Combined Cumulative Subscriptions & Bookings Backlog of $661
Million Represents a 2x increase Year-Over-Year
SoundHound AI, Inc. (Nasdaq: SOUN), a global leader in voice
artificial intelligence, today reported its financial results for
the fourth quarter and full year 2023.
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the full release here:
https://www.businesswire.com/news/home/20240229968938/en/
SoundHound AI Reports Record Quarter with
80% Q4 Revenue Growth to $17.1 Million; Adjusted EBITDA Improved by
80% Year-Over-Year in Q4 (Graphic: Business Wire)
“This was a breakthrough year in which SoundHound rapidly
integrated powerful new generative AI capabilities. Our real-world
voice AI applications are already live and driving consumer
engagement across vehicles, devices, and customer service
businesses,” said Keyvan Mohajer, CEO and Co-Founder of SoundHound
AI. “We also acquired SYNQ3, establishing SoundHound as the largest
voice AI provider for restaurants. Our pace and agility amid this
AI revolution has put us ahead of the field when it comes to
delivering real commercial value.”
Fourth Quarter and Full Year Financial Highlights
- Fourth quarter revenue was $17.1 million, an increase of 80%
year-over-year
- Fourth quarter gross margin was 77%, an increase of 6
percentage points year-over-year
- Fourth quarter earnings per share was a net loss of ($0.07),
compared to ($0.15) in the prior year, improved by 53%
- Adjusted EBITDA (non-GAAP) was ($3.7) million, compared to
($18.8) million in the prior year, improved by 80%
- Full year revenue was $45.9 million, an increase of 47%
year-over-year
- Full year gross margin was 75%, an increase of 6 percentage
points year-over-year
- Full year earnings per share was a net loss of ($0.40),
compared to ($0.74) in the prior year, and improved by 46%
- Adjusted EBITDA (non-GAAP) was ($35.9) million, compared to
($72.8) million in the prior year, and improved by 51%
- Combined Cumulative Subscriptions and Bookings Backlog1
customer metric grew to $661 million, up 2x compared to the prior
year comparable measure
- Achieved an annual run rate of ~3.5 billion queries, up roughly
50% year-over-year
“We finished the year strong by accelerating revenue and
meaningfully increasing our penetration in the marketplace,” said
Nitesh Sharan, CFO of SoundHound AI. ”We have fortified our balance
sheet and taken prudent measures to strengthen our bottom line to
ensure we can continue to capitalize on the tremendous customer
demand for our AI solutions.”
Business Highlights
Customer and partners announcements
- Notable, first-of-its-kind revenue contribution in Q4 from a
preeminent AI chip company
- Signed contract with a large auto OEM to significantly extend
and increase unit volumes through 2037
- Won a deal with a prominent US-based EV maker to voice-enable
their full fleet of market-leading vehicles
- SoundHound Chat AI was announced as the world’s first voice
assistant with integrated generative AI to go into full production
with an automaker. Stellantis’ DS Automobiles will be deploying the
technology across all models in 13 languages across 18
countries
- Three additional automotive brands, Peugeot, Opel, and
Vauxhall, announced SoundHound Chat AI pilots in Europe
- Custom branded AI voice assistant went live with a new line of
vehicles from Togg, a growing Turkish EV car maker
- Telly’s revolutionary dual screen smart TV integrated
SoundHound AI voice assistant
- Expanded our portfolio of renowned restaurant brands with
enterprise restaurants brands: Jersey Mike's, Krispy Kreme, White
Castle, and Church's Chicken
- Expanded agreement with White Castle to go live in 100
drive-thru lanes by the end of this year and announced partnership
with Samsung to revolutionize next-gen display technology for voice
AI drive-thrus
- In 2023, more than 100 customers adopted our AI restaurant
solutions, including mid market brands such as Beef O’Brady’s,
Blake’s Lotaburger, Bozzelli's Italian Deli, Bubbakoos Burritos,
Chicken Shack, CoreLife Eatery, Dog Haus, Naz’s Halal, and Noi
Thai
- Expanded our ecosystem for customer service by adding Oracle
MICROS Simphony Point-of-Sale for Restaurants, Toast Point-of-Sale
system, and integration with Olo, a leading restaurant SaaS
platform
- SoundHound AI is now working with audio experts HME to make its
solutions compatible with its world class NEXEO® headsets. HME
serves QSRs drive-thrus in over 140 countries, enabling them to
fulfill more than 30 million orders every day
Acquisition of SYNQ3
- The combination with SYNQ3 expands SoundHound AI’s customer
service offering, creating the largest voice AI provider for
restaurants and extending the company’s market reach by an order of
magnitude
- The newly joined entity brings nearly two decades of
SoundHound’s innovation with decades of SYNQ3’s industry expertise
and established customer relationships - accelerating the
deployment of leading-edge generative AI capabilities to the
industry
- SYNQ3 comes with more than 20 national and multinational
chains, such as Chipotle, Casey’s, Applebees, Panda Express, Papa
John’s, and Five Guys
Product launches
- Dynamic Interaction with Generative AI, an extension of the
company’s groundbreaking multimodal Dynamic Interaction
interface
- Smart Answering became generally available, our service that
lets any business handle customer service calls with voice AI
- Employee Assist, our voice AI product for restaurant employees
using advanced voice technology to coach in-store employees through
actions and provide fast answers to critical questions
- SoundHound Chat AI for Automotive, giving drivers and
passengers seamless access to a vast array of information domains
enabled by complex conversational capabilities
- Vehicle Intelligence, SoundHound’s voice AI-enabled solution
for instant hands-free access to car manual
- SoundHound Chat AI, a powerful new voice assistant that
delivers best-in-class voice AI by combining SoundHound and
third-party Generative AI models
1)
See section ‘Certain Defined
Terms' at the end of this press release for additional
information.
Fourth Quarter 2023 Financial Measures
Three Months Ended
(thousands, except per share data)
December 31, 2023
December 31, 20222
Change in %
Revenues
$
17,147
$
9,501
80
%
Operating expenses:
Cost of revenues
$
3,911
$
2,755
42
%
Sales and marketing
4,469
6,744
-34
%
Research and development
12,713
21,528
-41
%
General and administrative
7,641
7,427
3
%
Restructuring
806
-
N/A
Total operating expenses
$
29,540
$
38,454
-23
%
Operating loss
$
(12,393
)
$
(28,953
)
57
%
Net loss
$
(18,003
)
$
(30,881
)
42
%
Net loss per share
$
(0.07
)
$
(0.15
)
0.08
Adjusted EBITDA1
$
(3,676
)
$
(18,821
)
80
%
Full Year 2023 Financial Measures
Twelve Months Ended
(thousands, except per share data)
December 31, 2023
December 31, 20222
Change in %
Revenues
$
45,873
$
31,129
47
%
Operating expenses:
Cost of revenues
$
11,307
$
9,599
18
%
Sales and marketing
18,893
20,367
-7
%
Research and development
51,439
76,392
-33
%
General and administrative
28,285
30,443
-7
%
Restructuring
4,557
-
N/A
Total operating expenses
$
114,481
$
136,801
-16
%
Operating loss
$
(68,608
)
$
(105,672
)
35
%
Net loss
$
(88,937
)
$
(116,713
)
24
%
Net loss per share
$
(0.40
)
$
(0.74
)
0.34
Adjusted EBITDA1
$
(35,896
)
$
(72,843
)
51
%
1)
Please see table below for a reconciliation from GAAP to non-GAAP.
2)
Note: the Company identified corrections related to historical
financial transactions for certain prior periods, which have been
revised. These amounts had no impact on revenue, EPS or adjusted
EBITDA for the period noted. Specifically, for the three months
ended December 31, 2022, general and administrative expense and
total net loss both increased by $201. For the 12 months ended
December 31, 2022, general and administrative expense increased by
$265 and other income and expense increased by $1,075, resulting in
total net loss increasing by $1,340. Further details were included
in the company's Form 10-Q filed on November 15, 2023 for the
quarterly period ended September 30, 2023.
Summary of Liquidity and Cash Flows
The company’s total cash was approximately $109 million at
December 31, 2023. Current total cash balance is in excess of $200
million.
Condensed Cash Flow Statement
Year Ended
(thousands)
December 31, 2023
December 31, 2022
Cash flows:
Net cash used in operating activities
$
(68,265
)
$
(94,019
)
Net cash used in investing activities
(392
)
(1,329
)
Net cash provided by financing
activities
168,237
82,001
Net change in cash and cash
equivalents1
$
99,560
$
(13,347
)
1)
Foreign exchange impact on cash of ($20) for the period ending
December 31, 2023 not shown on chart.
Business Outlook 2024 and 2025
SoundHound expects full year 2024 revenue to be in a range of
$63 to $77 million, with a midpoint target of $70 million. The
company is also introducing a 2025 outlook, in which it expects its
growth to accelerate with revenue exceeding $100 million, achieving
positive adjusted EBITDA.
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 we file our 10-K. The
financial data presented in this press release should be considered
preliminary until the company files its 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. 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 AI solutions that let businesses offer
incredible conversational 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 across automotive, TV, and IoT, and to customer service
industries via groundbreaking AI-driven products like Smart
Answering, Smart Ordering, and Dynamic Interaction™, a real-time,
multimodal customer service interface. 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.
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, the potential utility of and market for our
products and services, our ability to achieve revenue from our
cumulative bookings backlog and subscription bookings backlog, 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 ability
to develop the bespoke products and services required under the
contracts included in our bookings backlog, including, but not
limited to, our ability to convert customer adoption of Smart
Ordering into realized revenue, our ability to predict or measure
supply chain disruptions at our customers, our market opportunity
and our ability to acquire new customers and retain existing
customers, the timing and impact of our growth initiatives, level
of product service failures that could lead our customers to use
competitors’ services, our ability to predict direct and indirect
customer demand for our existing and future products, our ability
to hire, retain and motivate employees, the effects of competition,
including price competition within our industry segment,
technological, regulatory and legal developments that uniquely or
disproportionately impact our industry segment, developments in the
economy and financial markets 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.
Certain Defined Terms
Cumulative Subscriptions & Bookings Backlog: The Company has
updated this metric to incorporate its customer subscriptions
activity with previously disclosed Cumulative bookings backlog.
Cumulative bookings backlog takes into account the prior quarter
end balance of bookings backlog plus new bookings in the current
quarter minus associated revenue recognized from bookings from
prior periods. Cumulative bookings backlog is derived from
committed customer contracts and this definition remains the same
as the previous one. Subscriptions backlog refers to potential
revenue achievable for the company with current customers where the
company is the leading or exclusive provider, and assuming a 4-year
ramp up during which time our technologies are being implemented
and assuming a successful full roll out of our technologies over a
total 5-year duration. Reasonable assumptions about adoption
percentages are included, with lower percentages applied to pilot
and proof-of-concept customers.
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 measure of financial
performance is included in this release: adjusted EBITDA. We define
Adjusted EBITDA as the company’s GAAP net loss excluding (i)
interest and other expense, net, (ii) depreciation and amortization
expense, (iii) income taxes, (iv) stock-based compensation, (v)
acquisition-related expenses, and (vi) restructuring expense. A
reconciliation of GAAP to this adjusted non-GAAP financial measure
is included 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.
The Company does not present a quantitative reconciliation of
the forward-looking non-GAAP financial measures and Adjusted
EBITDA, to the most directly comparable GAAP financial measure (or
otherwise present such forward-looking GAAP measures) because it is
impractical to forecast certain items without unreasonable efforts
due to the uncertainty and inherent difficulty of predicting,
within a reasonable range, the occurrence and financial impact of
and the periods in which such items may be recognized.
Fourth Quarter Reconciliation of GAAP Net Loss to Non-GAAP
Adjusted EBITDA
Three Months Ended
(thousands)
December 31, 2023
December 31, 2022
GAAP net loss
$
(18,003
)
$
(30,881
)
Adjustments:
OI&E and other1
$
4,003
$
644
Income taxes
1,607
1,284
Depreciation and amortization
372
840
Stock-based compensation
6,486
9,292
Restructuring
806
-
Acquisition-related expenses
1,053
-
Adjusted EBITDA (non-GAAP)
$
(3,676
)
$
(18,821
)
1)
Includes other income/(expense)
of $1.5 and $0.5 million for the three months ended December 31,
2023 and 2022, respectively.
Full Year Reconciliation of GAAP Net Loss to Non-GAAP
Adjusted EBITDA
Year Ended
(thousands)
December 31, 2023
December 31, 2022
GAAP net loss
$
(88,937
)
$
(116,713
)
Adjustments:
OI&E and other2
$
16,415
$
8,152
Income taxes
3,914
2,889
Depreciation and amortization
2,313
4,037
Stock-based compensation
24,789
28,792
Restructuring
4,557
-
Acquisition-related expenses
1,053
$
-
Adjusted EBITDA (non-GAAP)
$
(35,896
)
$
(72,843
)
2)
Includes other income/(expense) of $1.2 and ($1.3) million for the
years ended December 31, 2023 and 2022, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240229968938/en/
Investors: Scott Smith 408-724-1498 IR@SoundHound.com
Media: Fiona McEvoy 415-610-6590 PR@SoundHound.com
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