TLDR
- SoundHound AI reported full-year 2024 revenue of $84.7 million, up 85% from 2023
- Net loss widened to $351.1 million with EPS deteriorating to a $1.04 loss per share
- Q4 revenue reached $34.5 million, showing 100% year-over-year growth
- Company raised its 2025 revenue outlook to $157-177 million
- Analysts have a “Moderate Buy” rating with an average price target of $15.80
SoundHound AI, a provider of voice AI solutions specializing in conversational intelligence, has reported its financial results for the full year 2024, revealing substantial revenue growth alongside deeper losses.
The company reported annual revenue of $84.7 million for 2024. This represents an 85% increase compared to the previous year.
Despite this impressive top-line growth, SoundHound’s financial challenges have intensified. The company posted a net loss of $351.1 million for the year.
This marks a significant widening of losses by 283% compared to 2023. Translated to per-share figures, this equates to a loss of $1.04 per share.
The per-share loss shows considerable deterioration from the $0.40 loss reported in the previous fiscal year. The earnings per share figure missed analyst estimates by 176%.
Revenue performance was more positive. The company’s top-line figure exceeded analyst expectations by 1.0%.
The fourth quarter results were particularly strong. SoundHound reported Q4 revenue of $34.5 million.
This represents an impressive 100% increase compared to the same period in the previous year. The GAAP gross margin for the quarter stood at 39.9%.
The company’s adjusted EBITDA for the fourth quarter was a loss of $16.8 million. For the full year, the adjusted EBITDA loss totaled $61.9 million.
SoundHound’s full-year GAAP gross margin came in at 48.9%. Company officials noted that an increase in the year-end stock price led to a rise in the fair value of contingent liabilities.
This change significantly impacted both fourth-quarter and full-year GAAP net loss and EPS values. Despite these challenges, the company maintains an optimistic outlook.
SoundHound has raised its full-year 2025 revenue guidance to between $157 million and $177 million. This projection suggests potential doubling of sales from 2024 levels.
The market has responded positively to the mixed earnings report. Following the announcement, SoundHound’s shares jumped 17.5%.
The company’s stock is also up 4.9% compared to a week ago. This positive movement comes despite concerns over Nvidia’s recent divestment from SoundHound.
CEO Keyvan Mohajer addressed investor worries about this development. He suggested that the resulting sell-off, which pushed the stock down over 45%, was an overreaction.
SoundHound’s proprietary technology enables businesses across various industries to deliver fast, accurate conversational experiences in multiple languages. The company’s solutions are used in automotive, TV, and IoT applications.
The company processes billions of interactions annually for prominent businesses worldwide. Its client base has been expanding into new sectors including finance, healthcare, and energy.
Analyst opinions on SoundHound’s prospects remain divided. DA Davidson analyst Gil Luria maintains a Buy rating while increasing the price target from $9.50 to $13.
Luria highlighted the company’s strong financial performance toward the end of 2024. He noted that revenue growth exceeded expectations due to high demand for the company’s solutions.
The acquisition of Amelia was also cited as a positive development. According to analysts, this move has increased SoundHound’s total addressable market and diversified their portfolio.
SoundHound AI is rated a “Moderate Buy”
Overall, SoundHound AI is rated a “Moderate Buy” based on recommendations from five analysts. The average price target for SOUN stock is $15.80.
This target represents a potential upside of 46.03% from current levels. Looking ahead, revenue is forecast to grow at an average rate of 43% per year during the next two years.
This projected growth rate significantly outpaces the 12% growth forecast for the US Software industry as a whole. The company’s expanding client base and entry into new sectors may support this ambitious growth trajectory.
SoundHound’s recent quarterly and annual results demonstrate the company’s ability to drive substantial revenue growth while continuing to invest in expansion. The widening losses indicate the company remains in a growth phase with significant spending.
The market appears to be focusing on the revenue growth story and future potential rather than current profitability. This sentiment is reflected in both the positive stock price movement and analyst ratings.
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