SOUN - Earnings call transcript Q2 2024

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Operator

Hello, and thank you for standing by. At this time, I would like to welcome you to the SoundHound Q2 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Scott Smith, Head of Investor Relations. Please, go ahead.

Scott Smith

Good afternoon and thank you for joining our second quarter 2024 conference call. With me today is our CEO, Keyvan Mohajer; and our CFO, Nitesh Sharan.

some to before be remind statements this with would to making begin on like also everyone call. will short moving remarks Q&A. We forward-looking We that we'll forward-looking from suggested materially differ could results by Actual our statements. those Please refer SEC detailed and could of discussion statements. for that with discussion risks uncertainties qualify our for as and forward-looking a the affect our to filings the business statements that

Also and except to more from further on this us measures as Please In on required refer non-GAAP to detailed non-GAAP. update undertake may financial call release available today's press forward-looking of and to we information We limitations results addition, by date. law. definitions, on that note measures. for as details no those the the statements, and GAAP discuss today's are forward-looking of statements obligation certain uses to based any reconciliations

available Relations go I Finally, our audio over replay this webcast the Please turn CEO, entirety its to be call Keyvan. today's being call is our Investor Keyvan An website. like in to following Mohajer. call. With ahead, on audio will would that,

Keyvan Mohajer

Scott, to and thank joining for call you, everyone today. Thank the you

accelerate partner acquire into a Amelia. extension made to conversational announcement intelligence. wanted Before this mission strategy, with we quarter, and voice-enabling AI our our will This of of great conversational talk the to morning company a about the getting transaction opportunity I is natural the to a world leader, we a saw believe with we that

users, that enables is product monetization ecosystem billions now announcement create bold for a for AI delights capabilities, such the a time value platform and an conversational a that creators. Today's move. continuation vision with end human Our delivers and opportunities always of is innovation been exceeds and path of products and to has creates

along important in a with we excited AI conversational new is Coming an reasons. Most the significantly perfectly built for leader we that brands. hundreds together [ are markets. in penetration and importantly, Amelia number across enterprise in expand and verticals can platform AI is to into way voice this and a step have our of ] a this we leverage journey, into SoundHound new of expands deep

in We over to years, generative end AI expected decades to nearly grow we enterprise this to over X combine conversational in that massively spending of doing with the the years markets are projected coming grow billion. Together, XX-fold $XXX are experience next on AI.

announcement complementary strategic we service spectrum highly SoundHound's a have suite vast best-in-class, we service offer scalable of We businesses. and today can The customer a a products, existing marks significant believe support pillar. to customer and of of expansion

more even deal some this We are more into and provide already amid AI offering seen accelerated solutions. adoption M&A generative later and that Nitesh substantial breadth will of depth overall our voice to growth conversational and adding has this philosophy the insights on.

the we again, to strong Once are reporting on quarter. Now growth.

cumulative Second and $XXX quarter to XX% year-over-year backlog doubled roughly was up revenue bookings and million. subscriptions

We in technology. also steep engagement our a with saw increase

is Our X now rate annual over run queries billion. of

in Pillar AI strong and service in X. Chat X solutions continue Pillar our products, demand see AI including We our to for SoundHound customer

propositions also level are technology. users high value and a results brand, they data. powerful Our their are cycles choose them us at industry. AI believe our help the protect and They because that innovation resonating in with we Customers know

DNA. Last growing multimodal, with We of industry. and Polaris, numerous and required our models and benchmarks A can announced have property We have year, faster. our just Polaris, multilingual higher expensive switching With remains now long achieve training accumulated changes. faster also the deliver simple XX technical response years The core user against tuning in foundation better configuration historically number machine-learning lower beats and them model. These Polaris experience, cycles. cost we result is much accuracy, customers innovation are customizations times. internal we customizations to our state-of-the-art in of Polaris. intellectual can

updates Now dozens production languages. let markets business me almost some X, and we second have in now of in discuss XX the quarter. support Pillar cars in In

high with AI Vauxhall, SoundHound integrate brand a assistant Peugeot, a brands. In Chat Alfa Automobiles. the the are generative to turn world, AI, AI trial to X and anywhere results we voice models well go with in-vehicle large is our and Automobiles that driving of Citroen to Romeo the the brands, has into of so have first assistant into DS total, demand. and was number in This Stellantis production. across run road Stellantis with been live received now SoundHound this quickly to DS multiple production Opel, became first continued technology generative the on live course, capabilities

Chat important feature is quarter of increased result. upsell an a SoundHound making large language this as with our assistant, royalties AI and will power This models that powerful. the to our AI capable and more from existing it customers booking This is emphasize. combines increase

appetite Japan. in-vehicle the company integrated innovation SoundHound out quarter, our user talked to SoundHound pay Pillar constant X over to revenue Initially, increase time per there customers out historically, been deliver adopt Therefore, technology to roll will and a go do are being costs, quarter, experience first pleased more. America. X with Argentina brands willing and lower company more ChatGPT-style so. to time this Chat in AI Latin better we additional be first to Chat we this their much Brazil, to customers, While vehicles for will into the production in unit pressure the AI signed and seeing auto Chile. the are OEMs voice pay roll be to they're we They royalties in from to also generative capabilities now their first to this to AI. Last in want as about expect to And the their have upgrade to we contract in new a in have assistants to

won year, continue which We EV with immediately. maker, progress EV go to a make live U.S.-based with a prominent and interest also will Earlier gain deal manufacturers. we this

an the AI U.S.-based OEM be first integrated fleet to will generative of will Chat This capabilities. market-leading its assistant integrate mark AI SoundHound with full across vehicles.

web-based Additionally, Perplexity add phones, a we manufacturer to to SoundHound a LLMs customer, assistant. Last next-generation made the SoundHound Perplexity cannot a about devices. their currently most is and go also advanced helps assistant live. this has to offer to announced are voice we with SoundHound AI AI. and the digital provide The have allowed offline partnership existing with bring Chat responses cutting-edge up-to-date type we Chat questions AI complexity SoundHound fast-growing EV an to LLMs IoT market answer. us This in OEMs expanded having assistant AI truly Chat voice multifaceted, on move the and progress the cars conversations that with accurate, of to queries to the quarter, capability fulfill, expanding Chat available Europe, static in assistant currently today, online to able

Moving on X. to Pillar

This won locations. won we with quarter, XX that QSRs. the deals X the means total, business the top have sizable X now This QSRs of in we of number on of based

there. these exciting X of technology throughout deploy represents locations. It's of time. thousands that pizza QSRs is large, working means across thousands out an of well-known was with biggest the U.S. locations the QSR chains a One in our sizable QX a brands Each SoundHound pizza of we This of opportunity restaurant now with the engaged to

fortunate how be execute this time performance forward, this business of are critical We are mindful and our a we space so to in the very in at position, going we will this.

that in our needs. We are is to can Our all winning businesses us we growing tech. sizes, all an chains. own of businesses as small affordable, clear so fast addresses portfolio and customer easy-to-implement that companies with large It's few service very resonating as offer well solution of product enterprises their sizes become

proprietary data introduced have experience. of called Assist, product across software. of this large I'm or technology machine quarter. several are already support and chains and years learning include uses data QSR tasks headset to to a their service. AI and conversational benefiting interactions we have behind Those from real some up of We a Last via prominent a copilot the proud coffee we X year, signed this our employees new Employee voice brands, believe science We from also a winning tablet. We variety announce which have customers XX like because nearly our

sign They supporting work Interaction. finding are are Employee for and many to experience, together our Dynamic their that customers to Assist while improve choosing up in handle customer in We solution, tandem combination drive-thru with the employees.

on interfaces It as wake-up believe words touch multi-touch SoundHound be we constant AI its multimodal, and and Dynamic believe multilingual. voice of technology not full next seamlessly impact be delivers interfaces. is turn-taking, AI it's duplex, it generation conversational meaningful as be and require of interfaces. Interaction can We voice use will to does all on the what

increase Our proactively users, our of the revenue throughput by AI offering and increasing experience improve for also save solutions the upsells. costs customers, and

continuing like locations chain roll across very with live plan we And as into of to up all are thousands mentioned the are pizza Our soon. penetrating we existing and We Brady's, phone ramp already where ordering states U.S. solution Beef out locations customers Jersey are 'O' announced in earlier, corporate Mike's. to to XX

already rapid have talked showing Planet with roll X. from and gone more. multiple to Pillar have SoundHound we locations businesses single Going We and to already location locations. small Answering about beyond Smart hundreds within Last growth out of Fitness, quarter, restaurants, we is brands live continue live

retail businesses a franchise and personal These among number care, automotive home of others. across are include services and great We traction seeing services, local professional in industries. services,

at number to of alone. and a configurable to about questions Whether millions intelligent policies, verbal for and implementation filtering pricing Answering capabilities for Smart us responses, messaging and fast and capturing more. conveniently are multiple SMS We about calls, hours, allow seamless it's actions, excited scale because market use in products, caters providing the are once massive answering handling sizes it opens of cases services, the address all industries taking United calls companies up XX/X, us States with out to leads spam The businesses of the obvious. with

our consumers platform AI where quarter commerce a will ultimately to to food The to Allset voice us their build devices. and cutting-edge massive with Allset. we and accelerated in from built customer progress through enables We voice opportunity the use phones acquisition order acquired to The service. On of ecosystem. we making vehicles, are X, ordering have with enable path that proprietary is smart great a technology acquisition creating this moat that competitive Pillar

Allset brings a the will experience a marketplace knowledge of ecosystem voice reality. a commerce team and that make Additionally, wealth

our we creating names are that together, the and other to we as And people complete addressable of to range increase us order sign helps With notable naturally. step we experiences. and have X, this transactions, also and every and new a while to a convenient speaking closer we provide increased We get just new, market dynamic quarter it X strategy. move, in consumer by and category, this one mobilizing accessible plan for creating significantly food strategic convenient more ways Pillar

see in of gaining that a new the has prospective the creating XX% the voice consistently attracting flywheel with our and customer been portfolio starting or while We more we Our customers, with always received, some about of enterprise vision even always closing, all financial getting AI rate vision services at our customers, of more shape. In time well innovative existing technology and to voice-enabled this take talked most we as fortify have grown market and interested engagement using and share, over world. are grows. customers to effect this position, with continue

and are we higher their We keep are experiences the proud to best-in-class creating customers, boundaries grow. customers continue but push to for aiming our of and our ambitions the

example company we AI-fueled conversations. for Amelia. our acquired an that shares Amelia innovative an ambition, passion today, of As that is

offer best looking We to the to solutions available are support customer anywhere. leveraging shared forward AI capabilities our

for excited from seeing do We seeing SoundHound can welcome SoundHound are market for exact XX are disruption strong vision continued of be today when With beat building expectations create with the and with look are believe revenue, the predictions momentum we years AI our pleased our pleased are the value. also a the now towards reality. where to in to market almost another we created A we we forward quarter our together. We about is are ago. we what our team we couldn't and Amelia to the for solutions. We demand products lot stakeholders and as engagements more we becoming

performance, that now team about call all key I'll that, to to this possible financial their grateful remainder outlook the are our the shared over with drivers We Nitesh of and vision. With turn for to talk the amazing year. growth our makes

Nitesh Sharan

in growth the Thank our journey, exceeding the mile revenue. QX fourth revenue. you, good before improved is Keyvan, strength $XX.X This year-over-year. We of our pace. conversion consecutive maintain balance attack completing everyone. to revenue because are position our paying XX% quarter where our million and strength that by meaningfully outstanding for The achieved sheet afternoon, marks partnerships in to when through increased acquisitions it million quarter on we do another marker and debt capital results $XX that want organic us. it in of disruption, positive the that our on equity. I to investments the aggressively sense us we and makes go affords mentioned preferred accelerate a scale and our fuel opportunity source help to We down to

of the expansion One in space, partners. bookings average gauge subscriptions backlog to with the of doubled backlog. less roughly In restaurant with to quarter Most customer continue QX, an we duration measures use cumulative traction X gain and of although we was million, is this to the slightly traction years. year-over-year than $XXX our automotive

additional with of Stellantis production earlier, AI noted SoundHound AI. Today, X brands example, Amelia. announced with we leader, going and conversational into our adding For Keyvan Chat acquisition

a spend think explaining me Let minute how about M&A. we

we be value-generating. having First, approach can a believe M&A programmatic

Our world next the this technology humans transform of increasingly conversational voice-enable will from underpinning with and with which wave and voice our vision is overall conversations. We technology, strategy is how interact natural stems acquisition with now. the and here enable to to philosophy know requisite vision, the intelligence

this price, the and service, built restaurant continue we capabilities quarter, services our effectively realize amplify select or customer it of about one, announced of it for the have expanding meaningful fit and that Allset acquisition to accelerating it for boxes broadly our we business. Last right SYNQX ourselves, demand primary we been: can these to accelerant we've was in a can the that accelerate for industry fact, drive Amelia acquisition In an using When targets was and adoption our pillar and connect our our risks does products we lot to acquired pathway from appreciating transactions? Amelia it two, to strategy?; monetization appropriate seamlessly those buy significantly acquisition, to customer we earlier synergies?; together. it long-term it voice-enabled Today's and strategy?; operationalize see filters three, Pillar within growing. catalyze The us. we come and reach. have it more been such the four, X, when inherently is year, will checked at

discuss take a meaningful lot too and We been was While Stay demand right. enterprise deeper now of second so especially together in the more XX% complementarity, it's the QX plan more integration see. million, know quite it with the seeing for tuned please and time the take detail. opinion, will let would don't effort bypass, we just we we me still details. With it was $XX.X But we dive financials on lightly be today, this and early so up attractive that there the a note it in we and be some more to questions, year-over-year. acquisition know traction marketplace. our share will focus prize revenue to much have the and that, in announced opportunity on to quarter with get

edge We growth solution year-over-year basis, minimum and see driven price addition from from solutions quarter acquisition, SYNQX. Within of would digits were double our The year-over-year, growing Stellantis continue we of expansion. revenue. In purchase to sign to also a our agent purchased further the unit lower-margin product logos with new margins benefited our gross overall guarantee XX% scale comprise to margins business. where quarter for customers, the XX%, of Adjusting center across impact, from QX, roughly pillars, automotive from call down the XX%. diversified and business including generative meaningful The contribution and restaurants, by unit healthy a continue by AI in the acquisition mix largely amortization offerings. of intangibles, nice been had have restaurant resulting balance product non-cash our notably expansion, gross

the center $XX.X acquired to the this in in bring can automate near-term, can to margins is there data That million to QX, is the and value do expenses call what modernize. R&D and year-over-year. XX% on increase opportunities weigh for said, what goal our business our over While an time of our were come in broader does models. business

more innovations at investments a Polaris of the address and prioritizing to language less in products leverage to provide are initiative wider expand cost. disruptive We value customers of our fine-tuning suite customer to needs, like continue our array we even way models we to large

we be with increase to end, to is a differentiator year-over-year. an example, mind. our arbitrate were opportunistic the top of models will in our that continue QX, we to and expenses own always keep upon. Sales models of need thoughtful versus continue For In between million $X.X about customers and marketing will the the expand and using we ability XX% which work

We continue and momentum heightened to go-to-market to in engagement invest strong thoughtfully demand. customer and capture the

We industry XX% an million that about the few and are increase through reach lead-gen $X.X quarters. in The were marketing, X and high expenses of reflects expanding strategies. G&A main talked year-over-year. ROI G&A in increase past demand we QX, elements brand generation

comparison continues controls became be processes a requirements year-over-year internal by large, as OX financial non-financial XXX to Our accelerated and to and impacted we year. last in filer support under (b), investments

impacted million in was SYNQX acquisition-related expense operating items quarter. All acquisition. stock G&A also costs the by in were was the line QX. compensation Our Non-cash impacted negatively employee by $X.X

coming associated to loss the was this the to introduce $XX.X us terms, Compared future. OI&E As $XX previous one-time value favorable likely were the debt earlier a non-cash to acquisition-related early gain that the quarter. loss improving the by amortization in quarter. on for repayment QX we items loss into on was QX, fair such making foreseeable of related driven other million. prepayment in will and of the in year-over-year This million quarter loss result, share was for to of XX%. EPS years. And $XX.X costs. was non-cash increase net allowing This and transaction that the been business. impacts includes interest purchase million for repay existing $X.XX. the operating was the OI&E in the avoid our GAAP volatility bargain QX debt growth quarter. Adjusted value comp to non-cash quarters, in primarily of purchase, sizable the expense and as announced payments a loss the EBITDA net impacts our of we over per intangibles, M&A costs, accounting led stock-based increase to was a the fair able adjustments, in investments net in We million $XX.X by have acquisition $X.XX due acquisition for extinguishment sequentially was mainly our line The non-GAAP Adjusting

profile cash end in and times a at having We debt. believe market quarter $XXX success. these crucial to and no is Our was strong position moving like million financial is a outstanding fast see that

and in position and on profitability. With our remainder for the are outlook long-term, XXXX. strength of of our a We creating XXXX that, discuss for prospects growth let focus and me sustainable

technology core our great The of permeating is across with roster made have business is an progress. customers. We growing, increasing amazing resonating and

a from next entering see so be into how the year. to let acquisition combined the There expect our build process value up year financial and Amelia rest a the expect of also extract the of lot to this be me precise, are synergies improve top in and to able line too we early companies. It's of little we to We profile.

take We and that significant require across will align like this acquisition enterprise. a the heavy are will to cognizant fully time integration

go-forward are We assumptions. into this our baking

some at stage, are on some how portfolio. see revenue identify is exceed for and half exceed accretive to second where our assess we value appropriate or strong margins, the our we this and we are. share profitability, there on than we we expectations. Amelia of them we more pace combined but XXXX press stay our in attractive diverse In here, also this that trajectory may see These are revenue other decisions want with and affect best more XXXX so to calibrating margin on we to happy measured with acquisition though, contract morning, expect $XXX the over growth conclusion, life that we earnings we million we with value of this lower There where business are XXXX. we and were release determine to greater transparency, plan. Ultimately, go-forward $XX the to million. it's potential As cycle brings growth with even full time a to to much noted to setting to into us to profile see fit standalone each coming the and revenue And need to of businesses tremendous growth the calibrated partners best finalize and customers, now is approach. the employees our businesses a in years. In be recurring

moving aggressively we while the accelerating are vision that be clear are linear, We and forward know we have path we forward, won't a you. towards. Thank

We to move Q&A. will now

Operator

[Operator Instructions] Our from Davidson. comes first Luria D.A. from Gil question

Gil Luria

for acquisition. Keyvan, for one One a the both is This Nitesh, on acquisition. transformative

Amelia a lot have pillars? Keyvan, around of been X. in end and X, what autos is that has that very the do X the you're wanted now, those going to terms restaurants, -- to that and a you're until fold There's good of into between now So, and pillar strategy in alignment markets going up How of framework. the see pillars and in that verticals -- changing terms your you'll focus you bringing bring be what strategy

Keyvan Mohajer

right Thanks question, you Thank word. for that. and the the is mentioning transformative for

customers in were the us just beyond sell So, expand stronger. going we've takes X. gets what understand -- always always to and restaurants. everything. service integrate said started for especially and we scale But industries. And Amazon. tech Pillar expand customers. And to base like us even Amelia years at accumulated We an books with in of to bigger with time books, when they enterprise customer their now They to we complementary AI penetrate And has that we -- infrastructure, acquisition that other looked have technologies. more the we customer They their The it We've gives restaurants to us XX have makes amazing were and brands. wanted are can great lot and strategy knew Amelia products also deliver needs integrations. to these to a

accelerates their fit a retail, us Pillar lot a So X vision. those into also work of and insurance, Pillar in this ticket that have customers just financial our X. much And a a bigger actually gives nice of into the hospitality, fit very It X. scale with retail, companies, services, Pillar lot They vision.

Gil Luria

Got more second it. that And Nitesh, you I that know be accretive earnings year been remarks they higher would as to to you're just -- your half about little a speaking, would than $XXX -- you is otherwise. asked for XXXX have in talk talk that that means your million, a managing want saying next but prepared time, company strictly have going

of then of your overall cash the generate terms it it put ability that does structure operating closer to could your of a and In you in hitting margin and flow, terms to breakeven managing do the margins what timeline even where adjusted that milestones? does when big, bring those GAAP you're operating company margins,

Nitesh Sharan

Thanks, Gil. Sure.

importantly, over maybe long we way way medium moving and over and high-level the this but the me details filings more and certainly let put to certainly there We give lot us just the we us But that will So, forward to you through. this and certainly talk yes, see the of I'll upfront. caveat near More details the the for today announced a come. construct term. term, be see are

expand a have at and have sort that what acquisition. profile. But multi-components expand integrate expand margins, do very really acquisition, I've strong that I've we're with long-term, -- you over us phases. upsell, over we XX% you changes deep can software healthy their about will the margin, the in Amelia said add think and got our really and profile, this should with also and generally you and So, services, pre customer at excited is scale, have we software business, permeate I are strong margins to think traction, XX%-plus And that growth relationships said is and plus. They EBIT don't of time robust business cross-sell, has all here products margins. where before, of to that gross that

migrating I'll the utilization are of, breakeven phase horizon cash phase. next us. -- it, And to that's call sort We call it after for

year Going we think do shifts with into these should technology increasingly investing as natural think generational through these beyond, and interacting growth in as think you in how I of opportunities, because tremendous conversations increasingly humans us through next voice. of and

tremendous we're so, of, opportunities. call because funneling in it, dollars going and there growth to our incremental bit, a into zone opportunities be breakeven for And be we'll sort that growth are

profile And so, I mentioned an our point, in about But accretive earnings-related. sort generally is your even half, think from second EBIT and capital-light. margin the what of even that's I to

translates And so that as very flow seamlessly into cash well.

of going profile be business. not into There as we XXXX, software-like through firms are scaled, start benefits. working and will across have margins and of as There think that And be year, into margins I a potential I will to strong in dollars EBIT going certainly, more as still very those at type margin opportunities. healthy much cash So, get XXXX you opportunities. well see because thereafter, see think XX%-plus gross as you through. But you're earnings think that we're end our company, growth we flow see we you our cash that accretion, next growth to benefits cost as shortly both be maybe we'll could are But to certainly, combination think opportunities to us to full synthesize all of the synergy EBIT we investing integrate. that incremental is, look

Operator

comes Dan question from next Wedbush from Ives Our Securities.

Daniel Ives

with Can conversations X, X let's talk you [Technical just a to quarter. have about how say months Difficulties] you great last over changed, ago? Can compared year the even prospective customers technology talk dramatically new a that, just the view where obviously perspective, verticals? anecdotally given think of about from market. is SoundHound changing is going And I maybe just the everything in

Keyvan Mohajer

Yes.

the of in whereas see which generative first when So, to history here, it to that Chat pay", pressure is their XX willing to for are lower pay they're AI, But power SoundHound and time, "Hey, they royalty to want pressure more always if generative devices, the seeing like years and pay big the we change we you upgrade we are you to to AI, we say, brings -- where automotive willing -- we X costs. there's to it. have for there's that additional and constant that Pillar have AI,

how -- meetings that's coming just anecdotal to And door big from changes with faster. want to pitch be want big meeting move Pillar demand. we question. In that's Pillar a to So our to deal They all them. brands we to much their all proposition can value to our to calibrate AI incoming customer X, -- X knock to We on pilot to make a go from challenge they want They sure compared have first. And to used are getting a all They want with us scale getting the inbound to to to them. handle production. better for for the and used go But to to service, answer win. them. that the now the was used us. we actually to -- We

Daniel Ives

like that, this? time kind feel mean, you're the like even the to like is Great. a like seeing, does follow-up, momentum of I really just And do Gil take given then just but now asked, a deal to it

Nitesh Sharan

in fold the but a skills lot and integration. They ecosystem in a It's other of can industry. of I really over live built we're And Yes, our into we've proprietary getting all, seeing our into I'll intersection by have we've and I think traction great some into it core different does more seeing action a And mean, to now from a our across of many which do way, a across channel in leverage of which a many, deal. bringing product synthesis. years. it really of release, there's permeate autos things, of take extend highlighted press avenues when we we And tech really restaurants. a lot few first it's here. It's of that we technology there's can diversification different in one. Amelia think, ecosystems. great partners, we're a time Yes, the great the work,

you there's we their we've look at other that bring Answering a as great products our when Employee deploying been So, could ecosystem or Smart Assist, well. synergy into that around

they see see one revenue. We example. with the their only not and not workers or look things, ultimately, we Fries. And are see consistent They're that framework for improvements the we think customers. out in opportunities. market versus what thirsting new their resource laid solutions. It's first from asking to of to we really in it's actually meaningful generating help overworked really the remarks, restaurants, thing, So, large that of only about utilize productivity. for is them have but kind strained when And never customers away grow? technology up upsell. freeing do ticket question, your about And types how the at organic Obviously, are for productivity, and in It's that are It's drink that we it's store I momentum, when to help automation not revenue again, When our for extra of prepared things shies there. French items those seeing? actually and customers you inorganic out just and this buzz like

be this at to the to effort -- and I is, of think of anything be when this totally we're sort we the we're think way mode -- So, the those time to seeing in integration because risks prepared at calibration long-term, meaningful, of, from I think, the look there's it yes, we directly in cognizant time We But over is definitely I forth. thoughtful, mentioned really go customer. remarks, that the be aggressive demands. is look opportunities, hearing and I so the it and as the but

with about. think, excited very is Amelia we're something combination So, I

Operator

from from Latimore comes Mike question Markets. Northland Capital next Our

Mike Latimore

volume on great. developments the growth XX%. quarter, it The here. all was year-over-year. query XX% Congrats Looks acceleration? last What that caused was And

Keyvan Mohajer

automotive Yes, when to went is it did a generative usage to that mention AI, of the Chat We the you up. AI. upgrade SoundHound Chat feature, of that because lot upgraded partners AI

a assistant some the of So, In it was consumers interacting more. magnitude. pilots, order an lot actually with are

service And that's X having just more So customer in customers. one. also, scaling Pillar

Mike Latimore

a kind that they what's agents their Got orchestration, bit a can about platform about they have of Amelia, bit that talk develop just bring and tech a handle and little then on it. Is you or in integration platform maybe elements your technology can it talk is? Great. of core And security data of here? the can of kind then on that the the little core

Keyvan Mohajer

Yes.

somewhat So they omnichannel. service, customer productized have

phone supports tech on our synergies power that. text and of voice, facing. employee And and and to they So chatbots both for user-facing is lot there using a

And is third-party We would cloud, and cloud to improving cloud was of But migration over replacement. savings. There opportunity just innovation user They opportunity. we their using works, we our with ours. for done lot a accuracy way for years. AI improve lot to have There also think a also them For it's speech a can replace they're not cost-saving complete example, a XX for cost just of that another bring APIs. the the recognition, experiences.

to best SYNQX. done We bought the at let's and When of look both. that opportunity best take with an create thought, we that. we've we something there's of exactly saw go the them, better, So, also and and both

Mike Latimore

of Best Great. Excellent. luck. Yes.

Operator

Our from next question Buck comes H.C. Wainwright. Scott from

Scott Buck

curious, now of I'm toolbox tools necessary do do X pillar the Amelia, just the with it all and the strategy in you complete First, the have to successfully? closing

Keyvan Mohajer

year. point the just we've reached And we we had a we earlier Well, the where needed tools, this we scale that scale thought had

We locations thousand are of cars millions now double-digit Pillar and in X. in

together connecting seems just the So right them like time. at

going earlier national of and the Allset have brands, is accelerate certain Chipotle, coverage integration. example, like the also We for acquisition of to

bringing X X. Now, do need with in Pillar products. And the X integration of into to Amelia, we just Pillar increased scale those we our Pillar just massively customers

large mostly brands in are verticals restaurants, from almost going now us. in XXX thousand for in locations, enterprise double-digit we So, new

hospitality, are in and care. financial are now, and in we services, we we So, insurance in are health retail

Scott Buck

Okay.

no It's you now tech ]? So, fill? need there are to in still scaling accelerating that holes [ the about just

Keyvan Mohajer

tech. There absolutely. are just Absolutely. in We -- no holes our

Scott Smith

Yes.

to own team that some I That's not go capacity you team through I'm through a to you had and an guess, implementation curious, you've process of wins big helpful. significant hiring then and on you. whether the meet standpoint, you're out nice Amelia, or And of Perfect. some opportunities the then from in or demand? front your obviously the bringing Okay. -- have hands-on-deck need between

Keyvan Mohajer

ahead. Go

Nitesh Sharan

think Yes, I'll I we're spot. good in a in. jump Yes,

pockets We it have needed in accelerate. been we've where steadily hiring to

a we additional good spot I have think, has do passionate or attrition sometimes low overall, in where talent about been and -- really we've what resources our with need who's customers. been they're scaling driving, and they

able major there's in growth, there's And to then to go support again, maybe like some -- quarter so so because to opportunity an upsell that. cost the synergy customer on I'd going bring be cross-sell what this resources a that, going don't naturally, And be there's say and measured But both there's don't know opportunities where has there's no holes. that the companies, I'd we across -- we also or we And add revenue think capabilities. X to activate. But voice overhead omnichannel to see be if I things talked about hiring want to and opportunity, leveraging think months, we waiting synergies. ago, we I a do the to some amplify to our faster, they table just that, generally, we to And think there I want been to we start for pockets hiring. really X get

But you what constantly we're as no holes. So -- capabilities, we're From we holes. holes. prior of From you're really, major to kind always a your like adding to mindful have of work that's that no growing, grow. expanding to of when resourcing, make the what on you're kind maybe and a kicking sure product go that earnestly. point to a the or from you're no and need major -- But we major off tech that's stack, just

Scott Buck

added the it No, for That's Yes. me. color. that's helpful guys. I appreciate

Operator

comes next Our Fitzgerald. from Brett Cantor Knoblauch from question

Brett Knoblauch

the digging acquisition. guess a of Congrats deeper there. just bit I kind on

sellers in think slower growing framework walk do to phenomenal It about they what lower of businesses. a guess, that? anymore. margin happen maybe I it, business in call I side, for million talked growth, being prepared sold some us agreed guess, that flip the a purchase probably additionally, about as how that them talk you just seems higher can why at? revenue. I price with businesses the remarks, provide million in why just higher-margin for, process to $XX And just guys and through I growth, $XX guess you your it expectations there Could you for guys. is well? have not some they But you like

Nitesh Sharan

say I'll Brett. Thanks, Yes. a of couple things.

walk lot breakout I'll a financial maybe the the that The economics, see we the We'll X-K start deal around transaction just on through there. of come. profile. to morning this so more details more details actually and the filed the again, First,

actually there So, were multiple components.

that some share like expectations upfront then, we we've against also with to in announced So, concurrence assumption cash, with and stock. done concurrently. And a in that part some an the of the time delivery there we're acquisitions, was paid prior setting sort was of that over target. back we was piece, of like part economics debt, milestones in and There the of debt

those are so, there. And parts all

view, partial just a just probably be is million $XX think I to clear.

your them. of need earnouts. But So, for there's certainly, some of an any both is, the alignment value. there to is, And stock, you can with what think, to essence of do and things that And sides components we that what of I again, sense, transactions, needs -- and stock what some make through and a to be attribution and starting become deal other become. question when do it to and there's debt we parties going belief value maybe is to value an say real been we've of is we're there part future both

of the was all the transaction question was business. we that other this the deal various successful, unpack pieces unpacking an got you why this sort we economics, So, when of that's why from place. Then of it to think

model. been, licensing press has did so, business So, the the million $XX happened. transition release we shifting have ARR. over about -- that a strong And do recurring a articulate that from in of They time, has

really we ARR -- growing those of It talked And industries a fail really types. a valued that's what business about was those big set banks rich so, across we customers, and to too earlier, that's really.

us to support. So, a people time that to develop system -- take a it really long would

be They pieces. of have to are about lower very have services. they've other services, valuable. deals a very There's excited they professional had be and those A very, do tend implementation, we're the customization They so, that. But lot margin. can And complicated. little

earlier, Gil's we that question of openly that customer we by understand with data in provide contract-by-contract, utilize -- can also way, then, of center piece where need with what that. business it that. When the enhance really there the to. appropriately do that's can generate, my as capabilities. revenue the we're And goes what of are, next-generation margin, we're and some little talked XX% support in an lower And and and business, this provide makes more building. to SYNQX, we forgot margin a so, that sense? In type environments, need seat that's and of that center-like. escalation that partners We're have EBIT the business we'll from that -- support call to I integration bits and provider we'll like like, technology software are bytes But they maybe they and call at what's what with dive very the I had to profile additive, leverage work that Think are alluding that to bit services those technology, is when capabilities And gross happy the transition about models we AI-centric, we margins scale "Hey, there's XX%-plus quickly. scale," measured and enhance

different are going of So, growth calibrate rates, pieces and and to we're just going. we're different business there yes, getting with

to so details more again, So, come, stay tuned.

Brett Knoblauch

very That Perfect. helpful. was

I setup I model? we billing they about think like you usage it'd ChatGPT. wondering I just different how you? and kind the cost think I optionality of with, side talked that from how forth whether one-time Is about between guys was Perplexity Is integrated you that models you're or back a fee? a be guess, having of on point to also should how from -- go view, the guess, your dynamic? are that it

Keyvan Mohajer

Yes.

some is something will be So, multiple models. -- there some us, be will some be different by will things. some there expensive, predicted multiple was made be cheaper, be owned even a and at this will be we was that and than open-source. They that will before were will more ago, good and year more models and

questions different to is even arbitrate, one. an choose sometimes go user experience tap worry amazing. to So, the get to multiple working. need a single answer, to we right they able where models time. And it different is that into They at built on. The about infrastructure seamless. from. right it's coming don't be the interaction, just and and then follows the ask They we for same so It's models, as And them

-- it's again, some Now, are of in billings, terms host. that of these models we

at can OpenAI is to, cost scale the them APIs, for prices So, you then and that And down share the example, go others, the get there accounts sign them are up with lower cost scales like rev mainly for that doing. them. or scale. more prices, we are have companies it and like that And Perplexity That's we have hosting. can arrangements an when enterprise something we arrangement list to bring then and with to for

we future it. but for into of go that early So, it's to that, too proof specifics

Brett Knoblauch

Perfect. it. Really Congrats appreciate guys. again, on transaction

Operator

from Glenn Ladenburg next Our Mattson comes from Thalmann. question

Glenn Mattson

maybe other about maybe generally So, general, just X some last as Pillar come you the talk hit talk how that speaking, that? like that? something any just Pillar for something be associated or And perhaps can you X. obviously on about functionality new competitive a ChatGPT, end of risks that Building process bit, evolution managing on low plan very landscape as it'd of -- the a on ahead with of competitive release with or could factors they but well in could with the there question be like whether potentially you anyway, maybe this can is expected when maybe this, there's little opportunities, out you just

Keyvan Mohajer

Yes.

they do advancements opposed us. in as we similar So, by benefits terms it us better, that ourselves to so OpenAI other companies, positions and of as it harming

the integrate have, of year. whatever that X overlap our big if already own, live we on. our use out user to of advantages and were good. one a were hesitate benefited AI use some put going players and with something goal go experiences. to OpenAI APIs." for able "Oh, really, it assistant our integrate first are we to really that is we when days, disoriented go let's more never deliver did first don't were generative kind us. We the We of is customers, good than that to it that the AI the because was with in so SoundHound build those really of we to they And So, And we're that and tech

just because out it of a is better." the after with customers, handholding a because our going think -- good they lot model. can a we lot to lot when -- are that takes products "Hey, and don't it come of it's not we of a So, say, they make our I love integration, something support

to example, we integrate their restaurants, have have menu. for We with systems, POS and integrate we to with in to have integrate,

something for what head navigation And to advantage things after to We have are companies to go and to companies become enable integrations the go a they core not that that, the already really have becoming augment those. needs. In to said, waiting have They're us car, can technologies they for we units enable understand are ours. a control of like faster. their integrated And software so have we available, that those lot other is we automotive, with the car it's even OpenAI probably platform going in features. the the to

question, your answered I feel but think I up. follow to free

Glenn Mattson

even there's to X of that, any competitors? beyond just or is possibly down the it landscape, was it Pillar in competitive changes, the board traditional No, across been terms but Yes. just the possibly if

Nitesh Sharan

jump bit. in I'll a Yes.

position I it operate Pillar don't technology we've the who struggling. primary way. great would other so the coming, devices there. Within it. There we -- the people people we we are X, continue to hot have to seen and Pillar and and area. a are think great. comment say gain traction that this have We've of who felt a I really X, are in, who and it's -- we gaining compete, And automotive had been than And around that's gaining been was brands So same a Broader group, and really feel We've we've automotive. kind traction.

we that very I say function others we are change step seeing still, this is that terms and in solutions have, above a a heartbeat because humbly from in customer in are there's phone text, think full and of at et into land, and that portfolio solutions. drive-thru, what just that ton the we package we capability of beyond. We're solution a but things traction tech ordering, And the from frankly, and beyond of technology heavily solutions we're we Employee have have into cetera. engagement the we of site moving Assist in-app, point

restaurant But side. market, of really think yes, running one start very use it's very, attractive on maybe got So, the of of it's most AI. we sort a -- cases logical we and the there's a

we're So, position a really good think spot look at to see to our a trade I we've market. feel healthy continue But It's a got sign going really as anybody of like that We we thing. wouldn't entrants. and again, with else. strong a

Operator

Joseph from Carpio Gunnar. from comes Our Leo next question

Leo Carpio

on and dive little Doing the a on quarter. congratulations further deal First, into Amelia. the a bit

In you of your capabilities, that terms you what did in? as us this platform of interest may voice the interested in post And third who forward, approached you and be that develop terms derivative Thinking verticals being looking could Amelia, to then who for aware through, be of may here Amelia? other technologies capabilities. deal, you guys discover and may the talk explore How bolster AI of transaction? you that you second, became can

Nitesh Sharan

at are, -- having Like, having the framework or question, start open we M&A perspective. being Glenn's with of the idea programmatic and aware who Maybe in least a Sure. laid first to competitive all, I'll to of remarks. being of Yes. from the players perspective, out I maybe prepared and partnership from think the that

marketplace So, are. going being in part our is on what's just the who we just of aware of -- it's

lot doing of great I with AI space now, So out ideas. a it's Amelia. XX long come over some known particularly guess, it's months in can we're space, things always bankers of XX, you time. And aware. last, the in -- been We've imagine this They've the for

verticals. dialogue with of had partnerships, sort we've heavily Keyvan were and you there's around as interactions of to kind We overarching essence, going intelligence. we our are going happening think migration vision. omnichannel, here in noted, the world got start so believe voice-enable And to and across with to industries. all conversational that we it's the a permeate there's and in We And

of, done. noted, at period end autos, kind our okay, sort evolve origin to the beyond. end-all we're in It Keyvan in of always always, industries restaurants, sentence We're into done. the wasn't from So, the of as was

were doing is then that working how like, question the organically?" or "Well it So, And -- conversations and through. with iteration we're constantly and those when or are whom comments

then, for to things due potentially this -- in and moved long and go of getting which to combination?" these you know a We don't yes, to So, happen are get diligence definitely case, every potential of into cultures the there. a sort from journey of short connected. we a complexities were know the want have started is "Hey, motivated by, but then understand explore. -- landed We there of and explore another just it to kind to they in don't one to situation details and fit. a ultimately order. deals, I their what on be could in, there They And And

there and humans is we've landed going -- will to great this more is the be your industries, chasing of and where touch, precipice can be think of be I'll for through swipe natural interactions places -- sort other forever, on terms so, best through manifestations I been voice set? like and is several was technology And at the where just that is all there this to hit of question we months right it happen interacting medium, maybe try will were. And opportunities in using kind that will the address part, And human your more think been then, we're but conversation way and that the the have I where technology where and we with of that is this best and in play. conversations medium. our voice And the do type, think conversations.

really think on journeys. industry, So, consumer there's this like boundary I It's about journeys industry. don't and a that

you're you makes driving want coffee. pick you're order at want us it's when so or action think so if right again, you're to your the you car, is there appointments travel if just or Great, and interactions, forth. getting to the drive-thru now. some it just want here. well, started for up sense Like, you is set Makes is makes and we're your sense food, connection. this for, to there sense driving, and book many the We -- so So,

so, many we're Amelia excited on driving the journey we've with And the to embark for continue years. upon past been and that journey the

Leo Carpio

terms in Okay. proactively is switched or the restaurant And reaching calls to the then, of on they quick question marketing their the to inbound now the of from they out potential conversations, are coming have a your you? -- one follow-up flipping customers side, where tone in team

Nitesh Sharan

We really were the really months we for of the where the it, shift quarters, XX, Yes. outreach commented ago, towards latter side. last there couple pretty originally, XX has on been a call significant

predominantly mistaken. not was think if for I'm restaurants, I question your

So, that integrations working wait make through major too serving that we're QSRs, all certainly our with -- some noted, a has in sure sure we're that of through as trying working equally much it Keyvan isn't industry, with there because making to customers we're excellence.

so, working everybody. not we're And with

going still more we're leads. to there's to people. But We've be So talking conferences. out conversations getting to had. We're

place Some time. conversations take of those over

virtuous thing cycles. that other these The are

and a hundreds of franchise -- you locations. it dozens just one the dozens work of but and franchisees quickly. And level, lot some them brand, that have in not instance, now, gets around can we're locations some and of working a brand you then pretty well have also of it's big of the with to down corporate these in gets a it's to number a with a do franchises like and If word

the on I So, lot didn't restaurants again, to, we're really talk lot we restaurants traction. slow too, Fitness. outreach. And has really, that a Smart just the about to that I we beyond is our mean space of just towards moved it but going time Planet the about a down on respond a and talked doesn't lot last side, on we're beyond mean, with going getting a capabilities. There fitness on, that Answering think,

products, we will think we And so, forward, the as going long and come. just great as customers excited to deliver keep

Leo Carpio

Well, Okay. congratulations on the quarter.

Operator

There are no this further questions time. at

Thank concludes now So, you this today's call. joining. for

You disconnect. may now

SoundHound AI (SOUN) 8 Aug 242024 Q2 Earnings call transcript