PALO ALTO, California - SoundHound AI , Inc. (NASDAQ:SOUN) reported a significant 89% YoY increase in revenue for the third quarter, beating analyst expectations.
SOUN shares were up 1.4% following the release of the Q3 earnings report.
The conversational AI company posted revenue of $25.1 million, surpassing the consensus estimate of $23.02 million. Adjusted earnings per share came in at -$0.04, better than the anticipated -$0.07.
Despite the strong performance, SoundHound's shares declined, possibly due to broader market conditions or investor expectations.
SoundHound's CEO and Co-Founder, Keyvan Mohajer, commented on the results: "This is SoundHound's largest quarter on record as the company takes its first steps into important new verticals. Our increased scale, combined with incredible market enthusiasm for conversational AI, is allowing us to execute on the company's vision."
The company reported a significant improvement in customer concentration, with its largest customer now accounting for only 12% of revenue, down from 72% in the prior year.
SoundHound also highlighted increased industry diversification, with balanced contributions from automotive, restaurants, financial services, healthcare, and insurance sectors.
Looking ahead, SoundHound updated its revenue outlook for 2024 and 2025. The company expects full-year 2024 revenue to be in the range of $82-85 million, compared to the analyst consensus of $82.6 million. For 2025, SoundHound projects revenue between $155-175 million, above the consensus estimate of $152 million.
The company's GAAP gross margin for the quarter was 49%, while non-GAAP gross margin stood at 60%. SoundHound reported a GAAP net loss of $21.8 million and a non-GAAP net loss of $15 million for the quarter.
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