how that, you know, you know, 350 or 450Billion dollars of rescue act funds are going to go but. The good news is it's going directly to cities. There's not an additional step or process a city has to go through to get their hands on those funds. They're basically showing up in the checking accounts, if you will, of those cities. We identified specifically, and we only know this because President Biden spoke about it in a memo, that $4 million is directly going from the American Rescue Plan A to Syracuse. for them to renew and expand their solution. So our expectation is we're going to see similar situations play out across the U.S.
spk07: Okay. Very good. And then the confidence is extremely high on the 100 miles. And if we take kind of fourth quarter run rate we should be seeing a similar kind of growth rate in 2022. I guess I'm asking for a little bit of guidance on will growth accelerate from these levels from 21 to 22 with everything kind of being third and fourth quarter weighted?
spk06: Yeah, so this is Alan.
spk08: Just, I mean, we don't give our guidance for 2022 until November timeframe, but we did say in Ralph's prepared remarks that we are seeing expansions and we do expect to see an excellent 2022.
spk06: Great. Thank you. That's all my questions. I appreciate it.
spk00: Once again, if you have a question, please press star then 1. The next question comes from David Robinson with William Blair. Please go ahead.
spk02: Hi, thanks for taking my question. I guess on the attrition, I'm expecting it to be about 1% of gap revenue for the year. What was driving the improvement in attrition that you've seen throughout the year? And then have any changes in sales commerce, have there been any changes in sales conversations, I guess, with the kind of emerging uncertainty with the different COVID variants out there and potentials about economies closing back down.
spk06: This is Alan.
spk08: Yeah, sure. I mean, I guess the bottom line is we see several things that are occurring. Number one, the funding environment is better than we have seen it in a long time. Number two, the pipeline is increasing for us. Number three, though, The shots by our customers that we have right now are seeing that what we do provide is absolutely critical for what they're doing in their gun violence solutions. So that is why the attrition is low and staying as low as it can be. And if you think about that, you know, 1% obviously means about 99% is going to continue from a gap revenue perspective. That does not happen for customers who are providing solutions where their customers are challenged about how valuable it is.
spk06: Got it. Thanks for taking my question.
spk00: The next question comes from Mike Lattimore with Northland Capital Markets. Please go ahead.
spk09: Great. Thank you. Yeah. Ralph, you mentioned a couple of times that the sales cycles shrunk. I guess, can you quantify that a little bit?
spk08: Yeah, I mean, it's hard to quantify. I know it more anecdotally, kind of watching some of the more recent deals that we've booked, how quickly they've happened and kind of tracking the nature of the conversation that we are having with folks that just feel fundamentally different. We've had a couple of very, very fast transactions that have closed, and I think a lot of the credit goes to, again, people that have been using our solution and generating success with it. And I think once agencies experience going from being 90 to 95% deaf, dumb, and blind to incidents of ongoing persistent gun violence, they kind of get these real-time alerts kind of coming within typically 30 to 45 seconds with a very accurate location. It really can change the game in terms of response follow-on investigation, but more importantly, showing a community that, you know, police are there to serve and protect. And there's nothing more critical than showing up when someone is engaged in aggregated assault, best case, and attempted murder, worst case. That's what happens when, you know, people are firing these guns in these at-risk, underserved neighborhoods. So, I mean, credit really goes to our agency partners and the success that they're putting up and how they're talking about it and helping it be much more of a safe solution for other agencies to consider.
spk09: Got it, got it. And then with regard to Connect, can you give any more color, either quantitative or just generally about Connect as a percent of the pipeline that you have now?
spk08: Yeah, so we have a lot of work to do with Connect. I'm pretty pleased with the progress that we've made to date, but we need to do more. We have some, I would say, kind of early adopter agencies that adopted the ShotSpotter Connect solution. We're learning along with them, you know, the value that that can produce. Certainly a lot of agencies are having challenges around kind of resource deployments. Our ShotSpotter Connect or patrol management solution is meant to help them address that. resource shortage. And so we think there's a huge opportunity for us to further penetrate our existing install base as well as kind of venture outside of our install base and work with customers that don't necessarily have a gun violence problem. So they're not a shot spot or respond customer, but they do have patrol resources out there that they want to optimize to be more preventative and community engaged versus more response after the fact engaged. And again, that's what that ShotSpotter Connect solution does.
spk06: So we're pretty excited about it. Thank you.
spk00: At this time, this concludes our question and answer session. If your question was not taken, you may contact ShotSpotter's investor relations team by emailing ssti at gatewayir.com. I'd now like to turn the call back over to Mr. Clark for his closing remarks.
spk08: Yeah, awesome. Thank you so much. And thank you all for joining our call today. We certainly appreciate all the support that we're getting from our stakeholders, including investors. And we also want to offer our thoughts and prayers. We want to put them out to Officer Ella French, along with other victims of gun violence whose lives have been tragically taken too soon due to senseless gun violence. We want to keep all those folks close to our hearts and in our prayers. So thank you all very much, and looking forward to seeing you guys three months from now in our next earnings call.
spk00: Thank you for joining us today. For today's call, you may now disconnect.
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