Voice-enabled AI technologies innovator SoundHound AI (SOUN -2.76%) unveiled its first-quarter 2024 earnings on Thursday, May 9, spotlighting a 73% revenue increase from the previous year, to $11.6 million, which handily beat analyst expectations.
With a less-than-anticipated non-GAAP earnings per share (EPS) loss of $0.07 against an estimated $0.09 loss, the quarterly results suggest the company is growing its market presence and becoming more efficient in its operational management.
| Metric | Q1 2024 | Analyst Estimate | Q1 2023 | Change (YOY) |
|---|---|---|---|---|
| Revenue | $11.6 million | $10.1 million | $6.7 million | 73% |
| Non-GAAP EPS | ($0.07) | ($0.09) | ($0.08) | Improved |
| GAAP gross margin | 59.7% | N/A | 71% | (11.3 pps) |
| Cash and equivalents | $226 million | N/A | $37.1 million | N/A |
Data sources: Company results from SoundHound AI. Analyst estimates from FactSet. YOY = Year over year. GAAP = Generally accepted accounting principles. EPS = Earnings per share.
Company overview
SoundHound AI specializes in developing AI and voice-recognition technologies, powering applications in several industries, including automotive and restaurants. Its focus on innovation and securing intellectual property rights sets it apart in the competitive landscape of voice AI.
Recently, the company emphasized expanding its technological solutions, aiming to capture more of the voice AI market through strategic partnerships and product advancements. These initiatives are part of its broader strategy to improve monetization and enhance user experiences.
Quarter highlights
SoundHound AI expanded its voice AI solutions further into the automotive sector and customer service, reporting further collaborations with automaker Stellantis and quick-service restaurant (QSR) chains like Church's Chicken and Dine Brands Applebee's. These strategic moves underline the firm's innovative prowess and market expansion capabilities.
SoundHound's financial health appears more robust, closing the quarter with a strong cash balance of $226 million. This not only aids in sustaining operations but also fuels future growth and R&D investments. Such financial flexibility is vital for technological advancements and expanding market reach.
Another highlight is SoundHound AI's forward-looking revenue outlook for 2024, now projected in the range of $65 to $77 million (the bottom of the range was raised from $63 million). This updated outlook reflects confidence in the company's growth trajectory and its strategic initiatives aimed at expanding its voice AI offerings.
Furthermore, the quarter saw a substantial engagement in R&D and new product launches, such as the "Dynamic Interaction" AI interface for drive-thrus, illustrating SoundHound AI's commitment to leading-edge technology and market responsiveness.
Looking ahead
SoundHound AI's management has a positive outlook for upcoming quarters, backed by its strong first-quarter performance and strategic focus areas. The updated revenue guidance pinpoints the company's confidence in its growth trajectory and market expansion strategies.
Investors should monitor the firm's continued R&D progress and market expansion efforts, particularly in diversifying its customer base and enhancing product offerings. These factors will be critical in maintaining SoundHound AI's growth momentum and competitive edge in the voice AI market.
