SOUNDHOUND AI, INC. Q4 FY2023 earnings call

• Revenue Growth: Broke quarterly revenue record, Q4 revenue >$17M, up 80% YOY; full year 2023 revenue $45.9M.
• Adjusted EBITDA: 80% year-over-year improvement in adjusted EBITDA.
• SoundHound Chat AI: Launched in early 2023, integrated with generative AI, gaining traction with automakers like Stellantis, with brands like Peugeot, Opel, Vauxhall planning to utilize it.
• SoundHound Vehicle Intelligence: Launched in Q4, allows voice-enabling car manuals, working with EV and luxury brands.
• Pillar 2 Growth: Restaurant solutions like Smart Ordering, Employee Assist, Dynamic Interaction gaining traction; acquisition of SYNQ3 extended market reach in restaurant voice AI.

Pillar 1: Powered products like cars, TVs, and IoT devices. Q4 revenue surpassed $17 million, up 80% year-over-year. Had over 20 automotive brands (representing over 25% of the automotive industry), integrated with VIZIO, Telly, and various IoT devices. Revenue contribution from automotive and other IoT/device categories. Pillar 2: AI customer services for businesses. Saw growth in restaurant solutions with wins like Jersey Mike's, White Castle, Church's Chicken, and acquisition of SYNQ3. Q4 revenue growth driven by these segments with increasing adoption and partnerships.

• 2024 outlook: Top-line growth to $63M-$77M, midpoint $70M; Pillar 2 to grow from <10% of total revenue in 2023 to >20% in 2024.
• 2025 aim: Cross $100M revenue and achieve adjusted EBITDA profitability.
• Impact of SYNQ3 acquisition: Temporary decrease in gross margins early 2024 due to duplicative expenses, but expected to improve later in 2024 and beyond.

Q: Can you talk about expected strategic partnerships over the next six, nine months?

A: In Pillar 2, partnerships with Olo, Toast, Oracle, Square as channel partners; in Pillar 1, extended deal with a large automaker until 2037.

Q: How is the conversation with customers changing?

A: Demand is through the roof; customers are now coming to SoundHound vs. them knocking on doors 12-9 months ago.

Q: What's the nature of revenue from the chip company?

A: The chip company paid for SoundHound's IP, first time generating revenue from the relationship, with expectation of more opportunities ahead.

Q: Can you give color on 2025 visibility and SYNQ3 synergy?

A: Confident in 2025 target due to pipeline and customer traction; SYNQ3 acquisition brings cross-selling and upselling opportunities in restaurant voice AI.

Q: Thoughts on restaurant deployment and SYNQ3 contribution?

A: Deployment depends on customer type (franchisees vs. corporate); SYNQ3 brings upgrade and upsell opportunities, and efficiency in migrating back-end systems.

Q: What's the current share count and SYNQ3 contribution in 2024?

A: Share count around 270M; SYNQ3 contributes to growth in 2024 through synergies and migration of back-end systems.

Q: How many units/devices is SoundHound in and restaurant deployment outlook?

A: In millions of cars, TVs, and IoT devices; restaurant deployment growing from 10,000 range by end of year, targeting hundreds of thousands globally with revenue following.