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SoundHound AI, Inc Class A (SOUN)
:SOUN
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SoundHound AI, Inc Class A
(NASDAQ:SOUN)
43Neutral
Positive Factors
Market Positioning
The company highlighted sales momentum across multiple verticals including restaurants, automotive, healthcare, financial services government, and energy.
Revenue Growth
Increased revenue guidance suggests confidence in organic growth story.
Negative Factors
Financial Risks
Risks include dilution risk if the company raises additional capital, high levels of industry competition, technology and execution risks, customer concentration risk, and intellectual property risks.
Stock Performance
SOUN shares have come under pressure, down 29% year to date versus a 2.2% decline in the Russell 2000 Index.
SoundHound AI, Inc Class A (SOUN) vs. S&P 500 (SPY)
Market Cap
$3.93B
Dividend YieldN/A
Average Volume (3M)42.94M
Price to Earnings (P/E)―
Beta (1Y)3.42
Revenue Growth84.62%
EPS Growth-152.92%
CountryUS
Employees260
SectorTechnology
Sector Strength51
IndustrySoftware
Share Statistics
EPS (TTM)-0.98
Shares Outstanding366,426,270
10 Day Avg. Volume28,468,134
30 Day Avg. Volume42,942,279
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)46.45
Price to Cash Flow (P/CF)-29.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.80Price Target Upside60.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
SoundHound AI, Inc Class A Business Overview & Revenue Model
Company DescriptionSoundHound AI Inc is an innovator of conversational intelligence, offering an independent Voice AI platform that enables businesses across industries to deliver high-quality conversational experiences to customers.
How the Company Makes MoneySoundHound AI, Inc. generates revenue through licensing its voice AI technology to a variety of sectors, including automotive, consumer electronics, and enterprise software. The company's revenue model primarily relies on charging licensing fees to businesses that integrate its voice recognition and conversational AI solutions into their products. Additionally, SoundHound AI may earn revenue through subscription services for ongoing access to its platforms and by providing custom development services for businesses requiring tailored voice and AI solutions. Strategic partnerships with major technology companies and automotive manufacturers also contribute significantly to its earnings, allowing it to expand its market reach and application areas.
SoundHound AI, Inc Class A Financial Statement Overview
Summary
SoundHound AI, Inc exhibits strong revenue growth, a positive sign for future potential, but faces ongoing profitability and cash flow challenges. Significant debt levels and historical negative equity raise concerns about financial stability, despite recent improvements. The company must address operational inefficiencies to achieve profitability and ensure long-term sustainability.Income Statement
SoundHound AI, Inc has shown significant revenue growth over the years, moving from $7.68 million in 2019 to $84.69 million in 2024, indicating strong top-line growth. Despite this, the company consistently shows negative net income, with a net loss of $351.1 million in 2024, highlighting profitability challenges. This is reflected in negative EBIT and EBITDA margins, which have widened over time, suggesting ongoing operational inefficiencies.45
Neutral
Balance Sheet
The balance sheet reveals a high leverage position, with a debt-to-equity ratio indicating substantial liabilities compared to equity, though this improved in 2024 with equity turning positive. The equity ratio improved significantly in the latest year, suggesting better financial stability. Despite these improvements, the company has historically struggled with negative equity, posing a risk to financial health.30
Negative
Cash Flow
Cash flow analysis reveals persistent negative free cash flow, indicating cash burn and reliance on external financing, as evidenced by significant financing cash flows in recent years. The operating cash flow remains negative, and the free cash flow to net income ratio remains unfavorable. Despite improvements in operating cash flow in 2024, liquidity remains a concern.35
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 84.69M | 45.87M | 31.13M | 21.20M | 13.02M | Gross Profit |
| 41.38M | 34.57M | 21.53M | 14.61M | 7.15M | EBIT |
| -341.35M | -68.61M | -105.41M | -65.33M | -66.00M | EBITDA |
| -329.09M | -65.14M | -102.89M | -61.65M | -65.36M | Net Income Common Stockholders |
| -350.68M | -88.94M | -115.37M | -79.54M | -74.41M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 198.24M | 95.26M | 9.24M | 21.63M | 43.69M | Total Assets |
| 553.95M | 151.12M | 38.25M | 49.20M | 63.64M | Total Debt |
| 4.35M | 90.16M | 44.25M | 73.32M | 16.64M | Net Debt |
| -193.89M | -5.10M | 35.01M | 51.69M | -27.05M | Total Liabilities |
| 371.30M | 122.95M | 73.48M | 392.44M | 339.99M | Stockholders Equity |
| 182.65M | 28.17M | -35.23M | -343.24M | -276.35M |
| Cash Flow | Free Cash Flow | |||
| -109.52M | -68.66M | -95.35M | -66.81M | -48.47M | Operating Cash Flow |
| -108.88M | -68.27M | -94.02M | -66.18M | -46.30M | Investing Cash Flow |
| -12.37M | -392.00K | -1.33M | -636.00K | 11.45M | Financing Cash Flow |
| 210.91M | 168.24M | 82.00M | 44.65M | 53.45M |
SoundHound AI, Inc Class A Technical Analysis
Neutral
9.86
Price Trends
12.28
Negative
12.19
Negative
8.49
Positive
Market Momentum
-0.76
Negative
45.32
Neutral
67.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOUN, the sentiment is Neutral. The current price of 9.86 is above the 20-day moving average (MA) of 9.59, below the 50-day MA of 12.28, and above the 200-day MA of 8.49, indicating a neutral trend. The MACD of -0.76 indicates Negative momentum. The RSI at 45.32 is Neutral, neither overbought nor oversold. The STOCH value of 67.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SOUN.
SoundHound AI, Inc Class A Risk Analysis
SoundHound AI, Inc Class A disclosed 51 risk factors in its most recent earnings report. SoundHound AI, Inc Class A reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
SoundHound AI, Inc Class A Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $5.94B | ― | -3.82% | ― | 16.50% | 40.15% | |
58 Neutral | $21.97B | 10.49 | -18.75% | 2.40% | 4.80% | -25.17% | |
54 Neutral | $3.00B | ― | -32.07% | ― | 23.79% | 4.10% | |
50 Neutral | $3.69B | ― | -13.55% | ― | -26.72% | 77.64% | |
47 Neutral | $123.08M | ― | -365.12% | ― | -13.43% | 15.63% | |
43 Neutral | $3.93B | ― | -332.68% | ― | 84.62% | -152.92% |
* Technology Sector Average
Performance Comparison
SOUN
SoundHound AI, Inc Class A
9.86
4.00
68.26%
VERI
Veritone
2.76
-2.25
-44.91%
TSE:BB
BlackBerry
6.23
2.64
73.54%
AI
C3ai
22.62
-5.01
-18.13%
PATH
UiPath
10.81
-12.26
-53.14%
SoundHound AI, Inc Class A Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 7.06% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant revenue growth, strong presence in key markets such as automotive and healthcare, and strategic advancements with the launch of the voice commerce ecosystem. However, there were challenges with declining gross margins and increased operating expenses, resulting in an adjusted EBITDA loss. Despite these challenges, the company's strong revenue growth and strategic positioning in the AI market suggest a positive outlook.Highlights
Record Revenue Growth
SoundHound reported $35 million in revenue for Q4 2024, representing an increase of over 100% year-over-year, reaching the top-end of their revenue guidance range for the full year.
Expansion in Automotive and Healthcare
SoundHound's automotive pipeline is the strongest it's ever been, with four EV brands added, including Lucid and Togg. In healthcare, the company secured wins with Duke Health, Englewood Health, and Wellstar Health System.
Launch of Voice Commerce Ecosystem
SoundHound unveiled its voice commerce ecosystem, which integrates its voice assistant with AI customer service, already receiving interest from major automakers and national chain restaurants.
Strong Presence and Partnerships
SoundHound had a significant presence at CES, showcasing collaborations with NVIDIA, Lucid Motors, and LG, highlighting leadership in voice AI.
Significant Backlog and Financial Health
The company reported a cumulative subscriptions and bookings backlog of nearly $1.2 billion, up over 75% year-over-year, with a strong cash position of $198 million and no debt.
Lowlights
Gross Margin Decline
GAAP gross margin was 40%, down year-over-year due to the business and product mix of recent acquisitions. Non-GAAP gross margin was 52%, also down sequentially.
Increased Operating Expenses
R&D expenses increased by 60% year-over-year to $20.4 million, and sales and marketing expenses rose by 114% year-over-year to $9.6 million, primarily driven by acquisitions.
Adjusted EBITDA Loss
Adjusted EBITDA was a loss of $16.8 million in Q4, driven by strategic acquisitions and growth investments.
Company Guidance
During the SoundHound Fourth Quarter 2024 Earnings Conference Call, guidance was provided highlighting substantial growth metrics and future expectations. The company reported $35 million in revenue for the quarter, marking an impressive growth of over 100% year-over-year, and achieved the top-end of their full-year revenue guidance at $85 million, reflecting an 85% annual increase. SoundHound has grown its top-line at a compound annual growth rate of more than 50% over the past five years, with revenue increasing eightfold since going public less than three years ago. The call emphasized a $1.2 billion backlog in bookings, showcasing a 75% year-over-year increase, with the average contract duration being over six years. For 2025, SoundHound raised its revenue outlook to $157 million to $177 million, anticipating a less back-end loaded quarterly revenue mix compared to prior years. The company expects to achieve adjusted EBITDA profitability by the end of 2025, supported by its strong pipeline, increased SaaS-like revenue, and strategic investments across various sectors.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.