SoundHound AI (SOUN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 54% year-over-year to $13.5 million, driven by acquisitions and increased product royalties and service subscriptions, with strong customer momentum across key industries.

• Acquired Amelia to accelerate expansion in enterprise customer service and new verticals, and Allset to build a voice commerce ecosystem.

• Cumulative subscriptions and bookings backlog doubled year-over-year to $723 million, with strong growth in automotive and restaurant segments.

• Closed the quarter with $201 million in cash and prepaid $100 million in debt, saving significant interest and fees.

• Integration of generative AI (SoundHound Chat AI) and partnerships, such as with Perplexity, are driving higher engagement and expanding technology reach.

Financial highlights

• Q2 2024 revenue: $13.5 million, up 54% year-over-year; six-month revenue: $25.1 million, up 62%.

• Gross margin was 63% (67% non-GAAP), down from 79% year-over-year due to acquisition mix.

• Net loss was $37.3 million; GAAP net loss per share was $0.11; non-GAAP EPS loss was $0.04.

• Adjusted EBITDA loss was $13.8 million, improving sequentially by 10%.

• Cash and equivalents at quarter end were $201 million, with no outstanding debt.

Outlook and guidance

• 2024 revenue expected to exceed $80 million; 2025 revenue expected to exceed $150 million, reflecting Amelia acquisition.

• Amelia acquisition expected to be accretive to earnings in the second half of 2025.

• Combined company targets long-term gross margins of 70%+ and EBIT margins of 30%+ at scale.

• Management expects to fund operations for at least the next 12 months with current liquidity.

• Focus remains on scaling AI solutions, expanding customer base, and integrating recent acquisitions.