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SoundHound AI, Inc. (NASDAQ:SOUN) stock is trading lower Friday after the company reported an upbeat second-quarter print, boosted its guidance, and announced a fresh acquisition Thursday.
The voice AI and speech recognition company reported revenue of $13.5 million, up 54% year over year and beating the analyst consensus estimate of $13.1 million.
EPS loss of $(0.04) beat the analyst consensus loss estimate of $(0.09).
SoundHound AI doubled its cumulative subscriptions & bookings backlog to $723 million.
The company’s annual run rate of queries grew by 90% Y/Y to over 5 billion.
The adjusted gross margin plunged 1,350 bps to 66.5%.
SoundHound expects 2024 revenue to exceed $80 million (prior $65 million-$77 million) versus analyst consensus of $70.5 million. SoundHound expects 2025 revenue to exceed $150 million, versus the consensus estimate of $103.5 million.
The company snapped Amelia, an enterprise AI software company, for $80 million, with earnout potential aligned to revenue milestone achievements.
Combined revenue in 2025 will likely exceed $150 million, with Amelia contributing over $45 million in recurring AI software revenue.
The transaction will likely be accretive to SoundHound earnings in the second half of 2025, with meaningful revenue and cost synergies.
The combined company holds $160 million in cash and $39 million in debt.
Keyvan Mohajer, CEO and Co-Founder of SoundHound AI, said,“We believe the demand for voice and conversational AI is increasing and are committed to strengthening our leadership position in this growing market.”
SoundHound has experienced a turbulent journey since its 2021 SPAC merger, initially valued at $2.1 billion. By 2023, it laid off nearly half its workforce and secured additional funding to stabilize, TechCrunch reports.
SoundHound is acquiring Amelia to expand into new financial services and healthcare sectors. This acquisition allows SoundHound to quickly enter markets with complex integration needs, as Mohajer told TechCrunch. Although the price disparity between Amelia’s past funding and its sale is notable, Mohajer emphasized the strategic value of the deal in advancing both companies’ growth in the competitive AI landscape.
SoundHound AI stock gained 153% in the last 12 months.
Cantor Fitzgerald analyst Brett Knoblauch upgraded SoundHound AI from Neutral to Overweight and raised the price target from $5 to $7.
Price Action: SOUN shares are trading lower by 4.5% at $4.87 at last check Friday.
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