ShotSpotter IPOs, Facing Low Revenue and Losses

Author: Brian Karas, Published on Jun 09, 2017

A rare event for North American security manufacturers has happened.

ShotSpotter has IPOed on the NASDAQ, raising $30.8 million.

US IPOs, overall, have become much tougher since the dot com boom, with revenue and growth demands typically quite high for security manufacturers.

ShotSpotter has fairly low revenue, especially for being in business for more than 15 years.

In this note, we analyze ShotSpotter's IPO filing, issues, potential and competitors.

* **** ***** *** ***** ******** ******** ************* *** ********.

************** ***** ** *** ******, ******* $**.* *******.

** ****, *******, **** ****** **** ******* ***** *** *** com ****, **** ******* *** ****** ******* ********* ***** **** for ******** *************.

*********** *** ****** *** *******, ********** *** ***** ** ******** for **** **** ** *****.

** **** ****, ** ******* ***********'* *** ******, ******, ********* and ***********.

[***************]

ShotSpotter *****

*********** *** * ****** *******, *** **** ** ************** *******/******* that ********* ****** **** *********: ****** ******** **** *********** ****** throughout * ****, *** **** *** ********** ** **** ****** to *** ******** ** ***** ********. ** ***** **, **** aim ** **** ****** ******* ********, *** *** ******* **** to ******* *******, *** ** ********* ****** ******* *****, *** the **** ** ******* **** ******* ******, *** ***** *********.

**** * ***** ********, *********** ***** ***** ******* ** ** initial ******** **********, *** **** * ******* ************, ************* ********** a ****** ****** ** ****-******* *******, ******* ********** ******* *** investors.

Current ******** ****

********* ** * ************ *** ***********, *** ******* *** ~** deployments, ********* ** *** **, *** **** **** ************* *********** as ****. ***** *** *** ******/********* ********* ********* ** ***********.

History ** ********* / *********

***** *** ******* ** ******* ********* ** **** ** **********, implementing ** **** ******* ********** *** *** **** ****. *********** has *** ******** ******* ** *** ****** ******* ** ******* on *** ********, *********:

*** ******* *** ***** ***** **** *** ***** ** **** improve ********, ********* ******** *** ***** *** ********** ****** **** analyzes *** ***** **** ********* ******** ****** ********* ****** ** attempt ** ****** ***** ******.

*********** ** *** ******* ******* *******, ********* * ****** **** in ******, ******* ****** ********** ***** ******* ** ******* ******* ** *** ShotSpotter ******.

Funding *** *********** ** ****

*********** *** ****** ~$*** ***** ** *** ******* ** ****, and ***** **** ********** *** *** ********* *** *** ***** of *********, *** ******* *** ****** ** *** ***** **** profitable, ******* ****** ** $*.** ** **** *** $*.** ** 2015. *** ******* **** *** ~$*.* ******* ** **** ** hand ** ** ***** **, ****.

Revenue $**.* ******* / ***

***********'* **** ******* *** $**.* ******* ***, ***** ** ******* equivalent ** * $*.** ******* *** ********, ***** ***** ** solid *** ** *********** ***** ********** ******* *** *** *** a ** ****** **+ **** *******. ** * ***** ** comparison,******** ***** ***, * ****** *******, ******* *******, *** ******* ***** *** RMR ** ***********.

Revenue ********** / ****** ********** **********

******* **** ************ *-* ********** * ******** ********* ***** **** *** **** ****, **** a ~**% ******** ** *******, ** $**.** ** ****, ***** only ********** ********* ******** ~**%:

*******, ****** *** ***** ***** ****, ** ~-**% ** *******.

*********** *** ****** **** ****** ******, **** ** ****** *** detection *******, ************* *********, *** *** ******* ** ****** *** markets/customers **** ** *********** ******** *** ******** ***** *** *** company ** ******** **** *****.

SaaS / *** ** *** *****

*********** ******** ***** ****** ** * ************ *****, ***** ********* must ******** ** *** ******** ** ***** ** ******* *** product. ********* ** *** *-* ******, *********** ****** ******* ***** to ** ****:

*** ********** *** ****, *** ** ****** **** ******** ** be, **** ***** *** ******* ************** ** *** *********, ****** all ** *** *** ********* ***** ***** ****** *************, *** many **** ****** ** ****** ***** ******** ****.

***** ******** *********** ***** ******* ** ******* ******** ********** *** installation *** ** ****, ** ***** ********* *** ** ********* as *********** ******, ** ** ****** **** **** ******** ** renew *** * ****** ** ****. **** ****-**** ************, *** related *******, ** * *** ********* ** ***********'* ***** ***********.

Profitability *********

*********** ***** ************* ********* **** ** *** ****** ** ******* sales *** ********* ********, ******** *** ******* ***** ****** ********** if **** ******* ******** *** ********* *** ****** ********* ******* to ******** *********. ***** **** ** ******** (*** *** *******), it **** ******** *** ********* *** ************* ** ********** *** bring ** **** *********, ** *** *** ***** ******** ****** annual ******** **** **** ********, **** ****** ********** *****/********* ****.

Company ********* ********

*** ******* *** *** *** ********* * *********, ****** ** impossible ** ******* *** $**.** ****** ******** ******** ** *** company *******. ***** *** $*** ******** *******, ******* **** ******* losses, ********* ** ****** ** ** ********** ***.

Use ** *****

*** ********* ******** **** *** ***** ***** ****** **** ****** be **** ** ******** *****/********* *******, *********** ********* **** ***-*** enforcement *********, **** ** ************.

Challenging ******

*** ******* ********* ****** *** *** **** ************ *****, *********** ShotSpotter ** *** ** *** **** ****-***** ********* ** **** space *** ***** ******** *** ****** ** ****. *** ******* faces *********** **** ********* *********** ********* **************** ************ ********* ****** ******* *********, ** **** ******* ********* **** ** ********* ***** ******, *** ******* ***** ********* **********. ************, ******** ** ******* ********/** **** **** ****** ******** are ****** ** ****** ** ** *****/***** ******** *** **** extraction, ***** ***** ****** *** ******* ********* ** ****** ***********'* market, *********** ******** ************ ****** ** ****** ******* ********* ********** more ** * *********.

*********** ****** *** ******* **** ***** ****** **** **** ***** a ************* *****, *** *** **** ****** ** ********* **** challenges ***** *** *** ** *************. *******, *** ******* **** have *** ******* ** * ***** ********* **** *** ************* of *** ****** **** ***** ****-**** *********** ** ******* *********.

Update - ***

*********** ***** ** **** *** ** $**, *** ** **.*% on *** ***** *** ** $**.** *** ** *** *** of **** *** ******** ******** ** $**.**, ***** ***** *** IPO *****, ****** *** ******* * ****** ********* ** $*** million.

Comments (14)

Avatar

Jerry Wilkins

05/17/17 03:50pm

**** ****** **** *** *** ** * ********** **** ** the **** * ***** ****?

Avatar

Brian Karas

IPVM | In reply to Jerry Wilkins | 05/17/17 03:55pm

**** ** * **** question, ********** *********** **** of *** ******* ****** to ******** *********** ** hearing ********** *******, ****** them **** ****** ** obtain.

** * *******, ** would ****** ******* **** more *********** ** ***** to *** * **** sound *******, ** *** would **** *** **** and *********** '****' *****.

Undisclosed Manufacturer #1

05/17/17 06:56pm

***** - **** **** **** *** ***** ** ** ** independent **** ** *** ** *** ******* **********?

Avatar

Brian Karas

IPVM | In reply to Undisclosed Manufacturer #1 | 05/17/17 07:02pm

** **** ** ****** and ****** ***** **** to ** * **** outdoor ******** ********* ****, I ** *** **** that ***** ** *********.

* ***** **** ** properly **** *** ******* systems *** ***** **** to ** ** ** a ***** ************ **** to ******* *** ***** reflections, *********** ********, ***.

Avatar

Skip Cusack

In reply to Brian Karas | 05/19/17 11:09am

*** ******* **** *** of *** **********. *** efficacy ** **** ********** needs ** ** ********** in * ******** ***. Preferably **** ** *** curve **** * ********* system. *** ******* ** thoroughly *** ************** ** difficult. ***** ***** ********, ricochet *** *** * tricky ****** - *** very ********* ** *** environment. ** ** *** left ** **** *** manufacturer's **** *** ***** own *******'* ***********.

Avatar

Ethan Ace

IPVM | In reply to Undisclosed Manufacturer #1 | 05/17/17 07:06pm

** ******** **** ****** about ** **********, ********** given *** *** ****/**** offerings *** ********* *** simple ********* (*** ********), like ****** ** ***** included ** *** ******* X ****.

*** **** ***** ****, I'm *** **** ** would ** ******* ************** of ****** ***********, ***** we'd ****** ** ** a *****, *** ** indoor ** ***** ****. And **'* **** ** try *** ****** ** different ****, ***. ** it's ******** ***********. *** out ** *** ********, though.

Undisclosed Manufacturer #2

05/17/17 11:09pm

****... ** "*********" ** "The *******" ****'* ******** bought ** *** ******* in *** *** *** global *********?

Undisclosed #3

05/22/17 05:02pm

**** ** *** **** for ********* *** ** mile *******?

**** ** *** ********* cost *** **** *** sq **** *******?

**** *** ******* ** being ******* ** ******* outweigh *** ***** ********?

*.*. ***** ***** **** costs ******* **** ***** spent ** ***** '******' technologies ********* ** ** and/or ****?

Avatar

Brian Karas

IPVM | In reply to Undisclosed #3 | 05/22/17 05:18pm

* ***'* ***** ** is ****** ***** ** raw **** ********, ** different ********* **** **** more/less *********, ********* ** environmental *******.

** ** ******** **** valuable ** ****** **** have * *** ** gun-related ****** **. ***** where *** ******/********* *** relatively ***.

John Honovich

IPVM | 07/01/17 11:19am

******:

*********** ***** ** **** 7th ** $**, *** up **.*% ** *** first *** ** $**.** and ** *** *** of **** *** ******** modestly ** $**.**, ***** above *** *** *****, giving *** ******* * market ********* ** $*** million.

Undisclosed #3

07/28/17 05:50pm

***** *****, *************

****:

**** *****’* *** *********** ****** ***** ** *** ** *****

****:

‘***** ******’ **** **** ***** ** ***** *********** ******

Undisclosed #3

07/28/17 06:04pm

John Honovich

IPVM | 05/01/18 08:14pm

******: *********** *** **** than ******* ** ****** capitalization ***** **** *****:

****** ***** ******* ** system ******** ********:*********** *** ******** ** end ** **** ***** agreement

Paul Shah

05/01/18 08:42pm

* *** **** ** becoming **** *** **** part ** *** ******* that *** ****** ***. Once **** *******, ** doesn't **** ********* **** or **** ****. ***** agencies **** ******* ******. If *** **** ****** for **** & ***, its **** ****** *** everyone ****

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