This week, the trading frenzy surrounding the AI voice technology company, SoundHound, is reaching new heights.
Impressive Fourth Quarter Results
SoundHound reported strong results for the fourth quarter, slightly below Street estimates but with a promising outlook of accelerated revenue growth moving forward.
Unprecedented Trading Volume
Trading volume for SoundHound shares has been extraordinary – exceeding 212 million shares on Monday, surging over 300 million on Tuesday, and crossing 100 million on Wednesday. Remarkably, all of this is happening with less than 250 million shares available. The stock has skyrocketed by 87% in just one week and remains a highly sought-after issue in the market, boasting a market valuation of approximately $1.9 billion.
Phenomenal Year-To-Date Growth
Year-to-date, the stock has seen an exponential rise of nearly 250%, showcasing the strong performance of SoundHound.
Company Growth & Operations
CEO Keyvan Mohajer highlighted the company’s two core business pillars – interactive voice services for various devices and AI voice software for restaurants – both experiencing rapid growth.
Strong Revenue But Unexpected Loss
Despite the revenue of $17.1 million in the fourth quarter, marking an impressive 80% increase from the previous year, SoundHound fell short of Wall Street’s forecast. The company anticipated profitability using adjusted Ebitda but ended up with a $3.7 million loss, attributing it in part to audit-related costs due to a change in auditors mid-quarter.
Optimistic Outlook
Mohajer expressed pride in the company’s growth and first-time revenue contribution from a significant AI chip company, likely Nvidia, teasing potential future collaborations.
The future looks bright for SoundHound as it continues to innovate and expand in the AI voice technology sector.
SoundHound Continues to Expand and Grow
Mohajer’s Positive Outlook
Mohajer shared exciting news about SoundHound’s recent achievements. The company signed a significant contract with a leading auto maker that will boost unit volumes through 2037. Mohajer expressed enthusiasm about the future, stating that they are just beginning and the demand surpasses their expectations. After two decades of hard work, SoundHound is now in a strong position with a solid balance sheet, boasting over $200 million in cash compared to just $9 million a year ago.
Impressive Financial Performance
In the full year, SoundHound reported a revenue of $45.9 million, a substantial 47% increase. Despite posting a loss of 40 cents per share on an adjusted basis and an adjusted EBITDA loss of $35.9 million, the company remains optimistic about its future growth potential.
Upward Revenue Projections
Looking ahead to 2024, SoundHound anticipates a full-year revenue ranging from $63 million to $77 million, with a midpoint projection of $70 million, signaling an accelerated growth rate of 53%. These figures exceed the Street’s estimated revenue of $69.7 million.
For 2025, SoundHound forecasts revenue exceeding $100 million, accompanied by positive adjusted EBITDA. Mohajer predicts further revenue acceleration in 2025, potentially reaching around $109 million with a 55% growth rate. While analysts project revenue of $99.8 million in 2025, they also predict an adjusted EBITDA loss of $800,000.
Investor Interest and Strategic Partnerships
SoundHound garnered increased attention from investors following Nvidia’s disclosure of holdings in various companies, including SoundHound. Mohajer highlighted the company’s strategic partnerships with key investors such as Nvidia, Samsung, Tencent, Vizio, Oracle, and Hyundai. Vizio incorporates SoundHound’s voice technology into its TVs, while Hyundai utilizes SoundHound software in select vehicles. Additionally, Oracle provides cloud computing services for SoundHound’s AI software.
Notably, SoftBank Group recently revealed its ownership of SoundHound shares, surprising the company with its undisclosed investment.