Summary
SoundHound AI closed fiscal 2024 third quarter with record revenue but deeper losses. Revenue reached $25.1 million in the quarter, up 89.1% from $13.3 million in the prior-year quarter. Year-to-date revenue was $50.15 million, up 74.6% from $28.73 million. The operating loss widened to $33.77 million in the quarter from $14.53 million a year earlier. Net loss widened to $21.75 million in the quarter from $20.20 million a year earlier. Diluted loss per share narrowed to $0.06 in the quarter from $0.09. Operating margin was negative 134.6% in the quarter, down 25.1 percentage points from negative 109.5%. Year-to-date operating margin improved to negative 168.1% from negative 195.7%, up 27.6 percentage points.
Operational momentum centered on diversification and AI agent adoption. SoundHound now works with more than 200 enterprise brands. The largest customer accounted for 12% of revenue in the quarter, down from 72% in the prior year. Revenue spread across automotive, restaurants, financial services, healthcare, and insurance, with each sector contributing 5% to 25%, compared with over 90% automotive only a year earlier. The company signed seven of the top 20 QSR brands globally and added another top 10 global QSR pizza brand. It expanded with Chipotle and Casey's General Stores. In automotive, SoundHound Chat AI went live in Lancia vehicles in Europe and continued across Stellantis brands such as DS Automobiles, Peugeot, Vauxhall, Opel, Citroen, and Alfa Romeo. New wins included an electric vehicle manufacturer in the Middle East and a commercial deal for VE Commercial trucks in India. Deferred revenue, current portion, was $20.10 million at September 30, 2024, up 372.8% from $4.25 million a year earlier. Remaining performance obligations were $66.90 million at September 30, 2024, up 381.3% from $13.90 million a year earlier.
Cash generation remained negative. Operating cash flow was negative $35.32 million in the quarter, down 74.9% from negative $20.19 million in the prior-year quarter. For the first nine months, operating cash flow was negative $75.76 million, down 39.3% from negative $54.40 million. Capital expenditures were $0.22 million in the quarter, up 448.8% from $0.04 million. Year-to-date capital expenditures were $0.56 million, up 67.7% from $0.33 million. Non-GAAP adjusted EBITDA was negative $15.9 million in the quarter, compared with negative $7.3 million. Non-GAAP net loss was $15.0 million in the quarter, compared with $13.6 million, and non-GAAP loss per share was $0.04 in the quarter, a narrower loss than a year earlier. Non-GAAP gross margin was 59.7% in the quarter, compared with 73.7%. The company completed the Amelia acquisition in August 2024, which added enterprise conversational AI customers in finance, insurance, and healthcare. The SYNQ3 acquisition and the Amelia deal also brought lower margin call center business and acquisition-related costs.
Guidance points to a bigger top line ahead. SoundHound's updated full year 2024 outlook is $82 million to $85 million, and the full year 2025 outlook is $155 million to $175 million. Delivery depends on converting a large RPO balance and expanding AI agents across verticals. Risks include integrating Amelia and SYNQ3, managing a mix shift toward lower margin services, and keeping gross margin from falling further. The MD&A notes that approximately one third of revenue has historically come in the first half and two thirds in the second half, so seasonality can distort quarterly comparisons. The company also faces longer enterprise sales cycles, competition, and the need to invest in sales and marketing. SoundHound reported recurring losses and negative operating cash flow, but management believes it can fund operations for at least the next twelve months. The gap between GAAP and non-GAAP results remains wide because of stock-based compensation, amortization of acquired intangibles, and acquisition-related charges.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $25.1M | $13.5M | +86.4% | $13.3M | +89.1% |
| Gross profit | $12.2M | $8.5M | +43.8% | $9.7M | +26.0% |
| Gross margin | 48.6% | 63.0% | -14.4 pp | 72.9% | -24.3 pp |
| Research & development | $19.5M | $15.7M | +24.2% | $12.8M | +52.6% |
| Sales & marketing | $8.4M | $5.7M | +47.9% | $4.5M | +87.0% |
| General & administrative | $17.0M | $9.5M | +78.6% | $6.9M | +145.7% |
| Total operating expenses | $58.9M | $35.4M | +66.1% | $27.8M | +111.7% |
| Operating income (loss) | -$33.8M | -$22.0M | -53.6% | -$14.5M | -132.4% |
| Operating margin | -134.6% | -163.3% | +28.8 pp | -109.5% | -25.0 pp |
| Net income (loss) | -$21.8M | -$37.3M | +41.7% | -$20.2M | -7.7% |
| Net margin | -86.7% | -277.2% | +190.6 pp | -152.2% | +65.5 pp |
| Diluted EPS | -$0.06 | -$0.11 | +$0.05 | -$0.09 | +$0.03 |
Risks
SoundHound completed the SYNQ3 acquisition in January 2024 and the Amelia acquisition in August 2024 and continues to evaluate additional acquisitions. Integration risks include combining operations, technologies, and personnel, retaining key employees and customers, and managing higher expenses and potential dilution.
Amelia identified material weaknesses in its fiscal 2023 audit related to revenue recognition, financial close processes, and income taxes, and those weaknesses had not been remediated when SoundHound acquired Amelia. SoundHound also disclosed material weaknesses in its own internal control over financial reporting, and remediation can only be accomplished over time.
The company records goodwill and intangible assets from acquisitions, including SYNQ3 and Amelia. If those assets become impaired, SoundHound may take significant charges against earnings that could materially affect results of operations and shareholders' equity in future periods.
SYNQ3 and Amelia acquisitions include contingent earnout consideration that is remeasured each reporting period, with changes recorded in operating expense. For the three months ended September 30, 2024, the change in fair value of contingent acquisition liabilities was a gain of $1.4 million, while for the nine months ended September 30, 2024 it was a loss of $1.7 million.
Cost of revenues increased 259% in the three months ended September 30, 2024, and gross margin decreased to 49% from 73% in the prior-year period, primarily due to the Amelia and SYNQ3 acquisitions, including lower-margin call center agent business from SYNQ3 and amortization of acquired intangible assets.
Product royalties decreased 53% in the three months ended September 30, 2024, including a 53% decline in Asia, due to minimum guarantee licensing revenue recognized in the prior period. Growth in the quarter depended on service subscription revenue, which increased 3776% and was driven by the Amelia and SYNQ3 acquisitions.
Net cash used in operating activities was $75.8 million in the nine months ended September 30, 2024 compared to $54.4 million in the prior-year period, and net loss was $92.1 million. The company had $135.6 million in unrestricted cash and cash equivalents as of September 30, 2024 and expects to fund operations for at least the next twelve months.
SaaS KPIs
All quarters →Remaining Performance Obligations
Non-GAAP Gross Margin
Adjusted EBITDA
Summary, forecast, risks and KPIs are extracted from SOUNDHOUND AI, INC.'s SEC filings for Q3 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.