SoundHound AI, Inc. Announces Second Quarter Financial Results With $283 Million In Cumulative Bookings Backlog, Up More Than 3x Year-Over-Year

·12 min read

SANTA CLARA, Calif., August 11, 2022--(BUSINESS WIRE)--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.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220811005284/en/

SoundHound AI Inc. Announces Second Quarter Financial Results 2022 (Graphic: Business Wire)

"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

  • Cumulative bookings backlog increased 207% year-over-year, marking the third straight quarter of triple-digit growth

  • Monthly queries increased 3x since the start of 2021 and more than doubled year over year

  • Reported revenues were $6.2 million, up 43% quarter-over-quarter, down year-over-year, although up 56% when excluding prior year one-time revenue impact derived from a customer upon the conclusion of a professional services contract

  • Announced several new and expanded relationships including Square, Hyundai, Stellantis and LG

  • Launched first-of-its-kind voice ordering solution SoundHound for Restaurants with strong initial demand

  • Commenced trading on NASDAQ on April 28th

"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
IR@SoundHound.com

Fiona McEvoy
415-610-6590
PR@SoundHound.com

SOUNDHOUND AI, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

 

 

June 30,
2022

 

December 31,
2021

 

 

(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
PREFERRED STOCK, AND STOCKHOLDERS’
EQUITY (DEFICIT)

 

 

 

 

 

 

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
June 30,

 

Six Months Ended
June 30,

 

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
securities, net of tax

 

 

 

1

 

 

 

 

1

 

Comprehensive loss

$

(30,668

)

$

(14,651

)

$

(55,771

)

$

(33,911

)

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

Basic and diluted

$

(0.19

)

$

(0.22

)

$

(0.48

)

$

(0.51

)

 

 

 

 

 

 

 

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
June 30

 

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220811005284/en/

Contacts

SoundHound

Scott Smith
408-724-1498
IR@SoundHound.com

Fiona McEvoy
415-610-6590
PR@SoundHound.com