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SoundHound AI Reports Record Third Quarter Revenue, Up 89%, Exceeding $25 Million; Raises Outlook

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SoundHound AI reported record Q3 2024 revenue of $25.1 million, up 89% year-over-year. The company significantly improved customer diversification, reducing largest customer concentration from 72% to 12%, with balanced revenue across automotive, restaurants, financial services, healthcare and insurance sectors (5-25% each). GAAP gross margin was 49%, with a net loss of $21.8 million. The company raised its full-year 2024 revenue outlook to $82-85 million and 2025 outlook to $155-175 million. SoundHound expanded its AI solutions across multiple verticals, signing deals with major QSR brands and automotive manufacturers while completing the acquisition of Amelia.

SoundHound AI ha registrato un fatturato record nel terzo trimestre del 2024 di 25,1 milioni di dollari, con un incremento dell'89% rispetto all'anno precedente. L'azienda ha notevolmente migliorato la diversificazione dei clienti, riducendo la concentrazione del cliente più grande dal 72% al 12%, con un fatturato equilibrato tra i settori automobilistico, ristorazione, servizi finanziari, sanità e assicurazioni (5-25% ciascuno). Il margine lordo GAAP era del 49%, con una perdita netta di 21,8 milioni di dollari. L'azienda ha rivisto al rialzo le previsioni di fatturato per l'intero anno 2024 a 82-85 milioni di dollari e per il 2025 a 155-175 milioni di dollari. SoundHound ha ampliato le sue soluzioni AI in diversi settori, firmando accordi con importanti marchi di ristorazione veloce e produttori automobilistici, completando nel contempo l'acquisizione di Amelia.

SoundHound AI reportó ingresos récord de 25.1 millones de dólares en el tercer trimestre de 2024, lo que representa un aumento del 89% en comparación interanual. La compañía mejoró significativamente la diversificación de sus clientes, reduciendo la concentración del mayor cliente del 72% al 12%, con ingresos equilibrados entre los sectores de automóviles, restaurantes, servicios financieros, salud y seguros (5-25% cada uno). El margen bruto GAAP fue del 49%, con una pérdida neta de 21.8 millones de dólares. La empresa elevó su pronóstico de ingresos para todo el año 2024 a 82-85 millones de dólares y el pronóstico para 2025 a 155-175 millones de dólares. SoundHound amplió sus soluciones de IA en múltiples verticales, firmando acuerdos con importantes marcas de comida rápida y fabricantes de automóviles, mientras completaba la adquisición de Amelia.

사운드하운드 AI는 2024년 3분기에 2510만 달러의 기록적인 매출을 보고했으며, 이는 전년 대비 89% 증가한 수치입니다. 이 회사는 고객 다각화를 크게 개선하여 최대 고객 집중도를 72%에서 12%로 감소시켰고, 자동차, 레스토랑, 금융 서비스, 건강 관리 및 보험 분야에서 균형 잡힌 매출(각각 5-25%)을 기록했습니다. GAAP 총 마진은 49%였고, 순손실은 2180만 달러에 달했습니다. 이 회사는 2024년 전체 연도 매출 전망을 8200만-8500만 달러, 2025년 전망을 1억5500만-1억7500만 달러로 상향 조정했습니다. 사운드하운드는 여러 분야에 걸쳐 AI 솔루션을 확장하고, 주요 패스트푸드 브랜드 및 자동차 제조업체와 계약을 체결하였으며, 아멜리아의 인수도 완료했습니다.

SoundHound AI a annoncé des revenus record de 25,1 millions de dollars pour le troisième trimestre 2024, soit une augmentation de 89 % par rapport à l'année précédente. L'entreprise a considérablement amélioré la diversification de ses clients, réduisant la concentration du plus grand client de 72 % à 12 %, avec des revenus équilibrés dans les secteurs de l'automobile, de la restauration, des services financiers, de la santé et des assurances (5-25 % chacun). La marge brute GAAP était de 49 %, avec une perte nette de 21,8 millions de dollars. L'entreprise a révisé à la hausse ses prévisions de revenus pour l'année entière 2024 à 82-85 millions de dollars et pour 2025 à 155-175 millions de dollars. SoundHound a élargi ses solutions d'IA dans plusieurs secteurs, signant des accords avec de grandes marques de restauration rapide et des fabricants automobiles tout en finalisant l'acquisition d'Amelia.

SoundHound AI berichtete für das dritte Quartal 2024 von einem Rekordumsatz von 25,1 Millionen Dollar, was einem Anstieg von 89 % im Jahresvergleich entspricht. Das Unternehmen hat die Diversifizierung seiner Kunden erheblich verbessert und die Konzentration des größten Kunden von 72 % auf 12 % gesenkt, mit ausgewogenen Einnahmen in den Bereichen Automobil, Gastronomie, Finanzdienstleistungen, Gesundheitswesen und Versicherungen (jeweils 5-25 %). Die GAAP-Bruttomarge betrug 49 %, mit einem Nettoverlust von 21,8 Millionen Dollar. Das Unternehmen hob seine Umsatzprognose für das gesamte Jahr 2024 auf 82-85 Millionen Dollar und für 2025 auf 155-175 Millionen Dollar an. SoundHound erweiterte seine KI-Lösungen in mehreren Bereichen und unterzeichnete Verträge mit großen QSR-Marken und Automobilherstellern, während es die Akquisition von Amelia abschloss.

Positive
  • Record quarterly revenue of $25.1M, up 89% YoY
  • Significant customer diversification, reducing single-customer concentration from 72% to 12%
  • Expanded into multiple sectors with balanced revenue distribution (5-25% per sector)
  • Raised full-year 2024 revenue guidance to $82-85M
  • Strong cash position with $136M in cash and equivalents
Negative
  • GAAP net loss increased to $21.8M
  • GAAP gross margin declined from 72.9% to 48.6% YoY
  • Adjusted EBITDA loss widened to $15.9M from $7.3M YoY
  • Operating loss increased 132% to $33.8M

Insights

The Q3 results showcase remarkable growth with $25.1M revenue, up 89% year-over-year. Critical improvements in customer diversification are evident, with the largest customer now representing only 12% of revenue versus 72% last year. The company has successfully expanded across multiple sectors, with balanced revenue distribution between automotive, restaurants, financial services, healthcare and insurance.

While gross margins declined to 49% GAAP (60% non-GAAP), the strategic Amelia acquisition and vertical expansion justify this temporary compression. The raised 2024 outlook of $82-85M and 2025 projection of $155-175M signal strong growth trajectory. However, the $21.8M GAAP net loss and $15.9M adjusted EBITDA loss indicate ongoing profitability challenges that need attention.

The strategic expansion into voice AI applications across diverse sectors positions SoundHound at the forefront of the conversational AI revolution. Key partnerships with major QSRs, automotive manufacturers and financial institutions demonstrate strong market validation. The integration with NVIDIA for edge-based generative AI capabilities represents a significant technological advantage.

The company's success in signing seven of the top 20 QSR brands globally and expanding presence in electric vehicles shows strong product-market fit. The diversification strategy and technological innovations, particularly in multilingual capabilities and edge computing, create multiple growth vectors. However, execution of these numerous initiatives while managing costs will be important for long-term success.

SoundHound scales as a leader in conversational AI with more than 200 enterprise brands leveraging its AI agents across a growing number of verticals

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

SoundHound AI Reports Record Third Quarter Revenue, Up <percent>89%</percent>, Exceeding <money>$25 Million</money>; Raises Outlook (Graphic: Business Wire)

SoundHound AI Reports Record Third Quarter Revenue, Up 89%, Exceeding $25 Million; Raises Outlook (Graphic: Business Wire)

“This is SoundHound’s largest quarter on record as the company takes its first steps into important new verticals. Our increased scale, combined with incredible market enthusiasm for conversational AI, is allowing us to execute on the company’s vision,” said Keyvan Mohajer, CEO and Co-Founder of SoundHound AI. “We believe that voice is the ‘killer app’ for applied generative AI. Thanks to our best-in-class technology, mastery of complex vertical integrations, and proprietary AI software, SoundHound is ideally positioned to capitalize on this huge and growing opportunity.”

Third Quarter Financial Highlights

  • Reported revenue was $25.1 million, an increase of 89% year-over-year
  • Significantly improved customer concentration, where only 12% of revenue is attributed to the company’s largest customer, compared to 72% in the prior year, reflecting a broader mix of customers
  • Significantly increased industry diversification with well-balanced contributions across automotive, restaurants, financial services, healthcare and insurance sectors, each contributing 5%-25% of revenue, compared to over 90% automotive only in the prior year
  • GAAP gross margin was 49%; non-GAAP gross margin was 60%
  • GAAP earnings per share was a loss of ($0.06); non-GAAP earnings per share was a loss of ($0.04)
  • GAAP net loss was ($21.8) million; non-GAAP net loss was ($15.0) million
  • Adjusted EBITDA was ($15.9) million
  • Completed acquisition of Amelia, an enterprise conversational AI leader, to significantly expand to new verticals such as finance, insurance, and healthcare

“This quarter we transformed the company and continued to diversify our customer base, adding more products and expanding into new verticals," said Nitesh Sharan, CFO of SoundHound AI. "We are broadening our target markets and are confident about the medium to long-term opportunity in front of us. This greater potential is reflected in the increased revenue outlook we are providing.”

Business Highlights

AI Agents & Customer Service

  • Expanding into major financial, healthcare, insurance, retail, telecom, hospitality and travel institutions globally.
  • Customers include premier global brands such as AeroMexico, American Heritage Credit Union, Aveanna Healthcare, BNP Paribas, Hoffman Financial Group, Nordic Bank, Resorts World Las Vegas, and Sterling National Bank, among hundreds of others.
  • Signed with seven of the top 20 QSR brands globally, and several are already live with the company’s phone and drive-thru AI solutions.
  • Recently signed another top 10 global QSR brand in pizza while expanding with two existing well known pizza chains and several other growing brands such as Chipotle and Casey’s General Stores.
  • Rapid expansion with Smart Answering, with dozens of multi-location brands already live as the low-touch subscription product continues to move up market.
  • Showcasing AI restaurant solutions at NRF 2025 in January.

Automotive & Smart Devices

  • SoundHound Chat AI now live in Lancia vehicles in Europe, in addition to Stellantis brands: DS Automobiles, Peugeot, Vauxhall, Opel, Citröen, and Alfa Romeo.
  • New win with new electric vehicle manufacturer in the Middle East.
  • Now working with four electric vehicle manufacturers and already live in two.
  • New commercial deal to provide AI voice assistants for VE Commercial trucks in India – a joint venture between the Volvo Group and Eicher Motors.
  • Expansion in India with Kia, adding Hindi language capabilities to several models now followed by 10 additional regional languages.
  • Multi-year deal with DayinTec, one of the world's leading Tier 1 and OEM car manufacturers, and were chosen to integrate our technology in major automotive manufacturers in China.
  • Working with Connex2X, an innovative aftermarket connected vehicle company, to bring leading voice AI technology Into Connex2X’s vehicle products.
  • Continued relationship with VIZIO and Telly to expand into millions of TVs, with strong usage growth year over year.
  • Prominent presence planned for CES 2025, showcasing several automotive technologies and AI solutions, some for the very first time.
  • Leveraging our work with NVIDIA to bring voice generative AI to the edge without cloud connectivity, which will be showcased as a live demo at CES 2025.

Partnerships and awards

Third Quarter 2024 Financial Measures1

Three Months Ended

(thousands, unless otherwise noted)

 

September 30, 2024

 

 

September 30, 2023

 

 

Change

Revenues

$

25,094

 

$

13,268

 

 

89%

GAAP gross profit

$

12,193

 

$

9,678

 

 

26%

GAAP gross margin

 

48.6%

 

 

72.9%

 

 

(24.3)pp

Non-GAAP gross profit

$

14,983

 

$

9,776

 

 

53%

Non-GAAP gross margin

 

59.7%

 

 

73.7%

 

 

(14.0)pp

GAAP operating loss

$

(33,767)

 

$

(14,530)

 

 

132%

Non-GAAP adjusted EBITDA

$

(15,869)

 

$

(7,308)

 

 

117%

GAAP net loss

$

(21,751)

 

$

(20,197)

 

 

8%

Non-GAAP net loss

$

(14,958)

 

$

(13,622)

 

 

10%

GAAP net loss per share

$

(0.06)

 

$

(0.09)

 

 

0.03

Non-GAAP net loss per share

$

(0.04)

 

$

(0.06)

 

 

0.02

(1)

Please see tables below for a reconciliation from GAAP to non-GAAP.

 

Liquidity and Cash Flows

The company’s total cash and cash equivalents was $136 million at September 30, 2024.

Condensed Cash Flow Statement

Nine Months Ended

(thousands)

September 30, 2024

 

September 30, 2023

Cash flows:

 

 

 

 

 

Net cash used in operating activities

$

(75,755)

 

$

(54,395)

Net cash used in investing activities

$

(12,292)

 

$

(334)

Net cash provided by financing activities

$

115,445

 

$

155,175

Effects of exchange rate changes on cash

$

(16)

 

$

-

Net change in cash and cash equivalents

$

27,382

 

$

100,446

Business Outlook

SoundHound is updating its revenue outlook for 2024 and 2025. SoundHound expects its full year 2024 revenue to be in a range of $82 - $85 million and its full year 2025 revenue outlook to be in a range of $155 - $175 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 will be posted on the website, and will be included when the company files its 8-K. The financial data presented in this press release should be considered preliminary until the company files its 10-Q.

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. A live webcast and replay will also 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 and Other Disclosures

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 2024 and 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 interest and other income/(expense), net, (ii) income taxes (benefits), (iii) depreciation and amortization expense (including acquired intangible assets), (iv) stock-based compensation, (v) change in fair value of contingent consideration for business acquisition, and (vi) acquisition-related costs.

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) change in fair value of contingent consideration for business acquisition, (iv) acquisition-related costs, and (v) 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.

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

 

Three Months Ended

 

 

(thousands)

September 30, 2024

 

September 30, 2023

 

GAAP gross profit1

$

12,193

 

$

9,678

 

Adjustments:

 

 

 

 

 

 

Amortization of Intangibles

 

2,691

 

 

-

 

Stock-based compensation

 

99

 

 

98

 

Non-GAAP gross profit

$

14,983

 

$

9,776

 

GAAP gross margin

 

48.6%

 

 

72.9%

 

Non-GAAP gross margin

 

59.7%

 

 

73.7%

 

(1)

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

 

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

 

Three Months Ended

 

 

(thousands)

September 30, 2024

September 30, 2023

GAAP net loss

$

(21,751)

 

$

(20,197)

Adjustments:

 

 

 

Total other expense, net1

 

(1,525)

 

 

4,106

Income taxes/(benefits)

 

(10,491)

 

 

1,561

Depreciation and amortization

 

5,365

 

 

530

Stock-based compensation

 

9,060

 

 

6,692

Change in fair value of contingent acquisition liabilities

 

(1,356)

 

 

-

Acquisition-related expenses

 

4,829

 

 

-

Non-GAAP adjusted EBITDA

$

(15,869)

 

$

(7,308)

(1)

Includes other income (expense), net of $2.6 and $1.3 million for the three months ended September 30, 2024 and 2023, respectively.

 

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

Three Months Ended

(thousands)

 

 

 

September 30, 2024

 

September 30, 2023

GAAP net loss attributable to SoundHound common shareholders

$

(21,751)

 

$

(20,844)

Adjustments:

 

 

 

Depreciation and amortization

 

5,365

 

 

530

Stock-based compensation

 

9,060

 

 

6,692

Change in fair value of contingent acquisition liabilities

 

(1,356)

 

 

-

Acquisition-related expenses

 

4,829

 

 

-

Income tax effects related to acquisitions

 

(11,105)

 

 

-

Non-GAAP net loss

$

(14,958)

 

$

(13,622)

GAAP net loss per share1

 

(0.06)

 

 

(0.09)

Adjustments

 

0.02

 

 

0.03

Non-GAAP net loss per share1

 

(0.04)

 

 

(0.06)

(1)

Weighted average common shares outstanding (basic and diluted) for the three months ended September 30, 2024 and 2023 were 360,385,812 and 242,022,268, respectively.

 

Investors:

Scott Smith

408-724-1498

IR@SoundHound.com

Media:

Fiona McEvoy

415-610-6590

PR@SoundHound.com

Source: SoundHound AI, Inc.

FAQ

What was SoundHound AI's (SOUN) revenue growth in Q3 2024?

SoundHound AI reported Q3 2024 revenue of $25.1 million, representing an 89% increase year-over-year.

How much did SoundHound AI (SOUN) lose in Q3 2024?

SoundHound AI reported a GAAP net loss of $21.8 million in Q3 2024.

What is SoundHound AI's (SOUN) revenue guidance for 2024 and 2025?

SoundHound AI expects full-year 2024 revenue of $82-85 million and 2025 revenue of $155-175 million.

How much cash does SoundHound AI (SOUN) have as of Q3 2024?

SoundHound AI reported $136 million in cash and cash equivalents as of September 30, 2024.

SoundHound AI, Inc.

NASDAQ:SOUN

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