Soundthinking, Inc. Q2 FY2020 Earnings Call

Good afternoon and welcome to Shotspotter’s Second Quarter 2020 Earnings Conference Call. My name is Shamali, 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 that are subject to risks, uncertainties and assumptions that are difficult to predict and may cause 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 6, 2020. 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 thanks for joining us today. I hope everyone on the call is doing well. We’re managing to stay safe at Shotspotter and are following local health care department guidelines with respect to COVID-19. As usual, I’m going to start with a quick overview of the quarter and our operational outlook before Alan details the quarterly results. We’ll then take your questions after that. We’re pleased to report that some of our field customer-facing teams have been a bit more mobile since late May. Their ability to get back out into the field has had a positive impact on both customer engagement and moving our pipeline forward. The second quarter was a solid step toward reestablishing our previous momentum after the lockdown suspended most of our sales and renewal activity. We reported quarterly revenues of $11.3 million, up 10% from $10.3 million a year ago. And net income of $866,000 or $0.07 per diluted share versus $387,000 or $0.03 per diluted share in the second quarter of 2019. We went live with 26 new mines, including expansions in Cincinnati and New York City, as well as new deployments in Springfield, Illinois, Albuquerque, the U.S. Virgin Islands, and Mammoth County in New Jersey. During and subsequent to the end of the quarter, we also booked two new cities, Cleveland and Fort Lauderdale. And we’ve also been selected to provide gunshot detection services to a portion of Broward County, which is the largest sheriff’s department in the State of Florida. We are also awaiting the final award decision for an RFP bid we submitted to a large Tier 1 Midwestern. These fine engagements are in addition to a couple of Tier 4 savings that we booked since our last earnings call. These deals are fully staffed and active projects that we expect to bring live later this year. We also saw very encouraging progress with our international pipeline. Since the end of the second quarter, we were awarded an international tender with the City of Nelson Mandela Bay in South Africa. This was a competitive tender win accomplished in spite of multiple municipal leadership changes and the recent challenges presented by the pandemic. I believe this award evidences our international viability, and we believe it will strengthen our position to win additional overseas contracts that are in our growing international pipeline. Our deal case is picking up and we continue to benefit from both our direct marketing and sales team outreach, as well as the referrals we get from existing clients. We constantly hear police chiefs describe ShotSpotter as indispensable and critical; they mean it. We see it in how they advocate for us with their peers, our prospects, and especially in how they advocate for us when their ShotSpotter contracts come up for renewal. We’re pleased that we did not experience any attrition this quarter, and we are encouraged with our strong renewal activity to date. In Q2 alone, we renewed multiyear contracts with six clients representing nearly $7 million in bookings. And bear in mind that these particular renewals were signed during a period of intense scrutiny of police department and municipal budget contraction. In some cities, such as Sacramento where we signed a five-year extension, we prevail against a strong disinformation campaign led by certain supporters of the Defund the Police Movement. That’s a testament to how valuable our gunshot detection and precision policing technology has become. I want to quickly speak to the Defund the Police Movement and how it might affect ShotSpotter. In a nutshell, we don’t see it as a material threat and actually believe it may well represent a potential catalyst for our business. It’s important to remember that Defund the Police does not necessarily mean abolish the police. What the core of the movement is calling for is a fundamental change in how policing happens in America. The kinds of things being demanded are changes that our technology supports and enables. I’ve blogged a bit on this and I have also done some media interviews on the subject. In my mind, it comes down to the simple choice between a posture of over-policing while under-serving versus precision policing combined with community-inspired engagement. Precision policing recognizes that violent crime is fundamentally a parental problem; and that relatively few actors cause most of the community harm. Measurable increases in community public safety happen when these few high-risk individuals receive focused policing intervention. In other words, offenders need to be policed and communities need to be served. In part, community service happens when public safety outcomes are co-produced with law enforcement working with law-abiding citizens as a trusted partner. It’s difficult for police departments to credibly claim that it protects and serves the community if it doesn’t respond to 80% to 90% of gunfire events that happen on a persistent basis, even if those gunfire events are not reported in the first place. This leads to normalized violence, which can produce all manner of negative outcomes, including pediatric trauma. And ultimately, and sadly, it builds a business case for community distrust of the police. That is exactly the problem that ShotSpotter saw. We provide that real-time awareness of gunfire events that allows police to be smart on crime and protect and serve at the same time. Our real-time alerts allow faster responses to gunfire incidents increasing citizens’ belief that in fact the police do care and are engaged in improving the safety of their neighborhood. Our alerts provide immediate data on the number of rounds, whether there are multiple shooters, and the exact location, so officers can go into each call with greater situational awareness and confidence. And our tools also help departments aggregate mass gunfire activity, so that they can allocate their precious limited resources in order to have the most impact. One of our most visible customers, the New York City Police Department, has continued to expand its ShotSpotter deployments. We now cover approximately 74 miles in the city. In one of its recent news conferences, NYPD Commissioner Dermot Shea specifically cited ShotSpotter by name as a critical component of his department’s evolution toward using intelligence and data-driven tools that can keep crime down even as we build trust in the community. The public outcry and demonstrations calling for police reform due to the violent death of George Floyd and Breonna Taylor are pushing other police departments to follow NYPD’s example. The ability to help police achieve their mission is especially valuable because gun crime remains a chronic and growing problem in the U.S. And for many of the reasons I enumerated in last quarter’s call, we believe the COVID crisis has exacerbated many of the underlying causes of gun crime. We recently reported that the number of ShotSpotter recorded gunfire incidents on a comparative basis has increased 34.6% year-to-date 2020 over 2019 and over 68% since the George Floyd incident. ShotSpotter is more useful and necessary than ever before. As police departments reduce and reallocate budgets and resources, a proven automated and highly effective solution like ours becomes indispensable. And going forward, we are working to ensure that we remain so. Our Incident Reviews Center personnel are active 24/7, 365 days a year, and our customers have come to rely unconditionally on it. And even with the aggressive quarantine in California, we have kept the IRCs fully staffed and operating seamlessly. Most of you know that we’re in the process of building a satellite incident review center in Washington, D.C. as part of our new operations and sales presence in the capital. This effort has been delayed by the COVID crisis, but we are moving forward and hope to be up and running later this month. This will enhance our ability to advocate directly with federal and D.C.-based influencers and policymakers. It will also add capacity redundancy to our instant review center and provide an East Coast presence for sales and marketing activities. We believe that ShotSpotter can also increase its value to customers by providing complementary solutions to our core gunshot detection technology. Our emissions platform is designed to do just that with AI-driven analysis and forecasting of crime trends and activity. For many police departments, this kind of mission planning can maximize the impact of patrol and better utilize human resources, again, an increasingly important criterion for public safety decision-makers in a changing police environment. The latest version of emissions has now been available for approximately 11 months and is in place in eight police departments. We executed four renewals last quarter, which is evidence that these early-adopting customers are pleased with the results they’re seeing, and they are voting with their budget. Before Alan goes deeper into the quarter, I want to directly convey to our team how proud I am of the excellent job everyone in the company has been doing under tough circumstances. There is a lot of detail, large and small, technological and logistical that need to be addressed whenever we deploy or expand a ShotSpotter installation. Our teams have been handling these details with amazing professionalism and care, and often from thousands of miles away during quarantine. We’ve really stretched ourselves as an organization at every level, from sales to service to incident response. I’m incredibly proud and doubly confident that we created an organization that can maximize the growth opportunity ahead of us. And that opportunity remains large. As discussed, our solution fits the needs of modern police departments. We have a technology and service delivery solution that has no real competition, even as we continue to erect wider and taller barriers to entry, and our unsurpassed brand strength and reputation continue to grow. All in all, I feel confident about our prospects, and I look forward to taking your questions after Alan reviews our results. Over to you, Alan.

Thank you, Ralph. We’re very pleased with our performance in the second quarter. We successfully deployed 26 new miles with no attrition. We added four new cities, achieved record revenue, record gross profit, and record adjusted EBITDA. These were all accomplished despite the ongoing COVID-19 pandemic, along with the challenges affecting our police departments. We believe our progress is a reflection of the increased need for our services and the resiliency of our business model. As we discussed last quarter, in light of ongoing concerns around municipal budget, our full-year guidance includes approximately 5% attrition whereas 2% to 3% is what we normally expect. We continue to experience strong renewal, including receipt of the delayed $300,000 we mentioned in our first quarter earnings call. With the continuing issues around municipal budgets, we’re certainly not ready to say that the risk to renewals is behind us. The conversations with customers confirm our belief that, as Ralph mentioned, our technology, the solutions we provide and how they assist in community policing is more important than ever. 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 slightly ahead of expectations at $11.3 million, a 10% increase over $10.3 million in the second quarter of 2019. The increased revenues reflect a significant increase in new miles, as well as delayed renewals from last quarter. Gross profit for the second quarter of 2020 was $6.9 million or 61% of revenue versus $6 million or 58% of revenue for the prior-year period. We also saw a significant improvement in adjusted EBITDA for the second quarter, which is $3.4 million, a 41% increase from the $2.4 million in the second quarter of 2019. As a reminder, adjusted EBITDA is calculated by taking our GAAP net income and adding back interest, taxes, depreciation, amortization, and stock-based compensation. Now turning to our expense. Our operating expenses for the second quarter were $6 million or 53% of revenue versus $5.7 million or 55% of revenue in the second quarter of 2019. With operations slowed, we did benefit somewhat from lower travel. We completed the implementation of the software we discussed last quarter to assist our finance and customer successfully, and are just beginning to benefit from the increased efficiency. Breaking down our expenses, sales and marketing expense for the second quarter was $2.3 million or 21% of total revenue versus $2.4 million or 24% of total revenue for the prior-year period. Our sales and marketing teams continue to focus on building a sales pipeline and expanding our marketing growth. Our R&D expenses for the second quarter were $1.4 million or 12% of total revenue compared to $1.4 million or 13% of total revenue for the prior-year period. We continue to invest in increasing the functionality of our investment platform along with expanding our analytics capability as we evaluate various aspects of our data support and mitigation. G&A expenses for the quarter were $2.3 million or 21% of total revenue compared to $1.9 million or 18% of total revenue for the prior-year period. Our GAAP net income for the second quarter was $866,000 or $0.08 per share based on $11.4 million basic, and $0.07 per share based on $11.7 million diluted weighted average shares outstanding. This compares to a GAAP net income of $387,000 or $0.03 per share based on $11.4 million basic, and $12 million diluted weighted average shares outstanding for the prior-year period. We went live with four new cities in Q2 along with a 4.6 mile expansion in New York City where we now cover almost 74 miles a day. At the end of the second quarter, 761 miles were live with approximately 770 miles under contract. Deferred revenue at the end of the quarter was $23.3 million versus $24.6 million at the end of Q1 2020. We ended the quarter with $25.8 million in cash and equivalents versus $28.7 million at the end of Q1. In Q2, we spent $1.6 million repurchasing our shares. We’ve now deployed a total of $8.3 million of the $50 million share repurchase authorized by our Board. We have no short or long-term debt; however, we expect to raise the borrowing limit on our revolving line of credit from $10 million to approximately $20 million in the near future to improve financial flexibility. We are narrowing our full-year revenue outlook to $43.5 million to $45.5 million from the previous outlook of $43 million to $46 million. The midpoint remains the same. The timing of adding new miles throughout the remainder of the year would determine where we end in this range, along with our continued success in minimizing attrition. At the midpoint of our guidance, our revenue growth will be approximately 9% for the year. We now expect to remain profitable in both Q3 and Q4 as well as 2020 as a whole. We expect revenues to be flat from Q2 to Q3, with an increase in Q4. Expenses will increase normally in absolute dollars in each of our operating expense categories throughout the remainder of the year. I don’t need to tell you that despite our strong quarter, the world is not back to normal. Yet as we continue to be encouraged by the resiliency of our business including our employees and customers, in addition to our operating model. Our optimism about ShotSpotter’s long-term opportunity has only increased and we are encouraged that even in the near term, we can grow and increase profitability. As always, thank you for your support and partnership in helping the ShotSpotter team do well by doing good. Now back over to you, Ralph.

Thank you very much, Alan. I’ll close by reiterating the point that I made last quarter, that while we don’t believe ShotSpotter is recession-proof, we do feel the company is somewhat recession-resistant because public safety is always top of mind with those that control and influence municipal budgets. And our service is a critical element in cost-effectively addressing public safety in its most acute form, gun violence. Our unit economics remain strong, our scale and operational efficiency continue to expand, creating a solid profitable foundation on which to grow. And now we’ve not only proven that we have the resiliency to survive, but can even modestly thrive in a difficult operating environment. Thank you very much for joining us today, and we’re now prepared to take your questions.

At this time, we will be conducting a question-and-answer session. Our first question is from Joe Osha from JMP Securities. Please proceed with your question.

Hello, this is actually Hillary on for Joe. And I just wanted to first touch on your revised guidance range. I was just wondering if you could provide any clarity on what that might look like broken across those different revenue buckets that you spoke about at the Analyst Day?

Yes, this is Alan. At this point, we just narrowed the guidance because we’re getting more visibility into how the rest of the year looks. We raised that $0.5 million on the bottom and just lowered it $0.5 million at the top as well. The midpoint remains the same, so we feel pretty optimistic right now about how our renewals are going. We had originally thought we might have as high as 5% attrition on the renewals, and now we expect that to be significantly lower, back into our normal range, somewhere around 2% to 3% in terms of actual attrition. But the range itself is predicated on the miles actually lighting up and going live. So, we just thought it was appropriate to keep the midpoint range where it was as we evaluated how fast the deployments are actually going. Travel has improved, access to customers has improved, and deployments have improved a bit, but they certainly aren’t back to normal, and we continue to monitor that.

Okay, great. And then I just kind of wondering, when you look at New York City, obviously, the deployment has been hugely successful. I was just wondering what’s the potential there to see further expansion, or does the 74 miles cover the key target areas there? Thank you.

Yes. So this is Ralph. Thank you for that question. So I think New York is fairly well deployed at this point in time. We’re across five boroughs, we’re in over 70 square miles, and they’re just doing an incredible job in responding to and following up on ShotSpotter activation. So I don’t think it would be appropriate for us to really expect too much more out of New York City at this point in time. Although, of course, anything is possible. I know we said that earlier, yet we were able to get a very small expansion here in this quarter, but I’ve got to feel like we’re pretty close to being topped out in New York City, which is our second-largest customer in terms of miles deployed at this point in time.

All right. Great, thanks for taking my questions.

Thank you.

And our next question is from Richard Baldry with Roth Capital. Please proceed with your question.

Thanks. So, I’m curious if you can talk about how the selling cycle is changing in the work-from-home environment, either for the core gunshot detection or missions as well, and how well that’s working with your prospects?

Yes. So this is Ralph. I’ll start and, Alan, jump in as appropriate. So, I think like a lot of other companies, I mean we’re finding very creative and innovative ways to do things digitally and remotely. We’ve made a little bit of an investment, I would say, in perfecting the art of giving presentations to prospects over Zoom. We’re still seeing some really good uptake on our marketing outreach – on our inside sales group outreach to prospects. And I would say we have a number of customers that seem just because of the recent social unrest and the uptick in gun violence that we’re seeing a little bit more of a frenzied, I would say inbound activity than what we’ve seen. This is very similar, I think in many ways, to what we saw several years ago after the Ferguson event – the Michael Brown Ferguson event where the nature of the conversations around policing and how policing gets done changes and that generates a lot of interest with potential prospects. I would say for our existing customers that we’re always in dialogue with, some of which we’re having dialogues with them around expansions. It’s kind of two buckets, I would say. There are some that we’ve been talking with them about expansions. And those conversations have been accelerated, I would say. And I think there are other conversations that we’re having that have maybe been pushed back a little bit. They’re still very interested, but their attention is really being diverted by dealing with the pandemic response and now with the social unrest response, and maybe their budget thing is a little less clear at this point in time, but there’s still interest. So I think there are some pros and cons there, but overall we’re feeling really good about the relevancy of our solution and the market’s understanding about how we can make a difference and how they police in this modern era.

And a follow-up, I think last quarter, you said emissions was operational in two cities with – or more and more sort of booked waiting to go live. So, could we get an update on that and how you feel about its pipeline going into the second half? Thanks.

Sure, this is Alan.

Yes, you want me to go, Alan? We’ve gone live on two more of the emissions customers and expect the balance of those to go live fairly soon. Emissions is something that requires a lot of in-person activity for data ties and things like that. So, it is something that we do expect to be a little slower, at least for the next couple of months, but it is actually picking up. The interest is there, and it is something we’re still very optimistic about over the longer term.

I’m not sure if I’m willing to comment on this. I’ve been so curious about the disinformation campaign you alluded to. So, we can understand the types of things that we might see in the media and sort of your responses to those – how you overcome those types of objections. Thanks a lot and congrats on the big adds in the quarter.

Great, thank you. So I think in general, I would say, there is a lot of energy around defunding the police and there are certain segments that I will call extreme segments of defunding the police, where they are actually being quite literal. Fortunately, that’s a bit of a minority but it’s a significant minority actually, that’s been our observation. I think the core of the movement, as I mentioned earlier, is really more around how we re-imagine and re-prioritize how policing gets done, so that they continue to over-police less and under-serve more. I mean, we want to move policing to where they’re appropriately serving at-risk communities, particularly around gun violence. One of the interesting things that I’ve observed around what’s different kind of post-pandemic, in terms of how city council meetings happen, is before, you’d have to be really motivated to drive down to City Hall and participate in a discussion around a funding issue and the like. In this world now, where things are being done digitally, all of a sudden, people can show up from their living rooms through Zoom or whatever and proffer any amount of opinions that they have on things, and that was a little bit of what we saw in a few of our renewals where this is a very active mobilized front, where people are saying things like 'defund the police' in a way that is not very constructive, I guess I would say, because it’s just not practical to abolish the police or cut their budgets by 50%, and expect that you can have public safety outcomes. And so – but what we’ve tried to do in that environment, I think we talked earlier about our renewal taskforce. We’re always pretty intentional around how we communicate and discuss our value proposition with customers so they can feel good about it and then take that forward. We’re not actually doing the presentations in many of these city council meetings. It really has to be the police department and the local elected officials that have a really good understanding about how the technology is being used, applied, and the difference that it’s making in achieving public safety outcomes. And we kind of give them the tools and the data to be able to do that and articulate it, but they’re the ones really carrying the water. And I think in this particular environment, we’ve just been hyper-aggressive about making sure we’re getting in front of folks and reminding them of the great work that we do together as a team, and that’s been very, very successful. We’ve seen, I think at this point in time, again, it’s – we’re only halfway through the year, but I mean, we’re basically batting a thousand on the renewals, notwithstanding the last customer we talked about in the last quarter’s earnings call, the Atlanta Smart City initiative, but everywhere else, we’re running a really good track record. And it’s really quite affirming to hear the terms indispensable and critical have really come about when we’ve had conversations with our customers around the value proposition. They’re kind of coming back to us and saying, hey, I cannot do without ShotSpotter now that I have it deployed. I see what it does, I can’t go deaf, dumb, and blind to incidents of gunfire, that we now know 80% to 90% of the time that a gun is fired, people don’t call 911 because it’s become so normalized. So that’s a pretty scary proposition to a police department that has that real experience with our solution to know now that they’re in a much better place to be aware of it and respond. And so we’ve been very successful as a result of that.

Thanks.

And our next question is from Zach Cummins with B. Riley, FBR. Please proceed with your question.

Hi, good afternoon. Thanks for taking my questions, and congrats on the solid results. Ralph, I know you were talking about, you’ve done a really great job in terms of renewals, so far this year, especially in Q2 with no attrition. But can you give us a sense of how you’re feeling going into some of the budgetary meetings for these other municipalities in the back half of the year? It sounds like there is a little more clarity there, but just to get some of your perspective on that would be very helpful.

Yes. So I think we’re feeling pretty good. Our first line of defense, really, as I mentioned earlier, is really around fortifying our value proposition. That’s the first line of defense. And if we do a good job at – if the solution works, and we know it works very well and we’re very intentional around establishing, reestablishing, and reaffirming our value proposition, that’s the very first line, and most important line of defense around a renewal. And then after that, as Alan and I talked about, we have some other tools in our toolkit that if there are truly budget issues, the second line of defense is to help them find funding to support their ShotSpotter service offering, and so we’re ready and have resources to lean in with an agency if there truly is a budget issue where that second line of defense is, hey, I understand the value, but now I still don’t have the money, let’s go work together to figure out how to get the money from other sources. Fortunately, we’ve seen a lot of stimulus dollars that have been provided by the federal government. In fact, I was recently reading an email from the US Conference of Mayors where the White House and Republicans were really arguing that a lot of the money that they’ve given to a number of cities, 38 cities, in fact, have not been spent, and the numbers are pretty big; in the case of New York City, there’s $1.5 billion of stimulus back there that’s still unspent; Sacramento, $90 million; Denver, $127 million. So as much as these municipal budgets are a challenge, they’re a little bit offset from some of the federal stimulus money. So, I think we’re still feeling quite constructive. We’re not out of the woods yet, as Alan said. It’s not going to be 5%. It’s clearly not going to be zero. We think we’re going to do better than that. I think at this point in time, if we end the year with our normal attrition cadence of 2% to 3%, I think we would count that as a very big win in this really interesting year. Does that answer your question?

Yes, it does. Thank you for that. And in terms of the ever-changing restrictions across each state and municipality with COVID-19 restrictions, it sounds like your deployment teams had some more mobility in this quarter, but are you still seeing some challenges in certain pockets of the country where you’re unable to get feet on the ground to do these deployments?

Absolutely, yes. Yes. It’s not back to normal.

Got it. And just one final question, in terms of opportunities in the pipeline, it sounds like you are in the final stages with a Tier 1 city. I was just wondering if you could provide some extra context around any of the other opportunities that you’re seeing in the pipeline at this point.

So this is Alan. I would say – yes – I don’t know that we want to comment too much on that other than to say that our pipeline is strong. Probably as strong as it’s ever been, and we are seeing some opportunities that are even maybe more fused and have a shorter sales cycle, and we’ll be talking about those in the future, but I don’t think we really want to comment too much more beyond that.

Understood. Well, thanks for taking my questions and best of luck in Q3.

Thank you.

Our next question is from Matt Pfau with William Blair. Please proceed with your question.

Hey guys, nice quarter and thanks for taking my questions. Wanted to ask on some of the wins that you mentioned, both at the end of the second quarter and subsequently, obviously, some big cities that are in that mix. Were these opportunities that were in the pipeline pre-COVID and then perhaps got delayed a bit and then finally closed, or were they put in during COVID? And then, I guess what – each one is probably different, but what sort of was maybe the tipping point that made these cities feel comfortable executing the contract with you?

Yes. So maybe I’ll – this is Ralph. I’ll try to take that. And I think – I don’t think we want to comment specifically on any individual deal. I would say it’s a category of deals. Most of those deals were deals that we had been working on prior to COVID. I think you know the company to know that we typically talk about our sales cycles being 12 months to 18 months. I would say that there was more than zero of things that kind of happened post-COVID. I think Alan alluded to the fact that we are seeing some deals that are happening on really, really short timelines because of this significant uptick in gun violence that we’re seeing. Hopefully, we’ll be able to see a lot more about that in the next earnings calls about things that we are seeing in terms of sales cycles and how they might be deferring for certain types of customers, but I think I would say it’s a mix at this point in time and leave it at that.

Okay, got it. And then in terms of your Latin American opportunities, how are those progressing?

So, this is Alan. We think the pipeline is strong as it’s ever been. We still do expect to have at least one Latin American booking before the end of the year and more to follow on that.

Got it. Great, guys. That’s it for me. Thanks a lot. Appreciate it.

Thank you.

Our next question is from Jeremy Hamblin with Craig-Hallum. Please proceed with your question.

Hey, guys, this is Ryan on for Jeremy. You guys talked a little bit about inbound interest being a little frothy, I think you said. Can you talk about the level of interest you’ve seen? I know the environment is wildly different, but if you could maybe put it in the context compared to last year at this time?

That’s a really...

This is Alan. I would say – yes, it’s a hard comparison to make in this environment with COVID and the social unrest right now versus last year where neither of those were there, but I will say that if we were to take a snapshot and just take a look at the pipeline, it’s stronger now than it was then. And I think gun violence, as Ralph mentioned in his earlier comments, is increasing at a rapid rate and I think that’s also one of the reasons that some of the opportunities are coming in. They’re coming in faster than some of us would have expected, but I don’t know, Ralph. Other thoughts there?

Yes, I would use this opportunity just to remind folks of the difficulty of like doing point to point comparisons. And I say this every earnings call, our business is lumpy. And so I guess I would be a little bit reticent to try to make too much of a comparison for any one quarter this year versus a quarter last year. Just understanding that things happen lumpy and this was a fantastic quarter. We’re really pleased with it. But you don’t want to draw too much of a parallel or comparison to other quarters just because of the lumpiness of our business.

Okay, thanks, guys. That’s helpful. And then I guess sort of housekeeping a little bit, you mentioned travel getting back to normal; I’m kind of curious with cases rising again, have you had to restrict travel or any sales efforts in particular places that have been hit hard by the sort of second wave that we’ve seen? And I guess, going into the back half of the year, how are you guys thinking about that doing with things on that front?

So, this is Alan, and Ralph, feel free to ask me. Travel is not back to normal. So I think when we say getting closer to normal, it means that, as opposed to the latter part of March and April where we had a travel ban; in May, we did allow our team to go out and do necessary business travel, which includes some salesforce implementation and things like that, but some of the areas are still locked down and not accessible. Certainly not like they were last year, even into January, but we are working around that. Our customers are working around that. And notwithstanding things getting even worse than they are, we are able to conduct a significant amount of our meetings and do what we need to do working around that. But there are things like we talked about in Houston; we haven’t yet been able to make substantial progress in Houston, because they still have a lot of problems down there that they’re dealing with. So our ability to work on that pilot program has been delayed. It’s not going away, but it’s been delayed. But that’s just an example of some of the limitations in travel.

All right, great thanks, guys, and congrats on the quarter.

Thank you.

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@gatewayir.com. I’d now like to turn the call back over to Mr. Clark for his closing remarks.

Great. Yes. Thank you very much. Really, I hope that everyone is doing well and keeping safe, and really appreciate your support over the quarters. Looking forward to chatting with you in the next 90 days or so when we’re reporting on Q3. Everyone take care. Thank you.

Great. Yes. Thank you very much. Really hope that everyone is doing well and keeping safe, and really appreciate your support over the quarters. Looking forward to chatting with you in the next 90 days or so when we’re reporting on Q3. Everyone take care. Thank you.