SoundHound AI (SOUN) Q3 2024 earnings summary

Executive summary

• Revenue grew 89% year-over-year to $25.1 million in Q3 2024, surpassing $25 million in a quarter for the first time, driven by acquisitions of Amelia and SYNQ3.

• Expanded customer base to over 200 enterprise brands, reducing reliance on a single customer and deepening presence in automotive, restaurant, and enterprise verticals.

• Completed the acquisition of Amelia, broadening reach into healthcare, insurance, financial services, and retail.

• Signed major new deals in EV automotive, financial services, healthcare, insurance, retail, and government sectors.

• Technology leadership reinforced by rollout of the proprietary Polaris foundation model and upcoming CES 2025 showcase.

Financial highlights

• Q3 2024 revenue was $25.1 million, up 89% year-over-year; nine-month revenue was $50.2 million, up 75%.

• GAAP gross margin was 49%, down from 73% in Q3 2023; non-GAAP gross margin was 60%.

• GAAP net loss for Q3 was $21.8 million; non-GAAP net loss was $15.0 million; GAAP net loss per share was $0.06; non-GAAP EPS loss was $0.04.

• Adjusted EBITDA loss was $15.9 million, primarily due to acquisitions and growth investments.

• Cash and equivalents at quarter-end were $136 million, with $39 million in debt.

Outlook and guidance

• 2024 full-year revenue expected in the range of $82–$85 million.

• 2025 full-year revenue expected in the range of $155–$175 million, driven by scaling core businesses and acquisition synergies.

• Targeting Adjusted EBITDA profitability by end of 2025.

• Company expects mid-term gross margin improvement as integration of Amelia and SYNQ3 progresses.

• Management anticipates continued operating losses in the foreseeable future.