SoundHound AI Reports Record Fourth Quarter Revenue, Up 101%, Exceeding $34.5 Million; Raises Full Year Outlook

Rhea-AI Summary

SoundHound AI (SOUN) reported exceptional Q4 2024 results with revenue reaching $34.5 million, marking a 101% year-over-year increase. Full-year revenue grew 85% to $84.7 million.

Q4 financial metrics showed GAAP gross margin of 39.9% and non-GAAP gross margin of 52.1%. The company ended 2024 with nearly $200 million in cash and no debt. Q4 adjusted EBITDA was ($16.8) million, while full-year adjusted EBITDA was ($61.9) million.

The company demonstrated strong customer momentum across multiple sectors, including restaurants (working with over 30% of top 20 QSR brands), healthcare, automotive, and financial services (serving 70% of top 10 global financial institutions). SoundHound has raised its 2025 revenue outlook to $157-177 million.

Positive

• Revenue doubled YoY in Q4 2024 to $34.5M
• Full year revenue up 85% to $84.7M
• Strong cash position of $198M with zero debt
• Raised 2025 revenue guidance to $157-177M
• Expanded customer base across multiple sectors
• Non-GAAP gross margin of 52.1% in Q4

Negative

• Q4 adjusted EBITDA loss of $16.8M
• Full year adjusted EBITDA loss of $61.9M
• Q4 GAAP EPS loss of $0.69

Insights

Financial Analyst

SoundHound AI's Q4 2024 results demonstrate exceptional momentum with revenue surging 101% year-over-year to $34.5 million, pushing full-year revenue to $84.7 million (85% growth). This acceleration suggests their voice AI solutions are gaining significant market traction across multiple industries.

The company's financial foundation appears increasingly solid. Non-GAAP gross margins of 52.1% for Q4 and 58.5% for the full year indicate strong unit economics and pricing power. While adjusted EBITDA remains negative at ($16.8) million for Q4 and ($61.9) million for the full year, their $198 million cash reserve with zero debt provides approximately 3 years of runway at current burn rates, allowing continued aggressive investment in growth and technology.

The significant GAAP vs. non-GAAP EPS discrepancy (($0.69) vs. ($0.05)) stems from non-cash fair value adjustments to contingent liabilities triggered by stock price appreciation - essentially an accounting effect rather than operational performance.

SoundHound's customer diversification strategy is particularly impressive, penetrating multiple high-value sectors:

• Restaurant sector: 30% of top 20 QSR brands
• Healthcare: Major systems including Duke Health and Wellstar
• Automotive: Multiple Stellantis brands and EV manufacturers
• Financial services: 70% of top 10 global financial institutions

The raised 2025 revenue guidance of $157-177 million implies continued growth of 85-109%, suggesting management expects sustained or even accelerating momentum. This confidence likely stems from their expanding footprint in "Agentic AI" - autonomous AI systems that can perform complex tasks with minimal human intervention - where SoundHound appears to be establishing early leadership in commercial voice applications.

Their strategic focus on voice commerce (demonstrated at CES 2025) represents a potentially massive new revenue stream as voice-enabled purchasing becomes mainstream across devices and vehicles.

Technology Analyst

SoundHound's technological positioning in the voice AI market shows remarkable strategic foresight. Their self-described leadership in "Agentic AI" represents a critical evolution beyond simple command-response systems toward AI that can independently execute complex multi-step tasks - essentially functioning as autonomous digital assistants rather than mere query processors.

What distinguishes SoundHound technologically is their end-to-end voice stack ownership. Unlike competitors who assemble components from various sources, SoundHound has built proprietary technology across the entire voice AI pipeline: speech recognition, natural language understanding, dialog management, and response generation. This integrated approach enables faster processing, better contextual understanding, and more natural conversations - important differentiators in real-world applications.

Their in-vehicle voice commerce platform demonstrates this advantage perfectly. The automotive environment presents unique challenges: background noise, connectivity limitations, and driver distraction concerns. SoundHound's solution processes complex food ordering interactions entirely on-device when needed, maintaining functionality even with intermittent connectivity while ensuring driver safety through hands-free operation.

The NVIDIA partnership is particularly significant for edge computing capabilities. By optimizing their models to run efficiently on NVIDIA's automotive hardware, SoundHound can deliver generative AI responses with minimal latency - essential for automotive applications where cloud-dependent systems introduce dangerous delays. This edge-first approach also addresses privacy concerns by processing sensitive information locally.

Their cross-industry implementation strategy creates a powerful data flywheel effect. Each vertical provides unique conversational data and domain knowledge that improves their core AI models. Restaurant interactions improve food ordering capabilities, healthcare deployments enhance medical terminology understanding, and automotive implementations refine contextual awareness in noisy environments.

The 100+ million customer interactions milestone is more than a vanity metric - it represents an invaluable proprietary dataset for training and refining their models, particularly for domain-specific terminology and real-world usage patterns that generic large language models often struggle with.

As voice interfaces become ubiquitous entry points to AI systems, SoundHound's specialized expertise positions them to potentially capture significant market share in this rapidly expanding sector.

• Strong year-end performance propels the company to the top end of revenue guidance range with strong momentum in voice-enabled Agentic AI
• Company closes the year with nearly $200 million in cash and no debt

SANTA CLARA, Calif.--(BUSINESS WIRE)-- SoundHound AI, Inc. (Nasdaq: SOUN), a global leader in voice artificial intelligence, today reported its financial results for the fourth quarter and full year 2024.

SoundHound AI Reports Record Fourth Quarter Revenue, Up 101%, Exceeding $34.5 Million; Raises Full Year Outlook (Graphic: Business Wire)

“We had a breakthrough year, expanding our leadership position in voice and conversational AI through major customer wins, expanded partnerships, groundbreaking generative AI innovation, and strategic acquisitions,” said Keyvan Mohajer, CEO and Co-Founder of SoundHound AI. “As we move into the era of Agentic AI, we are uniquely positioned to capitalize on this evolving category. Together with our existing broad portfolio of voice-enabled AI solutions we can deliver even greater commercial impact.”

Fourth Quarter and Full Year Financial Highlights

• Fourth quarter revenue was $34.5 million, an increase of 101% year-over-year
• Fourth quarter GAAP gross margin was 39.9%; non-GAAP gross margin was 52.1%
• Fourth quarter adjusted EBITDA was ($16.8) million
• Full year revenue was $84.7 million, an increase of 85% year-over-year
• Full year GAAP gross margin was 48.9%; non-GAAP gross margin was 58.5%
• Full year adjusted EBITDA was ($61.9) million
• SoundHound's year-end stock price increase resulted in an increase in its fair value of contingent liabilities, significantly impacting both fourth quarter and full year GAAP net loss and EPS. The fluctuation is non-operating and non-cash in nature and is calculated based on mark to market fair value accounting standards. The corresponding non-GAAP values are not impacted. Accordingly, fourth quarter GAAP EPS was ($0.69) and fourth quarter non-GAAP EPS was ($0.05).

“We exited 2024 in a position of strength, and with accelerating momentum," said Nitesh Sharan, CFO of SoundHound AI. ”Our foundation runs deep, with a rapidly growing and diversified customer base and a highly capable team executing with tenacity to capture the tremendous opportunities in front of us.”

Business Highlights

Customer Momentum

• In Restaurants: Working with over 30% of the top 20 quick-service restaurant (QSR) brands, and continuing to expand across renowned restaurant brands including Burger King UK, Church’s Texas Chicken, Peet’s Coffee, Torchy’s Tacos, and Whataburger, among others.
• In Healthcare: New partners including Duke Health, Wellstar Health System, and Englewood Health. Customers include Allina Health, Aveanna Healthcare, and MUSC Health, among others.
• In Automotive: Expanding adoption across leading EV manufacturers, with customers including Lucid Motors, and Togg; launched in Lancia vehicles in Europe, adding to six other live Stellantis brands with SoundHound Chat AI Automotive.
• In Retail: Expanding AI solutions for multi-location retail brands in clothing, fitness, vehicle maintenance, home services, waste management, and more. Customers include Torrid, multiple Planet Fitness franchise groups, and My Gym, among others.
• In Energy: SoundHound continues to expand into new industries, adding one of the largest electric utilities in the United States to our wide-ranging portfolio of customers.
• In Government: SoundHound signed a contract with the City of Coral Springs and continues to roll out our conversational AI capabilities with federal government agencies such as a branch of the United States military together with General Dynamics Information Technology.
• In Telecom: Expanding in South America with Telefónica following recent multi-year renewal, and scaling with a major European broadcaster and telecommunications provider in five countries.
• In Financial Services: Customers including BNP Paribas as well regional banks and credit unions such as American Heritage Credit Union, Nordic Bank, Sterling Bank, and Truly Credit Union. SoundHound also works with 70% of the top 10 global financial institutions.
• In Insurance: In partnership with EXL expanding our industry presence with customers such as Transamerica, and scaling with companies like Apivia Courtage – surpassing 100 thousand calls automated in 2024.
• In Travel and Hospitality: Enhancing customer experiences for companies like AeroMexico and Resorts World Las Vegas, which recently highlighted our presence at CES 2025 on their digital display on The Strip.

Other Notable Highlights

• SoundHound is at the forefront of the Agentic AI revolution, leveraging its proven platform and strong market position to deliver next-generation agentic capabilities – an inevitable evolution in AI functionality for its customers.
• Unveiled the first ever in-vehicle voice commerce platform that enables seamless voice-controlled food ordering on the go at CES 2025.
• Partnered with Rekor to develop first-of-its-kind audio-visual AI, bringing hands-free voice control to emergency vehicle technology.
• Leading phone ordering technology surpassed 100 million customer interactions and processed hundreds of millions of dollars in restaurant orders.
• Conducted a research study about voice generative AI in vehicles, which found that 77% of regular drivers are likely to use voice generative AI capabilities in their vehicle if available.

Events and Awards

• Successful showcase at CES 2025, featuring collaborations with NVIDIA, Perplexity, Lucid Motors, LG and a broad range of the company's restaurant partners.
• SoundHound’s best-in-class technology earned multiple awards:
  • Frost Radar™ Leader in Enterprise Conversational AI in Healthcare 2024
  • XCelent Advanced Technology 2024 Award
  • Best Use of AI in the Automation & Self-Service Awards 2024
  • “Overall Connected Solution of the Year” at the AutoTech Breakthrough Awards
  • Shortlisted for Reuters 2024 Automotive D.R.I.V.E Honours for Innovation
  • Finalist for the 2025 Automotive News PACE Awards
• The company will be participating in NVIDIA GTC 2025, featuring demos of its voice assistant leveraging generative AI on the edge with NVIDIA Drive AGX™, and its recently introduced voice commerce ecosystem.

Fourth Quarter 2024 Financial Measures¹

Three Months Ended (thousands, unless otherwise noted)	December 31, 2024			December 31, 2023			Change
Revenues	$	34,543		$	17,147			101%
GAAP gross profit	$	13,784		$	13,236			4%
GAAP gross margin		39.9%			77.2%			(37.3)pp
Non-GAAP gross profit	$	18,007		$	13,354			35%
Non-GAAP gross margin		52.1%			77.9%			(25.8)pp
GAAP operating loss2	$	(257,072)		$	(12,393)			1,974%
Non-GAAP adjusted EBITDA	$	(16,793)		$	(3,593)			367%
GAAP net loss2	$	(258,599)		$	(18,003)			1,336%
Non-GAAP net loss	$	(18,993)		$	(9,771)			94%
GAAP net loss per share2	$	(0.69)		$	(0.07)			(0.62)
Non-GAAP net loss per share	$	(0.05)		$	(0.04)			(0.01)

Full Year 2024 Financial Measures¹

Twelve Months Ended (thousands, unless otherwise noted)	December 31, 2024			December 31, 2023			Change
Revenues	$	84,693		$	45,873			85%
GAAP gross profit	$	41,384		$	34,566			20%
GAAP gross margin		48.9%			75.4%			(26.5)pp
Non-GAAP gross profit	$	49,538		$	34,978			42%
Non-GAAP gross margin		58.5%			76.2%			(17.8)pp
GAAP operating loss2	$	(341,353)		$	(68,608)			398%
Non-GAAP adjusted EBITDA	$	(61,915)		$	(35,896)			72%
GAAP net loss2	$	(350,681)		$	(88,937)			294%
Non-GAAP net loss	$	(69,073)		$	(58,162)			19%
GAAP net loss per share2	$	(1.04)		$	(0.40)			(0.64)
Non-GAAP net loss per share	$	(0.20)		$	(0.25)			0.05

		1)		Please see tables below for a reconciliation from GAAP to non-GAAP.
		2)		GAAP-only operating loss includes a significant impact from the calculated fair value of contingent acquisition liabilities where future earn-out shares are marked-to-market on a quarterly basis, and with the increase in stock price at year-end the loss associated with this item was $221 million in the fourth quarter 2024 and $223 million in full year 2024, respectively. Non-GAAP measures exclude this non-cash impact

Liquidity and Cash Flows

The company’s total cash and cash equivalents was $198 million at December 31, 2024. The company had no outstanding debt as of December 31, 2024.

Condensed Cash Flow Statement

Year Ended

(thousands)	December 31, 2024			December 31, 2023
Cash flows:
Net cash used in operating activities	$	(108,878)		$	(68,265)
Net cash used in investing activities	$	(12,372)		$	(392)
Net cash provided by financing activities	$	210,906		$	168,237
Effects of exchange rate changes on cash	$	225		$	(20)
Net change in cash and cash equivalents	$	89,881		$	99,560

Business Outlook

SoundHound raises its full year 2025 revenue outlook to be in a range of $157 to $177 million.

Additional Information

For more information please see the company’s SEC filings which can be obtained on the company’s website at investors.soundhound.com. The financial statements for the company’s fiscal year ended December 31, 2024 will be posted on the website, and will be included as an attachment to the company’s current report on Form 8-K filed concurrently with the dissemination of this press release. The financial data presented in this press release should be considered preliminary and unaudited until the company files its Annual Report on Form 10-K.

Conference Call and Webcast

Keyvan Mohajer, Co-Founder and CEO, and Nitesh Sharan, CFO will host a live audio conference call and webcast today at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time. The live webcast and a replay will be accessible at investors.soundhound.com.

About SoundHound AI

SoundHound (Nasdaq: SOUN), a global leader in conversational intelligence, offers voice and conversational AI solutions that let businesses offer incredible experiences to their customers. Built on proprietary technology, SoundHound’s voice AI delivers best-in-class speed and accuracy in numerous languages to product creators and service providers across retail, financial services, healthcare, automotive, smart devices, and restaurants via groundbreaking AI-driven products like Smart Answering, Smart Ordering, Dynamic Drive-Thru, and Amelia AI Agents. Along with SoundHound Chat AI, a powerful voice assistant with integrated Generative AI, SoundHound powers millions of products and services, and processes billions of interactions each year for world class businesses. www.soundhound.com

Forward Looking Statements

This press release contains forward-looking statements, which are not historical facts, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. These forward-looking statements include, but are not limited to, statements concerning our expected financial performance, our ability to implement our business strategy and anticipated business and operations, and guidance for financial results for 2025. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. As a result, readers are cautioned not to place undue reliance on these forward-looking statements. Our actual results may differ materially from those expressed or implied by these forward-looking statements as a result of risks and uncertainties impacting SoundHound’s business including, our ability to successfully launch and commercialize new products and services and derive significant revenue, our market opportunity and our ability to acquire new customers and retain existing customers, unexpected costs, charges or expenses resulting from our 2024 acquisitions, the ability of our 2024 acquisitions to be accretive on the company's financial results, and those other factors described in our risk factors set forth in our filings with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We do not intend to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Non-GAAP Measures of Financial Performance

To supplement the company’s financial statements, which are presented on the basis of U.S. generally accepted accounting principles (GAAP), the following non-GAAP measures of financial performance are included in this release: non-GAAP gross profit, non-GAAP gross margin, adjusted EBITDA, non-GAAP net loss and non-GAAP earnings per share.

The company believes that providing this non-GAAP information in addition to the GAAP financial information allows investors to view the financial results in the way the company views its operating results. The company also believes that providing this information allows investors to not only better understand the company's financial performance, but also, better evaluate the information used by management to evaluate and measure such performance.

As such, the company believes that disclosing non-GAAP financial measures to the readers of its financial statements provides the reader with useful supplemental information that allows for greater transparency in the review of the company’s financial and operational performance.

The company defines its non-GAAP measures by excluding certain items:

The company arrives at non-GAAP gross profit and non-GAAP gross margin by excluding (i) amortization of intangibles (including acquired intangible assets) and (ii) stock-based compensation.

The company arrives at adjusted EBITDA by excluding (i) total other interest, net (included other interest and expense), (ii) loss on early extinguishment of debt, (iii) income taxes/(benefits), (iv) depreciation and amortization expense (including acquired intangible assets), (v) stock-based compensation, (vi) restructuring expense, (vii) change in fair value of contingent acquisition liabilities, and (viii) acquisition-related expenses.

The company arrives at non-GAAP net loss and non-GAAP net loss per share by excluding (i) depreciation and amortization expense (including acquired intangible assets), (ii) stock-based compensation, (iii) restructuring expense, (iv) loss on early extinguishment of debt, (v) change in fair value of contingent acquisition liabilities, (vi) gain on bargain purchase, (vii) acquisition-related expenses, and (viii) income tax effects related to acquisitions.

Reconciliations of GAAP to these adjusted non-GAAP financial measures are included in the tables below. When analyzing the company's operating results, investors should not consider non-GAAP measures as substitutes for the comparable financial measures prepared in accordance with GAAP.

To the extent that the company presents any forward-looking non-GAAP financial measures, the company does not present a quantitative reconciliation of such measures to the most directly comparable GAAP financial measure (or otherwise present such forward-looking GAAP measures) because it is impractical to do so.

Fourth Quarter Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit and GAAP Gross Margin to Non-GAAP Gross Margin

Three Months Ended
(thousands, unless otherwise noted)	December 31, 2024			December 31, 2023
GAAP gross profit1	$	13,784		$	13,236
Adjustments:
Amortization of Intangibles		4,123			-
Stock-based compensation		100			118
Non-GAAP gross profit	$	18,007		$	13,354
GAAP gross margin		39.9%			77.2%
Non-GAAP gross margin		52.1%			77.9%

1)

GAAP gross profit is calculated by subtracting the cost of revenues from revenues.

Fourth Quarter Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA

Three Months Ended
(thousands)	December 31, 2024			December 31, 2023
GAAP net loss	$	(258,599)		$	(18,003)
Adjustments:
Total other expense, net1		1,174			4,003
Loss on early extinguishment of debt		42			-
Income taxes/(benefits)		311			1,607
Depreciation and amortization		7,939			372
Stock-based compensation		9,853			6,569
Restructuring		-			806
Change in fair value of contingent acquisition liabilities		220,946			-
Acquisition-related expenses		1,541			1,053
Non-GAAP adjusted EBITDA	$	(16,793)		$	(3,593)

1)

Includes other income (expense), net of ($0.1) and $1.5 million for the three months ended December 31, 2024 and 2023, respectively.

Fourth Quarter Reconciliation of GAAP Net Loss to Non-GAAP Net Loss and Non-GAAP Net Loss Per Share

Three Months Ended (thousands, unless otherwise noted)
	December 31, 2024			December 31, 2023
GAAP net loss attributable to SoundHound common shareholders	$	(258,599)		$	(18,571)
Adjustments:
Depreciation and amortization		7,939			372
Stock-based compensation		9,853			6,569
Restructuring		-			806
Loss on early extinguishment of debt		42			-
Change in fair value of contingent acquisition liabilities		220,946			-
Acquisition-related expenses		1,541			1,053
Income tax effects related to acquisitions		(715)			-
Non-GAAP net loss	$	(18,993)		$	(9,771)
GAAP net loss per share1	$	(0.69)		$	(0.07)
Adjustments		0.64			0.03
Non-GAAP net loss per share1	$	(0.05)		$	(0.04)

1)

Weighted average common shares outstanding (basic and diluted) for the three months ended December 31, 2024 and 2023 were 375,102,329 and 248,250,552, respectively.

Full Year Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit and GAAP Gross Margin to Non-GAAP Gross Margin

Year Ended
(thousands, unless otherwise noted)	December 31, 2024			December 31, 2023
GAAP gross profit1	$	41,384		$	34,566
Adjustments:
Amortization of Intangibles		7,696			-
Stock-based compensation		458			412
Non-GAAP gross profit	$	49,538		$	34,978
GAAP gross margin		48.9%			75.4%
Non-GAAP gross margin		58.5%			76.2%

1)

GAAP gross profit is calculated by subtracting the cost of revenues from revenues.

Full Year Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA

Year Ended
(thousands)	December 31, 2024			December 31, 2023
GAAP net loss	$	(350,681)		$	(88,937)
Adjustments:
Total other expense, net1		2,946			15,578
Loss on early extinguishment of debt		15,629			837
Income taxes/(benefits)		(9,247)			3,914
Depreciation and amortization		16,054			2,313
Stock-based compensation		33,145			24,789
Restructuring		-			4,557
Change in fair value of contingent acquisition liabilities		222,670			-
Acquisition-related expenses		7,569			1,053
Non-GAAP adjusted EBITDA	$	(61,915)		$	(35,896)

1)

Includes other income (expense), net of $9.2 and $1.2 million for the years ended December 31, 2024 and 2023, respectively.

Full Year Reconciliation of GAAP Net Loss to Non-GAAP Net Loss and Non-GAAP Net Loss Per Share

Year Ended (thousands, unless otherwise noted)
	December 31, 2024			December 31, 2023
GAAP net loss attributable to SoundHound common shareholders	$	(351,097)		$	(91,711)
Adjustments:
Depreciation and amortization		16,054			2,313
Stock-based compensation		33,145			24,789
Restructuring		-			4,557
Loss on early extinguishment of debt		15,629			837
Change in fair value of contingent acquisition liabilities		222,670			-
Gain on bargain purchase		(1,223)			-
Acquisition-related expenses		7,569			1,053
Income tax effects related to acquisitions		(11,820)			-
Non-GAAP net loss	$	(69,073)		$	(58,162)
GAAP net loss per share1	$	(1.04)		$	(0.40)
Adjustments		0.84			0.15
Non-GAAP net loss per share1	$	(0.20)		$	(0.25)

1)

Weighted average common shares outstanding (basic and diluted) for the years ended December 31, 2024 and 2023 were 338,462,574 and 229,264,904, respectively.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250227063191/en/

Investors:

Scott Smith

408-724-1498

IR@SoundHound.com

Media:

Gianna Arantes

201-815-9852

PR@SoundHound.com

Source: SoundHound AI, Inc.

FAQ

What was SoundHound AI's (SOUN) revenue growth in Q4 2024?

SOUN's Q4 2024 revenue grew 101% year-over-year to $34.5 million

How much cash does SoundHound AI (SOUN) have on its balance sheet?

SOUN had nearly $200 million in cash and no debt as of December 31, 2024

What is SoundHound AI's (SOUN) revenue guidance for 2025?

SOUN raised its 2025 revenue outlook to $157-177 million

What was SoundHound AI's (SOUN) gross margin in Q4 2024?

SOUN's Q4 2024 GAAP gross margin was 39.9%, while non-GAAP gross margin was 52.1%

What major sectors does SoundHound AI (SOUN) serve?

SOUN serves restaurants, healthcare, automotive, retail, energy, government, telecom, financial services, insurance, and travel sectors