Q2 2021 Shotspotter Inc Earnings Call
'twenty 1 earnings conference call. My name is Anastasia and I will be your operator for today's call joining us are shotspotter CEO, Ralph Clark and CFO Alan Stewart. Please note that certain information discussed on the call. Today will include it will include forward looking statements about future events and Shotspotter.
<unk> 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 and shotspotter its 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 10th 'twenty, 'twenty, 1 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.
On the Investor Relations section of the company's website at IR Dot Shotspotter Dot com now I would like to turn the call over to Shotspotter C. M. C E O Ralph Clark Sir Please proceed.
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.
1020.
During the quarter, we went live with Shotspotter respond with 1 multi unit security customer.
2 new cities and 3 expansions.
We also went live with 3 Shotspotter connect deployment 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 solutions sales momentum is confirmation that our precision policing platform and positioning is resonating with market demands.
Quarterly adjusted EBITDA was $2.9 million compared to $3.4 million last year. The decrease was largely due to an budgeted marketing and legal spend associated with addressing a deepened. The police variant intended to falsely smear the efficacy of our real time acoustic gunshot detection and post incident forensics service.
Yes.
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 book with over 13 respond new customer and expansion projects in the process of being deployed and on boarded 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 and helping them address violent crime.
We're also incredibly grateful to renew our partnership with cheap all new to gate, the chief of police in Virginia Beach, She's new to gate was previously the assistant Chief of police in Cincinnati. It was both an artful user and Arden net promoter of Shotspotter in the Ohio region, where we now have 7 deployment, including Cleveland, Ohio.
Strong partnerships do matter.
I'm equally thrilled to report that we experienced zero customer or mileage attrition for Shotspotter response.
Net of price increases and discounts, we anticipate coming in at approximately 1% GAAP revenue attrition, which is lower than our original estimate of 3 or 4 per cent 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 contracted due to the perfect confluence of 3 powerful in what we believe to be sustained themes.
Number 1 violent crime is measurably, increasing in a large number of cities ranging from small to large and in between.
Any of you have probably seen both local and national press coverage on the gun violence issues.
As a company we have participated in a number of academic and policy Baker convenience on the subject of increased violent crime.
Shotspotter is at the forefront of this critical issue as a leading solutions provider directly engage with an on the ground that says.
We see the real world impact of violent crime, playing out daily and 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 99000 gunshots for the same period last year.
Number 2 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 3.
We're experiencing a robust funding environment driven by direct federal on new cities through the 350 billion American rescue at.
A return to congressional earmarks and a public endorsement of gunshot detection from the Baidu administration we've.
We've already tracked 5 earmarks, calling for acoustic gunshot detection projects totaling $3 billion that had been secured and the house appropriations Bill, including an earmark requests from the Democratic Chair of the Cdos Appropriations Committee Representatives heart right of Pennsylvania.
We were equally surprised and delighted to hear president by formally and publicly endorsed the idea that federal dollars to cities could and should be used to implement gunshot detection.
After the President's comments, the White house double down on that endorsement and released a public memo, which highlighted Syracuse. This plan to spend $4 million in American rescue plan 8 with a portion of that dedicated to reactivating and expanding their shotspotter response system.
This was followed by in person visits to Chicago P. D by Attorney General Garland and Senator Durbin to view 1 of the price things were 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 are 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 Kaki.
The opening was attended by many other policymakers and Influencers as well as local and National press.
Our D C satellite office adds more capacity and resiliency to our incident reduced center operations and allows us to have closer contact from briefings and training sessions with our east coast and Caribbean Law enforcement partners and prospects. In addition, we now share a close proximity with many key organizations that share our objective to aggressively.
<unk> done violence. These institutions include police executive research form or per International Association of Chiefs of police ICP National organization of Blackwell enforcement executives noble a T F along with the department of Homeland Security The National Police Foundation of course appropriators in their staffers in Congress.
Our lease 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 N Y P D.
They were quite busy in delivering under 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 in early 2022. These.
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.
This is the first of several deployments, we expect to operationalize later this year.
We have a dedicated quota carrying sales resource for investigating are likely to add at least 1 more later this year. In addition, we're investing in further enhancing investigates 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 million 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 2 new response cities and once security customer this quarter, while seeing no city attrition we.
We also have 3 city expansions and achieved strong revenue growth of 30% compared to the second quarter of 2000 Twenty's, losing.
Losing those cities to attrition continues to trend of keeping our actual attrition low similar to what we experienced in 2020.
With this ongoing success, we expect that our 2021 revenue attrition would be close to only 1% similar to last year's excellent results.
Early feedback on our third quarter deployment 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 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 <unk> acquisition.
Gross profit for the second quarter of 2021 was $8.3 million or <unk> 57 per cent 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. Other 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 GAAP net income or net loss and adding back interest taxes, depreciation amortization and stock based compensation.
As Ralph mentioned, the primary reason for our lower adjusted EBITDA and our net loss for the quarter is primarily related to the increased cost that we're experiencing in our marketing and legal costs related to address negative publicity generated by certain entities and organizations opposing the advocacy of the Shotspotter solutions.
Now turning to our expenses are.
Our operating expenses for the second quarter were $8.5 million or <unk> 58 per cent of revenue.
Versus $6 million or <unk> 53 per cent 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 lease.
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 per cent of total revenue per 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 products to position. This segment for expected growth in 2022.
Yeah.
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 per the prior year period.
We've continued 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 per cent of total revenue per 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 $250000 or a loss of <unk> <unk> per share an $11.6 million average shares outstanding on both a basic and diluted basis.
This compares to adjusted net income of $866000 or <unk> per share based on 11.4 million basic.
And <unk> <unk> 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, 2020.1.
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 12585 shares for approximately $500000, 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 million 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.
Now back to Ralph for some final thoughts and then we'll be happy to take your questions.
Thank you and as you can see there's a lot to be excited about here, we continue to be inspired and our work of bringing precision policing solutions to market.
Leasing 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.
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 share our atone 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'll pause for a moment as callers join the queue.
The first question comes from will power with Baird. Please go ahead.
Hey, guys. Thanks for taking the question. This is Charlie other country will.
The other color on the macro environment and the federal stimulus.
If you could just talk a little bit of that.
That being from federal stimulus to state and local governments and how youre thinking about that in terms of whether that's gonna be youre already seeing a benefit from that in the numbers or if that's more of a future benefit.
Yeah. So thank you for that question. This is Ralph and I'll start and Alan jump in too to add on and we're really encouraged by what we're seeing on the federal stimulus side as I'd mentioned in my prepared remarks. So we're seeing it come through 2 basic themes. There is the <unk>.
<unk> Act funds, that's going directly to cities, which is quite encouraging theres no additional steps that the city has to take in order to get access to that funding and Theres also the return of earmarks, which we're seeing some really interesting early successes and certainly.
Certainly you've seen 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 commenting 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 and the macro economic or the macro environment question.
Sure Yeah, Thanks for the Colorado.
And then also just last question from me could you talk a little bit about the pipeline for response, maybe what the pipeline looks like now versus what it looked like 6 months ago, maybe a year ago.
Sure. This is Alan I'll take that Alex cover a couple of Inc. Yeah sure.
So basically if you remember at the analyst day, we talked about are going live in about 90 miles from 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 it continues to grow some other funding.
That Ralph mentioned in terms of government is also helping them, adding new people to our pipeline.
Great. Thanks very much.
The next question comes from Richard Baldry with Roth Capital. Please go ahead.
Richard Baldry your line is live.
Thanks could you maybe address a little more specifically this defund the police environment propaganda 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.
Yeah. Thank you. Thank you for that question Richard So we're definitely have made some very public statements around kind of pushing back on kind of the 2 themes that were coming out there..1 is what we consider to be a M.
A.
Challenged analysis of Shotspotter 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 basically they were conflating. The issue of no reports filed to no gunshots happening which is.
Pretty pretty ridiculous.
And the more I guess you know.
Yeah.
Hurtful siliceous.
Pushback, we're having around the idea that we're collaborating with law enforcement agencies to manufacturer false evidence as a part of <unk> Corp.
Court proceedings is completely ridiculous and we pushed back on that fairly aggressively stating that that couldn't be.
From there from the truth than really what they are implying or explicitly stating is that wed be involved in some criminal activity without just completely outrageous I don't think I want to say anything about that at this point in time, we're clearly evaluate 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.
And moving over the same side again the.
The company's seasonality has tended to be stronger historically Q2 Q4s.
Patterns changing now can you talk about how the second half seasonality sequential up down sort of should play given the more moving parts you've got with leads internally now.
Sure. This is Alan I'll I'll start then Rob Please add I think the biggest thing between Q1 and Q2 is really tied to some other professional services that we mentioned that after the acquisition of leads and our Q1 call is very lumpy. So for example, what we got in professional services.
Revenue in Q1.
<unk> was about $750000 more than what we got in professional services for Q2.
But well Ralph also mentioned that during Q2, we were working on additional purchase orders and work orders that by the way have even come in and just literally today that they're going to help us ramp up the professional services again going into the second half of the year. So we just we see that although that is lumpy that is.
Something that does affect us.
Some other revenue quarter to quarter here.
Historically, you know we would normally see some changes and increase in revenue going into a flat from Q2 to Q3, which is I'm, 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 you expect will happen this year to low revenue.
Yeah.
Great. Thanks, Congrats on the quarter.
Okay.
The next question comes from Jeremy Hamblin with Craig Hallum Capital Group. Please go ahead.
Thanks, and and I wanted to follow up first on the.
The cost impact of kind of fighting a.
Public battle here on the efficacy.
Off the service and products.
1 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 of that falls into G&A.
But can you clarify Allen.
Sure Yeah, and just we have not identified exactly how much. It was but you can assume it's about $400000 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 gonna do with appropriately not overspend, but spend where we shouldn't be spending on that.
Got it that's helpful. And then in terms of you know the the gross margin run rate you know with leads you know a pretty decent portion of your overall revenue is it fair to assume that are you know that kind of gross margin run.
<unk> is going to be in that 57 per 757 per cent range.
Yeah, It's Alan again, Great question. The 1 thing that's important to understand about the professional services as we may have the revenue changing significantly quarter to quarter, but we have generally.
At the same number of people that are there waiting for or getting ready to perform when the next work orders so the cost quarter to quarter stays fairly Sane Hussein.
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 gross margins to be.
We are in the north 50 per cent for the company overall and increasing above that into the out years.
That's helpful. And then just another item of context, so I'm 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 quarter vs 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 adds because I I think I thought I.
Hurt and in the script that did you say you had like 13 cities or something like that that are either looking at a new new contracts or contract expansions for the second half.
Yeah, Yeah. Our project managers are fully booked are working on currently 13 projects and we would expect to have some projects added over the next <unk>.
6 months or so that will probably end up going live into.
Early 2022, but I think I think we just leave it at you know we're highly confident around.
Getting past 100 miles go lives up from this for this year for 2021.
We have a lot of visibility into it.
But no context for for you know is that's kind of split 50.50, I mean, that's my my guess would be that it's more.
More back half weighted than front half weighted is that a fair assumption.
Yes. So this is ralph.
And I would say that it is yeah. It is more back end loaded but I.
I'll say backend loaded even in terms of the timing of it happening and to.
Q4 may be versus Q3, or you know you.
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 to GAAP revenue. So ahead on Myles in terms of go lives slightly I would say behind on timing more backend loaded and front end loaded.
Great and then a last follow up is are you know.
I can't recall, a time, where we had that type of presidential endorsement.
The product that definitely caught our attention, but I wanted to get a sense.
Inbound calls and I believe that happened in you know.
About 3 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.
M.
You know just as it's kind of again some helpful context in terms of what that potentially could change.
The trajectory of the business over the next.
A couple of years.
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 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 crim.
Gunfire.
I think the.
The prospects already kind of understand that and they're kind of showing up with the prepared mind and a disposition to take action not necessarily acoustic gunshot detection action, but definitely they are feeling compelled to act to do something because the uptick in gun violence is real I mean, it's not it's not imaginary at all so that's that's.
Change the the.
I would say again the sales motion why were thinking the sales cycles are collapsing you combine that of course with the robust funding environment and then kind of this oval office endorsement.
From the bite administration, and then even kind of locally when you.
Your attorney General kind of shows up with a senator really viewing a M.
Who said gunshot detection deployment in Chicago asking questions about it you know seen it visually and experiencing in this really it makes it makes for a very different environment and I'll just add lastly that I think our successes and other agencies are taking note I think we have many more net promoters today than we had last year and certainly.
2 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 and our strategy.
Yeah.
Thanks for all that color, congrats and best wishes.
Thank you.
Thank you.
The next question comes from Brian Wright timber with Imperial capital. Please go ahead.
Yeah. Thank you very much.
First question.
Is number of cities added I Didnt see that I think in the first quarter you talked about 6 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.
Yeah. This is Alan and we mentioned that we added 2 new cities, we added 1 new security customer as well when we also expanded in 3 cities as well.
Great I, just didnt catch that thank you so much.
And then.
And I don't I don't want to leave out Shotspotter connect actually I have to say, we went live with 3 shotspotter 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 patrolled management with Shotspotter connect very important and sometime in the very near future Shotspotter investigate.
Okay, where those are the connect adds the 3 that you had in the period, where they from existing locations.
Locations you're already in.
Yes, so theyre up sells their upsells to existing customer relationships, we have with acoustic gunshot okay.
I didn't know if there were new relationships and they're selling into existing relationships, which makes sense, let me move on to <unk>.
I had 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 youre addressing.
Yeah. So this is Ralph and Alan jump in here, but we've identified $4 million of.
Earmarks.
That excuse me.
Sorry, I missed I misstated that I think it was.
It was $3 billion of earmarks that are we've identified on the house side.
The Senate is still working through their process through the appropriations process, we know theres a number of ask out there on the on the Senate side. So we're pretty encouraged to kind of go from zero to $3 million on the house there'll be some corresponding figure on the Senate and hopefully we'll get a full appropriations bill passed and we will see that funding go <unk>.
Luckily too.
To those agencies, it's hard to handicap really that how that you know.
$350 billion to $450 billion of rescue.
Rescue outcomes, we're going to go but the good news is it's going directly to cities. There's not additional step of process. A city has to go through to get their hands on those funds that was basically showing up in the ER and the checking accounts. So if you will of those cities. We identified specifically in this we only know this because baidu.
President <unk> spoke about it in a memo that $4 million is directly going from the American rescue plan, a 2 syracuse for them to renew and expand their solutions. So our expectations were gonna see similar situations play out.
Across the U S.
Okay.
Very good and then the confidence is extremely high on the hundred miles M.
And.
If I take yeah, if we take kind of fourth quarter run rate, we should be seen a similar kind of growth rate and 2022, I guess I'm asking for a little bit of guidance on an will growth accelerate from.
From these levels.
From 'twenty, 1 to 'twenty, 2 with everything kind of being third and fourth quarter weighted.
Yes. So this is Alan just I mean, we we don't give our guidance.
For 2022 until November timeframe, but we did say in Rob's prepared remarks that we are seeing expansions and we do expect to see a an excellent 2022.
Great. Thank you that's all my questions I appreciate it.
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.
Alright, Thanks for taking my question I guess on the attrition attrition I'm expecting it to be about 1% of GAAP revenue for the year, what was driving the improvement in attrition that you you've seen throughout the year and then have any changes in sales.
Have there been any changes in sales conversations.
I guess with the kind of emerging uncertainty with the different COVID-19 variance out there and potentials about economies clothing back down.
Okay.
I would tell you that so this is alan.
Yeah sure I mean, I guess the bottom line is we see several things that are occurring number 1 the funding environment is better than we have seen it in a long time and number 2 the pipeline is increasing for.
For us number 3 though the shotspotter customers that we have right now are seeing that what we do provide is absolutely critical for what they're doing in their guns gun violence M solutions. So that is why the attrition is is low and staying as low as it can be and <unk>.
If you think about that 1%.
It means about 99% is going to continue from a GAAP revenue perspective that does not happen per customers, who are providing solutions where their customers are challenged about how valuable it is.
Got it thanks for taking my question.
Yeah.
The next question comes from Mike Latimore with Northland Capital markets. Please go ahead.
Okay, great. Thank you.
Yeah.
Ralph you mentioned a couple of times the sales cycles shrunk.
I guess can you can you quantify that a little bit.
Yeah, I mean, it's hard to it's hard to quantify I know it more anecdotally I'm kind of watching some of the more recent deals that we book how quickly they would happen 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% depth.
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.
So on investigation, but more importantly, showing a community that police are there to serve and protect and there's nothing more critical than showing up when someone is engaged in aggregate aggregated assault best case and attempted murder worst case, that's what happens when people are firing firing these guns and these are at risk.
Underserved neighborhoods so I.
I mean credit really goes to our agency partners and the success that they are putting up and how they're talking about it and helping them be much more of a safe.
M a solution for other agencies to consider.
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 percentage of the pipeline that you have.
No.
Yeah.
Yeah. So we have a lot of work to do with connect I'm 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 have adopted the shotspotter connect.
Solution, we're learning along with them.
Sal you that that can produce certainly a lot of agencies are having challenges around kind of resource deployment. Our shotspotter connector patrolled management solution is this 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.
It was kind of venture outside of our install base and work with customers that don't necessarily have a gun violence problem. So theyre not a shotspotter respond customer, but they do they do have patrol resources out there that they want to optimize to be more preventative and community engaged versus more response after the.
Engage and again, that's what that transpire connect solution does so.
That's about it.
Okay. Thank you.
At this time. This concludes our question and answer session. If your question was not taken you may contact Shotspotter his investor relations team by E. Mailing S. S. T I at Gateway I, our dot Com I'd I'd now like to turn the call back.
Over to Mr. Clark for his closing remarks.
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 our investors and we also want to offer our thoughts and prayers, we want to put them out to officer L. A French along with other victims of gun violence.
Whose lives have been tragically taken too soon do the senseless gun violence are we want to keep all of those folks are close to our hearts and in our prayers. So thank you all very much and looking forward to seeing you guys 3 months from now and our next earnings call.
Yeah.
Thank you for joining us today for today's call you may now disconnect.
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