Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 07, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | ShotSpotter, Inc. | ||
Entity Central Index Key | 0001351636 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity File Number | 001-38107 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 47-0949915 | ||
Entity Address, Address Line One | 39300 Civic Center Dr. | ||
Entity Address, Address Line Two | Suite 300 | ||
Entity Address, City or Town | Fremont | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94538 | ||
City Area Code | 510 | ||
Local Phone Number | 794-3100 | ||
Entity Current Reporting Status | Yes | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 12,266,468 | ||
Entity Interactive Data Current | Yes | ||
Title of 12(b) Security | Common Stock, $0.005 par value per share | ||
Trading Symbol | SSTI | ||
Security Exchange Name | NASDAQ | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Public Float | $ 246,884,476 | ||
ICFR Auditor Attestation Flag | false | ||
Documents Incorporated by Reference | Portions of the Registrant’s Definitive Proxy Statement relating to the Annual Meeting of Stockholders, scheduled to be held on June, 21, 2023, are incorporated by reference into Part III of this Report. Such Proxy Statement will be filed with the Securities and Exchange Commission no later than 120 days following the end of the Registrant’s fiscal year ended December 31, 2022. | ||
Auditor Firm Id | 23 | ||
Auditor Name | Baker Tilly US, LLP | ||
Auditor Location | Minneapolis, Minnesota |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 10,479 | $ 15,636 |
Accounts receivable and contract asset, net | 30,957 | 16,134 |
Prepaid expenses and other current assets | 3,225 | 2,504 |
Total current assets | 44,661 | 34,274 |
Property and equipment, net | 21,988 | 17,409 |
Operating lease right-of-use assets | 3,240 | 2,323 |
Goodwill | 22,971 | 2,816 |
Intangible assets, net | 27,318 | 13,564 |
Other assets | 2,570 | 1,918 |
Total assets | 122,748 | 72,304 |
Current liabilities | ||
Accounts payable | 1,633 | 1,587 |
Deferred revenue, short-term | 41,907 | 26,235 |
Accrued expenses and other current liabilities | 9,965 | 6,680 |
Total current liabilities | 53,505 | 34,502 |
Deferred revenue, long-term | 1,813 | 474 |
Deferred tax liability, long-term | 685 | |
Other liabilities | 5,800 | 3,513 |
Total liabilities | 61,803 | 38,489 |
Commitments and contingencies (Note 18) | ||
Stockholders' equity | ||
Preferred stock: $0.005 par value; 20,000,000 shares authorized; no shares issued and outstanding as of December 31, 2022 and 2021, respectively | ||
Common stock: $0.005 par value; 500,000,000 shares authorized; 12,243,929 and 11,703,430 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 62 | 58 |
Additional paid-in capital | 153,573 | 132,780 |
Accumulated deficit | (92,400) | (98,785) |
Accumulated other comprehensive loss | (290) | (238) |
Total stockholders' equity | 60,945 | 33,815 |
Total liabilities and stockholders' equity | $ 122,748 | $ 72,304 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.005 | $ 0.005 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.005 | $ 0.005 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 12,243,929 | 11,703,430 |
Common stock, shares outstanding | 12,243,929 | 11,703,430 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenues | $ 81,003 | $ 58,155 | $ 45,734 |
Costs | |||
Cost of revenues | 34,218 | 25,611 | 18,525 |
Impairment of property and equipment | 25 | 234 | |
Total costs | 34,218 | 25,636 | 18,759 |
Gross profit | 46,785 | 32,519 | 26,975 |
Operating expenses | |||
Sales and marketing | 22,416 | 15,479 | 10,328 |
Research and development | 10,026 | 7,035 | 5,614 |
General and administrative | 15,750 | 12,744 | 9,740 |
Change in fair value of contingent consideration | (9,154) | 1,330 | |
Total operating expenses | 39,038 | 36,588 | 25,682 |
Operating income (loss) | 7,747 | (4,069) | 1,293 |
Other expense, net | |||
Interest income, net | 45 | 38 | 113 |
Other expense, net | (240) | (344) | (271) |
Total other income (expense), net | (195) | (306) | (158) |
Income (loss) before income taxes | 7,552 | (4,375) | 1,135 |
Provision (benefit) for income taxes | 1,167 | 56 | (90) |
Net income (loss) | $ 6,385 | $ (4,431) | $ 1,225 |
Net income (loss) per share, basic | $ 0.52 | $ (0.38) | $ 0.11 |
Net income (loss) per share, diluted | $ 0.52 | $ (0.38) | $ 0.10 |
Weighted average shares used in computing net income (loss) per share, basic | 12,171,609 | 11,647,558 | 11,408,757 |
Weighted average shares used in computing net income (loss) per share, diluted | 12,317,707 | 11,647,558 | 11,730,294 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 6,385 | $ (4,431) | $ 1,225 |
Other comprehensive loss: | |||
Change in foreign currency translation adjustment, net of taxes | (52) | (68) | (36) |
Comprehensive income (loss) | $ 6,333 | $ (4,499) | $ 1,189 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Beginning balance at Dec. 31, 2019 | $ 27,251 | $ 57 | $ 122,907 | $ (95,579) | $ (134) |
Beginning balance, Shares at Dec. 31, 2019 | 11,314,150 | ||||
Exercise of stock options | $ 314 | $ 1 | 313 | ||
Exercise of stock options, Shares | 96,456 | 96,456 | |||
Issuance of common stock in connection with exercise of warrants, Shares | 46,939 | ||||
Repurchase of common stock | $ (1,615) | (1,615) | |||
Repurchase of common stock, Shares | (74,520) | ||||
Issuance of common stock from ESPP purchases | 704 | 704 | |||
Issuance of common stock from ESPP purchases, Shares | 37,102 | ||||
Vesting of RSUs, Shares | 54,970 | ||||
Issuance of common stock from acquisition | 2,000 | 2,000 | |||
Issuance of common stock from acquisition, Shares | 63,901 | ||||
Stock-based compensation | 4,462 | 4,462 | |||
Foreign currency translation loss | (36) | (36) | |||
Net income (loss) | 1,225 | 1,225 | |||
Ending balance at Dec. 31, 2020 | 34,305 | $ 58 | 128,771 | (94,354) | (170) |
Ending balance, Shares at Dec. 31, 2020 | 11,538,998 | ||||
Exercise of stock options | $ 898 | 898 | |||
Exercise of stock options, Shares | 97,702 | 97,702 | |||
Issuance of common stock in connection with exercise of warrants | $ 8 | 8 | |||
Issuance of common stock in connection with exercise of warrants, Shares | 50,716 | ||||
Repurchase of common stock | $ (3,601) | (3,601) | |||
Repurchase of common stock, Shares | (95,151) | (95,151) | |||
Issuance of common stock from ESPP purchases | $ 832 | 832 | |||
Issuance of common stock from ESPP purchases, Shares | 30,193 | ||||
Vesting of RSUs, Shares | 80,972 | ||||
Stock-based compensation | 5,872 | 5,872 | |||
Foreign currency translation loss | (68) | (68) | |||
Net income (loss) | (4,431) | (4,431) | |||
Ending balance at Dec. 31, 2021 | 33,815 | $ 58 | 132,780 | (98,785) | (238) |
Ending balance, Shares at Dec. 31, 2021 | 11,703,430 | ||||
Exercise of stock options | $ 538 | $ 1 | 537 | ||
Exercise of stock options, Shares | 41,819 | 41,819 | |||
Repurchase of common stock | $ (3,084) | (3,084) | |||
Repurchase of common stock, Shares | (106,992) | (106,992) | |||
Issuance of common stock from ESPP purchases | $ 797 | 797 | |||
Issuance of common stock from ESPP purchases, Shares | 33,161 | ||||
Vesting of RSUs, Shares | 107,971 | ||||
Issuance of common stock from acquisition | 14,266 | $ 3 | 14,263 | ||
Issuance of common stock from acquisition, Shares | 464,540 | ||||
Stock-based compensation | 8,280 | 8,280 | |||
Foreign currency translation loss | (52) | (52) | |||
Net income (loss) | 6,385 | 6,385 | |||
Ending balance at Dec. 31, 2022 | $ 60,945 | $ 62 | $ 153,573 | $ (92,400) | $ (290) |
Ending balance, Shares at Dec. 31, 2022 | 12,243,929 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 6,385,000 | $ (4,431,000) | $ 1,225,000 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation of property and equipment | 6,400,000 | 5,795,000 | 5,399,000 |
Amortization of intangible assets | 2,799,000 | 1,032,000 | 187,000 |
Impairment of property and equipment | 0 | 25,000 | 234,000 |
Stock-based compensation | 8,282,000 | 5,872,000 | 4,462,000 |
Change in fair value of contingent consideration | (9,154,000) | 1,330,000 | |
Deferred taxes | 685,000 | 50,000 | (83,000) |
Loss on disposal of property and equipment | 3,000 | ||
Provision for accounts receivable | (74,000) | 74,000 | |
Changes in operating assets and liabilities: | |||
Accounts receivable and contract asset | (14,530,000) | (3,213,000) | 1,953,000 |
Prepaid expenses and other assets | (1,168,000) | (673,000) | (321,000) |
Accounts payable | (18,000) | 354,000 | (190,000) |
Accrued expenses and other current liabilities | 947,000 | 1,588,000 | 575,000 |
Deferred revenue | 11,630,000 | 2,143,000 | (2,392,000) |
Net cash provided by operating activities | 12,184,000 | 9,822,000 | 11,209,000 |
Cash flows from investing activities: | |||
Purchase of property and equipment | (10,915,000) | (7,840,000) | (4,059,000) |
Investment in intangible and other assets | (6,000) | (59,000) | (72,000) |
Business acquisition, net of cash acquired | (4,618,000) | 15,000 | (14,627,000) |
Net cash used in investing activities | (15,539,000) | (7,884,000) | (18,758,000) |
Cash flows from financing activities: | |||
Payment of contingent consideration liability | (403,000) | (347,000) | |
Payment of line of credit costs | (12,000) | ||
Proceeds from exercise of stock options | 538,000 | 898,000 | 314,000 |
Repurchases of common stock | (3,084,000) | (3,601,000) | (1,615,000) |
Proceeds from exercise of warrants | 8,000 | ||
Proceeds from employee stock purchase plan | 797,000 | 832,000 | 704,000 |
Net cash used in financing activities | (1,749,000) | (2,266,000) | (956,000) |
Change in cash, cash equivalents and restricted cash | (5,104,000) | (328,000) | (8,505,000) |
Effect of exchange rate on cash and cash equivalents | (53,000) | (79,000) | (2,000) |
Cash, cash equivalents and restricted cash at beginning of year | 15,636,000 | 16,043,000 | 24,550,000 |
Cash, cash equivalents and restricted cash at end of year | 10,479,000 | 15,636,000 | 16,043,000 |
Supplemental disclosure of non-cash financing activities: | |||
Property and equipment purchases included in accounts payable | 404,000 | $ 563,000 | 522,000 |
Estimated fair value of contingent consideration for business combination at closing | 12,400,000 | 170,000 | |
Fair value of common stock issued as consideration for business acquisition | $ 14,266,000 | $ 2,000,000 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Note 1. Organization and Description of Business ShotSpotter, Inc. (the “Company”) brings the power of digital transformation to law enforcement and security personnel by providing precision-policing and security solutions. As of December 31, 2022 we had approximately 250 customers and to date have worked with approximately 2,100 agencies to help drive more efficient, effective, and equitable public safety outcomes. Our Precision Policing Platform includes ShotSpotter Respond, COPLINK X, ShotSpotter Investigate, ShotSpotter GCM, and ShotSpotter Connect®. Our security solutions include ShotSpotter SecureCampus® and ShotSpotter SiteSecure. The Company’s flagship public safety solution, ShotSpotter Respond, is the leading outdoor gunshot detection, location and alerting system. ShotSpotter Investigate and ShotSpotter GCM (case management software to help produce courtroom-ready cases) and COPLINK X (an investigative lead search tool to accelerate crime solving) provide agencies with a cloud-based investigative digital case folder and analytical and collaboration tools to improve case closure rates. The Company's patrol management software, ShotSpotter Connect, uses artificial intelligence-driven analysis to help strategically plan directed patrols for maximum impact across a diverse set of crime types. The Company's security solutions, ShotSpotter SecureCampus and ShotSpotter SiteSecure, are typically smaller-scale deployments of ShotSpotter Respond vertically marketed to universities, corporate campuses, highways and key infrastructure centers to mitigate risk and enhance security by notifying authorities of outdoor gunfire incidents, saving critical minutes for first responders to arrive. In 2019, the Company created a technology innovation unit, ShotSpotter Labs, to expand its efforts supporting innovative uses of its technology to help protect wildlife and the environment. The Company’s principal executive offices are located in Fremont, California. The Company has five wholly-owned subsidiaries globally. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding financial reporting. In the opinion of management, the accompanying consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive income (loss), stockholders’ equity and cash flows for the year ended December 31, 2022, but are not necessarily indicative of the results of operations or cash flows to be anticipated for any future period. The consolidated financial statements include the results of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated during consolidation. The Company has evaluated subsequent events occurring after the date of the consolidated financial statements for events requiring recording or disclosure in the consolidated financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its significant estimates including the valuation of accounts receivable, the lives and realization of tangible and intangible assets and goodwill, contingent consideration liabilities, stock-based compensation expense, customer life, revenue recognition, contingent liabilities related to legal matters, and income taxes including deferred taxes and any related valuation allowance. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions it believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could be material to the Company’s financial position and results of operations. Revenue Recognition – Subscription Services The Company generates annual subscription revenues from the deployment of ShotSpotter Respond on a per-square-mile basis. The Company's security solutions, ShotSpotter SecureCampus, ShotSpotter SiteSecure, ShotSpotter Investigate, ShotSpotter GCM and COPLINK X are typically sold on a subscription basis, each with a customized deployment plan. ShotSpotter's Connect solution is also sold on a subscription basis. The Company generates a majority of its revenues from the sale of Respond subscription services, in which gunshot data generated by Company-owned sensors and software is sold to customers through a cloud-based hosting application for a specified contract period. Typically, the initial contract period is one to three years in length. The subscription contract is generally noncancelable without cause. Generally, these service arrangements do not provide the customer with the right to take possession of the hardware or software supporting the subscription service at any time. A small portion of the Company’s revenues are generated from the delivery of setup services to install Company-owned sensors in the customer’s coverage area and other services including training and a license to integrate with third-party applications. For ShotSpotter Respond, the Company generally invoices customers for 50 % of the total contract value when the contract is fully executed and for the remaining 50 % when the subscription service is operational and ready to go live – that is, when the customer has acknowledged the completion of all the deliverables in the signed customer acceptance form. For ShotSpotter SecureCampus, ShotSpotter SiteSecure and COPLINK X, the Company generally invoices subscription service renewals for 100 % of the total contract value when the renewal contract is executed. All fees billed in advance of services being delivered are recorded as deferred revenue. For ShotSpotter Respond, the pricing model is based on a per-square-mile basis. For ShotSpotter SecureCampus, ShotSpotter SiteSecure and ShotSpotter Investigate, the pricing model is on a customized-site basis. For ShotSpotter Connect, ShotSpotter GCM and COPLINK X, pricing is currently customized, generally tied to the number of sworn police officers in a particular city. The Company may also offer discounts or other incentives in conjunction with all ShotSpotter sales in an effort to introduce the product, accelerate sales or extend renewals for a longer contract term. As a result of the process for invoicing contracts and renewals upon execution, cash flows from operations and accounts receivable can fluctuate due to timing of contract execution and timing of deployment. The Company recognizes revenues upon the satisfaction of performance obligations. At contract inception, the Company assesses the services promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good or service (or bundle of services) that is distinct. To identify the performance obligations, the Company considers all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. The Company determined that the subscription services, training, and licenses to integrate with third-party applications are each distinct and represent separate performance obligations. The setup activities are not distinct from the subscription service and are combined into the subscription service performance obligation. However, setup fees may provide a material right to the customer that has influence over the customer's decision to renew. The total contract value is allocated to each performance obligation identified based on the standalone selling price of the service. Discounts are allocated pro-rata to the identified performance obligations. Revenues from subscription services are recognized ratably, on a straight-line basis, over the term of the subscription. Revenues from material rights are recognized ratably over the period in which they are determined to provide a material right to the customer, which is generally the longer of the estimated customer life or contract, which is typically three years . Revenues from training and third-party integration license fees are recognized upon delivery which generally occurs when the subscription service is operational and ready to go live. Subscription renewal fees are recognized ratably over the term of the renewal, which is typically one year . While most customers elect to renew their agreements, in some cases, they may not be able to obtain the proper approvals or funding to complete the renewal prior to expiration. For these customers, the Company stops recognizing subscription revenues at the end of the current contract term, even though services may continue to be provided for a period of time until the renewal process is completed. Once the renewal is complete, the Company recognizes subscription revenues for the period between the expiration of the original term of the agreement and the completion of the renewal process in the month in which the renewal is executed. If a customer declines to renew its subscription, then the remaining fees from material rights, if any, are immediately recognized. The Company capitalizes certain incremental costs of obtaining a contract, which includes sales commissions, based on the first-year fee upon booking of a new contract. These capitalized commissions are amortized on a straight-line basis over the customer life, which is determined to be five years . As there are not commensurate commissions earned on renewals of the subscription services, the Company recognizes the commissions as expense when the renewal invoice is paid instead of capitalizing them. Amortization of capitalized commissions is included in sales and marketing expense and was $ 0.8 million, $ 0.7 million and $ 0.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. Revenue Recognition – Software License, Maintenance and Support, and Professional Services The Company also generates revenues from the sale of (i) a software license and related maintenance and support services to ShotSpotter Investigate, its proprietary software technology, and (ii) professional software development services to a single customer, through a sales channel intermediary. The Company has been serving this customer for more than ten years . The sales channel intermediary contract includes a renewable license for software and related maintenance and support services. The contract also provides for the procurement of professional services, such as for software development and testing for product feature enhancements, by executing supplementary work orders. The Company recognizes revenue from the license of its software license and related maintenance and support services revenues upon the satisfaction of performance obligations. The Company determined that the term-based software license should be combined with the maintenance and support services as a single performance obligation. The nature of the maintenance and support services, inclusive of the Company’s obligation to provide additional, unspecified software functionality over the license term, allows this single customer to be flexible in utilizing the customized software to respond to its changing regulatory environment, and is critical to the customer’s ability to derive benefit and value from the license. Revenues from amounts allocated to the single performance obligation consisting of the software license and maintenance and support services are recognized ratably over the term of the contract because the Company’s obligation to provide the license and related support services is both continuous and uniform over the license term. The Company generally invoices for these services on a monthly basis in arrears. If a customer does not renew prior to the contract term expiring, the Company stops recognizing subscription revenues at the end of the current contract term, even though services may continue to be provided for a period of time until the renewal process is completed. Once the renewal is complete, the Company recognizes the revenues for the period between the expiration of the original contract term and the completion of the renewal process in the month in which the renewal is executed. Professional services revenue consists of fees typically associated with the design, development and testing of product feature enhancements requested by the customer. The customer procures additional development services as needed, and generally based upon annual development plans negotiated by and between the customer and the Company. Professional services do not result in significant customization of the maintenance and support services and are considered distinct services. All, and any part of the output, of the Company’s professional services towards such product feature enhancements, belong to the customer. Accordingly, the Company satisfies the performance obligations over time as the performance of work typically creates or enhances an asset that the customer controls as the asset is created or enhanced. As these product feature enhancements each have a fixed contract fee, the Company recognizes revenue over time proportionally as work is performed, based on cumulative resource costs incurred as a percentage of total forecast costs for the project. Management uses significant judgement in making these estimates, which affect the timing of revenue recognition, including how much revenue to recognize in each period, and in estimating the timing of revenue recognition for remaining performance obligations (see Note 3). The contract price and billing schedule are stated in each work order and the Company generally invoices in monthly installments upon the commencement of each work order. Gross Versus Net Presentation The Company’s single software license on premise instance and related maintenance and support service agreement was facilitated through a sales channel intermediary. The Company presents the total value of the billings to the end-user as revenue (or gross) and that portion of the billings to the customer retained by the sales channel intermediary as a sales cost which is included in sales and marketing in the accompanying statement of operations, as the Company determined that it is the principal in the arrangement. The Company’s conclusion is based on its role in controlling the goods and services consumed by the end-customer throughout the license term or development life cycle, combined with its control over the price charged to the end-user for such goods and services, and the inability of the sales channel intermediary to direct or control the services provided to the customer. The fees paid to the sales channel intermediary are expensed as incurred as it relates to a period of performance of one year, and the sales channel intermediary is paid the same rate of commission on any license term renewals or additional professional services that are sold to the customer. Costs Costs include the cost of revenues and charges for impairment of property and equipment. Cost of revenues primarily include depreciation expense associated with capitalized customer acoustic sensor networks, communication expenses, costs related to hosting the Company's service application, costs related to operating its Incident Review Center (the “IRC”), providing remote and on-site customer support and maintenance and forensic services, personnel and related costs of operations, stock-based compensation and allocated overhead, which includes information technology, facility and equipment depreciation costs. The Company expenses all costs as incurred for services that are not recoverable under an enforceable contract. Advertising and Public Relations Costs Advertising and public relations costs are expensed as incurred. Advertising and public relations costs were $ 1.5 million, $ 1.3 million and $ 0.3 million for the years ended December 31, 2022, 2021 and 2020, respectively, and were included in sales and marketing expense in the consolidated statements of operations. Research and Development Costs Research and development costs are expensed as incurred and consisted primarily of salaries and benefits, consultant fees, certain facilities costs, and other direct costs associated with the continued development of the Company’s solutions. Product development costs are expensed as incurred until technological feasibility has been established, which the Company defines as the completion of all planning, designing, coding and testing activities that are necessary to establish products that meet design specifications including functions, features and technical performance requirements. The Company has determined that technological feasibility for its software products is reached shortly before they are released for sale. Costs incurred after technological feasibility is established are not significant, and accordingly the Company expenses all research and development costs when incurred. The Company capitalizes the cost of technology acquired through a business combination based on the fair value of the assets acquired. Cash and Cash Equivalents Cash and cash equivalents include all cash and highly liquid investments with an original maturity of three months or less. At December 31, 2022 and 2021, the Company’s cash and cash equivalents consisted of cash deposited in financial institutions. Foreign Currency The functional currency for the Company’s foreign subsidiaries is the local currency. The assets and liabilities of the subsidiary are translated into U.S. dollars using the exchange rate as of each balance sheet date. Revenues and expenses are translated at the average exchange rates for the period. Gains and losses from translations are recognized in foreign currency translation included in accumulated other comprehensive income (loss) in the accompanying consolidated balance sheets. Foreign currency exchange gains and losses that are realized are recorded in other expense, net, in the accompanying consolidated statements of operations. Accounts Receivable and Contract Asset, net Accounts receivable, net consist of trade accounts receivables from the Company’s customers, net of allowance for doubtful accounts if deemed necessary, and are recorded at the invoiced amount. Accounts receivable also consists of trade accounts receivables (net of any commissions) from the sales channel intermediary through which the Company provides software license, maintenance and support, and professional services. The Company does not require collateral or other security for accounts receivable. Contract asset consists of revenues recognized in advance of invoicing the customer for amounts that the Company has the right to invoice. The Company does not charge interest on accounts receivable that are past due. The Company periodically evaluates the collectability of its accounts receivable and provides an allowance for doubtful accounts based on the Company’s historical experience. At December 31, 2022 and 2021, the Company had a provision against accounts receivable of $ 0 and $ 74,000 , respectively. If a receivable is deemed by the Company to be uncollectible, the Company will write off the receivable to bad debt expense. Concentrations of Risk Credit Risk — Financial instruments that potentially subject the Company to concentration of credit risk consisted primarily of cash and cash equivalents and accounts receivable from trade customers. The Company maintains its deposits of cash and cash equivalents at two domestic and four international financial institutions. The Company is exposed to credit risk in the event of default by a financial institution to the extent that cash and cash equivalents are in excess of the amount insured by the Federal Deposit Insurance Corporation ("FDIC") and other local country government agencies. The Company generally places its cash and cash equivalents with high-credit quality financial institutions. To date, the Company has not experienced any losses on its cash and cash equivalents. As of December 31, 2022, the Company had $ 9.5 million and $ 6,000 on hand with each domestic financial institution for which only $ 250,000 is insured under FDIC limits. Concentration of Accounts Receivable and Contract Asset — At December 31, 2022, two customers accounted for 23 % and 17 %, respectively, of the Company’s total accounts receivable. At December 31, 2021, one customer accounted for 65 %, of the Company’s total accounts receivable. Concentration of Revenues — For the year ended December 31, 2022, two customers accounted for 30 % and 10 %, respectively, of the Company’s revenues. For the year ended December 31, 2021, two customers accounted for 28 % and 14 %, respectively, of the Company’s revenues. For the year ended December 31, 2020, two customers accounted for 18 % and 15 %, respectively, of the Company’s revenues. Concentration of Suppliers — The Company relies on a limited number of suppliers and contract manufacturers. In particular, a single supplier is currently the sole manufacturer of the Company’s proprietary sensors. Business Acquisitions The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Acquisition-related expenses are recognized separately from the business combination and are recognized as general and administrative expense as incurred. Goodwill Goodwill represents the excess of amounts paid over the fair value of net assets acquired from an acquisition. Goodwill is tested for impairment at the reporting unit level (the Company has one reporting segment and tests at the company level) on an annual basis (October 1) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. The Company operates as one reportable segment. It performed its annual test for goodwill impairment as of October 1, 2022 and concluded that no goodwill impairment charge was necessary. Since inception through December 31, 2022, the Company has no t recorded any goodwill impairment. Intangible Assets Intangible assets consist of customer relationships, software technology, tradename and acquired patents and capitalized legal fees related to obtaining patents. Patent assets are stated at cost, less accumulated amortization. Customer relationships, tradename and software technology are recorded at fair value as of the date of the acquisition. Intangible assets are amortized on an attribution method, over their expected useful lives, which range from three years for patents, one to eight years for software technology, nine years for tradename, and seven to 15 years for customer relationships. Property and Equipment, net Property and equipment, net, is stated at cost, less accumulated depreciation and amortization. The Company depreciates property and equipment using the straight-line method over their estimated useful lives, ranging from three to five years . Leasehold improvements are amortized over the shorter of the asset’s useful life or the remaining lease term. Costs incurred to develop software for internal use and for the Company’s solutions are capitalized and amortized over such software’s estimated useful life. Internally developed software costs capitalized during all periods presented have not been material. Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount of the asset group to the group's future undiscounted cash flows expected to be generated from the existing service potential of the asset group for the period of time consistent with the remaining life of the group's primary asset. If such assets are determined to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the future undiscounted net cash flows arising from the assets. Assets to be disposed of are reported at the lower of their carrying amounts or fair value less cost to sell. Royalty Expense In 2009, the Company entered into a license agreement with a third-party relating to a patented gunshot digital imaging system that facilitates integration with certain third-party systems. The terms of the license agreement require the Company to pay a one-time fee of $ 5,000 for each license sold to a customer allowing the customer to integrate their ShotSpotter service with a third-party application, such as a video management system, with a minimum annual amount due of $ 75,000 . In 2022, 2021, and 2020, the Company incurred only the $ 75,000 minimum amount. The license agreement renews automatically on each subsequent year unless it is terminated in accordance with the agreement. Fair Value Measurements The Company uses a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date. The three-level hierarchy prioritizes, within the measurement of fair value, the use of market-based information over entity-specific information. Fair value focuses on an exit price and is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs or methodology used for valuing financial instruments are not necessarily an indication of the risks associated with investing in those financial instruments. The three-level hierarchy for fair value measurements is defined as follows: Level I — Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level II — Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level III — Inputs to the valuation methodology are unobservable and supported by little or no market data. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. An asset’s or a liability’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Stock-Based Compensation The Company generally grants options to purchase shares of its common stock to its employees, directors and non-employees for a fixed number of shares with an exercise price equal to the fair value of the underlying shares at the grant date. All stock option grants are accounted for using the fair value method, and stock-based compensation expense is recognized ratably over the requisite service period as the underlying options vest. The Company uses the Black-Scholes option pricing model to measure the fair value of its stock options. The Company estimates the grant date fair value of its common stock options using the following assumptions: Expected Term — The expected term represents the period that the stock-based compensation awards are expected to be outstanding. Since the Company did not have sufficient historical information to develop reasonable expectations about future exercise behavior, the Company used the simplified method to compute expected term, which reflects the weighted-average of time-to-vesting. Risk-Free Interest Rate — The risk-free interest rate is based on the yield on U.S. Treasury yield curve in effect at the grant date. Expected Volatility —The expected volatility is based on the historical volatility of the Company’s stock. Dividend Yield — Expected dividend yield is based on the Company's dividend policy at the time the options were granted. The Company does not plan to pay any dividends in the foreseeable future. Consequently, it has historically used an expected dividend yield of zero . The Company uses the market closing price of its common stock as traded on the Nasdaq Capital Market to determine fair value of its common stock for use in the Black-Scholes option pricing model. The Company generally grants unvested restricted stock unit awards to non-employee directors and executive management for a fixed number of shares and a fixed vesting schedule. The restricted stock unit awards are valued using the closing price on the date of grant and stock-based compensation is recognized ratably over the requisite service period. Forfeitures are recognized as and when they occur. Segment Information The chief operating decision maker is the Company's Chief Executive Officer, who allocates resources and assesses financial performance based upon discrete financial information at the consolidated level. There are no segment managers who are held accountable by the chief operating decision maker, or anyone else, for operations, operating results and planning for levels or components below the consolidated unit level. Accordingly, the Company has determined that it operates as a single operating and reportable segment . Income Taxes The Company records income taxes in accordance with the liability method of accounting. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax law. The Company establishes a valuation allowance to reduce the deferred tax assets when it is more likely than not that a deferred tax asset will not be realizable. Changes in tax rates are reflected in the tax provision as they occur. The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the event the Company determines that it would be able to realize its deferred assets in the future in excess of their net recorded amount, the Company makes an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority . The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Net Income (Loss) per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares and common stock equivalents outstanding during the period. Common stock equivalents are only included when their effect is dilutive. Common stock equivalents include unvested restricted stock units, convertible preferred stock, warrants and outstanding stock options. Recent Accounting Pronouncements Not Yet Effective In June 2016, the Financial Accounting Standards Board ("FASB') issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The amendments in this ASU replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects current expected credit loss (“CECL”) and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective at the beginning of the Company’s first quarter of fiscal 2023. Early adoption of the amendments is permitted. The Company determined its accounts receivable and contract asset are within the scope of CECL and does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. Recent Accounting Pronouncements Adopted In December 2019, the FASB issued ASU 2019-12 , Income Taxes (Topic 740), simplifying the accounting for income taxes by removing certain exceptions to the general principles. The guidance was effective at the beginning of the Company's first quarter of fiscal 2022. The adoption of this ASU did no t have a material impact on the Company's consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts from Customers . ASU 2021-08 aims to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and the effect of payment terms on subsequent revenue recognized by the acquirer. These amendments are effective prospectively for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company early adopted this ASU effective January 1, 2022 . |
Revenue Related Disclosures
Revenue Related Disclosures | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Related Disclosures | Note 3. Revenue Related Disclosures The changes in deferred revenue were as follows (in thousands): Year Ended December 31, 2022 2021 Beginning balance $ 26,709 $ 24,578 Deferred revenues acquired (Note 4 - Business Acquisitions) 5,382 — New billings 91,453 60,132 Revenue recognized during the year from beginning balance ( 31,180 ) ( 24,480 ) Revenue recognized during the year from new billings ( 48,643 ) ( 33,509 ) Foreign currency impact ( 1 ) ( 12 ) Ending balance $ 43,720 $ 26,709 The following table presents remaining performance obligations for contractually committed revenues as of December 31, 2022 (in thousands): 2023 $ 65,317 2024 35,368 2025 15,420 Thereafter 6,938 Total $ 123,043 The timing of revenue recognition included in the table above is based on estimates of go-live dates for contracts not yet live. Contractually committed revenue includes deferred revenue as of December 31, 2022 and amounts under contract that will be invoiced after December 31, 2022. During the year ended December 31, 2022, the Company recognized revenues of $ 80.2 million from customers in the United States, and $ 0.8 million from customers in South Africa and the Bahamas. During the year ended December 31, 2021, the Company recognized revenues of $ 57.3 million from customers in the United States and $ 0.9 million from customers in South Africa and the Bahamas. During the year ended December 31, 2020, the Company recognized revenues of $ 45.0 million from customers in the United States and $ 0.7 million from customers in South Africa and the Bahamas. During the year ended December 31, 2022 , the Company recognized revenues of $ 75.4 million from monthly subscription, maintenance and support services, and $ 5.6 million from professional software development services. During the year ended December 31, 2021, the Company recognized revenues of $ 54.7 million from monthly subscription, maintenance and support services and $ 3.4 million from professional software development services. During the year ended December 31, 2020, the Company recognized revenues of $ 45.7 million from monthly subscription, maintenance and support services. |
Business Acquisition
Business Acquisition | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Business Acquisition | Note 4. Business Acquisition On January 3, 2022 , the Company completed the acquisition of 100 % of the membership interests in Forensic Logic, LLC (“Forensic Logic”) for purchase consideration of $ 4.9 million in cash, subject to working capital adjustments, and 464,540 shares of ShotSpotter common stock with a fair value of $ 14.3 million based on the closing price on the date of acquisition. The purchase consideration also included a contingent consideration agreement based on forecasted 2022 and 2023 Forensic Logic revenues. If 2022 Forensic Logic revenues exceeded $ 7.0 million, the contingent consideration payable would be $ 3.75 million up to a maximum of $ 9.5 million. An additional amount up to $ 10.5 million in contingent consideration may be payable based on Forensic Logic’s revenues generated during 2023. Any amounts due are payable within approximately 120 days after the end of 2022 and 2023. The estimated fair value of the contingent consideration on the date of acquisition was $ 12.4 million, resulting in a total estimated purchase consideration of $ 31.6 million. The acquisition enabled the Company to broaden its suite of precision-policing solutions and cloud-based investigative platforms to offer its customers. The following table summarizes the assignment of fair value to the identified assets and liabilities recorded as of the acquisition date, January 3, 2022 (in thousands): Cash and cash equivalents $ 303 Accounts receivable and contract asset, net 220 Property and equipment, net 200 Operating lease right-of-use asset 1,893 Software technology 7,140 Tradename 1,000 Customer relationships 8,400 Goodwill 20,155 Other asset 186 Accrued expenses and other current liabilities ( 635 ) Operating lease liabilities ( 1,893 ) Deferred revenue ( 5,382 ) Total estimated consideration $ 31,587 Goodwill primarily represents the value of cash flows from future customers and the employee workforce. The Company expects to deduct the amortization of goodwill and intangible assets for tax purposes. A portion of the amortization deduction will commence upon settlement of contingent consideration liabilities. The Company valued the intangible assets using income-based approaches. Significant assumptions included forecasts of revenues, cost of revenues, research and development expense, sales and marketing expense, general and administrative expense, technology lives, royalty rates, working capital rates, customer attrition rates and other estimates. The Company discounted the cash flows at 24 %, reflecting the risk profile of the assets. Acquisition-related expenses totaled $ 0.1 million and $ 0.2 million for the year ended December 31, 2022 and 2021, respectively, and are included in general and administrative expense. The results of Forensic Logic have been included in the consolidated financial statements since the date of the acquisition. Forensic Logic’s consolidated revenue included in the consolidated financial statements since the acquisition date was $ 6.6 million. The Company has not disclosed net income or loss since the acquisition date as the business was integrated into the consolidated Company’s operations and therefore it was impracticable to determine this amount. The unaudited pro forma combined revenue and net loss have been prepared as if the Company had acquired Forensic Logic on January 1, 2021. The unaudited pro forma financial information has been derived from the consolidated statements of operations of the Company and Forensic Logic for the respective periods. The historical financial information has been adjusted in the unaudited combined pro forma information based upon currently available information and certain estimates and assumptions. The actual effect of the transactions ultimately may differ from the pro forma adjustments included herein. However, management believes that the assumptions used to prepare the pro forma adjustments provide a reasonable basis for presenting the significant effects of the transactions as currently contemplated and that the pro forma adjustments are factually supportable, give appropriate effect to the expected impact of events that are directly attributable to the transactions, and reflect those items expected to have a continuing impact on the Company. The unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2021. The unaudited pro forma combined revenue and net loss for the year ended December 31, 2021 would have been $ 64.5 million and $ 7.7 million, respectively. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 5. Fair Value Measurements In October 2018, upon the acquisition of certain technology, referred to as HunchLab, from Azavea, Inc., the Company recognized a contingent consideration liability classified within Level III of the fair value hierarchy because some of the inputs used in its measurement were neither directly nor indirectly observable. In January 2020 and February 2021, based on the relevant revenues earned during the second and third year of the three-year contingent consideration period, the Company paid $ 0.3 million and $ 0.4 million respectively, to Azavea, Inc., to satisfy all its obligations under the contingent consideration arrangement. In November 2020, upon the closing of the acquisition of Leeds, the Company recognized a contingent consideration liability of $ 0.2 million. The Leeds contingent consideration liability was valued using a Monte Carlo Simulation approach. The Company classified the Leeds contingent consideration liability within Level III of the fair value hierarchy. During the year ended December 31, 2021, the fair value of the contingent consideration was increased by $ 1.3 million based upon estimated 2022 revenue targets, representing an adjustment to the most likely outcome for the expected settlement of the liability. There have been no changes in the assumptions or fair value of the LEEDS contingent consideration liability during the year ended December 31, 2022. In January 2022, upon the closing of the acquisition of Forensic Logic, the Company recognized a contingent consideration liability of $ 12.4 million. The Forensic Logic contingent consideration liability was valued using a Monte Carlo Simulation approach with asset and revenue volatility of 60.0 % and 28.0 %, respectively. The Company classified the Forensic Logic contingent consideration liability within Level III of the fair value hierarchy. During the year ended December 31, 2022, the fair value of the contingent consideration was decreased by $ 9.2 million, based upon revised estimated 2022 and 2023 revenue targets due to delays in certain expected contracts by a small number of significant potential customers, representing an adjustment to the most likely outcome for the expected settlement of the liability and using a Monte Carlo Simulation approach with asset and revenue volatility of 60.0 % and 22.9 %, respectively. The changes in the fair value of the aggregate contingent consideration liability are summarized below (in thousands): Year Ended December 31, 2022 2021 Beginning balance $ 1,500 $ 573 Payment of contingent consideration liability — ( 403 ) Acquisition of Forensic Logic (Note 4 - Business Acquisition) 12,400 — Change in fair value of contingent consideration ( 9,154 ) 1,330 Ending balance $ 4,746 $ 1,500 There were no transfers into or out of Level III during the year ended December 31, 2022 and 2021. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 6. Goodwill The changes in goodwill for 2022 and 2021 are as follows (in thousands): Year Ended December 31, 2022 2021 Beginning balance $ 2,816 $ 2,811 Acquisition of Forensic Logic (Note 4—Business Acquisition) 20,155 — Change during the period — 5 Ending balance $ 22,971 $ 2,816 The Company has no t recorded any goodwill impairment charges through December 31, 2022. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | Note 7. Intangible Assets, net Intangible assets as of December 31, 2022 and 2021 are as follows (in thousands): December 31, 2022 Gross Accumulated Amortization Net Customer relationships $ 22,970 $ ( 2,760 ) $ 20,210 Acquired software technology 7,140 ( 1,015 ) 6,125 Patents 1,227 ( 1,133 ) 94 Tradename 1,000 ( 111 ) 889 Total intangible assets, net $ 32,337 $ ( 5,019 ) $ 27,318 December 31, 2021 Gross Accumulated Amortization Net Customer relationships $ 14,570 $ ( 1,131 ) $ 13,439 Patents 1,214 ( 1,089 ) 125 Total intangible assets, net $ 15,784 $ ( 2,220 ) $ 13,564 Intangible amortization expense was $ 2.8 million, $ 1.0 million and $ 0.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. The following table presents future intangible asset amortization as of December 31, 2022 (in thousands): 2023 $ 2,657 2024 2,649 2025 2,633 2026 2,594 2027 2,594 Thereafter 14,191 Total $ 27,318 |
Details of Certain Consolidated
Details of Certain Consolidated Balance Sheet Accounts | 12 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Details of Certain Consolidated Balance Sheet Accounts | Note 8. Details of Certain Consolidated Balance Sheet Accounts Prepaid expenses and other current assets (in thousands): December 31, 2022 2021 Deferred commissions $ 1,040 $ 822 Prepaid insurance 724 611 Prepaid software and licenses 647 756 Other prepaid expenses 236 198 Short-term deposits 363 — Other 215 117 $ 3,225 $ 2,504 Accounts receivable and contract asset, net (in thousands): December 31, 2022 2021 Accounts receivable $ 28,790 $ 16,167 Contract asset 2,167 41 Allowance for doubtful accounts — ( 74 ) $ 30,957 $ 16,134 Other assets (in thousands): December 31, 2022 2021 Deferred commissions $ 2,552 $ 1,723 Other 18 195 $ 2,570 $ 1,918 Property and equipment, net (in thousands): December 31, 2022 2021 Deployed equipment $ 44,700 $ 35,882 Construction in progress 5,267 4,818 Computer equipment 2,359 1,745 Software 1,314 1,314 Furniture and fixtures 472 295 Leasehold improvements 934 30 Vehicles 258 239 55,304 44,323 Accumulated depreciation and amortization ( 33,316 ) ( 26,914 ) $ 21,988 $ 17,409 Depreciation and amortization expense during the years ended December 31, 2022, 2021 and 2020 was $ 6.4 million, $ 5.8 million and $ 5.4 million, respectively. Accrued expenses and other current liabilities (in thousands): December 31, 2022 2021 Personnel-related accruals $ 5,971 $ 4,864 Contingent consideration liabilities 1,500 — Operating lease liabilities 868 409 Professional fees 441 925 Income tax payable 385 23 Sales/use tax payable 257 167 Other 543 292 $ 9,965 $ 6,680 Other liabilities (long-term) (in thousand): December 31, 2022 2021 Operating lease liabilities $ 2,554 $ 2,013 Contingent consideration liabilities 3,246 1,500 $ 5,800 $ 3,513 |
Impairment of Property and Equi
Impairment of Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Impairment of Property and Equipment | Note 9. Impairment of Property and Equipment During the years ended December 31, 2021 and 2020, the Company recognized impairment expense of $ 25,000 and $ 234,000 , respectively, for the impairment of property and equipment primarily related to the book value of customer assets installed at certain customers that did not renew during the year. During the year ended December 31, 2022, the Company did no t recognize any impairment of property and equipment |
Financing Arrangements
Financing Arrangements | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Note 10. Financing Arrangements On September 27, 2018 , the Company entered into a Credit Agreement with Umpqua Bank (the “Umpqua Credit Agreement”), which allowed the Company to borrow up to $ 10.0 million under a revolving loan facility (the “Revolving Facility”) . On November 23, 2022, the Company entered into a Fifth Amendment to the Umpqua Credit Agreement (the “Amendment”), which amends the terms of the Umpqua Credit Agreement, dated as of September 27, 2018, as amended (as amended by the Amendment, the “Credit Agreement”), to, among other things, (1) extend the maturity date from November 27, 2022 to October 15, 2024 , (2) increase the revolving credit commitment from $20.0 million to $ 25.0 million, (3) increase the letter of credit sub-facility from $ 6.0 million to $ 7.5 million, (4) remove the minimum profitability covenants and (5) replace the LIBOR index rate with a Term Secured Overnight Financing Rate (“SOFR”) index rate. The Company intends to use the Revolving Facility for general working capital purposes. Borrowings under the Credit Agreement are secured by substantially all of the assets of the Company. Any amounts outstanding under the letter of credit sub-facility reduce the amount available for the Company to borrow under the Revolving Facility. Under the Credit Agreement, the Company has the option to select an interest rate based on either (1) a base rate, which fluctuates daily and is the greater of (a) the prime rate in effect as of any date of determination and (b) the SOFR rate as of such date of determination plus 1.0 % per annum or (2) a SOFR rate, which can be for a period of 30 , 90 or 180 days at the Company’s option and is equal to the SOFR rate as published by CME Group Benchmark Administration Limited, in each case plus 2.0 % per annum. Any letters of credit issued under the Credit Agreement will be subject to a fronting fee of 2.0% per annum. Borrowings under the Credit Agreement may be repaid and reborrowed at any time prior to termination of the Credit Agreement. The Company is subject to certain financial covenants in the Credit Agreement, which include: (1) maintaining a ratio of consolidated funded debt, excluding the amount of any unsecured convertible notes issued by the Company, to consolidated earnings before income tax, depreciation and amortization (“Consolidated EBITDA”) of not greater than 3.00 to 1.00 measured at the end of each fiscal quarter and (2) maintaining a ratio of Consolidated EBITDA to interest charges of at least 2.00 to 1.00 measured at the end of each fiscal quarter. The Company was in compliance with its covenants as of December 31, 2022. The Credit Agreement contains various negative covenants that limit, subject to certain exclusions, the Company’s ability to incur indebtedness, make loans, invest in or secure the obligations of other parties, pay or declare dividends, make distributions with respect to the Company's securities, redeem outstanding shares of the Company’s stock, create subsidiaries, materially change the nature of its business, enter into related party transactions, engage in mergers and business combinations, the acquisition or transfer of Company assets outside of the ordinary course of business, grant liens or enter into collateral relationships involving company assets or reincorporate, reorganize or dissolve the Company. There were no borrowings outstanding as of December 31, 2022 and 2021. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 11. Related Party Transactions During the year ended December 31, 2022, 2021 and 2020, the Company recognized $ 0.08 million, $ 0.1 million and $ 0.2 million in revenues, respectively, from ShotSpotter Labs projects with charitable organizations that have received donations from one of the Company’s directors and one of the Company’s significant shareholders. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12. Income Taxes The domestic and foreign components of net income (loss) before income tax were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Domestic $ 7,583 $ ( 4,280 ) $ 1,562 Foreign ( 31 ) ( 95 ) ( 427 ) Net income (loss) before income tax $ 7,552 $ ( 4,375 ) $ 1,135 The provision (benefit) for income tax consists of the following (in thousands): Year Ended December 31, 2022 2021 2020 Current: Federal $ — $ — $ — State 455 — — Foreign 27 6 ( 7 ) Total 482 6 ( 7 ) Deferred: Federal 316 — — State 369 — — Foreign — 50 ( 83 ) Total 685 50 ( 83 ) Total provision (benefit) for income tax $ 1,167 $ 56 $ ( 90 ) A reconciliation of income taxes at the statutory federal income tax rate to income tax expense (benefit) included in the accompanying consolidated statements of operations is as follows (in thousands): December 31, 2022 2021 2020 Income tax (benefit) at statutory rate $ 1,545 $ ( 919 ) $ 240 Change in valuation allowance ( 388 ) 1,288 ( 165 ) Indefinite-lived asset (goodwill) ( 642 ) — — State tax 239 ( 288 ) ( 37 ) Change in deferred 415 ( 27 ) 8 Stock-based compensation 111 62 ( 11 ) Research and development credits ( 271 ) ( 160 ) ( 103 ) Foreign rate differential 43 7 ( 40 ) Other 115 93 18 Total $ 1,167 $ 56 $ ( 90 ) Temporary differences that gave rise to significant portions of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021 were as follows (in thousands): Year Ended December 31, 2022 2021 Deferred tax assets: Net operating losses $ 17,255 $ 19,920 Research and development credits 2,917 2,557 Accruals and reserves 5,914 2,605 Deferred revenue and contract costs 625 140 Gross deferred tax assets 26,711 25,222 Valuation allowance ( 25,343 ) ( 24,955 ) Net deferred tax assets 1,368 267 Deferred tax liabilities: Fixed assets and intangibles ( 2,053 ) ( 267 ) Total deferred tax assets (liabilities), net $ ( 685 ) $ — In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company regularly assesses the likelihood that the deferred tax assets will be recovered from future taxable income. The Company considers projected future taxable income and ongoing tax planning strategies, then records a valuation allowance to reduce the carrying value of the net deferred taxes to an amount that is more likely than not able to be realized. Based upon the Company’s assessment of all available evidence, including the previous three years of U.S.-based taxable income and loss after permanent items, estimates of future profitability, and the Company’s overall prospects of future business, the Company determined that it is more likely than not that the Company will not be able to realize a portion of the deferred tax assets in the future. The Company will continue to assess the potential realization of deferred tax assets on an annual basis, or an interim basis if circumstances warrant. If the Company’s actual results and updated projections vary significantly from the projections used as a basis for this determination, the Company may need to change the valuation allowance against the gross deferred tax assets. Management determined that a valuation allowance of $ 25.3 million and $ 25.0 million was required as of December 31, 2022 and 2021, respectively. At December 31, 2022 and 2021, the Company had available net operating loss carryforwards of approximately $ 67.1 million and $ 78.4 million, respectively, for federal income tax purposes, of which $ 62.2 million were generated before 2018 and will begin to expire in 2028 . The remaining net operating losses of $ 4.9 million can be carried forward indefinitely under the Tax Cuts and Jobs Act ("TCJA"). The Company continually monitors all positive and negative evidence regarding the realization of its deferred tax assets and may record assets when it becomes more likely than not, than they will be realized, which may impact the expense or benefit from income taxes. At December 31, 2022 and 2021, the net operating losses for state purposes are $ 43.8 million and $ 49.7 million, respectively, and will begin to expire in 2023 if not utilized. As of December 31, 2022, the Company had available for carryover, research and experimental credits of approximately $ 1.7 million for federal income tax purposes and $ 1.6 million for California income tax purposes, which are available to reduce future income taxes. The federal research and experimental tax credits will begin to expire, if not utilized, in 2027. The California research and experimental tax credits carry forward indefinitely until utilized. Section 382 of the Internal Revenue Code of 1986 (the “Code”), as amended, and similar California regulations impose substantial restrictions on the utilization of net operating losses and tax credits in the event of an “ownership change” of a corporation. Accordingly, the Company’s ability to utilize net operating losses and credit carryforwards may be limited as the result of such an “ownership change” as defined in the Code. As of December 31, 2022, the Company had temporary book over tax basis differences from indefinite-lived assets (goodwill), of which 80 percent was offset by the existing net operating losses with indefinite carryforward period and deductible temporary differences that are scheduled to reverse into net operating losses with indefinite carryforward period for federal purposes and for states that conform to the federal net operating loss provisions under TCJA. The remaining book over tax basis difference from indefinite-lived assets that was not offset by indefinite-lived net operating losses resulted in a deferred tax liability of $ 0.7 million as of December 31, 2022. Uncertain Tax Positions The Company applied FASB ASC 740-10-50, Accounting for Uncertainty in Income Tax , which prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. A reconciliation of the beginning and ending amounts of unrecognized uncertain tax positions is as follows (in thousands): Balance as of December 31, 2020 $ 859 Increases for current year tax positions 87 Increases for prior year tax positions 8 Balance as of December 31, 2021 954 Increases for current year tax positions 140 Decreases for prior year tax positions ( 11 ) Balance as of December 31, 2022 $ 1,083 Of the total unrecognized tax benefits at December 31, 2022, no amount will impact the Company's effective tax rate because the uncertain amounts have a valuation allowance recorded against them. The Company does not anticipate that there will be a substantial change in unrecognized tax benefits within the next 12 months. The Company recognizes interest and penalties related to unrecognized tax positions within the income tax expense line in the accompanying consolidated statements of operations. There were no accrued interest and penalties associated with uncertain tax positions as of December 31, 2022 and 2021. The Company files federal and state income tax returns in the United States, certain United States territories, and certain foreign jurisdictions. The statues of limitations remain open for 2008 through 2022 for federal and state purposes in the United States. and certain U.S. territories. Years beyond the normal statutes of limitations remain open to audit by tax authorities due to tax attributes generated in earlier years which are being carried forward and may be audited in subsequent years when utilized. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Capital Stock | Note 13. Capital Stock Common Stock The Company is authorized to issue 500,000,000 shares of common stock with a par value of $ 0.005 per share. At December 31, 2022 and 2021, there were 12,243,929 and 11,703,430 shares of common stock issued and outstanding, respectively. Holders of common stock have voting rights equal to one vote per share of common stock held and are entitled to receive any dividends as may be declared from time to time by the Board. At December 31, 2022, shares of common stock reserved for future issuance were as follows: Options outstanding 1,256,056 Shares available for future grant 1,527,374 Unvested restricted stock units 223,821 Total 3,007,251 Preferred Stock The Company is authorized to issue 20,000,000 shares of preferred stock, with a par value of $ 0.005 . At December 31, 2022 and 2021, there was no preferred stock issued or outstanding. Stock Repurchase Program In May 2019, the Company's board of directors adopted a stock repurchase program for up to $ 15 million of our common stock. During the year ended December 31, 2022, the Company repurchased 106,992 shares of its common stock at an average price of $ 28.81 per share for $ 3.1 million and used up the remaining balance under the stock repurchase program authorized in May 2019 in the third quarter ended September 30, 2022. During the year ended December 31, 2021, the Company repurchased 95,151 shares of its common stock at an average price of $ 37.82 per share for $ 3.6 million. The repurchases were made in open market transactions using cash on hand, and all of the shares repurchased were retired. In November 2022, the Company’s board of directors approved a new stock repurchase program for up to $ 25.0 million of the Company’s common stock. Although the board of directors has authorized the stock repurchase program, it does not obligate the Company to repurchase any specific dollar amount or number of shares, there is no expiration date for the stock repurchase program, and the stock repurchase program may be modified, suspended or terminated at any time and for any reason. |
Net Income (Loss) per Share
Net Income (Loss) per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Share | Note 14. Net Income (Loss) per Share The following table summarizes the computation of basic and diluted net income (loss) per share (in thousands, except share and per share data): Year Ended December 31, 2022 2021 2020 Numerator: Net income (loss) $ 6,385 $ ( 4,431 ) $ 1,225 Denominator: Weighted-average shares outstanding, basic 12,171,609 11,647,558 11,408,757 Weighted-average shares outstanding, diluted 12,317,707 11,647,558 11,730,294 Net income (loss) per share, basic $ 0.52 $ ( 0.38 ) $ 0.11 Net income (loss) per share, diluted $ 0.52 $ ( 0.38 ) $ 0.10 The following potentially dilutive shares outstanding at the end of the periods presented were excluded in the calculation of diluted net income (loss) per share as the effect would have been anti-dilutive: Year Ended December 31, 2022 2021 2020 Options to purchase common stock 1,015,497 783,928 573,340 Unvested restricted stock units 97,275 128,810 101,255 Total 1,112,772 912,738 674,595 |
Equity Incentive Plans
Equity Incentive Plans | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity Incentive Plans | Note 15. Equity Incentive Plans In February 2005, the Company adopted the 2005 Stock Plan, as amended in January 2010 and November 2012 (the “2005 Plan”). Under the 2005 Plan provisions, the Company was authorized to grant incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units ("RSUs"), and shares of restricted stock. In May 2017, the Board and the Company’s stockholders approved the 2017 Equity Incentive Plan (the “2017 Plan”). As a result of the adoption of the 2017 Plan, no further grants may be made under the 2005 Plan. The 2017 Plan provides for the issuance of stock options, RSUs and other awards to employees, directors and consultants of the Company. The 2017 Plan includes an evergreen provision that provides for the number of shares of common stock reserved for issuance under the 2017 Plan to automatically increase on January 1 of each year by the lesser of (1) 5 % of the number of shares of the Company’s common stock outstanding on December 31 st of the preceding calendar year or (2) such number of shares as determined by the board of directors. The following table summarizes the activity of shares available for grant under the 2017 Equity Incentive Plan: Shares available for grant at December 31, 2021 1,661,956 Increase in accordance with the evergreen provision 585,172 Options issued during the year ( 557,218 ) Canceled during the year 43,271 RSUs granted ( 205,807 ) Shares available for grant at December 31, 2022 1,527,374 Stock Options Incentive stock options may only be granted to Company employees and may only be granted with an exercise price not less than the fair value of the common stock, or not less than 110 % of fair value when the grant is issued to a person who, at the time of grant, owns stock representing more than 10 % of the voting power of all classes of stock. Non-statutory stock options may be granted to Company employees, directors and consultants, and may be granted at a price per share not less than fair value on the date of the grant. Options granted under the 2005 Plan and 2017 Plan generally vest over four years and expire no later than 10 years from the grant date. The 2005 Plan and 2017 Plan grants the board of directors discretion to determine when the options granted will become exercisable. Compensation expense for stock options is based upon the estimated fair value of the awards. The fair value of stock option grants is determined using the Black-Scholes option pricing model which requires the use of certain assumed inputs. The assumed inputs used to determine the fair value of stock options granted for the years ended December 31, 2022, 2021, and 2020 are set forth below: Year Ended December 31, 2022 2021 2020 Fair value of common stock $ 16.30 -$ 37.00 $ 31.12 -$ 48.05 $ 23.49 -$ 34.07 Expected term (in years) 6 6 6 Risk-free interest rate 1.54 %- 4.18 % 0.45 %- 1.62 % 0.36 %- 0.83 % Expected volatility 63 %- 64 % 65 %- 67 % 64 %- 68 % Expected dividend yield — — — A summary of stock option activities during 2022, 2021 and 2020 is as follows: Number Weighted Weighted Aggregate Intrinsic Value Exercised (in thousands) Outstanding at December 31, 2019 617,493 $ 17.13 Granted 347,095 $ 32.14 $ 19.15 Exercised ( 96,456 ) $ 3.25 $ 2,257 Canceled ( 54,890 ) $ 26.07 Outstanding at December 31, 2020 813,242 $ 24.58 Granted 111,489 $ 39.00 $ 23.32 Exercised ( 97,702 ) $ 9.20 $ 3,064 Canceled ( 43,101 ) $ 35.84 Outstanding at December 31, 2021 783,928 $ 28.00 Granted 557,218 $ 27.40 $ 16.30 Exercised ( 41,819 ) $ 12.88 $ 778 Canceled ( 43,271 ) $ 28.85 Outstanding at December 31, 2022 1,256,056 $ 28.20 Additional information for stock options at December 31, 2022 were as follows: Number Weighted Aggregate Intrinsic Value (in thousands) Weighted Outstanding at December 31, 2022 1,256,056 28.20 $ 8,652 7.60 Exercisable at December 31, 2022 615,261 27.04 $ 5,396 6.38 At December 31, 2022, total unrecognized stock-based compensation cost related to unvested stock options was $ 10.5 million, which will be recognized ratably over a weighted-average period of 2.8 years. No income tax benefits from stock-based compensation arrangements have been recognized in the consolidated statements of operations. Restricted Stock Units The Company grants RSUs under the 2017 Plan to executive management and its non-employee directors. RSUs granted to executive management generally vest over four years , while RSUs granted to non-employee directors generally vest annually. A new non-employee director will receive an initial grant upon joining the board of directors and all non-employee directors receive new annual grants at each annual meeting of stockholders. Compensation expense for RSUs is based upon the estimated fair value of the awards on the date of grant. The following table summarizes the activity of RSU awards: Number Weighted Aggregate Fair Value of RSUs Vested (in thousands) Unvested RSUs at December 31, 2019 114,996 $ 30.24 Granted 91,759 $ 31.75 Vested ( 54,970 ) $ 32.12 $ 1,766 Forfeited ( 10,277 ) $ 41.50 Unvested RSUs at December 31, 2020 141,508 $ 29.67 Granted 84,035 $ 37.86 Vested ( 80,972 ) $ 29.22 $ 3,078 Forfeited ( 15,761 ) $ 31.38 Unvested RSUs at December 31, 2021 128,810 $ 35.09 Granted 205,807 $ 26.90 Vested ( 107,971 ) $ 31.88 $ 3,129 Forfeited ( 2,825 ) $ 26.50 Unvested RSUs at December 31, 2022 223,821 $ 29.21 At December 31, 2022, total unrecognized stock-based compensation cost related to RSUs was $ 5.7 million, which will be recognized ratably over a weighted-average period of 2.6 years. During the year ended December 31, 2022, the Company modified RSUs to accelerate vesting for two individuals in respect of 5,849 RSUs and cancelled the award of another individual in respect of 1,887 RSUs. The Company accounted for these as modifications of those awards and recognized net incremental compensation expense of $ 0.01 million. The incremental compensation cost is measured as the excess of the fair value of the modified award over the fair value of the original award immediately before its terms were modified and recognized as compensation expense on the date of modification for vested awards 2017 Employee Stock Purchase Plan In May 2017, the Board and the Company’s stockholders adopted the 2017 Employee Stock Purchase Plan (“2017 ESPP”). The 2017 ESPP permits the maximum discounted purchase price permitted under U.S. tax rules, including a “lookback”, which allows eligible employees to purchase shares of the Company’s common stock at a 15 % discount to the lesser of the fair market value of common stock at the beginning and end of the offering period. The 2017 ESPP initial offering period, which began in June 2017, ran for approximately 24 months in length, and contained four 6-month purchase periods. Subsequent offering periods generally run for six months each. An employee’s purchase rights terminate immediately upon termination of employment or other withdrawal from the 2017 ESPP. No participant will have the right to purchase shares of common stock in an amount that has a fair market value of more than $ 25,000 determined as of the first day of the applicable purchase period, for each calendar year. The 2017 ESPP contains a provision which provides for an automatic annual share increase on January 1 of each year, in an amount equal to the lesser of (1) 2 % of the total number of shares of common stock outstanding on December 31 st of the preceding calendar year, (2) 150,000 shares or (3) such number of shares as determined by the board of directors. The Company's board of directors authorized the automatic increase to the 2017 ESPP plan on January 1, 2022 for the year ended December 31, 2022. The following table summarizes the activity of shares available under the 2017 ESPP: Shares available for grant at December 31, 2021 399,328 Increase in accordance with the evergreen provision 150,000 Issued during the year ( 33,161 ) Shares available for grant at December 31, 2022 516,167 Stock-Based Compensation Expense Total stock-based compensation expense for all award types is recorded in the consolidated statements of operations and was allocated as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenues $ 1,992 $ 1,567 $ 1,093 Sales and marketing 1,754 1,612 1,268 Research and development 1,082 734 580 General and administrative 3,454 1,959 1,521 Total $ 8,282 $ 5,872 $ 4,462 Stock-based compensation expense is recognized over the award’s expected vesting schedule. Forfeitures are recognized as and when they occur. |
Benefit Plan
Benefit Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Benefit Plan | Note 16. Benefit Plan The Company sponsors a 401(k) plan to provide defined contribution retirement benefits for all eligible employees. Participants may contribute a portion of their compensation to the plan, subject to the limitations under the Internal Revenue Code. The Company is allowed to make 401(k) matching contributions as defined in the plan and as approved by the board of directors. The Company matched 50 % of employee contributions made during 2022 up to a maximum of 2 % of compensation; the match will be deposited to the employees' 401(k) accounts in 2023. During the years ended December 31, 2022, 2021, and 2020, the Company recorded $ 0.3 million, $ 0.3 million, and $ 0.2 million, respectively, of matching contribution expense. These matching contributions are subject to additional vesting criteria. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Lessee Disclosure [Abstract] | |
Leases | Note 17. Leases The Company leases its principal executive offices in Fremont, California, under a non-cancelable operating lease which expires in February 2027 . This lease does not have significant rent escalation holidays, concessions, leasehold improvement incentives, contingent rent provisions or other build-out clauses. The lease contains an option to extend the term for an additional period of up to five years subject to certain terms and conditions. The Company elected the practical expedient to group lease and non-lease components for all leases. Upon lease commencement on October 1, 2021 , the Company recognized an operating lease right-of-use asset of $ 2.0 million and a corresponding lease liability of $ 2.0 million, using a discount rate of 3.00 %, which reflects the Company’s incremental borrowing rate for a similar asset and similar term as of the date of commencement. In April 2020, the Company executed a lease agreement for office space in Washington, DC, under a non-cancelable operating lease that expires in November 2025 . This lease does not have significant rent escalation holidays, concessions, leasehold improvement incentives, or other build-out clauses. Further, the lease does not contain contingent rent provisions. The lease contains an option to extend the term for an additional five years subject to certain terms and conditions. The Company has elected the practical expedient to group lease and non-lease components for all leases. Upon lease commencement on May 1, 2020, the Company recognized an operating lease right-of-use asset of $ 0.5 million and a corresponding lease liability of $ 0.5 million, using a discount rate of 3.85 %, which reflects the Company’s incremental borrowing rate for a similar asset and similar term as of the date of commencement. In January 2022, as part of the Forensic Logic acquisition, the Company acquired the non-cancelable operating leases of Forensic Logic 's offices in Walnut Creek, California and Tucson, Arizona, which expire in June 2025 and February 2026 , respectively. Neither lease has significant rent escalation holidays, concessions, leasehold improvement incentives, or other build-out clauses. Each lease contains an option to extend the term for an additional period of five years subject to certain terms and conditions. The Company has elected the practical expedient to group lease and non-lease components for all leases. In measuring the lease liability upon acquisition, the Company used a discount rate of 3.25 % which reflects the Company’s incremental borrowing rate for a similar asset and similar term as of the date of acquisition. The operating lease cost recognized for the years ended December 31, 2022, 2021 and 2020, was $ 1.0 million $ 0.6 million and $ 0.4 million, respectively. Supplemental information related to the operating leases as follows (in thousands): December 31, 2022 2021 Assets Operating lease right-of-use assets $ 3,240 $ 2,323 Liabilities Lease liabilities (short-term) (presented within Accrued expenses and other current liabilities ) $ 868 $ 409 Lease liabilities (long-term) (presented within Other liabilities) 2,554 2,013 Total operating lease liabilities $ 3,422 $ 2,422 Year Ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities (presented within Operating cash flows) $ 941 $ 553 Maturities of the lease liabilities at December 31, 2022 are as follows (in thousands): 2023 $ 1,041 2024 1,078 2025 946 2026 506 2027 39 Total lease payments, undiscounted 3,610 Less: imputed interest ( 188 ) Total $ 3,422 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 18. Commitments and Contingencies Contingencies On August 28, 2018, Silvon S. Simmons (the "Plaintiff") amended a complaint against the City of Rochester, New York and various city employees, filed in the United States District Court, Western District of New York, to add the Company and employees as defendants. The amended complaint alleges conspiracy to violate plaintiff's civil rights, denial of the right to a fair trial, and malicious prosecution. The Plaintiff claims that ShotSpotter colluded with the City of Rochester to fabricate and create gunshot alert evidence to secure Plaintiff's conviction. On the basis of the allegations, the Plaintiff has petitioned for compensatory and punitive damages and other costs and expenses, including attorney's fees. The Company believes that the Plaintiff's claims are without merit and are disputing them vigorously. On October 12, 2021, the Company filed a defamation lawsuit against VICE Media, LLC ("VICE"), in Delaware Superior Court. The complaint alleges that VICE intentionally misrepresented court records and targeted ShotSpotter with false accusations in order to cultivate a subversive brand that enables VICE to sell sponsored content to corporate advertisers. The lawsuit was dismissed by the prevailing judge on June 30, 2022, but the Company obtained a retraction from VICE of several false statements following the dismissal. The Company may become subject to legal proceedings, as well as demands and claims that arise in the normal course of business. Such claims, even if not meritorious, could result in the expenditure of significant financial and management resources. The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed and adjusted to include the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel, and other information and events pertaining to a particular matter. An unfavorable outcome on any litigation matters could require payment of substantial damages, or, in connection with any intellectual property infringement claims, could require the Company to pay ongoing royalty payments or could prevent the Company from selling certain of its products. As a result, a settlement of, or an unfavorable outcome on, any of the matters referenced above or other litigation matters could have a material adverse effect on the Company’s business, operating results, financial condition and cash flows. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 19. Subsequent Events Management evaluated subsequent events through March 14, 2023 , which was the date the financial statements were available to be issued, and determined that there are no subsequent events to be reported. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding financial reporting. In the opinion of management, the accompanying consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive income (loss), stockholders’ equity and cash flows for the year ended December 31, 2022, but are not necessarily indicative of the results of operations or cash flows to be anticipated for any future period. The consolidated financial statements include the results of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated during consolidation. The Company has evaluated subsequent events occurring after the date of the consolidated financial statements for events requiring recording or disclosure in the consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its significant estimates including the valuation of accounts receivable, the lives and realization of tangible and intangible assets and goodwill, contingent consideration liabilities, stock-based compensation expense, customer life, revenue recognition, contingent liabilities related to legal matters, and income taxes including deferred taxes and any related valuation allowance. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions it believes to be reasonable under the circumstances. Actual results could differ from those estimates and such differences could be material to the Company’s financial position and results of operations. |
Revenue Recognition - Subscription Services | Revenue Recognition – Subscription Services The Company generates annual subscription revenues from the deployment of ShotSpotter Respond on a per-square-mile basis. The Company's security solutions, ShotSpotter SecureCampus, ShotSpotter SiteSecure, ShotSpotter Investigate, ShotSpotter GCM and COPLINK X are typically sold on a subscription basis, each with a customized deployment plan. ShotSpotter's Connect solution is also sold on a subscription basis. The Company generates a majority of its revenues from the sale of Respond subscription services, in which gunshot data generated by Company-owned sensors and software is sold to customers through a cloud-based hosting application for a specified contract period. Typically, the initial contract period is one to three years in length. The subscription contract is generally noncancelable without cause. Generally, these service arrangements do not provide the customer with the right to take possession of the hardware or software supporting the subscription service at any time. A small portion of the Company’s revenues are generated from the delivery of setup services to install Company-owned sensors in the customer’s coverage area and other services including training and a license to integrate with third-party applications. For ShotSpotter Respond, the Company generally invoices customers for 50 % of the total contract value when the contract is fully executed and for the remaining 50 % when the subscription service is operational and ready to go live – that is, when the customer has acknowledged the completion of all the deliverables in the signed customer acceptance form. For ShotSpotter SecureCampus, ShotSpotter SiteSecure and COPLINK X, the Company generally invoices subscription service renewals for 100 % of the total contract value when the renewal contract is executed. All fees billed in advance of services being delivered are recorded as deferred revenue. For ShotSpotter Respond, the pricing model is based on a per-square-mile basis. For ShotSpotter SecureCampus, ShotSpotter SiteSecure and ShotSpotter Investigate, the pricing model is on a customized-site basis. For ShotSpotter Connect, ShotSpotter GCM and COPLINK X, pricing is currently customized, generally tied to the number of sworn police officers in a particular city. The Company may also offer discounts or other incentives in conjunction with all ShotSpotter sales in an effort to introduce the product, accelerate sales or extend renewals for a longer contract term. As a result of the process for invoicing contracts and renewals upon execution, cash flows from operations and accounts receivable can fluctuate due to timing of contract execution and timing of deployment. The Company recognizes revenues upon the satisfaction of performance obligations. At contract inception, the Company assesses the services promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good or service (or bundle of services) that is distinct. To identify the performance obligations, the Company considers all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. The Company determined that the subscription services, training, and licenses to integrate with third-party applications are each distinct and represent separate performance obligations. The setup activities are not distinct from the subscription service and are combined into the subscription service performance obligation. However, setup fees may provide a material right to the customer that has influence over the customer's decision to renew. The total contract value is allocated to each performance obligation identified based on the standalone selling price of the service. Discounts are allocated pro-rata to the identified performance obligations. Revenues from subscription services are recognized ratably, on a straight-line basis, over the term of the subscription. Revenues from material rights are recognized ratably over the period in which they are determined to provide a material right to the customer, which is generally the longer of the estimated customer life or contract, which is typically three years . Revenues from training and third-party integration license fees are recognized upon delivery which generally occurs when the subscription service is operational and ready to go live. Subscription renewal fees are recognized ratably over the term of the renewal, which is typically one year . While most customers elect to renew their agreements, in some cases, they may not be able to obtain the proper approvals or funding to complete the renewal prior to expiration. For these customers, the Company stops recognizing subscription revenues at the end of the current contract term, even though services may continue to be provided for a period of time until the renewal process is completed. Once the renewal is complete, the Company recognizes subscription revenues for the period between the expiration of the original term of the agreement and the completion of the renewal process in the month in which the renewal is executed. If a customer declines to renew its subscription, then the remaining fees from material rights, if any, are immediately recognized. The Company capitalizes certain incremental costs of obtaining a contract, which includes sales commissions, based on the first-year fee upon booking of a new contract. These capitalized commissions are amortized on a straight-line basis over the customer life, which is determined to be five years . As there are not commensurate commissions earned on renewals of the subscription services, the Company recognizes the commissions as expense when the renewal invoice is paid instead of capitalizing them. Amortization of capitalized commissions is included in sales and marketing expense and was $ 0.8 million, $ 0.7 million and $ 0.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. Revenue Recognition – Software License, Maintenance and Support, and Professional Services The Company also generates revenues from the sale of (i) a software license and related maintenance and support services to ShotSpotter Investigate, its proprietary software technology, and (ii) professional software development services to a single customer, through a sales channel intermediary. The Company has been serving this customer for more than ten years . The sales channel intermediary contract includes a renewable license for software and related maintenance and support services. The contract also provides for the procurement of professional services, such as for software development and testing for product feature enhancements, by executing supplementary work orders. The Company recognizes revenue from the license of its software license and related maintenance and support services revenues upon the satisfaction of performance obligations. The Company determined that the term-based software license should be combined with the maintenance and support services as a single performance obligation. The nature of the maintenance and support services, inclusive of the Company’s obligation to provide additional, unspecified software functionality over the license term, allows this single customer to be flexible in utilizing the customized software to respond to its changing regulatory environment, and is critical to the customer’s ability to derive benefit and value from the license. Revenues from amounts allocated to the single performance obligation consisting of the software license and maintenance and support services are recognized ratably over the term of the contract because the Company’s obligation to provide the license and related support services is both continuous and uniform over the license term. The Company generally invoices for these services on a monthly basis in arrears. If a customer does not renew prior to the contract term expiring, the Company stops recognizing subscription revenues at the end of the current contract term, even though services may continue to be provided for a period of time until the renewal process is completed. Once the renewal is complete, the Company recognizes the revenues for the period between the expiration of the original contract term and the completion of the renewal process in the month in which the renewal is executed. Professional services revenue consists of fees typically associated with the design, development and testing of product feature enhancements requested by the customer. The customer procures additional development services as needed, and generally based upon annual development plans negotiated by and between the customer and the Company. Professional services do not result in significant customization of the maintenance and support services and are considered distinct services. All, and any part of the output, of the Company’s professional services towards such product feature enhancements, belong to the customer. Accordingly, the Company satisfies the performance obligations over time as the performance of work typically creates or enhances an asset that the customer controls as the asset is created or enhanced. As these product feature enhancements each have a fixed contract fee, the Company recognizes revenue over time proportionally as work is performed, based on cumulative resource costs incurred as a percentage of total forecast costs for the project. Management uses significant judgement in making these estimates, which affect the timing of revenue recognition, including how much revenue to recognize in each period, and in estimating the timing of revenue recognition for remaining performance obligations (see Note 3). The contract price and billing schedule are stated in each work order and the Company generally invoices in monthly installments upon the commencement of each work order. Gross Versus Net Presentation The Company’s single software license on premise instance and related maintenance and support service agreement was facilitated through a sales channel intermediary. The Company presents the total value of the billings to the end-user as revenue (or gross) and that portion of the billings to the customer retained by the sales channel intermediary as a sales cost which is included in sales and marketing in the accompanying statement of operations, as the Company determined that it is the principal in the arrangement. The Company’s conclusion is based on its role in controlling the goods and services consumed by the end-customer throughout the license term or development life cycle, combined with its control over the price charged to the end-user for such goods and services, and the inability of the sales channel intermediary to direct or control the services provided to the customer. The fees paid to the sales channel intermediary are expensed as incurred as it relates to a period of performance of one year, and the sales channel intermediary is paid the same rate of commission on any license term renewals or additional professional services that are sold to the customer. |
Costs | Costs Costs include the cost of revenues and charges for impairment of property and equipment. Cost of revenues primarily include depreciation expense associated with capitalized customer acoustic sensor networks, communication expenses, costs related to hosting the Company's service application, costs related to operating its Incident Review Center (the “IRC”), providing remote and on-site customer support and maintenance and forensic services, personnel and related costs of operations, stock-based compensation and allocated overhead, which includes information technology, facility and equipment depreciation costs. The Company expenses all costs as incurred for services that are not recoverable under an enforceable contract. |
Advertising and Public Relations Costs | Advertising and Public Relations Costs Advertising and public relations costs are expensed as incurred. Advertising and public relations costs were $ 1.5 million, $ 1.3 million and $ 0.3 million for the years ended December 31, 2022, 2021 and 2020, respectively, and were included in sales and marketing expense in the consolidated statements of operations. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred and consisted primarily of salaries and benefits, consultant fees, certain facilities costs, and other direct costs associated with the continued development of the Company’s solutions. Product development costs are expensed as incurred until technological feasibility has been established, which the Company defines as the completion of all planning, designing, coding and testing activities that are necessary to establish products that meet design specifications including functions, features and technical performance requirements. The Company has determined that technological feasibility for its software products is reached shortly before they are released for sale. Costs incurred after technological feasibility is established are not significant, and accordingly the Company expenses all research and development costs when incurred. The Company capitalizes the cost of technology acquired through a business combination based on the fair value of the assets acquired. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all cash and highly liquid investments with an original maturity of three months or less. At December 31, 2022 and 2021, the Company’s cash and cash equivalents consisted of cash deposited in financial institutions. |
Foreign Currency | Foreign Currency The functional currency for the Company’s foreign subsidiaries is the local currency. The assets and liabilities of the subsidiary are translated into U.S. dollars using the exchange rate as of each balance sheet date. Revenues and expenses are translated at the average exchange rates for the period. Gains and losses from translations are recognized in foreign currency translation included in accumulated other comprehensive income (loss) in the accompanying consolidated balance sheets. Foreign currency exchange gains and losses that are realized are recorded in other expense, net, in the accompanying consolidated statements of operations. |
Accounts Receivable and Contract Asset, net | Accounts Receivable and Contract Asset, net Accounts receivable, net consist of trade accounts receivables from the Company’s customers, net of allowance for doubtful accounts if deemed necessary, and are recorded at the invoiced amount. Accounts receivable also consists of trade accounts receivables (net of any commissions) from the sales channel intermediary through which the Company provides software license, maintenance and support, and professional services. The Company does not require collateral or other security for accounts receivable. Contract asset consists of revenues recognized in advance of invoicing the customer for amounts that the Company has the right to invoice. The Company does not charge interest on accounts receivable that are past due. The Company periodically evaluates the collectability of its accounts receivable and provides an allowance for doubtful accounts based on the Company’s historical experience. At December 31, 2022 and 2021, the Company had a provision against accounts receivable of $ 0 and $ 74,000 , respectively. If a receivable is deemed by the Company to be uncollectible, the Company will write off the receivable to bad debt expense. |
Concentrations of Risk | Concentrations of Risk Credit Risk — Financial instruments that potentially subject the Company to concentration of credit risk consisted primarily of cash and cash equivalents and accounts receivable from trade customers. The Company maintains its deposits of cash and cash equivalents at two domestic and four international financial institutions. The Company is exposed to credit risk in the event of default by a financial institution to the extent that cash and cash equivalents are in excess of the amount insured by the Federal Deposit Insurance Corporation ("FDIC") and other local country government agencies. The Company generally places its cash and cash equivalents with high-credit quality financial institutions. To date, the Company has not experienced any losses on its cash and cash equivalents. As of December 31, 2022, the Company had $ 9.5 million and $ 6,000 on hand with each domestic financial institution for which only $ 250,000 is insured under FDIC limits. Concentration of Accounts Receivable and Contract Asset — At December 31, 2022, two customers accounted for 23 % and 17 %, respectively, of the Company’s total accounts receivable. At December 31, 2021, one customer accounted for 65 %, of the Company’s total accounts receivable. Concentration of Revenues — For the year ended December 31, 2022, two customers accounted for 30 % and 10 %, respectively, of the Company’s revenues. For the year ended December 31, 2021, two customers accounted for 28 % and 14 %, respectively, of the Company’s revenues. For the year ended December 31, 2020, two customers accounted for 18 % and 15 %, respectively, of the Company’s revenues. Concentration of Suppliers — The Company relies on a limited number of suppliers and contract manufacturers. In particular, a single supplier is currently the sole manufacturer of the Company’s proprietary sensors. |
Business Acquisitions | Business Acquisitions The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Acquisition-related expenses are recognized separately from the business combination and are recognized as general and administrative expense as incurred. |
Goodwill | Goodwill Goodwill represents the excess of amounts paid over the fair value of net assets acquired from an acquisition. Goodwill is tested for impairment at the reporting unit level (the Company has one reporting segment and tests at the company level) on an annual basis (October 1) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. The Company operates as one reportable segment. It performed its annual test for goodwill impairment as of October 1, 2022 and concluded that no goodwill impairment charge was necessary. Since inception through December 31, 2022, the Company has no t recorded any goodwill impairment. |
Intangible Assets | Intangible assets consist of customer relationships, software technology, tradename and acquired patents and capitalized legal fees related to obtaining patents. Patent assets are stated at cost, less accumulated amortization. Customer relationships, tradename and software technology are recorded at fair value as of the date of the acquisition. Intangible assets are amortized on an attribution method, over their expected useful lives, which range from three years for patents, one to eight years for software technology, nine years for tradename, and seven to 15 years for customer relationships. |
Property and Equipment, net | Property and Equipment, net Property and equipment, net, is stated at cost, less accumulated depreciation and amortization. The Company depreciates property and equipment using the straight-line method over their estimated useful lives, ranging from three to five years . Leasehold improvements are amortized over the shorter of the asset’s useful life or the remaining lease term. Costs incurred to develop software for internal use and for the Company’s solutions are capitalized and amortized over such software’s estimated useful life. Internally developed software costs capitalized during all periods presented have not been material. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount of the asset group to the group's future undiscounted cash flows expected to be generated from the existing service potential of the asset group for the period of time consistent with the remaining life of the group's primary asset. If such assets are determined to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the future undiscounted net cash flows arising from the assets. Assets to be disposed of are reported at the lower of their carrying amounts or fair value less cost to sell. |
Royalty Expense | Royalty Expense In 2009, the Company entered into a license agreement with a third-party relating to a patented gunshot digital imaging system that facilitates integration with certain third-party systems. The terms of the license agreement require the Company to pay a one-time fee of $ 5,000 for each license sold to a customer allowing the customer to integrate their ShotSpotter service with a third-party application, such as a video management system, with a minimum annual amount due of $ 75,000 . In 2022, 2021, and 2020, the Company incurred only the $ 75,000 minimum amount. The license agreement renews automatically on each subsequent year unless it is terminated in accordance with the agreement. |
Fair Value Measurements | Fair Value Measurements The Company uses a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date. The three-level hierarchy prioritizes, within the measurement of fair value, the use of market-based information over entity-specific information. Fair value focuses on an exit price and is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs or methodology used for valuing financial instruments are not necessarily an indication of the risks associated with investing in those financial instruments. The three-level hierarchy for fair value measurements is defined as follows: Level I — Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level II — Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level III — Inputs to the valuation methodology are unobservable and supported by little or no market data. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. An asset’s or a liability’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. |
Stock-Based Compensation | Stock-Based Compensation The Company generally grants options to purchase shares of its common stock to its employees, directors and non-employees for a fixed number of shares with an exercise price equal to the fair value of the underlying shares at the grant date. All stock option grants are accounted for using the fair value method, and stock-based compensation expense is recognized ratably over the requisite service period as the underlying options vest. The Company uses the Black-Scholes option pricing model to measure the fair value of its stock options. The Company estimates the grant date fair value of its common stock options using the following assumptions: Expected Term — The expected term represents the period that the stock-based compensation awards are expected to be outstanding. Since the Company did not have sufficient historical information to develop reasonable expectations about future exercise behavior, the Company used the simplified method to compute expected term, which reflects the weighted-average of time-to-vesting. Risk-Free Interest Rate — The risk-free interest rate is based on the yield on U.S. Treasury yield curve in effect at the grant date. Expected Volatility —The expected volatility is based on the historical volatility of the Company’s stock. Dividend Yield — Expected dividend yield is based on the Company's dividend policy at the time the options were granted. The Company does not plan to pay any dividends in the foreseeable future. Consequently, it has historically used an expected dividend yield of zero . The Company uses the market closing price of its common stock as traded on the Nasdaq Capital Market to determine fair value of its common stock for use in the Black-Scholes option pricing model. The Company generally grants unvested restricted stock unit awards to non-employee directors and executive management for a fixed number of shares and a fixed vesting schedule. The restricted stock unit awards are valued using the closing price on the date of grant and stock-based compensation is recognized ratably over the requisite service period. Forfeitures are recognized as and when they occur. |
Segment Information | Segment Information The chief operating decision maker is the Company's Chief Executive Officer, who allocates resources and assesses financial performance based upon discrete financial information at the consolidated level. There are no segment managers who are held accountable by the chief operating decision maker, or anyone else, for operations, operating results and planning for levels or components below the consolidated unit level. Accordingly, the Company has determined that it operates as a single operating and reportable segment |
Income Taxes | Income Taxes The Company records income taxes in accordance with the liability method of accounting. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax law. The Company establishes a valuation allowance to reduce the deferred tax assets when it is more likely than not that a deferred tax asset will not be realizable. Changes in tax rates are reflected in the tax provision as they occur. The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the event the Company determines that it would be able to realize its deferred assets in the future in excess of their net recorded amount, the Company makes an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority . The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. |
Net Income (Loss) per Share | Net Income (Loss) per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares and common stock equivalents outstanding during the period. Common stock equivalents are only included when their effect is dilutive. Common stock equivalents include unvested restricted stock units, convertible preferred stock, warrants and outstanding stock options. |
Recent Accounting Pronouncements Not Yet Effective | Recent Accounting Pronouncements Not Yet Effective In June 2016, the Financial Accounting Standards Board ("FASB') issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The amendments in this ASU replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects current expected credit loss (“CECL”) and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective at the beginning of the Company’s first quarter of fiscal 2023. Early adoption of the amendments is permitted. The Company determined its accounts receivable and contract asset are within the scope of CECL and does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. Recent Accounting Pronouncements Adopted In December 2019, the FASB issued ASU 2019-12 , Income Taxes (Topic 740), simplifying the accounting for income taxes by removing certain exceptions to the general principles. The guidance was effective at the beginning of the Company's first quarter of fiscal 2022. The adoption of this ASU did no t have a material impact on the Company's consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts from Customers . ASU 2021-08 aims to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and the effect of payment terms on subsequent revenue recognized by the acquirer. These amendments are effective prospectively for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company early adopted this ASU effective January 1, 2022 . |
Revenue Related Disclosures (Ta
Revenue Related Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Changes in Deferred Revenue | The changes in deferred revenue were as follows (in thousands): Year Ended December 31, 2022 2021 Beginning balance $ 26,709 $ 24,578 Deferred revenues acquired (Note 4 - Business Acquisitions) 5,382 — New billings 91,453 60,132 Revenue recognized during the year from beginning balance ( 31,180 ) ( 24,480 ) Revenue recognized during the year from new billings ( 48,643 ) ( 33,509 ) Foreign currency impact ( 1 ) ( 12 ) Ending balance $ 43,720 $ 26,709 |
Schedule of Remaining Performance Obligations for Contractually Committed Revenues | The following table presents remaining performance obligations for contractually committed revenues as of December 31, 2022 (in thousands): 2023 $ 65,317 2024 35,368 2025 15,420 Thereafter 6,938 Total $ 123,043 |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Acquisition [Line Items] | |
Summary of Assignment of Fair Value to Identified Assets and Liabilities | The following table summarizes the assignment of fair value to the identified assets and liabilities recorded as of the acquisition date, January 3, 2022 (in thousands): Cash and cash equivalents $ 303 Accounts receivable and contract asset, net 220 Property and equipment, net 200 Operating lease right-of-use asset 1,893 Software technology 7,140 Tradename 1,000 Customer relationships 8,400 Goodwill 20,155 Other asset 186 Accrued expenses and other current liabilities ( 635 ) Operating lease liabilities ( 1,893 ) Deferred revenue ( 5,382 ) Total estimated consideration $ 31,587 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Changes in Fair Value of Aggregate Contingent Consideration Liability | The changes in the fair value of the aggregate contingent consideration liability are summarized below (in thousands): Year Ended December 31, 2022 2021 Beginning balance $ 1,500 $ 573 Payment of contingent consideration liability — ( 403 ) Acquisition of Forensic Logic (Note 4 - Business Acquisition) 12,400 — Change in fair value of contingent consideration ( 9,154 ) 1,330 Ending balance $ 4,746 $ 1,500 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | The changes in goodwill for 2022 and 2021 are as follows (in thousands): Year Ended December 31, 2022 2021 Beginning balance $ 2,816 $ 2,811 Acquisition of Forensic Logic (Note 4—Business Acquisition) 20,155 — Change during the period — 5 Ending balance $ 22,971 $ 2,816 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets Net | Intangible assets as of December 31, 2022 and 2021 are as follows (in thousands): December 31, 2022 Gross Accumulated Amortization Net Customer relationships $ 22,970 $ ( 2,760 ) $ 20,210 Acquired software technology 7,140 ( 1,015 ) 6,125 Patents 1,227 ( 1,133 ) 94 Tradename 1,000 ( 111 ) 889 Total intangible assets, net $ 32,337 $ ( 5,019 ) $ 27,318 December 31, 2021 Gross Accumulated Amortization Net Customer relationships $ 14,570 $ ( 1,131 ) $ 13,439 Patents 1,214 ( 1,089 ) 125 Total intangible assets, net $ 15,784 $ ( 2,220 ) $ 13,564 |
Schedule of Future Intangible Asset Amortization | The following table presents future intangible asset amortization as of December 31, 2022 (in thousands): 2023 $ 2,657 2024 2,649 2025 2,633 2026 2,594 2027 2,594 Thereafter 14,191 Total $ 27,318 |
Details of Certain Consolidat_2
Details of Certain Consolidated Balance Sheet Accounts (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets (in thousands): December 31, 2022 2021 Deferred commissions $ 1,040 $ 822 Prepaid insurance 724 611 Prepaid software and licenses 647 756 Other prepaid expenses 236 198 Short-term deposits 363 — Other 215 117 $ 3,225 $ 2,504 |
Schedule of Accounts Receivable and Contract Asset, Net | Accounts receivable and contract asset, net (in thousands): December 31, 2022 2021 Accounts receivable $ 28,790 $ 16,167 Contract asset 2,167 41 Allowance for doubtful accounts — ( 74 ) $ 30,957 $ 16,134 |
Schedule of Other Assets | Other assets (in thousands): December 31, 2022 2021 Deferred commissions $ 2,552 $ 1,723 Other 18 195 $ 2,570 $ 1,918 |
Schedule of Property and Equipment, Net | Property and equipment, net (in thousands): December 31, 2022 2021 Deployed equipment $ 44,700 $ 35,882 Construction in progress 5,267 4,818 Computer equipment 2,359 1,745 Software 1,314 1,314 Furniture and fixtures 472 295 Leasehold improvements 934 30 Vehicles 258 239 55,304 44,323 Accumulated depreciation and amortization ( 33,316 ) ( 26,914 ) $ 21,988 $ 17,409 |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities (in thousands): December 31, 2022 2021 Personnel-related accruals $ 5,971 $ 4,864 Contingent consideration liabilities 1,500 — Operating lease liabilities 868 409 Professional fees 441 925 Income tax payable 385 23 Sales/use tax payable 257 167 Other 543 292 $ 9,965 $ 6,680 |
Schedule of Other Long-term Liabilities | Other liabilities (long-term) (in thousand): December 31, 2022 2021 Operating lease liabilities $ 2,554 $ 2,013 Contingent consideration liabilities 3,246 1,500 $ 5,800 $ 3,513 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Domestic and Foreign Components of Net Income (Loss) Before Income Tax | The domestic and foreign components of net income (loss) before income tax were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Domestic $ 7,583 $ ( 4,280 ) $ 1,562 Foreign ( 31 ) ( 95 ) ( 427 ) Net income (loss) before income tax $ 7,552 $ ( 4,375 ) $ 1,135 |
Schedule of Provision (Benefit) for Income Tax | The provision (benefit) for income tax consists of the following (in thousands): Year Ended December 31, 2022 2021 2020 Current: Federal $ — $ — $ — State 455 — — Foreign 27 6 ( 7 ) Total 482 6 ( 7 ) Deferred: Federal 316 — — State 369 — — Foreign — 50 ( 83 ) Total 685 50 ( 83 ) Total provision (benefit) for income tax $ 1,167 $ 56 $ ( 90 ) |
Schedule of Reconciliation of Statutory Federal Income Tax Rate to Income Tax Expense (Benefit) | A reconciliation of income taxes at the statutory federal income tax rate to income tax expense (benefit) included in the accompanying consolidated statements of operations is as follows (in thousands): December 31, 2022 2021 2020 Income tax (benefit) at statutory rate $ 1,545 $ ( 919 ) $ 240 Change in valuation allowance ( 388 ) 1,288 ( 165 ) Indefinite-lived asset (goodwill) ( 642 ) — — State tax 239 ( 288 ) ( 37 ) Change in deferred 415 ( 27 ) 8 Stock-based compensation 111 62 ( 11 ) Research and development credits ( 271 ) ( 160 ) ( 103 ) Foreign rate differential 43 7 ( 40 ) Other 115 93 18 Total $ 1,167 $ 56 $ ( 90 ) |
Schedule of Company's Deferred Tax Assets and Liabilities | Temporary differences that gave rise to significant portions of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021 were as follows (in thousands): Year Ended December 31, 2022 2021 Deferred tax assets: Net operating losses $ 17,255 $ 19,920 Research and development credits 2,917 2,557 Accruals and reserves 5,914 2,605 Deferred revenue and contract costs 625 140 Gross deferred tax assets 26,711 25,222 Valuation allowance ( 25,343 ) ( 24,955 ) Net deferred tax assets 1,368 267 Deferred tax liabilities: Fixed assets and intangibles ( 2,053 ) ( 267 ) Total deferred tax assets (liabilities), net $ ( 685 ) $ — |
Schedule of Unrecognized Uncertain Tax Positions | A reconciliation of the beginning and ending amounts of unrecognized uncertain tax positions is as follows (in thousands): Balance as of December 31, 2020 $ 859 Increases for current year tax positions 87 Increases for prior year tax positions 8 Balance as of December 31, 2021 954 Increases for current year tax positions 140 Decreases for prior year tax positions ( 11 ) Balance as of December 31, 2022 $ 1,083 |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Common Stock Reserved for Future Issuance | At December 31, 2022, shares of common stock reserved for future issuance were as follows: Options outstanding 1,256,056 Shares available for future grant 1,527,374 Unvested restricted stock units 223,821 Total 3,007,251 |
Net Income (Loss) per Share (Ta
Net Income (Loss) per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic and Diluted Net Income (Loss) per Share | The following table summarizes the computation of basic and diluted net income (loss) per share (in thousands, except share and per share data): Year Ended December 31, 2022 2021 2020 Numerator: Net income (loss) $ 6,385 $ ( 4,431 ) $ 1,225 Denominator: Weighted-average shares outstanding, basic 12,171,609 11,647,558 11,408,757 Weighted-average shares outstanding, diluted 12,317,707 11,647,558 11,730,294 Net income (loss) per share, basic $ 0.52 $ ( 0.38 ) $ 0.11 Net income (loss) per share, diluted $ 0.52 $ ( 0.38 ) $ 0.10 |
Schedule of Anti-dilutive Shares Outstanding Excluded in Calculation of Diluted Net Income (Loss) per Share | The following potentially dilutive shares outstanding at the end of the periods presented were excluded in the calculation of diluted net income (loss) per share as the effect would have been anti-dilutive: Year Ended December 31, 2022 2021 2020 Options to purchase common stock 1,015,497 783,928 573,340 Unvested restricted stock units 97,275 128,810 101,255 Total 1,112,772 912,738 674,595 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Schedule of Fair Value of Stock Option Grants Determined using Block-Scholes Option Pricing Model Assumed Inputs | The fair value of stock option grants is determined using the Black-Scholes option pricing model which requires the use of certain assumed inputs. The assumed inputs used to determine the fair value of stock options granted for the years ended December 31, 2022, 2021, and 2020 are set forth below: Year Ended December 31, 2022 2021 2020 Fair value of common stock $ 16.30 -$ 37.00 $ 31.12 -$ 48.05 $ 23.49 -$ 34.07 Expected term (in years) 6 6 6 Risk-free interest rate 1.54 %- 4.18 % 0.45 %- 1.62 % 0.36 %- 0.83 % Expected volatility 63 %- 64 % 65 %- 67 % 64 %- 68 % Expected dividend yield — — — |
Schedule of Stock Option Activity | A summary of stock option activities during 2022, 2021 and 2020 is as follows: Number Weighted Weighted Aggregate Intrinsic Value Exercised (in thousands) Outstanding at December 31, 2019 617,493 $ 17.13 Granted 347,095 $ 32.14 $ 19.15 Exercised ( 96,456 ) $ 3.25 $ 2,257 Canceled ( 54,890 ) $ 26.07 Outstanding at December 31, 2020 813,242 $ 24.58 Granted 111,489 $ 39.00 $ 23.32 Exercised ( 97,702 ) $ 9.20 $ 3,064 Canceled ( 43,101 ) $ 35.84 Outstanding at December 31, 2021 783,928 $ 28.00 Granted 557,218 $ 27.40 $ 16.30 Exercised ( 41,819 ) $ 12.88 $ 778 Canceled ( 43,271 ) $ 28.85 Outstanding at December 31, 2022 1,256,056 $ 28.20 |
Schedule of Additional Information for Stock Options | Additional information for stock options at December 31, 2022 were as follows: Number Weighted Aggregate Intrinsic Value (in thousands) Weighted Outstanding at December 31, 2022 1,256,056 28.20 $ 8,652 7.60 Exercisable at December 31, 2022 615,261 27.04 $ 5,396 6.38 |
Schedule of Unvested Restricted Stock Units Awards Activity | The following table summarizes the activity of RSU awards: Number Weighted Aggregate Fair Value of RSUs Vested (in thousands) Unvested RSUs at December 31, 2019 114,996 $ 30.24 Granted 91,759 $ 31.75 Vested ( 54,970 ) $ 32.12 $ 1,766 Forfeited ( 10,277 ) $ 41.50 Unvested RSUs at December 31, 2020 141,508 $ 29.67 Granted 84,035 $ 37.86 Vested ( 80,972 ) $ 29.22 $ 3,078 Forfeited ( 15,761 ) $ 31.38 Unvested RSUs at December 31, 2021 128,810 $ 35.09 Granted 205,807 $ 26.90 Vested ( 107,971 ) $ 31.88 $ 3,129 Forfeited ( 2,825 ) $ 26.50 Unvested RSUs at December 31, 2022 223,821 $ 29.21 |
Schedule of Stock-Based Compensation Expense for All Award Types Recorded in Consolidated Statements of Operations | Total stock-based compensation expense for all award types is recorded in the consolidated statements of operations and was allocated as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenues $ 1,992 $ 1,567 $ 1,093 Sales and marketing 1,754 1,612 1,268 Research and development 1,082 734 580 General and administrative 3,454 1,959 1,521 Total $ 8,282 $ 5,872 $ 4,462 |
2017 Equity Incentive Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Schedule of Activity of Shares Available for Grant | The following table summarizes the activity of shares available for grant under the 2017 Equity Incentive Plan: Shares available for grant at December 31, 2021 1,661,956 Increase in accordance with the evergreen provision 585,172 Options issued during the year ( 557,218 ) Canceled during the year 43,271 RSUs granted ( 205,807 ) Shares available for grant at December 31, 2022 1,527,374 |
2017 Employee Stock Purchase Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Schedule of Activity of Shares Available for Grant | The following table summarizes the activity of shares available under the 2017 ESPP: Shares available for grant at December 31, 2021 399,328 Increase in accordance with the evergreen provision 150,000 Issued during the year ( 33,161 ) Shares available for grant at December 31, 2022 516,167 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Lessee Disclosure [Abstract] | |
Summary of Supplemental Information Related to Operating Leases | Supplemental information related to the operating leases as follows (in thousands): December 31, 2022 2021 Assets Operating lease right-of-use assets $ 3,240 $ 2,323 Liabilities Lease liabilities (short-term) (presented within Accrued expenses and other current liabilities ) $ 868 $ 409 Lease liabilities (long-term) (presented within Other liabilities) 2,554 2,013 Total operating lease liabilities $ 3,422 $ 2,422 Year Ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities (presented within Operating cash flows) $ 941 $ 553 |
Summary of Maturity of Operating Lease Liabilities | Maturities of the lease liabilities at December 31, 2022 are as follows (in thousands): 2023 $ 1,041 2024 1,078 2025 946 2026 506 2027 39 Total lease payments, undiscounted 3,610 Less: imputed interest ( 188 ) Total $ 3,422 |
Organization and Description _2
Organization and Description of Business - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 Customers Subsidiary Agencies | |
Business And Nature Of Operations [Line Items] | |
Number of customers | Customers | 250 |
Number of agencies | Agencies | 2,100 |
Number of subsidiary | Subsidiary | 5 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Segment Customers Financialinstitution | Dec. 31, 2021 USD ($) Customers | Dec. 31, 2020 USD ($) Customers | |
Accounting Policies [Line Items] | |||
Provision for accounts receivable | $ 0 | $ 74,000 | |
Cash and cash equivalents | $ 10,479,000 | 15,636,000 | |
Number of customers | Customers | 250 | ||
Impairment charge of goodwill | $ 0 | $ 0 | |
One-time license fee payable for each license sold to customer | 5,000 | ||
Minimum annual amount due under license agreement | 75,000 | ||
Minimum amount incurred under license agreement | $ 75,000 | $ 75,000 | $ 75,000 |
Expected dividend yield | 0% | ||
Number of operating segment | Segment | 1 | ||
Number of reportable segment | Segment | 1 | ||
Description of uncertain income tax position | For tax positions meeting the more likely than not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority | ||
Patents | |||
Accounting Policies [Line Items] | |||
Estimated useful life of intangible assets | 3 years | ||
Tradename | |||
Accounting Policies [Line Items] | |||
Estimated useful life of intangible assets | 9 years | ||
Credit Concentration Risk | |||
Accounting Policies [Line Items] | |||
Cash deposits insured | $ 250,000 | ||
Credit Concentration Risk | Domestic Financial Institution One | |||
Accounting Policies [Line Items] | |||
Cash and cash equivalents | 9,500,000 | ||
Credit Concentration Risk | Domestic Financial Institution Two | |||
Accounting Policies [Line Items] | |||
Cash and cash equivalents | $ 6,000 | ||
Customer Concentration Risk | Accounts Receivable | |||
Accounting Policies [Line Items] | |||
Number of customers | Customers | 2 | 1 | |
Customer Concentration Risk | Revenues | |||
Accounting Policies [Line Items] | |||
Number of customers | Customers | 2 | 2 | 2 |
Customer Concentration Risk | Customer One | Accounts Receivable | |||
Accounting Policies [Line Items] | |||
Concentration risk percentage | 23% | 65% | |
Customer Concentration Risk | Customer One | Revenues | |||
Accounting Policies [Line Items] | |||
Concentration risk percentage | 30% | 28% | 18% |
Customer Concentration Risk | Customer Two | Accounts Receivable | |||
Accounting Policies [Line Items] | |||
Concentration risk percentage | 17% | ||
Customer Concentration Risk | Customer Two | Revenues | |||
Accounting Policies [Line Items] | |||
Concentration risk percentage | 10% | 14% | 15% |
United States | Credit Concentration Risk | |||
Accounting Policies [Line Items] | |||
Number of financial institutions at which cash deposits are maintained | Financialinstitution | 2 | ||
International | Credit Concentration Risk | |||
Accounting Policies [Line Items] | |||
Number of financial institutions at which cash deposits are maintained | Financialinstitution | 4 | ||
Sales and Marketing Expense | |||
Accounting Policies [Line Items] | |||
Advertising and public relations costs | $ 1,500,000 | $ 1,300,000 | $ 300,000 |
ASU 2021-08 | |||
Accounting Policies [Line Items] | |||
Change in accounting principle, ASU, adoption date | Jan. 01, 2022 | ||
Change in accounting principle, ASU, adoption | true | ||
ASU 2019-12 | |||
Accounting Policies [Line Items] | |||
Change in accounting principle, ASU, adoption | true | ||
Change in accounting principle, ASU, material effect | false | ||
Gunshot Detection Services | |||
Accounting Policies [Line Items] | |||
Percentage of contract price invoiced to customer on contract signed | 50% | ||
Percentage of contract price invoiced to customer on subscription service operational and ready to go live | 50% | ||
Percentage of contract value invoiced subscription service renewals on renewal contract executed | 100% | ||
Gunshot Detection Services | Adoption of Topic 606 | |||
Accounting Policies [Line Items] | |||
Revenues material right recognition period | 3 years | ||
Subscription renewal fees recognition period | 1 year | ||
Capitalized commissions, amortization period | 5 years | ||
Gunshot Detection Services | Adoption of Topic 606 | Sales and Marketing Expense | |||
Accounting Policies [Line Items] | |||
Amortization of capitalized commissions | $ 800,000 | $ 700,000 | $ 600,000 |
Minimum | |||
Accounting Policies [Line Items] | |||
Property and equipment estimated useful lives | 3 years | ||
Minimum | Software Technology | |||
Accounting Policies [Line Items] | |||
Estimated useful life of intangible assets | 1 year | ||
Minimum | Customer Relationships | |||
Accounting Policies [Line Items] | |||
Estimated useful life of intangible assets | 7 years | ||
Minimum | Gunshot Detection Services | |||
Accounting Policies [Line Items] | |||
Subscription services initial contract period | 1 year | ||
Minimum | Software License, Maintenance and Support, and Professional Services | Adoption of Topic 606 | |||
Accounting Policies [Line Items] | |||
Period of service to customers | 10 years | ||
Maximum | |||
Accounting Policies [Line Items] | |||
Highly liquid investments maturity period | 3 months | ||
Property and equipment estimated useful lives | 5 years | ||
Maximum | Software Technology | |||
Accounting Policies [Line Items] | |||
Estimated useful life of intangible assets | 8 years | ||
Maximum | Customer Relationships | |||
Accounting Policies [Line Items] | |||
Estimated useful life of intangible assets | 15 years | ||
Maximum | Gunshot Detection Services | |||
Accounting Policies [Line Items] | |||
Subscription services initial contract period | 3 years |
Revenue Related Disclosures - S
Revenue Related Disclosures - Schedule of Changes in Deferred Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation Of Revenue [Line Items] | ||
Beginning balance | $ 26,709 | $ 24,578 |
Deferred revenues acquired (Note 4 - Business Acquisitions) | 5,382 | |
New billings | 91,453 | 60,132 |
Foreign currency impact | (1) | (12) |
Ending balance | 43,720 | 26,709 |
Recognition From Balance at the Beginning of the Year | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue recognized during the year | (31,180) | (24,480) |
Revenue Recognized During the Year from New Billings | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue recognized during the year | $ (48,643) | $ (33,509) |
Revenue Related Disclosures -_2
Revenue Related Disclosures - Schedule of Remaining Performance Obligations for Contractually Committed Revenues (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Estimated remaining performance obligations for contractually committed revenues | $ 123,043 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Estimated remaining performance obligations for contractually committed revenues | $ 65,317 |
Estimated remaining performance obligations for contractually committed revenues recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Estimated remaining performance obligations for contractually committed revenues | $ 35,368 |
Estimated remaining performance obligations for contractually committed revenues recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Estimated remaining performance obligations for contractually committed revenues | $ 15,420 |
Estimated remaining performance obligations for contractually committed revenues recognition period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Estimated remaining performance obligations for contractually committed revenues | $ 6,938 |
Estimated remaining performance obligations for contractually committed revenues recognition period |
Revenue Related Disclosures -_3
Revenue Related Disclosures - Schedule of Remaining Performance Obligations for Contractually Committed Revenues 1 (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Estimated remaining performance obligations for contractually committed revenues | $ 123,043 |
Revenue Related Disclosures - A
Revenue Related Disclosures - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Subscription, maintenance and support services Member | |||
Disaggregation Of Revenue [Line Items] | |||
Revenues | $ 75.4 | $ 54.7 | $ 45.7 |
Professional software development services member | |||
Disaggregation Of Revenue [Line Items] | |||
Revenues | 5.6 | 3.4 | |
United States | |||
Disaggregation Of Revenue [Line Items] | |||
Revenues | 80.2 | 57.3 | 45 |
South Africa | |||
Disaggregation Of Revenue [Line Items] | |||
Revenues | 0.8 | 0.9 | 0.7 |
Bahamas | |||
Disaggregation Of Revenue [Line Items] | |||
Revenues | $ 0.8 | $ 0.9 | $ 0.7 |
Business Acquisition - Addition
Business Acquisition - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Jan. 03, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | |||||
Fair value of common stock issued as consideration for business acquisition | $ 14,266 | $ 2,000 | |||
Revenues | $ 81,003 | $ 58,155 | $ 45,734 | ||
Common Stock | |||||
Business Acquisition [Line Items] | |||||
Issuance of common stock for acquisition, Shares | 464,540 | 63,901 | |||
Forensic Logic | |||||
Business Acquisition [Line Items] | |||||
Business acquisition date | Jan. 03, 2022 | ||||
Membership interests, acquired | 100% | ||||
Business acquisition purchase consideration in cash | $ 4,900 | ||||
Business acquisition contingent consideration payable in cash | $ 3,750 | ||||
Number of days amounts to be determined and paid | 120 days | ||||
Preliminary fair value of the contingent consideration | 12,400 | ||||
Business acquisition estimated purchase consideration/purchase consideration | $ 31,600 | ||||
Percentage of discounted cash flows | 24% | ||||
Acquisition related expenses | $ 100 | 200 | |||
Acquisition revenue | $ 6,600 | ||||
Business acquisition pro forma revenue | 64,500 | ||||
Business acquisition, pro forma net income (loss) | $ 7,700 | ||||
Forensic Logic | Forecast | |||||
Business Acquisition [Line Items] | |||||
Number of days amounts to be determined and paid | 120 days | ||||
Forensic Logic | Maximum | |||||
Business Acquisition [Line Items] | |||||
Business acquisition contingent consideration payable in cash | 9,500 | ||||
Forensic Logic | Maximum | Forecast | |||||
Business Acquisition [Line Items] | |||||
Business acquisition contingent consideration payable in cash | $ 10,500 | ||||
Forensic Logic | Minimum | |||||
Business Acquisition [Line Items] | |||||
Revenues | $ 7,000 | ||||
Forensic Logic | Common Stock | |||||
Business Acquisition [Line Items] | |||||
Fair value of common stock issued as consideration for business acquisition | $ 14,300 | ||||
Issuance of common stock for acquisition, Shares | 464,540,000 |
Business Acquisition - Summary
Business Acquisition - Summary of Assignment of Fair Value to Identified Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 03, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 22,971 | $ 2,816 | $ 2,811 | |
Forensic Logic | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 303 | |||
Accounts receivable and contract asset, net | 220 | |||
Property and equipment, net | 200 | |||
Operating lease right-of-use asset | 1,893 | |||
Goodwill | 20,155 | |||
Other asset | 186 | |||
Accrued expenses and other current liabilities | (635) | |||
Operating lease liabilities | (1,893) | |||
Deferred revenue | (5,382) | |||
Total estimated consideration | 31,587 | |||
Forensic Logic | Software Technology | ||||
Business Acquisition [Line Items] | ||||
Identifiable technology and intangible assets | 7,140 | |||
Forensic Logic | Tradename | ||||
Business Acquisition [Line Items] | ||||
Identifiable technology and intangible assets | 1,000 | |||
Forensic Logic | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Identifiable technology and intangible assets | $ 8,400 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Feb. 28, 2021 | Jan. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 31, 2022 | Nov. 30, 2020 | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||||||
Payment of contingent consideration liability | $ 403,000 | $ 347,000 | |||||
Transfers into or out of level 3 | $ 0 | 0 | |||||
Level 3 | |||||||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||||||
Percentage of assets, fair value adjustment | 60% | ||||||
Percentage of revenue volatility | 22.90% | ||||||
Fair Value Measurements Recurring | Level 3 | |||||||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||||||
Change in fair value of contingent consideration | $ (9,154,000) | $ 1,330,000 | |||||
Azavea, Inc | |||||||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||||||
Payment of contingent consideration liability | $ 400,000 | $ 300,000 | |||||
LEEDS | Level 3 | |||||||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||||||
Estimated fair value of contingent consideration | $ 200,000 | ||||||
Forensic Logic | Level 3 | |||||||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||||||
Estimated fair value of contingent consideration | $ 12,400,000 | ||||||
Percentage of assets, fair value adjustment | 60% | ||||||
Percentage of revenue volatility | 28% |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Changes in Fair Value of Aggregate Contingent Consideration Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Contingent consideration from business combination | $ (9,154) | $ 1,330 |
Fair Value Measurements Recurring | Level 3 | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | 1,500 | 573 |
Payment of contingent consideration liability | (403) | |
Acquisition of Forensic Logic (Note 4 - Business Acquisition) | 12,400 | |
Change in fair value of contingent consideration | (9,154) | 1,330 |
Ending balance | $ 4,746 | $ 1,500 |
Goodwill - Schedule of Changes
Goodwill - Schedule of Changes in Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Line Items] | ||
Beginning balance | $ 2,816 | $ 2,811 |
Acquisition of Forensic Logic (Note 4 - Business Acquisition) | 20,155 | |
Change during the period | 5 | |
Ending balance | $ 22,971 | $ 2,816 |
Goodwill - Additional Informati
Goodwill - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill impairment charges | $ 0 | $ 0 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Intangible Assets Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 32,337 | $ 15,784 |
Accumulated Amortization | (5,019) | (2,220) |
Net | 27,318 | 13,564 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 22,970 | 14,570 |
Accumulated Amortization | (2,760) | (1,131) |
Net | 20,210 | 13,439 |
Acquired Software Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 7,140 | |
Accumulated Amortization | (1,015) | |
Net | 6,125 | |
Patents | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 1,227 | 1,214 |
Accumulated Amortization | (1,133) | (1,089) |
Net | 94 | $ 125 |
Tradename | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 1,000 | |
Accumulated Amortization | (111) | |
Net | $ 889 |
Intangible Assets, Net - Additi
Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Intangible amortization expense | $ 2,799 | $ 1,032 | $ 187 |
Intangible Assets, Net - Sche_2
Intangible Assets, Net - Schedule of Future Intangible Asset Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
2023 | $ 2,657 | |
2024 | 2,649 | |
2025 | 2,633 | |
2026 | 2,594 | |
2027 | 2,594 | |
Thereafter | 14,191 | |
Net | $ 27,318 | $ 13,564 |
Details of Certain Consolidat_3
Details of Certain Consolidated Balance Sheet Accounts - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Deferred commissions | $ 1,040 | $ 822 |
Prepaid insurance | 724 | 611 |
Prepaid software and licenses | 647 | 756 |
Other prepaid expenses | 236 | 198 |
Short-term deposits | 363 | |
Other | 215 | 117 |
Total | $ 3,225 | $ 2,504 |
Details of Certain Consolidat_4
Details of Certain Consolidated Balance Sheet Accounts - Schedule of Accounts Receivable and Contract Asset, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Accounts receivable | $ 28,790 | $ 16,167 |
Contract asset | 2,167 | 41 |
Allowance for doubtful accounts | (74) | |
Accounts receivable and contract asset | $ 30,957 | $ 16,134 |
Details of Certain Consolidat_5
Details of Certain Consolidated Balance Sheet Accounts - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other Assets Noncurrent Disclosure [Abstract] | ||
Deferred commissions | $ 2,552 | $ 1,723 |
Other | 18 | 195 |
Total other assets | $ 2,570 | $ 1,918 |
Details of Certain Consolidat_6
Details of Certain Consolidated Balance Sheet Accounts - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 55,304 | $ 44,323 |
Accumulated depreciation and amortization | (33,316) | (26,914) |
Property and equipment, net | 21,988 | 17,409 |
Deployed Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 44,700 | 35,882 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 5,267 | 4,818 |
Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,359 | 1,745 |
Software | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,314 | 1,314 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 472 | 295 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 934 | 30 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 258 | $ 239 |
Details of Certain Consolidat_7
Details of Certain Consolidated Balance Sheet Accounts - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 6.4 | $ 5.8 | $ 5.4 |
Details of Certain Consolidat_8
Details of Certain Consolidated Balance Sheet Accounts - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Expenses And Other Current Liabilities [Abstract] | ||
Personnel-related accruals | $ 5,971 | $ 4,864 |
Contingent consideration liabilities | 1,500 | |
Operating lease liabilities | 868 | 409 |
Professional fees | 441 | 925 |
Income tax payable | 385 | 23 |
Sales/ use tax payable | 257 | 167 |
Other | 543 | 292 |
Accrued expenses and other current liabilities | $ 9,965 | $ 6,680 |
Details of Certain Consolidat_9
Details of Certain Consolidated Balance Sheet Accounts - Schedule of Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Expenses And Other Current Liabilities [Abstract] | ||
Operating lease liabilities | $ 2,554 | $ 2,013 |
Contingent consideration liabilities | 3,246 | 1,500 |
Other liabilities, noncurrent | $ 5,800 | $ 3,513 |
Impairment of Property and Eq_2
Impairment of Property and Equipment - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Impairment of property and equipment | $ 0 | $ 25,000 | $ 234,000 |
Financing Arrangements - Additi
Financing Arrangements - Additional Information (Details) - Umpqua Credit Agreement - USD ($) | 12 Months Ended | |||
Nov. 23, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 27, 2018 | |
Debt Instrument [Line Items] | ||||
Credit facility interest rate description | (1) a base rate, which fluctuates daily and is the greater of (a) the prime rate in effect as of any date of determination and (b) the SOFR rate as of such date of determination plus 1.0% per annum or (2) a SOFR rate, which can be for a period of 30, 90 or 180 days at the Company’s option and is equal to the SOFR rate as published by CME Group Benchmark Administration Limited, in each case plus 2.0% per annum. | |||
Credit facility covenant description | The Company is subject to certain financial covenants in the Credit Agreement, which include: (1) maintaining a ratio of consolidated funded debt, excluding the amount of any unsecured convertible notes issued by the Company, to consolidated earnings before income tax, depreciation and amortization (“Consolidated EBITDA”) of not greater than 3.00 to 1.00 measured at the end of each fiscal quarter and (2) maintaining a ratio of Consolidated EBITDA to interest charges of at least 2.00 to 1.00 measured at the end of each fiscal quarter. The Company was in compliance with its covenants as of December 31, 2022. | |||
Credit facility on maintaining a ratio of consolidated funded debt | 3% | |||
Credit facility on maintaining a ratio of Consolidated EBITDA to interest charges | 2% | |||
Credit facility borrowings outstanding | $ 0 | $ 0 | ||
SOFR | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread | 2% | |||
Period of interest rate option applied on credit facility | 30 days | |||
Period of interest rate option applied on credit facility | 90 days | |||
Period of interest rate option applied on credit facility | 180 days | |||
Credit facility variable rate | SOFR | |||
SOFR | Fluctuating Rate Per Annum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument basis spread | 1% | |||
Revolving Facility | ||||
Debt Instrument [Line Items] | ||||
Credit agreement date | Sep. 27, 2018 | |||
Credit facility maximum borrowing capacity under loan | $ 25,000,000 | $ 10,000,000 | ||
Credit facility maturity date | Nov. 27, 2022 | |||
Credit facility extended maturity date | Oct. 15, 2024 | |||
Letter of Credit Sub-facility | ||||
Debt Instrument [Line Items] | ||||
Credit facility maximum borrowing capacity under loan | $ 7,500,000 | $ 6,000,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
ShotSpotter Labs | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ 80 | $ 100 | $ 200 |
Income Taxes - Schedule of Dome
Income Taxes - Schedule of Domestic and Foreign Components of Net Income (Loss) Before Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 7,583 | $ (4,280) | $ 1,562 |
Foreign | (31) | (95) | (427) |
Income (loss) before income taxes | $ 7,552 | $ (4,375) | $ 1,135 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision (Benefit) for Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
State | $ 455 | ||
Foreign | 27 | $ 6 | $ (7) |
Total | 482 | 6 | (7) |
Deferred: | |||
Federal | 316 | ||
State | 369 | ||
Foreign | 50 | (83) | |
Total | 685 | 50 | (83) |
Total provision (benefit) for income tax | $ 1,167 | $ 56 | $ (90) |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Statutory Federal Income Tax Rate to Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Income tax (benefit) at statutory rate | $ 1,545 | $ (919) | $ 240 |
Change in valuation allowance | (388) | 1,288 | (165) |
Indefinite-lived asset (goodwill) | (642) | ||
State tax | 239 | (288) | (37) |
Change in deferred | 415 | (27) | 8 |
Stock-based compensation | 111 | 62 | (11) |
Research and development credits | (271) | (160) | (103) |
Foreign rate differential | 43 | 7 | (40) |
Other | 115 | 93 | 18 |
Total provision (benefit) for income tax | $ 1,167 | $ 56 | $ (90) |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Company's Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating losses | $ 17,255 | $ 19,920 |
Research and development credits | 2,917 | 2,557 |
Accruals and reserves | 5,914 | 2,605 |
Deferred revenue and contract costs | 625 | 140 |
Gross deferred tax assets | 26,711 | 25,222 |
Valuation allowance | (25,343) | (24,955) |
Net deferred tax assets | 1,368 | 267 |
Deferred tax liabilities: | ||
Fixed assets and intangibles | (2,053) | $ (267) |
Total deferred tax (liabilities), net | $ (685) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | |
Income Taxes [Line Items] | |||
Increased in valuation allowance | $ 25,300,000 | $ 25,000,000 | |
Percentage of net operating losses with indefinitely carryforward period | 80% | ||
Deferred tax liability | $ 700,000 | ||
Interest or penalties accrued | 0 | 0 | |
California | |||
Income Taxes [Line Items] | |||
Research and experimental credits carryforwards | $ 1,600,000 | ||
Research and experimental credits carryforwards, expiration | The California research and experimental tax credits carry forward indefinitely until utilized. | ||
Federal | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards subject to expiration | $ 67,100,000 | 78,400,000 | |
Net operating loss carryforward not subject to expiration | $ 4,900,000 | ||
Net operating loss carryforwards latest expiration year | 2028 | ||
Net operating loss carryforwards | $ 62,200,000 | ||
Research and experimental credits carryforwards | $ 1,700,000 | ||
Research and experimental credits carryforwards, expiration | The federal research and experimental tax credits will begin to expire, if not utilized, in 2027. | ||
State | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards latest expiration year | 2023 | ||
Net operating loss carryforwards | $ 43,800,000 | $ 49,700,000 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Uncertain Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Balance at beginning of year | $ 954 | $ 859 |
Increases for current year tax positions | 140 | 87 |
Increases for prior year tax positions | 8 | |
Decreases for prior year tax positions | (11) | |
Balance at end of year | $ 1,083 | $ 954 |
Capital Stock - Additional Info
Capital Stock - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 30, 2022 | |
Class Of Stock [Line Items] | ||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | ||
Common stock, par value | $ 0.005 | $ 0.005 | ||
Common stock, shares issued | 12,243,929 | 11,703,430 | ||
Common stock, shares outstanding | 12,243,929 | 11,703,430 | ||
Common stock, voting rights | Holders of common stock have voting rights equal to one vote per share of common stock held | |||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | ||
Preferred stock, par value | $ 0.005 | $ 0.005 | ||
Preferred stock, shares issued | 0 | 0 | ||
Preferred stock, shares outstanding | 0 | 0 | ||
Repurchase of common stock | 106,992 | 95,151 | ||
Average price per share | $ 28.81 | $ 37.82 | ||
Repurchase of common stock amount | $ 3,084,000 | $ 3,601,000 | $ 1,615,000 | |
Maximum | ||||
Class Of Stock [Line Items] | ||||
Amount approved for common stock repurchase | $ 15,000,000 | $ 25,000,000 |
Capital Stock - Schedule of Com
Capital Stock - Schedule of Common Stock Reserved for Future Issuance (Details) | Dec. 31, 2022 shares |
Class Of Stock [Line Items] | |
Common stock reserved for future issuance | 3,007,251 |
Options Outstanding | |
Class Of Stock [Line Items] | |
Common stock reserved for future issuance | 1,256,056 |
Shares Available for Future Grant | |
Class Of Stock [Line Items] | |
Common stock reserved for future issuance | 1,527,374 |
Unvested Restricted Stock Units | |
Class Of Stock [Line Items] | |
Common stock reserved for future issuance | 223,821 |
Net Income (Loss) per Share - S
Net Income (Loss) per Share - Summary of Computation of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net income (loss) | $ 6,385 | $ (4,431) | $ 1,225 |
Denominator: | |||
Weighted-average shares outstanding, basic | 12,171,609 | 11,647,558 | 11,408,757 |
Weighted-average shares outstanding, diluted | 12,317,707 | 11,647,558 | 11,730,294 |
Net income (loss) per share, basic | $ 0.52 | $ (0.38) | $ 0.11 |
Net income (loss) per share, diluted | $ 0.52 | $ (0.38) | $ 0.10 |
Net Income (Loss) per Share -_2
Net Income (Loss) per Share - Schedule of Anti-dilutive Shares Outstanding Excluded in Calculation of Diluted Net Income (Loss) per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Total | 1,112,772 | 912,738 | 674,595 |
Options to Purchase Common Stock | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Total | 1,015,497 | 783,928 | 573,340 |
Unvested Restricted Stock Units | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Total | 97,275 | 128,810 | 101,255 |
Equity Incentive Plans - Additi
Equity Incentive Plans - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||
May 31, 2017 shares | Dec. 31, 2022 USD ($) Participant shares | Dec. 31, 2021 shares | Dec. 31, 2020 shares | Dec. 31, 2017 | |
Options to Purchase Common Stock | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Total unrecognized stock-based compensation cost related to unvested stock options | $ | $ 10,500,000 | ||||
Total unrecognized stock-based compensation cost related to unvested stock options, recognized ratably over a weighted-average period | 2 years 9 months 18 days | ||||
Income tax benefits from stock-based compensation | $ | $ 0 | ||||
Restricted Stock Unit | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Total unrecognized stock-based compensation cost related to unvested stock options, recognized ratably over a weighted-average period | 2 years 7 months 6 days | ||||
Cancelled restricted stock units | 2,825 | 15,761 | 10,277 | ||
Total unrecognized stock-based compensation cost related RSUs | $ | $ 5,700,000 | ||||
Restricted Stock Unit | Executive Management | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
2005 Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares available for future grant | 0 | ||||
2017 Equity Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares available for future grant | 1,527,374 | 1,661,956 | |||
Shares of common stock reserved for issuance, automatic annual increase initiation period | --01-01 | ||||
Percentage of number of shares of common stock outstanding | 5% | ||||
2017 Equity Incentive Plan | Restricted Stock Unit | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Recognized net incremental compensation expense | $ | $ 10,000 | ||||
2017 Equity Incentive Plan | Restricted Stock Unit | Two individuals | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Accelerated vesting | 5,849 | ||||
2017 Equity Incentive Plan | Restricted Stock Unit | Another individual | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Cancelled restricted stock units | 1,887 | ||||
Incentive Stock Options | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Ownership percentage, minimum | 10% | ||||
Incentive Stock Options | Minimum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of fair value of common stock granted to employees | 110% | ||||
2005 Plan and 2017 Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
2005 Plan and 2017 Plan | Maximum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Expiration period | 10 years | ||||
2017 Employee Stock Purchase Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares available for future grant | 516,167 | 399,328 | |||
Percentage of number of shares of common stock outstanding | 2% | ||||
Percentage of fair market value of common stock at beginning and end of offering period | 15% | ||||
Purchase of common stock under ESPP, Description | The 2017 ESPP permits the maximum discounted purchase price permitted under U.S. tax rules, including a “lookback”, which allows eligible employees to purchase shares of the Company’s common stock at a 15% discount to the lesser of the fair market value of common stock at the beginning and end of the offering period. | ||||
Initial offering period in length | 24 months | ||||
Number of participant have the right to purchase shares of common stock | Participant | 0 | ||||
Fair Market Value Of Common Stock | $ | $ 25,000 | ||||
Periodic increment of common stock reserved for future issuance | 150,000 |
Equity Incentive Plans - Schedu
Equity Incentive Plans - Schedule of Activity of Shares Available for Grant (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Increase in accordance with the evergreen provision | 3,007,251 | ||
Options issued during the year | (557,218) | (111,489) | (347,095) |
Canceled during the year | 43,271 | 43,101 | 54,890 |
2017 Equity Incentive Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Shares available for grant at December 31, 2021 | 1,661,956 | ||
Increase in accordance with the evergreen provision | 585,172 | ||
Options issued during the year | (557,218) | ||
Canceled during the year | 43,271 | ||
RSUs granted | (205,807) | ||
Shares available for grant at December 31, 2022 | 1,527,374 | 1,661,956 | |
2017 Employee Stock Purchase Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Shares available for grant at December 31, 2021 | 399,328 | ||
Increase in accordance with the evergreen provision | 150,000 | ||
Issued during the year | (33,161) | ||
Shares available for grant at December 31, 2022 | 516,167 | 399,328 |
Equity Incentive Plans - Sche_2
Equity Incentive Plans - Schedule of Fair Value of Stock Option Grants Determined using Block-Scholes Option Pricing Model Assumed Inputs (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected term (in years) | 6 years | 6 years | 6 years |
Risk-free interest rate, minimum | 1.54% | 0.45% | 0.36% |
Risk-free interest rate, maximum | 4.18% | 1.62% | 0.83% |
Expected dividend yield | 0% | ||
Minimum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Fair value of common stock | $ 16.30 | $ 31.12 | $ 23.49 |
Expected volatility | 63% | 65% | 64% |
Maximum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Fair value of common stock | $ 37 | $ 48.05 | $ 34.07 |
Expected volatility | 64% | 67% | 68% |
Equity Incentive Plans - Sche_3
Equity Incentive Plans - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Number of Options Outstanding, Beginning Balance | 783,928 | 813,242 | 617,493 |
Number of Options Outstanding, Granted | 557,218 | 111,489 | 347,095 |
Number of Options Outstanding, Exercised | (41,819) | (97,702) | (96,456) |
Number of Options Outstanding, Canceled | (43,271) | (43,101) | (54,890) |
Number of Options Outstanding, Ending Balance | 1,256,056 | 783,928 | 813,242 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Weighted Average Exercise Price, Beginning Balance | $ 28 | $ 24.58 | $ 17.13 |
Weighted Average Exercise Price, Granted | 27.40 | 39 | 32.14 |
Weighted Average Exercise Price, Exercised | 12.88 | 9.20 | 3.25 |
Weighted Average Exercise Price, Canceled | 28.85 | 35.84 | 26.07 |
Weighted Average Exercise Price, Ending Balance | 28.20 | 28 | 24.58 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Weighted Average Grant Date Fair Value per Option, Granted | $ 16.30 | $ 23.32 | $ 19.15 |
Aggregate Intrinsic Value Exercised | $ 778 | $ 3,064 | $ 2,257 |
Equity Incentive Plans - Sche_4
Equity Incentive Plans - Schedule of Additional Information for Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-Based Payment Arrangement [Abstract] | ||||
Number of Options, Outstanding | 1,256,056 | 783,928 | 813,242 | 617,493 |
Weighted Average Exercise Price, Outstanding | $ 28.20 | $ 28 | $ 24.58 | $ 17.13 |
Aggregate Intrinsic Value, Outstanding | $ 8,652 | |||
Weighted Average Remaining Contractual term (in years), Outstanding | 7 years 7 months 6 days | |||
Number of Options, Exercisable | 615,261 | |||
Weighted Average Exercise Price, Exercisable | $ 27.04 | |||
Aggregate Intrinsic Value, Exercisable | $ 5,396 | |||
Weighted Average Remaining Contractual term (in years), Exercisable | 6 years 4 months 17 days |
Equity Incentive Plans - Sche_5
Equity Incentive Plans - Schedule of Unvested Restricted Stock Units Awards Activity (Details) - Restricted Stock Unit - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of RSUs, Beginning Balance | 128,810 | 141,508 | 114,996 |
Number of RSUs, Granted | 205,807 | 84,035 | 91,759 |
Number of RSUs, Vested | (107,971) | (80,972) | (54,970) |
Number of RSUs, Forfeited | (2,825) | (15,761) | (10,277) |
Number of RSUs, Ending Balance | 223,821 | 128,810 | 141,508 |
Weighted Average Grant Date Fair Value per RSU, Beginning Balance | $ 35.09 | $ 29.67 | $ 30.24 |
Weighted Average Grant Date Fair Value per RSU, Granted | 26.90 | 37.86 | 31.75 |
Weighted Average Grant Date Fair Value per RSU, Vested | 31.88 | 29.22 | 32.12 |
Weighted Average Grant Date Fair Value per RSU, Forfeited | 26.50 | 31.38 | 41.50 |
Weighted Average Grant Date Fair Value per RSU, Ending Balance | $ 29.21 | $ 35.09 | $ 29.67 |
Aggregate Fair Value of RSUs' Vested | $ 3,129 | $ 3,078 | $ 1,766 |
Equity Incentive Plans - Sche_6
Equity Incentive Plans - Schedule of Stock-Based Compensation Expense for All Award Types Recorded in Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 8,282 | $ 5,872 | $ 4,462 |
Cost of Revenue | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 1,992 | 1,567 | 1,093 |
Sales and Marketing | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 1,754 | 1,612 | 1,268 |
Research and Development | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 1,082 | 734 | 580 |
General and Administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 3,454 | $ 1,959 | $ 1,521 |
Benefit Plan - Additional Infor
Benefit Plan - Additional Information (Details) - 401(k) Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Defined plan, percentage to matched contributions | 50% | ||
Defined plan, matching contribution expense | $ 0.3 | $ 0.3 | $ 0.2 |
Maximum | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined plan, percentage to matched contributions | 2% |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
May 01, 2020 | Jan. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 01, 2021 | |
Lessee, Lease, Description [Line Items] | ||||||
Operating lease, description | The Company leases its principal executive offices in Fremont, California, under a non-cancelable operating lease which expires in February 2027. | |||||
Operating lease, expiration period | 2025-11 | 2027-02 | ||||
Operating lease expiration start date | 2025-06 | |||||
Operating lease expiration end date | 2026-02 | |||||
Lessee, operating lease, existence of option to extend [true false] | true | |||||
Operating lease, option to extend, description | Each lease contains an option to extend the term for an additional period of five years subject to certain terms and conditions. | The lease contains an option to extend the term for an additional period of up to five years subject to certain terms and conditions. | ||||
Lease commencement date | Oct. 01, 2021 | |||||
Operating lease right-of-use asset | $ 500 | $ 3,240 | $ 2,323 | $ 2,000 | ||
Operating lease liability | $ 500 | $ 2,000 | ||||
Operating lease, discount rate | 3.85% | 3.25% | 3% | |||
Operating lease cost recognized | $ 1,000 | $ 600 | $ 400 | |||
Maximum | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Operating lease extended, additional term | 5 years | 5 years |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Information Related to Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Oct. 01, 2021 | May 01, 2020 | |
Assets and Liabilities, Lessee [Abstract] | ||||
Operating lease right-of-use assets | $ 3,240 | $ 2,323 | $ 2,000 | $ 500 |
Lease liabilities (short-term) (presented within Accrued expenses and other current liabilities) | $ 868 | $ 409 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities | ||
Lease liabilities (long-term) (presented within Other liabilities) | $ 2,554 | $ 2,013 | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other liabilities | Other liabilities | ||
Total operating lease liabilities | $ 3,422 | $ 2,422 | ||
Cash paid for amounts included in the measurement of lease liabilities (presented within Operating cash flows) | $ 941 | $ 553 |
Leases - Summary of Maturities
Leases - Summary of Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Lessee, Operating Lease, Liability, to be Paid [Abstract] | ||
2023 | $ 1,041 | |
2024 | 1,078 | |
2025 | 946 | |
2026 | 506 | |
2027 | 39 | |
Total lease payments, undiscounted | 3,610 | |
Less: imputed interest | (188) | |
Operating lease liability | $ 3,422 | $ 2,422 |