SoundHound AI (SOUN -17.77%) stock is losing ground today following the company's third-quarter earnings report Tuesday evening. The company's share price was down 18.7% as of 12:15 p.m. ET.SoundHound AI published third-quarter results after the market closed yesterday, delivering sales and earnings for the period that actually came in significantly better than anticipated. The company posted a non-GAAP (adjusted) loss of $0.04 per share on sales of $25.09 million in the period, beating the average Wall Str ...

Earnings Performance - SoundHound AI reported Q3 sales of $25 1 million, a 89% YoY increase, beating analyst expectations of $23 million [2] - Adjusted net losses improved from $0 09 to $0 04 per share, surpassing the expected $0 07 loss [2] Backlog and Acquisitions - The company's backlog is valued at over $1 billion with an average contract duration of six years [4] - Excluding the Amelia acquisition, the backlog more than doubled from $342 million in the previous year [5] - The acquisition of Amelia, an enterprise AI software maker, adds significant value to the backlog metric, which will be consolidated in the next report [3][4] Stock Performance and Market Reaction - Despite strong earnings, SoundHound AI's stock dropped 19 1% due to insufficient support for a price increase driven by social media hype [1][7] - The company's guidance for 2024 and 2025 is slightly ahead of current Street views, indicating strong growth prospects [6] Long-Term Outlook - SoundHound AI's AI-powered voice controls are expected to create significant shareholder value over the long term [9] - The recent price drop is seen as a healthy correction, aligning the stock with its actual business trajectory rather than speculative social media activity [7][8]

SoundHound AI stock investors are concerned about the massive dive in margins. In today's video, I discuss recent updates impacting SoundHound AI (SOUN -18.78%). To learn more, check out the short video, consider subscribing, and click the special offer link below.*Stock prices used were the market prices of Nov. 13, 2024. The video was published on Nov. 13, 2024. ...

SoundHound AI stock is down 10% after earnings despite a double beat.In this video, I will cover SoundHound AI's (SOUN -16.17%) third-quarter earnings report. Watch the short video to learn more, consider subscribing, and click the special offer link below.*Stock prices used were from the trading day of Nov. 12, 2024. The video was published on Nov. 12, 2024. ...

SoundHound AI Inc. (NASDAQ: SOUN) has emerged as a powerhouse in the AI sector, outpacing the broader market with a remarkable year-to-date gain of 263%, leaving the S&P 500’s 25.8% growth far behind.This impressive rally is fueled by the rising demand for its flagship solutions, SoundHound Chat AI and SoundHound Voice AI for customer service, which help businesses enhance customer engagement and streamline operations.As of the latest trading, SoundHound’s stock stands at $7.56, with a 33% increase in just ...

I'm an investment analyst with clinical experience in healthcare and an MBA, expanding my focus from biotech to a range of sectors. I've had the privilege of sharing my insights on Seeking Alpha since 2017, emphasizing financial modeling techniques like DCF analysis to identify underlying assumptions in stock valuations. I provide scenario-based forecasts to help readers gauge reasonable outcomes. Influenced by works like Superforecasting and Antifragile, I advocate for disciplined risk management through a ...

SoundHound AI NASDAQ: SOUN will advance by triple digits in 2025 because it is the leading play on conversational AI. The company is well-positioned in a world where AI is rapidly advancing and AI-enabled services are expected to dominate, providing a suite of services and apps that connect brands of all varieties with people meaningfully.  SoundHound’s 2024 results takeaways are that this company is gaining traction with more than 200 brands using its products, including companies like Hyundai OTCMKTS: HYM ...

Financial Data and Key Metrics - Q3 revenue increased by 89% year-over-year, reaching $25.1 million, marking the first time the company exceeded $25 million in a quarter [7][39] - Annualized run rate of over 6 billion queries, up over 100% year-over-year, excluding the impact of recent acquisitions [7] - Gross margin for Q3 was 49%, down year-over-year due to the impact of recent acquisitions, but non-GAAP gross margin was 60% [45][46] - Operating loss for Q3 was $33.8 million, with a net loss of $21.8 million and GAAP net loss per share of $0.06 [50][51] - Adjusted EBITDA loss was $15.9 million in Q3, driven by strategic acquisitions and growth investments [51] - Cash and equivalents as of September 30th were $136 million, with $39 million of debt outstanding [52] Business Line Data and Key Metrics - The company's AI agent customer service offerings now span multiple industries, including financial services, healthcare, and automotive, with significant growth in enterprise customer brands [10][12] - Automotive portfolio continues to grow, with strong traction in the EV space, including a new deal with an EV OEM in the Middle East and partnerships with Stellantis [14] - Restaurant business has expanded, with seven of the top 20 quick service restaurants (QSRs) as customers, and the company has surpassed 100 million AI-powered inbound customer calls [29][44] - The company's AI agent offerings now represent more than half of its business and are growing rapidly, with significant wins in telecom, healthcare, insurance, banking, retail, and government sectors [21][22][37] Market Data and Key Metrics - The company has expanded its presence in the Chinese market through partnerships with DayinTec and a major Chinese multinational technology company, focusing on the automotive industry [16] - Growth in the Indian market includes a new deal with VE Commercial trucks and expanded partnerships with Kia, adding Hindi language capabilities and planning to roll out more languages like Bangla and Punjabi [17] - The company has a strong presence in North America, with an estimated total addressable market (TAM) of over 30 million businesses for its SMB-focused smart answering solution [23] Company Strategy and Industry Competition - The company is focused on voice AI as the next major interface for human-technology interaction, leveraging generative AI and large language models (LLMs) to drive growth [39][40] - SoundHound is building a competitive moat through its proprietary technology, including the Polaris foundation model, which is now powering approximately one-third of all AI interactions for restaurant customers [34][35] - The company is expanding its ecosystem through partnerships with major technology and hardware providers, such as NVIDIA, Deloitte, and Oracle, to enhance its offerings and scale faster [19][31][32] Management Commentary on Operating Environment and Future Outlook - Management highlighted the acceleration of AI adoption across industries, with AI becoming a mandate rather than an exploration within innovation budgets [11] - The company expects 2024 revenue to be in the range of $82 million to $85 million, with 2025 revenue projected to be between $155 million and $175 million, driven by growth in automotive, AI agent, and restaurant businesses [53] - The company aims to achieve adjusted EBITDA profitability by the end of 2025, focusing on cost synergies and rationalizing its portfolio to capitalize on meaningful investment opportunities [54] Other Important Information - The company will have a prominent presence at CES 2025, showcasing automotive technologies and AI solutions, including voice generative AI for in-car experiences and a voice commerce ecosystem [31][32][33] - The Polaris foundation model, which leverages billions of real conversations and over a million hours of audio, is now in production and is expected to power all customer experiences in the future [34][35] Q&A Session Summary Question: Amelia Acquisition Integration and Business Retention - The company is still in the process of integrating the Amelia acquisition, with plans to retain high-margin, deep-integration components like AIOps and voice enablement, while potentially discontinuing lower-margin services like escalation support [58][59][60][61][62][63][64][65][66] Question: Technology Benchmarks and Model Training - The company's Polaris foundation model is benchmarked using real-life interactions and standardized tests, with a focus on reducing hallucination in AI responses. The model has been trained on billions of real conversations and over a million hours of audio [67][68][69][70] Question: Capacity and Resource Allocation Across Verticals - The company sees significant growth opportunities in automotive, restaurants, and enterprise AI agents, with a focus on scaling existing partnerships and expanding into new industries like healthcare and financial services [72][73][74][75][76][77][78][79] Question: Revenue Outlook and Acquisition Impact - The increased revenue outlook for 2024 and 2025 is driven by both organic growth and the impact of acquisitions, with significant cross-sell and upsell opportunities across the portfolio [80][81][82] Question: Backlog and Seasonality - The company's cumulative subscriptions and bookings backlog has doubled year-over-year, with a combined metric now exceeding $1 billion. Seasonality is expected to stabilize as the business shifts more towards SaaS [84][85][86][95][96] Question: M&A Appetite and Industry Focus - The company is open to strategic M&A opportunities, particularly in industries like energy and retail, but is currently focused on integrating recent acquisitions and driving growth in existing verticals [99][100][101][102][103][104][105] Question: Partnerships with Large AI LLM Companies - The company uses OpenAI as one of its vendors and has built an LLM-agnostic architecture, allowing it to arbitrate across multiple LLMs, including its own Polaris foundation model [106] Question: Restaurant Business Growth and Future Plans - The company is the leader in AI for restaurants, with seven of the top 20 QSRs as customers. Future plans include integrating voice AI across automotive and restaurant ecosystems, enabling voice commerce and advanced ordering capabilities [107][108]

SoundHound AI, Inc. (SOUN) came out with a quarterly loss of $0.06 per share versus the Zacks Consensus Estimate of a loss of $0.08. This compares to loss of $0.09 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 25%. A quarter ago, it was expected that this company would post a loss of $0.09 per share when it actually produced a loss of $0.11, delivering a surprise of -22.22%.Over the last four quarters, the company has surpas ...

Cash and Cash Equivalents - Cash and cash equivalents increased to $135.6 million as of September 30, 2024, compared to $95.3 million as of December 31, 2023[11] - Total unrestricted cash and cash equivalents as of September 30, 2024 was $135.6 million[25] - Total cash, cash equivalents, and restricted cash equivalents increased to $136.417 million as of September 30, 2024, from $109.035 million at the beginning of the period[18] Accounts Receivable and Contract Assets - Accounts receivable, net of allowances, rose to $13.6 million as of September 30, 2024, from $4.1 million as of December 31, 2023[11] - Contract assets and unbilled receivable, net of allowance for credit losses, increased to $24.6 million as of September 30, 2024, from $11.8 million as of December 31, 2023[11] - Unbilled receivables from Customer A and C accounted for 35% each of the company's unbilled receivables balance as of September 30, 2024[35] Total Assets and Liabilities - Total current assets grew to $181.2 million as of September 30, 2024, compared to $113.5 million as of December 31, 2023[11] - Total liabilities increased to $203.7 million as of September 30, 2024, from $123.0 million as of December 31, 2023[11] - Stockholders' equity significantly rose to $296.0 million as of September 30, 2024, from $28.2 million as of December 31, 2023[11] - Total assets measured at fair value increased from $90.5 million as of December 31, 2023, to $117.7 million as of September 30, 2024, primarily driven by growth in cash equivalents and treasury bills[184] Revenue and Net Loss - Revenues for the three months ended September 30, 2024, were $25.1 million, an increase of 89% compared to $13.3 million in the same period in 2023[13] - Net loss for the three months ended September 30, 2024, was $21.8 million, compared to a net loss of $20.2 million in the same period in 2023[13] - Net loss for the nine months ended September 30, 2024, was $92.082 million, compared to $70.934 million for the same period in 2023[18] - The company reported a net loss of $21.8 million for the three months ended September 30, 2024, and $92.1 million for the nine months ended September 30, 2024[24] - Revenue for the three months ended September 30, 2024 was $25.094 million, compared to $13.268 million for the same period in 2023, representing an 89.2% increase[95] - Revenue for the nine months ended September 30, 2024 was $50.150 million, compared to $28.726 million for the same period in 2023, representing a 74.6% increase[95] - Hosted services revenue for the three months ended September 30, 2024 was $17.546 million, compared to $4.262 million for the same period in 2023, representing a 311.7% increase[95] - Service subscriptions revenue for the three months ended September 30, 2024 was $19.029 million, compared to $0.491 million for the same period in 2023, representing a 3775.6% increase[99] - The United States accounted for $13.471 million of revenue for the three months ended September 30, 2024, compared to $0.792 million for the same period in 2023, representing a 1601.1% increase[96] Operating Expenses and Loss from Operations - Research and development expenses for the three months ended September 30, 2024, were $19.5 million, an increase of 53% compared to $12.8 million in the same period in 2023[13] - Total operating expenses for the three months ended September 30, 2024, were $58.9 million, an increase of 112% compared to $27.8 million in the same period in 2023[13] - Loss from operations for the three months ended September 30, 2024, was $33.8 million, compared to a loss of $14.5 million in the same period in 2023[13] - Net cash used in operating activities for the nine months ended September 30, 2024, was $75.755 million, compared to $54.395 million for the same period in 2023[18] - Depreciation and amortization expenses for the nine months ended September 30, 2024, were $8.115 million, up from $1.941 million in the same period in 2023[18] Stock-Based Compensation and Equity Issuance - Stock-based compensation for the three months ended September 30, 2024, was $9.1 million[14] - Stock-based compensation for the nine months ended September 30, 2024, was $23.292 million, up from $20.639 million in the same period in 2023[18] - Issuance of Class A common stock under the Equity Distribution Agreement resulted in $48.3 million in additional paid-in capital[14] - Issuance of Class A common stock for equity incentive awards resulted in $436,000 in additional paid-in capital[14] - Issuance of Class A common stock upon acquisition of Amelia resulted in $23.9 million in additional paid-in capital[14] - Proceeds from sales of Class A common stock under the Sales Agreement and Equity Distribution Agreement were $287.271 million for the nine months ended September 30, 2024[18] - Total additional paid-in capital increased to $980.150 million as of September 30, 2024, from $585.699 million as of September 30, 2023[16] - The company sold 37,907,219 shares of common stock under the Sales Agreement, raising $137.3 million in gross proceeds and $133.8 million in net proceeds[156] - Under the Equity Distribution Agreement, the company sold 31,694,198 shares of common stock, raising $150.0 million in gross proceeds and $146.2 million in net proceeds[159] - The company granted a total of 9,254,425 and 13,646,611 RSUs during the three and nine months ended September 30, 2024, respectively[171] - Total unrecognized stock-based compensation expense related to unvested RSUs with service conditions was approximately $76.5 million as of September 30, 2024[172] - Total unrecognized stock-based compensation expense related to unvested Performance-based RSUs was approximately $8.6 million as of September 30, 2024[173] - Stock-based compensation expense for the three months ended September 30, 2024, was $9.06 million, compared to $6.69 million for the same period in 2023[178] Acquisitions and Goodwill - Goodwill and intangible assets, net, were recorded at $111.7 million and $182.6 million, respectively, as of September 30, 2024, following recent acquisitions[11] - The company completed the acquisition of Synq3, Inc. on January 3, 2024, and Amelia Holdings, Inc. on August 6, 2024[23] - The fair value of contingent earnout consideration under SYNQ3 and Amelia acquisitions was $73.2 million[20] - The company acquired SYNQ3 for a total preliminary purchase consideration of $15.7 million, including $3.9 million in cash and 5,755,910 shares of Class A Common Stock[45][47] - The SYNQ3 acquisition is expected to expand the company's AI customer service solutions and accelerate the deployment of generative AI capabilities in the restaurant industry[46] - The company agreed to pay up to $0.8 million in cash and 1,434,936 shares of Class A Common Stock to certain SYNQ3 stockholders based on tiered annual revenue targets for fiscal years 2024, 2025, and 2026[51] - The company acquired Amelia Holdings for a total preliminary purchase consideration of $103.9 million, including 3,809,520 shares of Class A Common Stock and $8.4 million in cash for seller transaction expenses[59] - The Amelia acquisition is expected to strengthen the company's position in voice and conversational AI and allow entry into new industries such as healthcare, insurance, financial services, and retail[58] - The company agreed to issue up to 16,822,429 shares of Class A Common Stock to Amelia selling shareholders based on achievement of certain revenue targets in fiscal years 2025 and 2026[59] - The company recognized $1.9 million in acquisition-related expenses for the nine months ended September 30, 2024, primarily related to the SYNQ3 and Amelia acquisitions[57] - The company recorded goodwill of $6.039 million from the SYNQ3 acquisition, reflecting expected synergies from increased revenue opportunities and cost savings[54] - The company assumed $121.5 million in senior secured term loan facility from Amelia as part of the acquisition[60] - The company recorded a $0.5 million loss related to the Contingent Amelia Earnout Consideration for the three and nine months ended September 30, 2024[63] - The preliminary purchase price for the acquisition is $103.886 million, including $8.407 million in cash paid, $15.291 million in equity consideration, $8.628 million in equity consideration in escrow, and $71.560 million in contingent earnout consideration[65] - Identified assets acquired total $192.095 million, including $174.500 million in intangible assets, $8.239 million in accounts receivable, and $1.128 million in cash and cash equivalents[65] - Liabilities assumed total $193.900 million, including $70.000 million in short-term debt, $23.144 million in deferred revenue, and $14.839 million in accounts payable[65] - Goodwill acquired on the acquisition is $105.691 million, which includes expected synergies from increased revenue opportunities and cost savings[65] - SYNQ3 contributed revenue of $2.8 million and $8.9 million, and net loss of $1.9 million and $5.2 million, for the three and nine months ended September 30, 2024, respectively[68] - Amelia contributed revenue of $15.6 million and net loss of $0.4 million for the three and nine months ended September 30, 2024[68] - Unaudited pro forma revenue for the three and nine months ended September 30, 2024, is $33.766 million and $104.154 million, respectively, with net losses of $31.943 million and $123.192 million[70] - The Company incurred $4.8 million in acquisition-related expenses during the three months ended September 30, 2024[67] - Developed technology, customer relationships, and trade names acquired have preliminary fair values of $98.900 million, $68.600 million, and $7.000 million, respectively, with useful lives of 7.0, 7.0, and 5.0 years[67] - The Company completed an immaterial acquisition on June 14, 2024, for a total preliminary purchase consideration of $1.0 million, recognizing a preliminary gain on bargain purchase of $1.2 million[73] - Goodwill increased by $111.730 million during the nine months ended September 30, 2024, primarily due to the acquisitions of SYNQ3 and Amelia[105] - Intangible assets had a net carrying value of $182.579 million as of September 30, 2024, with developed technology accounting for $102.067 million of the total[107] - Future amortization expense of intangible assets is expected to be $30.334 million in 2025 and $29.372 million in 2026[109] Debt and Financing - Long-term debt decreased to $39.7 million as of September 30, 2024, from $84.3 million as of December 31, 2023[11] - Contingent acquisition liabilities were recorded at $74.5 million as of September 30, 2024[11] - Payments on Term Loan and Amelia Debt totaled $175.602 million for the nine months ended September 30, 2024[18] - The company incurred $6.0 million in stated interest and $1.5 million in interest expense related to the debt discount for the nine months ended September 30, 2024, under the Term Loan[131] - The company prepaid $105.6 million on June 7, 2024, to fully settle the Term Loan, including a $5.0 million prepayment premium and $0.6 million in transaction expenses, resulting in a $15.6 million loss on debt extinguishment[132] - The company assumed $121.5 million in debt from the Amelia Acquisition, with $70.0 million paid in cash and 2,943,917 shares of Class A common stock issued to settle fees. The remaining balance is $39.7 million, maturing on June 30, 2026[134] - As of September 30, 2024, the company's long-term debt carrying value was $39.7 million, down from $84.3 million as of December 31, 2023[135] Customer Concentration - Customer A accounted for 12% of revenue for the three months ended September 30, 2024, and 19% for the nine months ended September 30, 2024[36] - Customer C accounted for 16% of revenue for the nine months ended September 30, 2024[36] Contingent Liabilities and Litigation - Contingent holdback consideration decreased from $2.55 million as of March 31, 2024, to $731,000 as of September 30, 2024, due to measurement period adjustments and settlements[186] - Contingent earnout consideration increased significantly from $4.41 million as of June 30, 2024, to $74.45 million as of September 30, 2024, largely due to the acquisition of Amelia[188] - The company recognized a loss of $0.5 million related to contingent holdback consideration for the nine months ended September 30, 2024[186] - The company recognized a gain of $1.5 million and a loss of $1.2 million related to contingent earnout consideration for the three and nine months ended September 30, 2024, respectively[188] - The risk-free interest rate used for fair value measurement of contingent holdback consideration decreased from 4.6% in January 2024 to 3.9% in September 2024[187] - The company recorded a $1.9 million liability for accrued litigation liabilities as of September 30, 2024, related to a reversed judgment in favor of TEBO[114] - A $3.4 million liability was recorded for potential sales tax exposure as of September 30, 2024, up from $0.2 million as of December 31, 2023[115] Stock and Warrants - Total Class A common stock shares outstanding as of September 30, 2024, were 336,481,401, compared to 208,975,388 as of September 30, 2023[16] - The company issued 2,269,982 shares of Class A Common Stock in March 2024 from the cashless exercise of Term Loan Warrants, with no warrants outstanding as of September 30, 2024[117] - As of September 30, 2024, there were 3,665,996 Public Warrants and Private Warrants issued and outstanding, with no exercises during the three and nine months ended September 30, 2024 and 2023[123] - The company raised $25.0 million by issuing 835,011 shares of Series A Convertible Preferred Stock, all of which were converted to Class A Common Stock by September 30, 2024[138] - During the nine months ended September 30, 2024, 475,005 shares of preferred stock were converted into 16,624,215 shares of Class A Common Stock[143] - As of September 30, 2024, the company had 284,248 shares remaining for issuance under the 2022 Incentive Plan[161] - 816,479 shares of Class A Common Stock were issued under the 2022 Employee Stock Purchase Plan as of September 30, 2024[162] - The company adopted the 2024 Employment Inducement Incentive Award Plan, reserving 6,000,000 shares of Class A Common Stock, with no shares issued as of September 30, 2024[163] - Total unrecognized stock-based compensation expense related to unvested stock options was approximately $1.9 million, expected to be recognized over a weighted-average period of 0.91 years[166] Technology and Intellectual Property - The company's voice AI technology processes billions of interactions annually and powers millions of products and services globally[197] - SoundHound holds over 155 granted patents and has more than 115 patents pending, covering areas such as speech recognition and natural language understanding[199] - The company's Houndify platform offers over 100 content domains, enabling developers to leverage its voice AI technology for various applications[198] - SoundHound provides disruptive technologies superior to alternatives, offering better terms, brand control, user experience customization, and data access[203] - The company aims to win on technology and brand control dimensions, offering a white-label solution for customers to maintain brand and user experience[204] - SoundHound's platform enables product creators to generate additional revenue through Voice AI, incentivizing platform adoption[205] Future Commitments and Obligations - The company committed to pay a minimum of $98.0 million in cloud costs over a seven-year period under an exclusive agreement with a cloud service provider[111] - Aggregate non-cancelable future minimum payments as of September 30, 2024, total $80,750 thousand, with $24,000 thousand due in both 2027 and 2028[113] - The aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts was $66.9 million as of September 30, 2024, with $40.9 million expected to be recognized within one year[104] Restructuring and Other Expenses - The company recorded $