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May 16, 2022, 4:30 p.m. EDT

SoundHound AI, Inc. Reports First Quarter 2022 Financial Results

SANTA CLARA, Calif., (BUSINESS WIRE) -- SoundHound AI, Inc. /zigman2/quotes/235003037/composite SOUN -5.04% (“SoundHound,” “we,” or “our”), a global leader in voice artificial intelligence (“voice AI”), today reported the financial results of SoundHound, Inc. (“Legacy SoundHound”), at and for the three months ended March 31, 2022. The financial statements reflect the operations of Legacy SoundHound prior to it becoming a wholly-owned subsidiary of SoundHound, as a result of the business combination with Archimedes, which closed on April 26, 2022. In connection with the business combination, the Company changed its name to SoundHound AI, Inc. The Company also published a Letter to Shareholders today which details SoundHound’s technology moat, revenue models, commercial alliances, opportunities and near-term goals which can be accessed on its investor website at investors.soundhound.com .

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220516005687/en/

“SoundHound’s momentum in 2021 continued in the first quarter of 2022, with key business wins and tremendous growth in user engagement,” stated Keyvan Mohajer, CEO and Co-Founder of SoundHound. “Our deep history of technological breakthroughs and competitive differentiators are rapidly enabling our mission to voice-enable the world, and our $230 million of cumulative bookings backlog highlight the confidence and commitment our customers have working with us to build the future together.”

First Quarter Business Highlights

  • Reported revenues were $4.3 million, up 15% compared to prior year

  • Cumulative bookings were $230 million, up 134% over prior year

  • User queries in first quarter grew +90% versus prior year

  • Announced several new and expanded customer partnerships, including with Hyundai, Netflix, Qualcomm, Snap, and VIZIO

  • Chief Revenue Officer, Zubin Irani, joined the team and began accelerating growth through investments in sales and marketing

“Our first quarter results demonstrate the momentum we are experiencing with our customers and the continued voice AI market expansion and acceptance,” said Nitesh Sharan, Chief Financial Officer, SoundHound. “We are accelerating growth through sales and marketing investments to expand into new verticals while deepening partnerships with existing customers.”

First Quarter 2022 Summary Financial Results

  Three Months Ended March 31,   Change
  2022   2021   $   %
Revenues $ 4,290   $ 3,739   $ 551   15%
Operating expenses:                    
Cost of revenues $ 1,773   $ 1,593   $ 180   11%
Sales and marketing   2,581     1,076     1,505   140%
Research and development   16,650     14,443     2,207   15%
General and administrative   4,003     3,246     757   23%
Total operating expenses $ 25,007   $ 20,358   $ 4,649   23%
Loss from operations $ (20,717)   $ (16,619)   $ (4,098)   25%

SoundHound expects to file its Form 10-Q for the quarterly period ended March 31, 2022 on May 16, 2022. In addition, on May 16, 2022, SoundHound expects to file an amendment to its Form 8-K, originally filed on May 2, 2022, to reflect Legacy SoundHound’s financial statements for the three months ended March 31, 2022 and Management’s Discussion and Analysis of Financial Condition and Results of Operations relating to those financial statements.

Closing of Business Combination

On April 26, SoundHound Inc. successfully completed its previously announced business combination with Archimedes. The resulting company, SoundHound AI, Inc., began trading on Nasdaq under the ticker symbol “SOUN” on April 28. SoundHound received gross cash proceeds of $118 million from transactions related to the business combination, which will enable the Company to continue its forward momentum in the rapidly growing voice AI market, where voice assistants are forecast to exceed the number of humans on earth, at 8.4 billion, by 2024.

On a pro forma basis, assuming the Business Combination occurred as of March 31, 2022, the Company’s cash and cash equivalents would have amounted to $101.3 million at quarter-end. Primary use of proceeds from the transaction is expected to be in sales and marketing to fuel growth, in continued advancements in innovation and technology, and in global operating functions to support business expansion.

First Quarter 2022 Summary Cash Flows

  Three Months Ended March 31,
  2022   2021
Cash flows:          
Net cash (used in) operating activities $ (14,989)   $ (14,704)
Net cash (used in) investing activities   (611)     (63)
Net cash provided by financing activities   1,955     605
Net changes in cash and cash equivalents $ (13,645)   $ (14,162)

Business Outlook

  • SoundHound expects to generate full year 2022 revenue of between $27 million to $33 million, with revenue momentum accelerating in the second half of the year principally due to seasonality and the expected benefits from sales and marketing investments.

Conference Call and Webcast

As a result of the timing related to the closing of the business combination, SoundHound will begin hosting regularly scheduled quarterly earnings conference calls beginning in the second quarter of 2022.

For more information please see SoundHound’s Shareholder Letter and other SEC filings which can be obtained on our website at investors.soundhound.com or sec.gov .

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 detailed from time to time in SoundHound’s filings with the Securities and Exchange Commission.

    Three Months Ended March 31,
    2022   2021
Revenues   $ 4,290     $ 3,739  
Operating expenses:            
Cost of revenues     1,773       1,593  
Sales and marketing     2,581       1,076  
Research and development     16,650       14,443  
General and administrative     4,003       3,246  
Total operating expenses     25,007       20,358  
Loss from operations     (20,717 )     (16,619 )
Other expense, net:            
Interest expense     (2,977 )     (748 )
Other expense, net     (1,057 )     (1,726 )
Total other expense, net     (4,034 )     (2,474 )
Loss before provision for income taxes     (24,751 )     (19,093 )
Provision for income taxes     352       167  
Net loss     (25,103 )     (19,260 )
Other comprehensive gain:            
Unrealized holding gain on available-for-sale securities, net of tax            
Comprehensive loss   $ (25,103 )   $ (19,260 )
Net loss per share:            
Basic and diluted   $ (2.00 )   $ (1.62 )
Weighted-average common shares outstanding:            
Basic and diluted     12,527,229       11,872,698  
    March 31, 2022   December 31, 2021
Current assets:        
Cash and cash equivalents   $ 8,211     $ 21,626  
Restricted cash equivalents     230       460  
Accounts receivable, net of allowances of $109 as of March 31, 2022 and December 31, 2021, respectively     1,332       2,060  
Prepaid expenses and other current assets     2,676       2,193  
Debt issuance cost     566       1,132  
Total current assets     13,015       27,471  
Restricted cash equivalents, non-current     736       736  
Right-of-use assets     10,225       10,291  
Property and equipment, net     5,474       6,155  
Deferred tax asset     2,169       2,169  
Deferred offering costs     3,318       1,264  
Other assets     1,005       1,117  
Total assets   $ 35,942     $ 49,203  
Current liabilities:            
Accounts payable   $ 6,938     $ 3,760  
Accrued liabilities     11,703       7,298  
Operating lease liabilities, current portion     3,519       3,281  
Financing lease liabilities, current portion     822       1,301  
Income tax liability     2,730       2,737  
Deferred revenue, current portion     6,006       6,042  
Convertible notes, current portion     30,198       29,868  
Derivative liability     4,080       3,488  
Note payable, current portion     30,810       29,964  
Total current liabilities     96,806       87,739  
Operating lease liabilities, net of current portion     8,073       8,611  
Financing lease liabilities, net of current portion     252       292  
Deferred revenue, net of current portion     13,372       14,959  
Other liabilities     1,338       1,336  
Total liabilities     119,841       112,937  
Commitments and contingencies (Note 6)        
Redeemable convertible preferred stock; $0.0001 par value; 26,316,129 shares authorized; 19,248,537 shares issued and outstanding, liquidation preference of $284,826 as of March 31, 2022 and December 31, 2021, respectively     279,503       279,503  
Stockholders’ deficit:            
Common stock, $0.0001 par value; 45,000,000 shares authorized; 12,718,968 and 12,280,051 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively     1       1  
Additional paid-in capital     48,429       43,491  
Accumulated deficit     (411,832 )     (386,729 )
Total stockholders’ deficit     (363,402 )     (343,237 )
Total liabilities, redeemable convertible preferred stock, and stockholders’ deficit   $ 35,942     $ 49,203  
    Three Months Ended March 31,
    2022   2021
Cash flows from operating activities:        
Net loss   $ (25,103 )   $ (19,260 )
Adjustments to reconcile net loss to net cash used in operating activities:            
Depreciation and amortization     1,292       1,451  
Stock-based compensation     2,464       1,388  
Change in fair value of derivative and warrant liability     592       1,403  
Amortization of debt issuance cost     1,742       301  
Non-cash lease amortization     846       812  
Changes in operating assets and liabilities:            
Accounts receivable     728       1,705  
Prepaid expenses and other current assets     (483 )     (52 )
Operating lease liabilities     (1,080 )     (1,154 )
Deferred offering costs     (2,054 )      
Other assets     112       (16 )
Accounts payable     3,178       (391 )
Accrued liabilities     4,398       657  
Deferred revenue     (1,623 )     (1,378 )
Other liabilities     2       (170 )
Net cash (used in) operating activities     (14,989 )     (14,704 )
Cash flows from investing activities:            
Purchases of property and equipment     (611 )     (63 )
Net cash (used in) investing activities     (611 )     (63 )
Cash flows from financing activities:            
Proceeds from the exercise of common stock options     2,474       1,199  
Payment of finance and capital lease obligations     (519 )     (594 )
Net cash provided by financing activities     1,955       605  
Net (decrease) in cash, cash equivalents, and restricted cash equivalents     (13,645 )     (14,162 )
Cash, cash equivalents, and restricted cash equivalents, beginning of period     22,822       44,982  
Cash, cash equivalents, and restricted cash equivalents, end of period   $ 9,177     $ 30,820  
Reconciliation to amounts on the condensed consolidated balance sheets:            
Cash and cash equivalents   $ 8,211     $ 29,530  
Current portion of restricted cash equivalents     230       230  
Non-current portion of restricted cash equivalents     736       1,060  
Total cash, cash equivalents, and restricted cash equivalents shown in the condensed consolidated statements of cash flows   $ 9,177     $ 30,820  
Supplemental disclosures of cash flow information:            
Cash paid during the year for:            
Interest   $ 1,013     $ 78  
Income taxes   $ 32     $  
Noncash investing and financing activities            
Operating lease liabilities and right-of-use assets through adoption of ASC 842   $     $ 11,428  
Operating lease liabilities arising from obtaining right-of-use assets   $ 650     $  
Property and equipment acquired under capital leases or debt   $     $ 265  


View source version on businesswire.com: https://www.businesswire.com/news/home/20220516005687/en/

SOURCE: SoundHound AI, Inc.

Investor Contact
Jennifer Neuman
(212) 835-8500
ir@soundhound.com Press Contact
Lisa Flattery
(408) 441-3294


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