Summary
SoundHound AI reported record third-quarter revenue of $11.2 million for fiscal 2022 Q3, up 178% from the prior-year quarter. Year-to-date revenue reached $21.6 million, up 35%. The company said the quarter included Houndify Edge licensing revenue from one customer, tied to minimum guarantee units over the life of the contract. Cumulative bookings backlog hit $302 million, up 239% year over year, the fourth straight quarter of triple-digit growth. Monthly queries reached 180 million, passing an annual run rate of 2 billion, more than doubling year to date. Those are strong adoption signals, but they came alongside heavy spending.
Operating loss was $27.0 million, and the loss widened 57.3% from the prior-year quarter. Net loss was $28.9 million, a 21.6% widening. Diluted loss per share was $0.15, which narrowed 57.1% from the prior-year quarter. Year to date, net loss was $84.7 million, a 46.8% widening, while diluted loss per share was $0.59, a 31.4% narrowing. Operating margin was -241.4%, up 184.8 percentage points from the prior-year quarter. Year-to-date operating margin was -354.4%, down 66.0 percentage points from the prior-year period. On a non-GAAP basis, adjusted EBITDA loss was $16.9 million, compared with $14.5 million a year earlier. The company is growing quickly, but losses remain large.
Operating cash flow was -$26.8 million for the quarter, down 45.3% from the prior-year quarter. For the nine months, operating cash flow was -$73.6 million, down 44.0% from the prior-year period. Capital expenditures were $0.21 million for the quarter, up 67.5%, and $1.19 million for the nine months, up 407.7%. Deferred revenue, current portion only, was $5.31 million at September 30, 2022. The company said it expects to fund operations for at least the next twelve months and may seek additional debt or equity financing. Management also announced cost cuts, including a workforce reduction of about 10% and adjustments to discretionary expenses, to streamline the company and focus on key verticals. That is a necessary step given the cash burn.
The company reaffirmed full-year 2022 revenue guidance and refined the range to $28 million to $32 million, from a previous range of $27 million to $33 million. That guidance is for the full fiscal year, not the next quarter. SoundHound expanded automotive relationships with Stellantis in Europe, Dongfeng Peugeot Citroen Automobiles in China, and integrations with LG and Harman platforms. It also expanded restaurant channel ties with Oracle and Toast, and continued work with Mastercard and Square. The company said its automated restaurant order completion rate is on track to surpass human levels. It announced general availability of Edge and Cloud connectivity solutions and launched Intelligent Transcription. A new breakthrough technology is slated for November 17. Risks include COVID-19 disruptions, supply chain and semiconductor shortages, the Russia-Ukraine conflict, inflation, higher interest rates, and competition in voice AI. The company also noted customer retention of at least 80% as of September 30, 2022. Growth is real, but profitability and cash generation remain the main tests.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2022 | Q2 FY2022 | QoQ | Q3 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $11.2M | $6.2M | +81.8% | — | — |
| Gross profit | $8.6M | $3.7M | +134.8% | — | — |
| Gross margin | 76.9% | 59.6% | +17.3 pp | — | — |
| Research & development | $19.4M | $18.9M | +2.6% | — | — |
| Sales & marketing | $6.7M | $4.4M | +52.7% | — | — |
| General & administrative | $9.6M | $9.4M | +2.4% | — | — |
| Total operating expenses | $38.2M | $35.1M | +8.9% | — | — |
| Operating income (loss) | -$27.0M | -$28.9M | +6.6% | -$229.5K | -11669.0% |
| Operating margin | -241.4% | -470.3% | +228.8 pp | — | — |
| Net income (loss) | -$28.9M | -$30.7M | +5.7% | -$191.1K | -15036.5% |
| Net margin | -258.6% | -498.5% | +239.9 pp | — | — |
| Diluted EPS | -$0.15 | -$0.19 | +$0.04 | — | — |
Risks
As of September 30, 2022, cash and cash equivalents were $33.4 million, and the company has incurred recurring losses since inception. It may seek additional debt or equity financing, including an equity line of credit whose resale registration statement had not been declared effective as of November 14, 2022, and there is no assurance it will obtain sufficient funding on acceptable terms. Operating cash flow was an outflow of $73.6 million year to date, down 44.0% from $51.1 million in the prior-year period.
The quarter's revenue increase was primarily attributable to $5.3 million of licensing revenue from one Houndify Edge solution delivered to a customer, which also drove a 1,697% increase in Korea revenue for the quarter. If this licensing does not repeat, future revenue may be volatile.
Revenue came principally from automotive and IoT customers, and COVID-19 related automotive production declines, chip shortages, and broader supply chain challenges adversely impacted per-unit Houndify royalties. The company cannot predict the full impact on operations, liquidity, or financial results.
The primary focus on enterprise customers means aligning with enterprise sales cycles that can be longer than consumer cycles. The company also makes significant upfront investments in customer specific engineering projects to grow and maintain relationships.
Inflation has risen significantly worldwide, and government efforts to combat it via benchmark interest rate increases and related monetary policies could increase market volatility and adversely affect domestic and international financial markets and general economic conditions.
The company anticipates fluctuations in customer and user demand based on seasonality, and because it addresses multiple industry verticals, the overall seasonality impact may not be consistent year to year.
SaaS KPIs
All quarters →Remaining Performance Obligations
Adjusted EBITDA
Customer Retention Rate
Cumulative Bookings Backlog
Summary, forecast, risks and KPIs are extracted from SOUNDHOUND AI, INC.'s SEC filings for Q3 FY2022 (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.