SoundHound AI, Inc. (Nasdaq: SOUN), a global leader in voice artificial intelligence, today reported its financial results for the three months ended June 30, 2022.
“We are delighted to have kicked off our first quarter as a publicly listed company with strong business momentum. We have seen significant growth in bookings, user queries, customers, and new product launches,” said Keyvan Mohajer, Co-Founder and CEO of SoundHound. “We believe conversational voice AI is the next major disruption in computing. Our technological breakthroughs put us right at the forefront of this massive opportunity to voice enable billions of devices and services, and create a new monetization ecosystem.”
Second Quarter Business Highlights
“Despite broader macroeconomic volatility, our Q2 results demonstrate our accelerating growth,” said Nitesh Sharan, CFO of SoundHound. “We are driving targeted investments in sales, marketing and technology, disrupting legacy providers while concurrently scaling new opportunities. The combination of our unique ecosystem strategy and superior technology is category defining.”
Second Quarter 2022 Financial Highlights
| Three Months Ended | |||||||||||
(thousands) | June 30, 2022 | March 31 2022 | June 30, 2021 | |||||||||
Cumulative bookings backlog1 |
$ |
283,431 |
|
$ |
229,827 |
|
$ |
92,305 |
| |||
|
|
|
|
|
|
| ||||||
Revenues | $ | 6,152 |
| $ | 4,290 |
| $ | 8,2792 |
| |||
Operating expenses: |
|
|
|
|
|
| ||||||
Cost of revenues | $ | 2,488 |
| $ | 1,773 |
| $ | 1,628 |
| |||
Sales and marketing |
| 4,370 |
|
| 2,581 |
|
| 1,008 |
| |||
Research and development |
| 18,862 |
|
| 16,650 |
|
| 14,023 |
| |||
General and administrative |
| 9,362 |
|
| 4,003 |
|
| 4,119 |
| |||
Total operating expenses | $ | 35,082 |
| $ | 25,007 |
| $ | 20,778 |
| |||
Operating profit (loss) | $ | (28,930 | ) | $ | (20,717 | ) | $ | (12,499 | ) | |||
| Net profit (loss) | $ | (30,668 | ) | $ | (25,103 | ) | $ | (14,651 | ) | |||
Net earnings (loss) per share |
| (0.19 | ) |
| (0.29 | ) |
| (0.22 | ) | |||
|
|
|
|
|
|
| ||||||
Adjusted EBITDA3 | $ | (20,015 | ) | $ | (17,037 | ) | $ | (9,770 | ) | |||
1) | Cumulative bookings backlog is cumulative new bookings minus revenue associated with the booking in the current period. | |
2) | Reported revenues in the second quarter 2021 were impacted by a one-time recognition of $4.3 million in revenue as a result of the conclusion of a professional services contract during the three months ended June 30, 2021. | |
3) | Please see table below for a reconciliation from GAAP to non-GAAP. |
Second Quarter 2022 Summary Cash Flows
(thousands) | Six Months Ended | |||||||
| June 30, 2022 | June 30, 2021 | ||||||
Cash flows: |
|
|
|
| ||||
Net cash used in operating activities | $ | (46,767 | ) | $ | (32,625 | ) | ||
Net cash used in investing activities |
| (982 | ) |
| (111 | ) | ||
Net cash provided by financing activities |
| 90,167 |
|
| 35,254 |
| ||
Net change in cash and cash equivalents | $ | 42,418 |
| $ | 2,518 |
| ||
The Company’s cash and cash equivalents was $65 million at June 30, 2022 quarter-end.
Business Outlook
SoundHound reaffirms its full year 2022 revenue guidance of between $27 million to $33 million, with revenue momentum accelerating through the second half of the year principally due to seasonality and the expected benefits from sales and marketing investments.
Additional Information
On April 26, SoundHound Inc. successfully completed its previously announced business combination with Archimedes Tech SPAC Partners Co. The resulting company, SoundHound AI, Inc., began trading on Nasdaq Global Market under the ticker symbol “SOUN” on April 28, 2022.
SoundHound expects to file its Form 10-Q for the quarterly period ended June 30, 2022, by August 15, 2022. For more information please see the company’s SEC filings which can be obtained on our website at investors.soundhound.com or sec.gov.
Conference Call and Webcast
Keyvan Mohajer, Co-Founder and CEO and Nitesh Sharan, CFO will host a live audio conference call and webcast today at 2:30 p.m. Pacific Time/5:30 p.m. Eastern Time. To register, please visit SoundHound’s Investor Relations website at investors.soundhound.com. Following the call, a replay will be available on the same website.
About SoundHound
SoundHound, a leading innovator of conversational intelligence, offers an independent voice AI platform that enables businesses across industries to deliver best-in-class conversational experiences to their customers. Built on proprietary Speech-to-Meaning® and Deep Meaning Understanding® technologies, SoundHound’s advanced voice AI platform provides exceptional speed and accuracy and enables humans to interact with products and services like they interact with each other—by speaking naturally. SoundHound is trusted by companies around the globe, including Hyundai, Mercedes-Benz, Pandora, Deutsche Telekom, Snap, VIZIO, KIA, and Stellantis. www.soundhound.com
Forward Looking Statements
This press release contains forward-looking statements, which are not historical facts, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. As a result, readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting SoundHound’s business including, current uncertainties associated with the COVID-19 pandemic, our inability to predict or measure supply chain disruptions resulting from the COVID-19 pandemic and other causes, the potential future revenue associated with our AI platform products and services; our rate of growth; our ability to predict direct and indirect customer demand for our existing and future products and to secure adequate manufacturing capacity; our ability to hire, retain and motivate employees; the effects of competition, including price competition within our industry segment; technological, regulatory and legal developments that uniquely or disproportionately impact our industry segment; developments in the economy and financial markets and other risks described in the Prospectus filed April 8, 2022 and detailed from time to time in SoundHound’s filings with the Securities and Exchange Commission.
Non-GAAP Measures of Financial Performance
To supplement our financial statements, which are presented on the basis of U.S. generally accepted accounting principles (GAAP), the following non-GAAP measure of financial performance is included in this release: adjusted EBITDA. A reconciliation of GAAP to this adjusted non-GAAP financial measure is included below. When analyzing the Company's operating results, investors should not consider non-GAAP measures as substitutes for the comparable financial measures prepared in accordance with GAAP.
Reconciliation of GAAP Net Profit (Loss) to Non-GAAP Adjusted EBITDA
(thousands) | Three Months Ended | |||||||||||
| June 30, 2022 | March 31 2022 | June 30, 2021 | |||||||||
GAAP net profit (loss) | $ | (30,668 | ) | $ | (25,103 | ) | $ | (14,651 | ) | |||
|
|
|
|
|
|
| ||||||
Adjustments: |
|
|
|
|
|
| ||||||
Interest and other expense1 | $ | (1,349 | ) | $ | (4,034 | ) | $ | (2,110 | ) | |||
Income taxes |
| (389 | ) |
| (352 | ) |
| (43 | ) | |||
Depreciation and Amortization |
| (1,052 | ) |
| (1,216 | ) |
| (1,382 | ) | |||
Stock-based compensation | $ | 7,863 | $ | 2,464 | $ | 1,346 | ||||||
Adjusted EBITDA | $ | (20,015 | ) | $ | (17,037 | ) | $ | (9,770 | ) | |||
1) | Includes other income/(expense) of $0.2, $(1.1) and $0.2 million, respectively |
Contacts
SoundHound
Scott Smith
408-724-1498
This email address is being protected from spambots. You need JavaScript enabled to view it.
Fiona McEvoy
415-610-6590
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| SOUNDHOUND AI, INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands, except share and per share data) | ||||||||
| June 30, |
| December 31, |
| ||||
| (Unaudited) |
|
|
| ||||
ASSETS |
|
|
|
| ||||
|
|
|
|
| ||||
Current assets: |
|
|
|
| ||||
Cash and cash equivalents | $ | 65,010 |
| $ | 21,626 |
| ||
Restricted cash equivalents |
| — |
| 460 |
| |||
Accounts receivable, net of allowances of $109 as of June 30, 2022 and December 31, 2021 |
| 1,015 |
|
| 2,060 |
| ||
Prepaid expenses |
| 4,685 |
|
| 1,276 |
| ||
Debt issuance cost |
| 122 |
|
| 1,132 |
| ||
Other current assets |
| 927 |
|
| 917 |
| ||
Total current assets |
| 71,759 |
|
| 27,471 |
| ||
Restricted cash equivalents, non-current |
| 230 |
|
| 736 |
| ||
Right-of-use assets |
| 9,535 |
|
| 10,291 |
| ||
Property and equipment, net |
| 4,868 |
|
| 6,155 |
| ||
Deferred tax asset |
| 2,169 |
|
| 2,169 |
| ||
Debt issuance cost |
| 235 |
|
| — |
| ||
Deferred offering costs |
| — |
|
| 1,264 |
| ||
Other assets |
| 1,007 |
|
| 1,117 |
| ||
Total assets | $ | 89,803 |
| $ | 49,203 |
| ||
|
|
|
|
|
|
| ||
LIABILITIES, REDEEMABLE CONVERTIBLE |
|
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
|
| ||
Accounts payable | $ | 5,348 |
| $ | 3,760 |
| ||
Accrued liabilities |
| 5,939 |
|
| 7,298 |
| ||
Operating lease liabilities |
| 3,299 |
|
| 3,281 |
| ||
Financing lease liabilities |
| 361 |
|
| 1,301 |
| ||
Income tax liability |
| 2,829 |
|
| 2,737 |
| ||
Deferred revenue |
| 6,174 |
|
| 6,042 |
| ||
Convertible note |
| — |
|
| 29,868 |
| ||
Derivative liability |
| — |
|
| 3,488 |
| ||
Notes payable |
| 16,930 |
|
| 29,964 |
| ||
Total current liabilities |
| 40,880 |
|
| 87,739 |
| ||
|
|
|
|
|
|
| ||
Operating lease liabilities, net of current portion |
| 7,124 |
|
| 8,611 |
| ||
Financing lease liabilities, net of current portion |
| 214 |
|
| 292 |
| ||
Deferred revenue, net of current portion |
| 9,465 |
|
| 14,959 |
| ||
Notes payable, net of current portion |
| 26,126 |
|
| — |
| ||
Other liabilities |
| 1,338 |
|
| 1,336 |
| ||
Total liabilities |
| 85,147 |
|
| 112,937 |
| ||
Commitments and contingencies (Note 7) |
|
|
|
| ||||
|
|
|
|
| ||||
Legacy SoundHound redeemable convertible preferred stock; $0.0001 par value; 0 and 146,218,514 shares authorized; 0 and 106,949,326 shares issued and outstanding, liquidation preference of $0 and $284,826 as of June 30, 2022 and December 31, 2021, respectively |
| — |
|
| 279,503 |
| ||
|
|
|
|
| ||||
Stockholders’ equity (deficit): |
|
|
|
| ||||
Legacy SoundHound common stock, $0.0001 par value; 250,030,433 shares authorized; 0 and 68,230,806 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively |
| — |
|
| 1 | |||
Class A Common Stock, $0.0001 par value; 455,000,000 shares authorized; 156,121,466 and 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively |
| 16 |
| — |
| |||
Class B Common Stock, $0.0001 par value; 44,000,000 shares authorized; 40,396,600 and 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively |
| 4 |
| — |
| |||
Additional paid-in capital |
| 447,136 |
|
| 43,491 |
| ||
Accumulated deficit |
| (442,500 | ) |
| (386,729 | ) | ||
Total stockholders’ equity (deficit) |
| 4,656 |
| (343,237 | ) | |||
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit) | $ | 89,803 |
| $ | 49,203 |
| ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
SOUNDHOUND AI, INC. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
| Three Months Ended |
| Six Months Ended | |||||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 | |||||||||
Revenues | $ | 6,152 |
| $ | 8,279 |
| $ | 10,442 |
| $ | 12,018 |
| ||||
Operating expenses: |
|
|
|
|
|
| ||||||||||
Cost of revenues |
| 2,488 |
|
| 1,628 |
|
| 4,261 |
|
| 3,221 |
| ||||
Sales and marketing |
| 4,370 |
|
| 1,008 |
|
| 6,951 |
|
| 2,084 |
| ||||
Research and development |
| 18,862 |
|
| 14,023 |
|
| 35,512 |
|
| 28,466 |
| ||||
General and administrative |
| 9,362 |
|
| 4,119 |
|
| 13,365 |
|
| 7,365 |
| ||||
Total operating expenses |
| 35,082 |
|
| 20,778 |
|
| 60,089 |
|
| 41,136 |
| ||||
Loss from operations |
| (28,930 | ) |
| (12,499 | ) |
| (49,647 | ) |
| (29,118 | ) | ||||
|
|
|
|
|
| |||||||||||
Other expense, net: |
|
|
|
|
|
| ||||||||||
Interest expense |
| (1,572 | ) |
| (2,294 | ) |
| (4,549 | ) |
| (3,042 | ) | ||||
Other income (expense), net |
| 223 |
|
| 184 |
|
| (834 | ) |
| (1,542 | ) | ||||
Total other expense, net |
| (1,349 | ) |
| (2,110 | ) |
| (5,383 | ) |
| (4,584 | ) | ||||
Loss before provision for income taxes |
| (30,279 | ) |
| (14,609 | ) |
| (55,030 | ) |
| (33,702 | ) | ||||
Provision for income taxes |
| 389 |
|
| 43 |
|
| 741 |
|
| 210 |
| ||||
Net loss |
| (30,668 | ) |
| (14,652 | ) |
| (55,771 | ) |
| (33,912 | ) | ||||
Other comprehensive gain: |
|
|
|
|
|
| ||||||||||
Unrealized holding gain on available-for-sale |
| — |
|
| 1 |
|
| — |
|
| 1 |
| ||||
Comprehensive loss | $ | (30,668 | ) | $ | (14,651 | ) | $ | (55,771 | ) | $ | (33,911 | ) | ||||
|
|
|
|
|
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| ||||||||||
Net loss per share: |
|
|
|
|
|
| ||||||||||
Basic and diluted | $ | (0.19 | ) | $ | (0.22 | ) | $ | (0.48 | ) | $ | (0.51 | ) | ||||
|
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| ||||||||||
Weighted-average common shares outstanding: |
|
|
|
|
|
| ||||||||||
Basic and diluted |
| 161,976,429 |
|
| 67,357,878 |
|
| 116,031,777 |
|
| 66,666,508 |
| ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
SOUNDHOUND AI, INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
| Six Months Ended | |||||||
| 2022 |
| 2021 | |||||
Cash flows from operating activities: |
|
| ||||||
Net loss | $ | (55,771 | ) | $ | (33,912 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
| ||||
Depreciation and amortization |
| 2,269 |
|
| 2,836 |
| ||
Stock-based compensation |
| 10,327 |
|
| 2,734 |
| ||
Change in fair value of derivative and warrant liability |
| 606 |
|
| 1,314 |
| ||
Amortization of debt issuance cost |
| 2,185 |
|
| 1,399 |
| ||
Non-cash lease amortization |
| 1,545 |
|
| 1,790 |
| ||
Changes in operating assets and liabilities: |
|
| ||||||
Accounts receivable |
| 1,045 |
|
| (2,323 | ) | ||
Prepaid expenses |
| (3,409 | ) |
| 266 |
| ||
Other current assets |
| (10 | ) |
| (373 | ) | ||
Operating lease liabilities |
| (2,258 | ) |
| (2,096 | ) | ||
Other assets |
| 110 |
|
| (26 | ) | ||
Accounts payable |
| 1,846 |
|
| (107 | ) | ||
Accrued liabilities |
| 108 |
|
| 1,468 |
| ||
Deferred revenue |
| (5,362 | ) |
| (4,845 | ) | ||
Other liabilities |
| 2 |
|
| (750 | ) | ||
Net cash used in operating activities |
| (46,767 | ) |
| (32,625 | ) | ||
|
|
|
|
| ||||
Cash flows from investing activities: |
|
|
|
| ||||
Purchases of property and equipment |
| (982 | ) |
| (111 | ) | ||
Net cash used in investing activities |
| (982 | ) |
| (111 | ) | ||
|
|
|
|
| ||||
Cash flows from financing activities: |
|
|
|
| ||||
Proceeds from issuance of convertible notes, net of issuance cost |
| — |
|
| 5,044 |
| ||
Proceeds from note payable, net of issuance cost |
| — |
|
| 29,833 |
| ||
Proceeds from the issuance of common stock upon exercise of options |
| 2,904 |
|
| 1,672 |
| ||
Proceeds from Business Combination, net of transaction costs paid |
| 91,695 |
|
| — |
| ||
Payments on notes payable |
| (3,416 | ) |
| — |
| ||
Payments on finance leases |
| (1,016 | ) |
| (1,295 | ) | ||
Net cash provided by financing activities |
| 90,167 |
|
| 35,254 |
| ||
Net increase in cash, cash equivalents, and restricted cash equivalents |
| 42,418 |
|
| 2,518 |
| ||
Cash, cash equivalents, and restricted cash equivalents, beginning of period |
| 22,822 |
|
| 44,982 |
| ||
Cash, cash equivalents, and restricted cash equivalents, end of period | $ | 65,240 |
| $ | 47,500 |
| ||
|
|
|
|
| ||||
Reconciliation to amounts on the condensed consolidated balance sheets: |
|
|
|
| ||||
Cash and cash equivalents | $ | 65,010 |
| $ | 46,210 |
| ||
Current portion of restricted cash equivalents |
| — |
|
| 230 |
| ||
Non-current portion of restricted cash equivalents |
| 230 |
|
| 1,060 |
| ||
Total cash, cash equivalents, and restricted cash equivalents shown in the condensed consolidated statements of cash flows | $ | 65,240 |
| $ | 47,500 |
| ||
|
|
|
|
| ||||
Supplemental disclosures of cash flow information: |
|
|
|
| ||||
Cash paid for: |
|
|
|
| ||||
Interest | $ | 1,140 |
| $ | 149 |
| ||
Income taxes | $ | 33 |
| $ | 18 |
| ||
|
|
|
|
| ||||
Noncash investing and financing activities |
|
|
|
| ||||
Operating lease liabilities and right-of-use assets through adoption of ASC 842 | $ | — |
| $ | 11,428 |
| ||
Conversion of convertible note into common stock pursuant to Business Combination | $ | 20,239 |
| $ | — |
| ||
Unpaid deferred offering costs associated with the Business Combination | $ | 1,006 |
| $ | — |
| ||
Conversion of redeemable convertible preferred stock to common stock pursuant to Business Combination | $ | 279,503 |
| $ | — |
| ||
Debt discount through issuance of common stock warrants | $ | — |
| $ | 3,842 |
| ||
Operating lease liabilities arising from obtaining right-of-use assets | $ | 650 |
| $ | — |
| ||
Property and equipment acquired under finance leases or debt | $ | — |
| $ | 650 |
| ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| Last Trade: | US$6.36 |
| Daily Change: | -0.27 -4.07 |
| Daily Volume: | 34,867,376 |
| Market Cap: | US$2.070B |
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