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NEWARK, CA – May 8, 2018 – ShotSpotter, Inc. (NASDAQ: SSTI), the leader in gunshot detection solutions that help law enforcement officials and security personnel identify, locate and deter gun violence, today reported results for the first quarter ended March 31, 2018.

“We started the year with very strong performance, posting our fifth consecutive quarter of revenue growth exceeding 40% from the corresponding prior year period,” said Ralph Clark, CEO of ShotSpotter. “In the first quarter we went live with initial deployments in four new cities and expanded coverage in four others, turning on 47 net new go-live miles. We now have approximately 522 miles under coverage, which represents only a fraction of the cities in the U.S. that have a significant gun violence problem. We are excited to take a key step in addressing the same issue outside this country, adding a VP of international sales to target Latin America. The strong momentum and visibility has continued into Q2, allowing us to increase our revenue expectations for the full year.”

Revenues for the first quarter of 2018 increased 51% to a record $6.9 million from $4.6 million for the same period in 2017. The increase in revenues was driven by new customer deployments, mileage expansions with existing customers and strong customer renewal rates.

Gross profit for the first quarter of 2018 was $3.6 million, or 52% of revenue, a 91% increase from $1.9 million, or 41% of revenue, for the same period in 2017.

Total operating expenses in the first quarter of 2018 increased 57% to $4.8 million from $3.1 million in the same period last year. The increase in operating expenses was due primarily to company headcount growth and the cost of operating as a public company.

Net loss totaled $1.2 million, or $0.12 per share (based on 10.1 million basic and diluted weighted average shares outstanding), compared with a net loss of $1.6 million, or $0.93 per share (based on 1.7 million basic and diluted weighted average shares outstanding) for the same period in 2017. Adjusted EBITDA for the first quarter of 2018 was $26,000.

As of March 31, 2018, the company had cash, cash equivalents and restricted cash of $14.8 million compared to $19.6 million at the previous quarter end and remained debt free.

For the full year of 2018, the company is increasing its revenue outlook to $33.0 million to $34.0 million, up from $31.0 to $33.0 million.

The company’s outlook statements are based on current expectations. The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under “Safe Harbor Statement” below.

ShotSpotter will hold a conference call on May 8, 2018 at 4:30 p.m. Eastern Daylight Time (1:30 p.m. Pacific Daylight Time) to discuss these results and provide an update on business conditions.

ShotSpotter management will host the presentation, followed by a question and answer period.

The conference call will be broadcast simultaneously and available for replay via the investor

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

A replay of the call will be available after 7:30 p.m. Eastern time on the same day through June 7, 2018.

Adjusted EBITDA. ShotSpotter discloses the following non-GAAP financial measure in this release and the earnings call referencing this press release: Adjusted EBITDA, which represents the company’s net loss before interest (expense) income, income taxes, depreciation and amortization, and stock-based compensation expense. Adjusted EBITDA is a measure used by management internally to understand and evaluate the company’s core operating performance and trends across accounting periods and in connection with developing future operating plans, making strategic decisions regarding the allocation of capital and considering initiatives focused on cultivating new markets for our solutions. In particular, the exclusion of these expenses in calculating adjusted EBITDA facilitates comparisons of the company’s operating performance on a period-to-period basis.

ShotSpotter believes adjusted EBITDA also provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. For example, ShotSpotter adjusts EBITDA for stock-based compensation expense because that expense often varies for reasons that are generally unrelated to financial and operational performance in any particular period. Stock-based compensation is utilized by ShotSpotter to attract and retain employees with a goal of long-term retention and the alignment of employee interests with those of the Company and its stockholders, rather than to address operational performance for any particular period.

Adjusted EBITDA is not a measure calculated in accordance with GAAP. Accordingly, use of adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of ShotSpotter’s financial results as reported under GAAP. Some of these limitations are: (1) adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; and (2) other companies, including companies in our industry, may calculate adjusted EBITDA or similarly titled measures differently, which reduces the usefulness of the metric as a comparative measure. Because of these and other limitations, you should consider adjusted EBITDA alongside our GAAP-based financial performance measures, in particular net loss, and our other GAAP financial results.

The following table presents a reconciliation of adjusted EBITDA to net loss, the most directly comparable GAAP measure, for each of the periods indicated:

	Three Months Ended March 31,
	2018			2017
GAAP net loss	$	(1,217	)	$	(1,561	)
Less:
Interest (income) expense		(27	)		365
Income taxes		26			—
Depreciation and amortization		817			679
Stock-based compensation expense		427			23
Adjusted EBITDA	$	26		$	(494	)

This press release contains "forward-looking statements" within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding the company’s overall business, total addressable market, international expansion, expectations regarding future sales and expenses, and revenue expectations and guidance for 2018. Words such as "expect," "anticipate," "should," "believe," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the company’s control. The company’s actual results could differ materially from those stated or implied in

forward-looking statements due to a number of factors, including but not limited to: the company’s ability to maintain and increase sales; the availability of funding for the company’s customers to purchase the company’s solutions; the complexity, expense and time associated with contracting with government entities; the company’s ability to maintain and expand coverage of existing public safety customer accounts and further penetrate the public safety market; the company’s ability to sell its solutions into new markets; the lengthy sales cycle for the company’s solutions; changes in federal funding available to support local law enforcement; the company’s ability to deploy and deliver its solutions; and the company’s ability to maintain and enhance its brand, as well as other risk factors included including the company’s most recent annual report on Form 10-K and other SEC filings. These forward-looking statements are made as of the date of this press release and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Except as required by law, the company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.

ShotSpotter is the leader in gunshot detection solutions that help law enforcement officials and security personnel identify, locate and deter gun violence. ShotSpotter is based in Newark, California and offers its solutions on a SaaS-based subscription model worldwide with customers currently in the U.S. and South Africa.


	Three Months Ended March 31,
	2018			2017
Revenues	$	6,907		$	4,562
Costs
Cost of revenues		3,308			2,675
Total costs		3,308			2,675
Gross profit		3,599			1,887

Operating expenses
Sales and marketing		1,554			1,108
Research and development		1,236			1,034
General and administrative		2,028			930
Total operating expenses		4,818			3,072
Operating loss		(1,219	)		(1,185	)
Other income (expense), net
Interest income (expense), net		27			(365	)
Other income (expense), net		1			(11	)
Total other income (expense), net		28			(376	)
Loss before income taxes		(1,191	)		(1,561	)
Provision for income taxes		26			—
Net loss	$	(1,217	)	$	(1,561	)
Net loss per share, basic and diluted	$	(0.12	)	$	(0.93	)
Weighted average shares used in computing net loss per share, basic and diluted		10,067,830			1,678,326

	March 31,			December 31,
	2018			2017
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	14,732		$	19,567
Accounts receivable		6,367			3,928
Prepaid expenses and other current assets		1,301			839
Restricted cash		30			30
Total current assets		22,430			24,364
Property and equipment, net		13,802			11,596
Intangible assets, net		92			95
Other assets		1,556			143
Total assets	$	37,880		$	36,198
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	1,932		$	1,627
Deferred revenue, short-term		16,477			15,780
Accrued expenses and other current liabilities		2,989			3,815
Total current liabilities		21,398			21,222
Deferred revenue, long-term		1,615			2,710
Other liabilities		98			104
Total liabilities		23,111			24,036
Stockholders' equity:
Common stock		51			48
Additional paid-in capital		110,475			109,708
Accumulated deficit		(95,787	)		(97,595	)
Accumulated other comprehensive income		30			1
Total stockholders' equity		14,769			12,162
Total liabilities and stockholders' equity	$	37,880		$	36,198


	Three Months Ended March 31,
	2018			2017
Cash flows from operating activities:
Net loss	$	(1,217	)	$	(1,561	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		817			679
Stock-based compensation		427			23
Amortization of debt issuance costs		—			34
Changes in operating assets and liabilities:
Accounts receivable		(2,439	)		(1,946	)
Prepaid expenses and other assets		11			(26	)
Accounts payable		305			(382	)
Accrued expenses and other current liabilities		(834	)		(166	)
Deferred revenue		706			1,470
Net cash used in operating activities		(2,224	)		(1,875	)
Cash flows from investing activities:
Purchase of property and equipment		(2,985	)		(1,077	)
Investment in intangible and other assets		(10	)		(7	)
Net cash used in investing activities		(2,995	)		(1,084	)
Cash flows from financing activities:
Proceeds from notes payable		—			1,500
Proceeds from exercise of stock options		342			5
Net cash provided by financing activities		342			1,505
Decrease in cash and cash equivalents		(4,877	)		(1,454	)
Effect of exchange rate on cash and cash equivalents		42			2
Cash, cash equivalents and restricted cash at beginning of year		19,597			3,895
Cash, cash equivalents and restricted cash at end of period	$	14,762		$	2,443