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• Revenue: $29.1 million, up 151% year over year.

• GAAP Gross Margin: 37%, down year over year.

• Non-GAAP Gross Margin: 51%.

• R&D Expenses: $24.8 million, a 66% increase year over year.

• Sales and Marketing Expenses: $12 million, a 117% increase year over year.

• G&A Expenses: $18.4 million, a 79% increase year over year.

• Adjusted EBITDA: Loss of $22.2 million.

• GAAP Net Income: $130 million.

• Non-GAAP Net Loss: $22.3 million.

• Non-GAAP Net Loss Per Share: $0.06.

• Cash and Equivalents: $246 million with no debt.

• Net Cash Used in Operations: $19 million, improved by 13% year over year.

• 2025 Revenue Guidance: $157 to $177 million.

• Warning! GuruFocus has detected 6 Warning Signs with SOUN.

Release Date: May 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• SoundHound AI Inc (NASDAQ:SOUN) reported a strong Q1 with over $29 million in revenue, marking a 151% increase year over year.

• The company's Polaris model has shown significant technological advantages, including better latency and sentence accuracy compared to competitors.

• SoundHound AI Inc (NASDAQ:SOUN) has successfully integrated acquisitions like Synq3 and Allset, leading to expanded customer bases and new market opportunities.

• The company is experiencing strong momentum in voice commerce, with significant interest from OEMs and restaurant chains.

• SoundHound AI Inc (NASDAQ:SOUN) has a diversified revenue base with no single customer contributing more than 10% of revenue, reducing risk.

Negative Points

• The company's GAAP gross margin decreased to 37% due to the impact of recent acquisitions and product mix.

• R&D expenses increased by 66% year over year, driven by acquisitions and increased development spend.

• Sales and marketing expenses rose by 117% year over year, impacting overall profitability.

• The automotive sector showed relative softness due to macroeconomic uncertainties, affecting unit sales.

• The company reported an adjusted EBITDA loss of $22.2 million in Q1, indicating ongoing financial challenges.

Q & A Highlights

Q: How is the business distributed across different verticals, and what are the growth expectations for the rest of the year? A: Nitesh Sharan, CFO, explained that the business is well-balanced across various industries, including automotive, restaurants, financial services, healthcare, and hospitality. The automotive sector, despite some macroeconomic challenges, remains a significant growth area, especially with the introduction of voice commerce solutions. The restaurant sector is also seeing strong growth, with over 13,000 locations using their AI solutions. The enterprise sector is benefiting from the new Agentic solution, which accelerates time to value for customers.