Summary
SoundHound AI's fiscal 2024 second quarter revenue was $13.46 million, up 53.8% from $8.75 million in the prior-year quarter. Year-to-date revenue was $25.06 million, up 62.1% from $15.46 million. Service subscriptions and product royalties drove the increase, with the company pointing to the SYNQ3 acquisition and unit-based royalty gains in Asia and EMEA. Monetization revenue remained small. The quarter also brought the Allset acquisition, a food ordering platform with nearly 7,000 restaurant partners, and the announced acquisition of Amelia to expand into finance, insurance, and healthcare verticals.
The bottom line moved in the opposite direction. Operating loss was $21.98 million, wider by 33.4% than the $16.48 million loss in the prior-year quarter. Net loss was $37.32 million, wider by 60.1% from $23.31 million. Diluted loss per share was $0.11, flat with the prior-year quarter. For the first six months, operating loss was $50.51 million, wider by 21.2%, and net loss was $70.33 million, wider by 38.6%. Diluted loss per share for the year to date was $0.23, an improvement from a loss of $0.25. Operating margin was negative 163.3% in the quarter, up 25.0 percentage points from negative 188.4%; year-to-date operating margin was negative 201.6%, up 68.1 percentage points from negative 269.7%.
The company's non-GAAP picture was less severe. Non-GAAP gross margin was 66.5%, down from 80.0%. Non-GAAP net loss was $14.8 million, and adjusted EBITDA was negative $13.8 million. The company's non-GAAP measures exclude certain items, including stock-based compensation and acquisition-related costs. The company also completed the conversion of all preferred equity into Class A common stock. It said the SYNQ3 acquisition brought a lower-margin call center business into the mix, which weighed on margins.
Cash generation stayed negative. Operating cash flow was negative $18.49 million in the quarter, an improvement of 5.9% from negative $19.66 million in the prior-year quarter. For the six months, operating cash flow was negative $40.44 million, down 18.2% from negative $34.20 million. Capital expenditures were $0.24 million in the quarter, down 15.1%, and $0.34 million year to date, up 14.3%. Current deferred revenue was $2.93 million at June 30, 2024, down 36.4% from $4.61 million a year earlier. Remaining performance obligations were $10.60 million, down 32.9% from $15.80 million. The company said RPO and deferred revenue can swing with the timing of performance obligations and billing frequency.
Guidance now reflects the Amelia deal. SoundHound updated its full year 2024 revenue outlook to exceed $80 million and its 2025 revenue outlook to exceed $150 million. The company ended the quarter with a cumulative subscriptions bookings backlog of $723 million, which it said roughly doubled year over year, and an annual run rate of over 5 billion queries, with second quarter queries up approximately 90% year over year. Management also cited customer wins across automotive and restaurants, including Stellantis brands in production with SoundHound Chat AI and a partnership with Perplexity for online large language models.
Risks remain substantial. SoundHound has recurring losses and negative operating cash flow. It expects some operating expenses to increase in the short term as it invests in its control environment, though it aims for those costs to grow below revenue over the long term. Gross margin may keep fluctuating with product mix and acquisitions. The company also flagged risks tied to commercializing new products, converting customer adoption of Smart Ordering into revenue, retaining customers, competition including price competition, supply chain disruptions at customers, and the integration and accretion of 2024 acquisitions. Seasonality is another factor: historically about one third of revenue has come in the first half and two thirds in the second half.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $13.5M | $11.6M | +16.1% | $8.8M | +53.8% |
| Gross profit | $8.5M | $6.9M | +22.5% | $6.9M | +22.6% |
| Gross margin | 63.0% | 59.7% | +3.3 pp | 79.1% | -16.1 pp |
| Research & development | $15.7M | $14.9M | +5.8% | $11.7M | +34.1% |
| Sales & marketing | $5.7M | $5.5M | +2.0% | $5.1M | +11.4% |
| General & administrative | $9.5M | $10.3M | -7.1% | $6.4M | +49.5% |
| Total operating expenses | $35.4M | $40.1M | -11.7% | $25.2M | +40.7% |
| Operating income (loss) | -$22.0M | -$28.5M | +22.9% | -$16.4M | -33.8% |
| Operating margin | -163.3% | -246.1% | +82.8 pp | -187.8% | +24.5 pp |
| Net income (loss) | -$37.3M | -$33.0M | -13.1% | -$21.9M | -70.2% |
| Net margin | -277.2% | -284.7% | +7.5 pp | -250.6% | -26.6 pp |
| Diluted EPS | -$0.11 | -$0.12 | +$0.01 | -$0.10 | -$0.01 |
Risks
Net loss widened to $70.33 million for FY2024 year to date, and operating cash flow used $40.44 million year to date, down 18.2% compared with prior-year year to date. The company says it expects to fund operations for at least the next twelve months, but the Equity Distribution Agreement was fully utilized as of July 11, 2024, so additional capital may be required.
MD&A attributes lower gross margin to the SYNQ3 acquisition, which added lower-margin call center agent revenue and amortization of acquired intangibles. Gross margin may continue to fluctuate near term and is expected to improve only as SYNQ3 integration proceeds.
Remaining performance obligations decreased 32.9% to $10.60 million versus the prior-year quarter, and deferred revenue decreased 36.4% to $2.93 million versus the prior-year quarter. These declines may indicate weaker forward bookings visibility even as revenue grew 53.8% in the current quarter.
The SYNQ3 purchase price allocation remains preliminary, with fair values of intangibles, contingent sales tax liabilities, and contingent acquisition liabilities still being assessed. Contingent earnout and holdback liabilities are remeasured each reporting period, which can create volatility in operating expenses.
MD&A states that revenue growth depends on aligning with enterprise sales cycles, which can be longer than consumer cycles, and requires significant upfront investment in customer-specific engineering projects. This may delay revenue recognition and increase execution risk.
MD&A says it anticipates seasonality, noting that historically about one third of revenue fell in the first half and two thirds in the second half. Because it addresses multiple industry verticals, overall seasonality may not be consistent year to year, making demand forecasting more difficult.
MD&A describes big tech voice AI offerings as extensions of core services that can take over the customer experience and disintermediate brands, while legacy vendors are seen as using dated technology. If SoundHound fails to maintain its technology and brand-control advantage, adoption may suffer.
The June 2024 repayment of the Term Loan caused a material loss on extinguishment of debt, contributing to the current quarter and year-to-date net loss widening. Although interest expense is expected to decrease, the refinancing reduced debt but required significant cash use.
SaaS KPIs
All quarters →Non-GAAP Gross Margin
Adjusted EBITDA
Remaining Performance Obligations (RPO)
Summary, forecast, risks and KPIs are extracted from SOUNDHOUND AI, INC.'s SEC filings for Q2 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.