SoundThinking, Inc.

Shotspotter's fourth quarter and full year 2021 conference call. My name is Carl, 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 and Shotspotter's business strategy and future financial and operating performance. These forward-looking statements are only predictions and are subject to risks, Certainties and assumptions 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, February 22, 2022. 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 CEO, Ralph Clark. Sir, please proceed.

Good afternoon and thank you for joining us today. I'd like to start off by saying how thrilled we are to announce the acquisition of Forensic Logic. This acquisition represents an important step in building out and executing to our precision policing platform aspirations. Before I dive into more details on Forensic Logic, I want to first share a brief review of our Q4 and 2021 year-end results. I'll then share our outlook for 2022 before turning it over to Alan and then taking your questions. We reported Q4 revenues of $14 million, representing 10% year-over-year growth from the $12.6 million of revenue we reported in Q4 of last year. We had anticipated securing a contract amendment due in November for our professional service, maintenance, and support of Crime Center at NYPD. However, due to a changeover in the administration of the New York City's Comptroller's Office, we were only able to formally secure the final signature on the contract amendment in early January post our Q4 revenue cutoff date. This will result in two plus million dollars of catch-up revenue that will be recognized in Q1 of 2022 for services rendered and earned in November and December of 2021. We had another strong showing of domestic respond go-live miles for Q4, including expansions in seven cities. Albuquerque, which became ShotSpot, our client in 2020, is a particularly compelling case study. Their Q4 expansion represents their third expansion to date. There are still another four and a half miles expected to go live in Q1 of 2022, which will make Albuquerque our fourth largest deployment at approximately 28 miles. In total, the company booked a record $100 million of business, including several large multi-year renewals. ShotSpotter Respond was taken live in over 100 new miles for 2021, compared to 49 miles the year prior, surpassing our earlier forecasted 90 miles for 2021. We're pleased to see this accelerating traction. We also experienced another incredibly strong year in customer retention. Our customer attrition had an impact of less than 1% of GAAP revenue, net of price increases for 2021. This continues to demonstrate the sticky nature of our solution once deployed. This is not by accident, but by design. We enjoy a unique high quality technology solution that has been proven to perform in a variety of challenging acoustic terrains. Importantly, we are intentionally focused on customer onboarding and training to help our customers adopt policies and best practices that help them achieve, measure, and communicate positive outcomes. We also continue to benefit from strong brand loyalty reflected in our world-class net promoter score or NPS of 59, which drives our SAS industry leading sales and marketing spend per dollar of new annualized contract revenue of only 37 cents. We believe we're reaching the tipping point of having a critical mass of referenceable law enforcement executives that are helping to drive low cost viral adoption of our solutions. We've successfully overcome some selected organized campaigns from the abolish the police movement and have succeeded in keeping solid sales motion. We're extremely proud of the fact that numerous city councils after transparent discussion and thoughtful deliberation have overwhelmingly supported the adoption of ShotSpotter as a part of their toolkit in addressing gun violence and saving lives. A few recent examples include a 10 to one vote in Denver, a seven to one vote in Pasadena, a 14 to one vote in Houston, and a unanimous vote in Mobile, Alabama. These elected officials recognize the importance of addressing the public safety gap in some of their most vulnerable neighborhoods that are struggling with persistent gun violence. And they have supported ShotSpotter as a valuable tool to be used in saving lives and protecting their citizens. On the international front, Cape Town, South Africa reissued their tender to procure and redeploy an expanded acoustic gunshot detection service over their original shot spotter coverage area. We have submitted our bid response, and we are confident that we are well positioned to meet the technical, financial, and experience requirements set forth in the tender. Our $300 million defamation suit against Vice Media is still ongoing. However, we've recently been successful in securing five formal and public retractions of material misstatements from publications that had repeated VICE's false assertions. These retractions were issued following their review of public court documents that unambiguously support our position. We remain confident in our ability to defend our stakeholder base, correct the record, and hold VICE to account for their malice. Now to ForensicLogic. We're very excited about adding ForensicLogic CopLink X to our solution platform. The Forensic Logic CopLink X solution is the largest law enforcement data sharing and crime analytics network, providing authorized subscribers access to more than 1 billion federated and indexed records from over 2,500 agencies. The platform includes an advanced Google-style search engine and analytical tools. It is used by hundreds of municipal, county, state, and federal law enforcement agencies to create case momentum on a local and cross-jurisdictional basis. TopLink X users include investigators, analysts, patrol officers, and command staff in order to initiate investigations, find patterns across crimes, and be more efficient and overall effective. Similar to our leads acquisition, where we shared a common customer in NYPD, we've gotten to know forensic logic over the years through our shared Oakland Police Department relationship. We're already seeing strong operational product and go-to-market synergies between our solutions. There are a number of cross-selling opportunities in both directions that are underway, including a collaborative pursuit of a state-level investigative case management and data services RFI. On the product side, ForensicLogic has strong and established product market fit. We see CoplinkX differentiating our investigate solution and extending response reach deeper into Crime Gun Intel Centers, or CGICs, with an integrated NIBIN product feature that improves the investigative process when respond leads to increased recovery of shell casing evidence. There's probably no more impactful use case study of operational synergy than the attempted violent robbery involving four assailants targeting a retired OPD captain, Ursi Joyner, in the afternoon of October the 21st. This tragic incident resulted in one of the assailants being killed and Ursi suffering from 22 gunshot wounds. Fortunately, due to the shot spotter alert, Oakland PD was able to respond rapidly to the precise scene before the first 911 call came in and immediately get Ursi to Highland Hospital where surgeons were able to save his life. Soon after, investigators across multiple Bay Area agencies were querying the forensic logic platform and quickly learned that the deceased assailant was involved in a similar robbery attempt with a stickup crew in another local jurisdictions two years prior. By connecting the dots, it was not long before they had developed enough intelligence to get up on the other assailant and then make arrests in Sacramento and Houston, where the assailants will now stand trial. ForensicLogic grew revenue over 38% last year, bringing on customers like the Tennessee Department of Safety and Homeland Security that uses the information sharing platform for all 25,000 members of state and local law enforcement agencies within Tennessee. We estimate Forensic Logic adds another $500 million plus of recurring revenue TAM to our franchise across domestic, local, state, and federal law enforcement agencies. And we believe it further enhances our position as a unique precision policing platform solutions provider and will become a key growth driver for the company in coming years. We enter 2022 with a robust $63 million of organic annual revenue, including $10 million of annual recurring revenue from our recently upsized maintenance and support contract with NYPD. Forensic logic will add another $6 million of recurring revenue, which then totals $69 million of visible ARR going into 2022. This compares to the $53 million of ARR a year ago. Given the accelerated growth and confidence we have in our core business, combined with the revenue contribution from Forensic Logic and the $2 million of November-December catch-up revenue from our NYPD amendment that we will recognize in Q1 of 2022, we are now raising our full-year 2022 revenue guidance to $81 million to $83 million from our last revenue guidance of $71 to $73 million. Our new guidance represents a 41% growth from 2021 to the midpoint of 2022 guidance.

Now, Alan, over to you. Thank you, Ralph.