SoundHound AI, Inc. (Nasdaq: SOUN), a global leader in voice artificial intelligence, recently announced its financial results for the second quarter of 2024. This report highlights the company’s significant achievements, financial performance, and strategic initiatives during this period.
Key Highlights
- Revenue Growth: SoundHound AI reported a record revenue of $13.5 million, marking a 54% increase year-over-year.
- Gross Margin: The GAAP gross margin was 63%, while the non-GAAP gross margin was 67%.
- Earnings Per Share: The GAAP earnings per share was a loss of $0.11, and the non-GAAP earnings per share was a loss of $0.04.
- Net Loss: The GAAP net loss was $37.3 million, and the non-GAAP net loss was $14.8 million.
- Cash Position: They closed the quarter with over $200 million in cash.
- Acquisition: SoundHound AI acquired Amelia, a leader in enterprise conversational AI, to expand into new verticals like finance, insurance, and healthcare.
- Debt Repayment: They prepaid $100 million in debt, saving over $55 million in interest and fees over the remaining life of the loan.
Financial Performance
- Revenue Growth: SoundHound AI reported a record revenue of $13.5 million for Q2 2024, marking a 54% increase year-over-year. This growth was driven by strong customer momentum across key industries and the successful acquisition of new global brands.
- Gross Margin: The company’s GAAP gross margin stood at 63%, while the non-GAAP gross margin was 67%. These figures reflect SoundHound AI’s efficient cost management and robust revenue generation capabilities.
- Earnings Per Share (EPS): The GAAP EPS for Q2 2024 was a loss of $0.11, whereas the non-GAAP EPS was a loss of $0.04. Despite the losses, the company showed significant improvement in its financial health compared to previous quarters.
- Net Loss: SoundHound AI reported a GAAP net loss of $37.3 million and a non-GAAP net loss of $14.8 million. The adjusted EBITDA was a loss of $13.8 million.
- Cash Position: The company closed the quarter with a strong cash balance of $201 million. This robust cash position provides SoundHound AI with the financial flexibility to pursue strategic initiatives and investments.
Strategic Initiatives
- Acquisition of Amelia: One of the most significant highlights of Q2 2024 was the acquisition of Amelia, an enterprise conversational AI leader. This acquisition is expected to expand SoundHound AI’s reach across multiple new verticals, including finance, insurance, and healthcare. The combined companies aim to offer best-in-class customer service support to a broad range of new verticals, including some of the largest multinational enterprise brands, top 15 global banks, and Fortune 500 organizations.
- Debt Prepayment: SoundHound AI prepaid $100 million in debt during the quarter, saving over $55 million in interest and fees over the remaining life of the loan. This move significantly improved the company’s capital structure and reduced its financial liabilities.
- Customer Expansion: The company signed one of the largest pizza chains in the world on an AI roadmap to introduce SoundHound’s phone ordering services to thousands of stores. This partnership is expected to drive significant revenue growth and enhance the company’s market presence.
Operational Highlights
- Query Volume: The annual run rate of queries exceeded 5 billion, with the second quarter witnessing a 90% year-over-year increase. This surge in query volume underscores the growing demand for SoundHound AI’s voice and conversational AI solutions.
- Subscriptions & Bookings Backlog: The cumulative subscriptions and bookings backlog reached $723 million, roughly doubling year-over-year. This metric highlights the strong customer demand and the company’s ability to secure long-term contracts.
- Equity Conversion: SoundHound AI completed the conversion of all preferred equity into class A common stock. This move simplified the company’s capital structure and aligned the interests of all shareholders.
Market Position and Future Outlook
SoundHound AI continues to strengthen its leadership position in the voice and conversational AI market. The company’s strategic acquisitions, robust financial performance, and strong customer momentum position it well for future growth. The demand for voice and conversational AI is expected to increase, and SoundHound AI is committed to capitalizing on this trend.
Conclusion
SoundHound AI’s Q2 2024 earnings report reflects a milestone quarter with significant achievements in revenue growth, strategic acquisitions, and operational efficiency. The company’s strong financial position and strategic initiatives provide a solid foundation for future growth and market expansion. As SoundHound AI continues to innovate and expand its offerings, it is well-positioned to maintain its leadership in the rapidly growing voice and conversational AI market.