SoundHound AI SOUN incurred a third-quarter 2024 loss of 6 cents per share, down from the year-ago quarter’s loss of 9 cents per share. The figure beat the Zacks Consensus Estimate by 25%.
Revenues increased 89% year over year to $25.1 million, beating the Zacks Consensus Estimate by 5.96%. This growth was driven by the expansion of its Generative AI solutions and strong demand across various industries, particularly in automotive and restaurants.
In the third quarter of 2024, SOUN completed the acquisition of Amelia, an enterprise conversational AI leader, significantly expanding its reach into new verticals such as finance, insurance and healthcare.
The company also improved customer concentration, with only 12% of revenue was attributed to the largest customer, down from 72% in the previous year, reflecting a more diversified customer base.
SoundHound AI, Inc. Price, Consensus and EPS Surprise
SoundHound AI, Inc. price-consensus-eps-surprise-chart | SoundHound AI, Inc. Quote
SOUN raised its 2024 and 2025 guidance following the robust third-quarter performance, which bodes well for investors. SOUN shares have appreciated 256.6% year to date, outperforming the Zacks Computer & Technology sector’s return of 29.5%.
SOUN’s Operating Details
In third-quarter 2024, operating expenses were $58.8 million, higher than the year-ago quarter’s figure of $27.7 million. The increase was primarily due to the impact of acquisitions.
In the reported quarter, General and Administrative expenses were $17 million (67.9% of total revenues), up 146% year over year.
In the reported quarter, Research and Development expenses were $19.5 million (77.9% of total revenues), up 53% year over year.
In the reported quarter, Sales and Marketing expenses were $8.4 million (33.3% of total revenues), up 87% year over year.
Adjusted EBITDA loss of $15.9 million was higher than the year-ago quarter’s figure of $7.3 million.
In the third quarter of 2024, the operating loss was $33.7 million, higher than $14.5 million reported in the year-ago quarter.
SOUN’s Balance Sheet
As of Sept. 30, 2024, cash & cash equivalents were $136 million compared with $ 201 million as of June 30, 2024.
As of Sept. 30, 2024, long-term debt amounted to $39 million compared with no outstanding debt in the previous quarter.
SOUN Raises FY24 Guidance
SoundHound expects its full-year 2024 revenues in the range of $82-$85 million.
The company also expects a full-year 2025 revenue outlook in the range of $155-$175 million.
SOUN Zacks Rank & Stocks to Consider
SoundHound AI currently carries a Zacks Rank #3 (Hold).
Adobe ADBE, BiliBili BILI and NVIDIA NVDA are some better-ranked stocks that investors can consider in the broader sector. Each stock presently carries Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Adobe shares have lost 11.7% year to date. ADBE is set to report its fourth-quarter 2024 results on Dec. 11.
Bilibili shares have gained 73.3% year to date. BILI is set to report its third-quarter 2024 results on Nov. 14.
NVIDIA shares have gained 199.5% year to date. NVDA is set to report its third-quarter fiscal 2025 results on Nov. 20.
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