SOUNDHOUND AI, INC. Q4 FY2024 earnings call

• Keyvan Mohajer highlighted that Q4 was the strongest quarter with $35 million in revenue, a year-over-year increase of over 100%, and the company reached the top-end of its full-year revenue guidance. • The company's three-pillar business strategy (voice assistant, AI customer service, voice commerce ecosystem) is gaining traction, with strong POCs from OEMs and restaurants. Notable business wins include four EV brands in automotive, four wins in healthcare, Burger King UK going live, expansion in restaurants, a contract with the City of Coral Springs in government/military, and a large energy deal. • SoundHound is a leader in Agentic AI, with its platform evolving to an ecosystem of autonomous agents working to achieve complex goals. • The company had a strong presence at CES, showcasing groundbreaking technologies and collaborations with NVIDIA, Rekor, etc. • Polaris, the multimodal, multilingual foundation model, has impressive results, outperforming competitors in accuracy and latency.

SoundHound achieved its strongest quarter on record in Q4 2024 with revenue of $35 million, representing a year-over-year increase of over 100%. For the full year, revenue reached $85 million, hitting the top-end of the guidance range. In the automotive segment, Q4 unit growth was affected by industry macro pressures, but projections for 2025 are positive due to early signs of growth. The customer service segment saw scaling with the signing of meaningful new logos like Burger King in the UK and a large energy company in the US. Active cloud users showed double-digit year-over-year growth, which is a key metric for the company. Revenue contribution across segments includes automotive, customer service, and various other verticals contributing to the overall growth.

• For 2025, SoundHound raised its revenue guidance to $157 million to $177 million. The first half of 2025 is expected to contribute closer to 40% of annual revenue, with the quarterly mix still back-end loaded but less so than prior years due to increased recurring subscription business. • The company remains committed to achieving adjusted EBITDA profitability by the end of 2025 through continued scale and high ROI investments, as well as driving acquisition cost synergies.

• A charge related to the change in fair value of contingent liabilities from acquisitions significantly impacted the GAAP loss from operations in Q4, as it is a non-operating and non-cash expense that fluctuates with stock price changes. • Customer concentration has improved but still poses some risk, and industry macro pressures can affect business growth, such as the impact on automotive Q4 unit growth.

Q: Gil Luria asked about leveraging advances in AI models for the restaurant drive-thru business.

A: Keyvan Mohajer stated that the company's architecture was designed to benefit from model advances, allowing for more accuracy and lower running costs, and the company demoed edge deployment.

Q: Gil Luria inquired about the backlog duration and verticals.

A: Nitesh Sharan responded that the duration was slightly over six years, with balance across automotive, restaurant, healthcare, financial services, energy, etc.

Q: Thomas Blakey asked about the typical time to revenue for POCs.

A: Keyvan Mohajer said for live OEMs, POCs can be quick with POCs expected in the first half of 2025, and Nitesh Sharan expanded on ramping in different verticals.

Q: Mike Latimore asked about Amelia's use cases and pricing model.

A: Keyvan Mohajer said customer service is more pronounced but IT automation is strategic, and Nitesh Sharan mentioned a mix of SaaS, interaction-based, and success-based models.

Q: Scott Buck asked about prioritizing verticals and cross-selling cadence.

A: Nitesh Sharan said priorities are based on highest returns, and cross-selling has near-term opportunities.

Q: Glenn Mattson asked about military work and guidance lumpiness.

A: Keyvan Mohajer talked about military partnerships, and Nitesh Sharan said while mix is more SaaS, some licensing deals still exist.

Q: Leo Carpio asked about platform technologies and POC to revenue time.

A: Keyvan Mohajer said SoundHound uses in-house and third-party technologies, and POCs can be quick for live customers.