SoundThinking Revenue Reaches $25 Million in Third Quarter as Gross Profit Falls 13%
Key Facts
SoundThinking reported revenue of $25.0 million in the third quarter of 2026, compared with $25.1 million in the same period of 2025, and said revenue "remained relatively stable year over year." Gross profit, meanwhile, fell 13% to $11.9 million from $13.6 million a year earlier. Gross margin declined to 48% of revenue, compared with 54% in the third quarter of 2025. The company attributed the drop in gross profit to lower revenue volume and higher information technology and facilities costs. The company's shares closed at $8.23 on November 11, 2026, according to EL7 daily data.
Operating expenses rose to $20.1 million in the third quarter, compared with $15.7 million in the same period a year earlier, according to the official earnings release. SoundThinking said the increase was primarily due to acquisition-related costs from the Transom deal and higher marketing and sales expenses. The deal costs come as the company is also contending with some contracts not being renewed or renewals being delayed, two factors it said affected quarterly revenue. The quarter's performance, as reported by the company, combines revenue that changed little year over year with lower gross profit and higher operating expenses. The company did not provide new forward guidance in light of the pending deal.
The results come amid the acquisition agreement the company announced in September. Under the agreement, Transom has offered to acquire SoundThinking through a tender offer for $8.00 in cash per share, along with a non-transferable contingent value right that could be worth up to $3.00 per share. The additional consideration is tied to the achievement of specified revenue targets, according to the company's filing with the U.S. Securities and Exchange Commission. The agreement therefore includes a fixed cash payment and an additional right contingent on reaching those milestones. The company said the deal is expected to close in the fourth quarter of 2026, subject to customary closing conditions, including that tendered shares represent a majority of outstanding shares.
SoundThinking said it would not provide forward guidance or update previous guidance while awaiting completion of the Transom deal. It also said it would not hold a conference call or webcast to discuss third-quarter results and does not expect to hold such events in coming quarters. The expected closing date remains subject to the satisfaction of closing conditions, according to the company statement. The statement cited risks related to whether those conditions can be met within the expected timeframe or whether the deal will be completed at all. In the meantime, the potential additional consideration per share remains tied to achieving the revenue targets specified in the agreement.