SOUN - Earnings call transcript Q3 2024

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Operator

Hello, and thank you for standing by. I would like to welcome you to the SoundHound Q3 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 Third Quarter 2024 Conference Call. our Mohajer; is Nitesh our today Sharan. me CEO, and Keyvan CFO, With

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

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

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

Keyvan Mohajer

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

have our we mission conversational to seen of quarter, an acceleration with This voice-enable the intelligence. world

service hundreds more of into agent offering We have our customer AI extended brands.

our revenue for up and And over by of acquisition. achieved We are XXX% the queries run We year-over-year increased ever. a impact excluding across billion the annualized, seeing time a XX% We X demand $XX businesses. of that's year-over-year. first recent million strong exceeded all in over quarter rate

be to setting thrilled are We records.

our not success seeing in our massive are we vision has business, wavered. While

business are evolution predictions. on AI X of pioneering founded our the We

way embrace with and the adopting small, to creators just preferred expectations. inexpensive can microphone devices, is of and fiction partner users with voice it like science product are it finally for the enthusiastically, meeting and interact a billions becoming quality is First, Users a SoundHound.

necessary as has all consistent, the and in conversational and incredible human. And Second, to electricity. AI voice will AI a recent thanks AI years, as handled agent users Wi-Fi transactions to their questions businesses by made have become accurate than by service customer to we believe prefer will strides a

a is into are company, are and enterprise software a hundreds projected scale over our significantly AI verticals that are in to in deep SoundHound years. brands. Moreover, expanding with which new end into leader agent markets conversational coming AI we AI, of pure-play our service enterprise is grow expansion reaching massively solutions, embedded swift customer as the

incredible also growing our as So market is not demonstrated in fast. in markets exciting, we the also are business just third operate only are quarter our we broader growing the rapidly. The but addressable fast, expanding And scale.

partners customers building portfolio are and the we our an of We our breadth with their have increasing AI. that is and in talking a massive are usage seen The about businesses are way shift of ecosystem technology. growing,

is most an is innovation mandate. their It no For within longer budget. adoption a companies, exploration AI

And a consumers, multiple in penetrated becoming our building integrations market with and ecosystem strength across moat and more the of position a in businesses, with arbitration is partners. a more most is are differentiator engine LLMs. which technology, We more of growing our our biggest importantly, and

that solutions and now experience. both by customer for service customer agents span industries improving drive companies efficiencies AI employee for multiple Our and offer

with. is AI customers to substantiated customers, HR we very work our by best we IT have transactions. employees, agents deliver And solutions. to companies For best-in-class kinds and answer the queries experience of initiate able are to looking and for all the agent-led This

National Bank, Union, Bank, example, Vegas, others. For Resorts World Las Hoffman and hundreds American Credit Healthcare, Group, Financial Nordic Aveanna AeroMexico, Sterling Heritage of Paribas, BNP among

services for of financial financial variety using on unions institutions with AI regional organizations queries, customers hotel globally. These of bank to agents top of sizes, are work XX our to on. and a all and booking reservations from X also health to banks tasks out credit We flight transfer to from

in road. and we Our large grow new automotive them won we a already portfolio are technology and and X on to X East seeing continues space. our strong signed EVs Middle this EV the have in of OEM EV up quarter. In coming traction with live deal and the We a total, the have

was with Stellantis being their AI We have more in with but technology of the strong car. a past quarters assistant, X driving importantly, in within of SoundHound enhanced continue now strength digital brands various delight markets, latest. This out Europe This first usage the technology to AI and generative AI usage of its the to show of been the generative Lancia X over rolled voice growth kind drivers has Chat momentum now. our solution, increase leveraging

we technology are very hope to market our that with announce other in that has partnerships and new won soon. We've a Our presence the interest Chinese through, broken also in brands increase way. seeing we substantial tremendous

X the automotive have one leading partnered DayinTec, with manufacturers software in to We China. suppliers Tier of

Additionally, phased the our companies Bangla and our quarter, a with many In additional languages in venture partnership assistance. largest them We such further new several continue plan AI we VE we world, Volvo roll multinational our accomplishment great to models. we Eicher And manner, accelerating Commercial are expanded provide language their to Chinese this out as Indian capabilities beginning another the another adding increase industry. is within signed voice reach we more as between technology supporting grew is team deal partnership Kia, Also, joint Punjabi. Trucks, market. to there with China's globally. And with Hindi for one of a This to automotive focus come. to a and more also the on we

with of making logos way acquisitions. customers, our Moving grown have and winning agent expanding existing this the to our customer over of with organically, very I'm ecosystem portfolio. course pleased year, on smart the AI this business growing service we new partners

as enterprise for as Channel ecosystem. EXL, Technology, across such like Deloitte, deep work NICE, major we industries Fujitsu, We Henry, energy Dynamics brands a among in also expanded businesses Epic, verticals. and others, available others. And and some Cerner broader whole into Kyndryl, with out going have services verticals our customer Information We ServiceNow, our and partnerships of into technology class Oracle we healthcare Jack new to retail. host our General of deeper and financial our technology build are critical among see opportunities a range making world now pipeline

robust for X enterprise offerings have We AI.

their customers that is First conversational our allows to chat customers. phone seamless sophisticated a solution and AI power experiences omnichannel for

solutions banking. Amelia banking, deploy to by IT our uses to Transamerica. In partner Telefonica to these brands. I the was secured consumer with the information telecom, In same also deal military, strong signed document with thousands AI years, brands. an General growing often in both to see we customers out with chose with resolve enhance engagement technology, address offering government comprehensive AI's their retail, shopping In to of Dynamics and number to dramatically further. In and this within work trusted signed its a a having AI access. us of to events an few critical the adding AI insurance, full X call our us credit together enterprises. build signed federal automations IT insurance, for to for we lower sell makes a Health deploying this relationship opportunities renewed us many wins in In healthcare, or Truity with customer America South solutions time package We for popular expanding expand they our EXL, helps enterprise fashion together offer Military. agent offering renewed to U.S. a union powered enterprise leaders partner contract The of solutions a resolution agent wanted SoundHound manage, with label in to further another that issues Union automation solution patient for Truity when to the also generative speed experience branch is government costs. It and choice the patients' opportunity them happen. and to and with AI of we of quarter Credit In improve second infrastructure MUSC before

million with companies another for SMBs opportunity individual some This includes scalable great largest but seeing X low with is smart AI brands years. with in are answering. our services XX estimate agent America just about this that Finally, enterprise multinational highly North locations. We businesses world Those the a wins offering, renewed touch, card our more the offering to strong excited over pipeline for one be growing of we X,XXX payment also massive TAM in alone. over are and

very is of number We to exciting. across the cover opportunity in market enterprise growing solutions of to from front us have SMBs industries, so the a

For assist. ordering to staff supporting employee our restaurants, and we their across continue offering phone expand with drive-thru,

drive-thru expand continue brands new with ones. to solutions Our penetrate and existing

efficiencies process and new is for locations ordering to in during for our While they customers, multiple dozens upsell our them. We the solution customers their is also continue the Panda about Express of order power are drive-thru locations. excited creating per the for AI in realize states what add

is We also are how the just restaurant orders. accept delighted incredible. and much they're Chicken with went live feedback faster They to with from able the Church's staff Texas

We Castle. in with White expand continue to more locations

of can scale Our that earliest related even going also innovation us and deployments quarter, different already forward. to languages trusted continents to happen. started. It's hardware implemented speeding faster navigate largest deployment. Last we we Because is just our our the drive-thru customer have believe make help up also ability and this tech we getting and locations variations, our that we're drive-thru X in acoustic partners help

customers. Of and the for is brands with the HME, late, can convenient and modality a power restaurant brand brands globally demand as to makes to have others. demand brand Square, recently to out consumer Samsung, yet such This for consumers. are to powerful excited are a to for pizza of business ordering we among rollouts XX speed another hardware over We improve in we relationship Oracle We apps. ordering a mobile just pizza signed packet mobile platform X native functionality. like application top with query that top QSR that time. The Sapient, and from solution signed phone their so includes scalable we voice And of their are our also continues and Toast, have AI, facing power our Micros, enterprise accelerate. which that now new seeing deepening build partners many Olo,

voice an ordering emerging restaurants the apps coffee in some kitchen and adding tremendous to we addressable shops mobile our off efficiencies we employee premier see as burger of to As or chicken ordering, kiosk, phone drive-thru, assist, ordering the from increasing premise market. Whether demand further with mobile grow, the continues in based world. channel AI are seeing even QSR

that stores of home Some serves and quarter of the products. include restaurant and Tacos a with Torchy's chain wins retail unique this style large food hundreds sells

customers. Applebee's, larger one Subs, expanded chains. with locations, X/X had also Panda Casey's with wins fully 'O' Beef within of We We Express well we every pizza remain existing their Chipotle And Brady's quarter in with the all our franchise see and Firehouse implemented as Five we now of their are to expansion penetrated in to adding and as Guys, locations.

AI customer product with portfolio all businesses resonating Our sizes. is of service

restaurants. ordering are for We solutions the phone market leader in

years voice anything can get solutions of Monday we from Zupas you our believe McAlister's our Lotaburger. Basically, Pizza, or Guys, AI Additionally, with share convenience. Co, brands we and Habit real Kitchen, that with and Blake's Applebee's, Sunday our using Deli, pizzas calls the Schlotzsky's, winning the wanted AI. With from data of pies you solutions. are crossed inbound Blaze trusted phone milestone Casey's, some We SoundHound XX more through way. using to and have Jersey with than Five Chipotle, exclusively to of interactions. have our California of solutions nearly science and because been machine the have Pizza own go are proud Corner have million tech, XXX burritos along I patents, speed hundreds behind XXX of ordering burgers Pizza, to to Firehouse Bakery, say CafÃ© Mike's, million interactions Burger, That's learning experience. We data that, Mott and Noodles handling that Subs, solutions customer to our

the today built creating with January. massive a at opportunity announce moat have have in we We to CES that a our proprietary will in a competitive customer prominent technology XXXX service. I'm is happy that technologies will also presence solutions, generative work be edge This time. showcasing bring several some to the and There, automotive very with for cloud AI to connectivity. first include NVIDIA voice our we without AI will

CES at will experiences enhance cloud-based demonstration live empowers by the automakers vehicles. into how show Our the bringing LLMs directly intelligence in-car solution of to

AI, generative connectivity. We way meaningful will their have interactions drivers ultimately standard this new using well to as efficient that assistant can with cloud understand in-car without redefine experience. control how driver need for with context for demonstrate a believe cars, technology will an the car as We voice drivers interact like access setting seamless capabilities the the

demonstrate will what XXXX, we believe also voice will be commerce We of the ecosystem CES at the future.

and year are range other new completing voice just to excited you of an the speaking that convenient to More people altogether of category to are tickets, a ordering transactions and We XXXX. by CES ways appointments, from of making details look at taking to naturally to food, creating power. with devices We a we part from commerce, dynamic share do this come. ecosystem for and all forward buying

of of carefully next our the proprietary been on audio level. model, built has Before speech closing, dozens our multimodal, work. to It languages million learned on and foundation has technology elevates X accumulated years. We've decades production, from model X over of hours multilingual in Polaris Polaris recognition give and Polaris exceptional. update SoundHound over Foundation to the that of automatic rolling billions our the out I real wanted results in an are that conversations

our AI approximately will engine efficiently X/X We exceptional reducing delighted power And built we of while improve say interactions accuracy, because are AI be hosting all And and Polaris seeing it can that adapt SoundHound ourselves, soon efforts. I'm the costs. increases experiences. SoundHound is restaurant human in we to with developed also powering minimal impressive handles for and to we now this expect that customers. technology customer all

market As we This engineering and release the keeps exchanges. that our innovation Polaris, groundbreaking in edge will technology pillars conversational continue AI continue competition ahead We the at a adoption to of have us features to our consistently and and of the speech, understands in customer way we to of also meaning the will in technologies us all of In number conversational the of continue exciting take cloud. to the revolutionize allows share. develop closing, technology superior position automotive, intent, see base. In we ourselves a business. cutting full we deliver our winning to AI generative of AI

now business and companies of to a AI and technology service, new than that half This are partners agent EV offerings leading the in the choosing space products rate. innovative to We and our world. speaks with our are bring their rapid to customer technology at are more offerings. In our growing

consistent enterprise We vision ever and we've are that importantly, the partners, users experiences brands and major to and with over adding are business integrator the growth. working being Fortune partners XXX most stakeholders, our amazing is our realizing system premier of than noticed catalyze vision We've technology had now more created. years, a before. Companies,

to turn drivers, in the We joint collaboration Nitesh team. With play and engagement outlook. to all continued our our talk about especially success, business our all key are to role I'll a amazing that, now to growth who and performance, call grateful financial over the

Nitesh Sharan

over growth, increased revenue we QX everyone. afternoon, this and good revenue XX% XX% started. $XX just and again year-over-year. quarter, in once getting Keyvan, exceeding you, million Thank are We had

AI financials we let me Before landscape voice and into in we new technology an interact the will the humans are AI catalyzing this language believe natural that shift. major app. quarter, here. This world we we contextualize We order, and LLMs generational for how view killer pace. In the is believe dive conversations building technology, generative at the a be how shifting exponential next is and interface opportunity are with the what

years. XX, We a next foundation are X, the and building for XX

and succeed. The innovation been our the to in and particular, investments up of year, set reality. have for heritage uniquely activities this shifting ourselves positions basis to Our us capital

XXXX this is and to finish with up lens ourselves. it and we gear into that XXXX, transition organize we align As

maintain financial XXXX, deepen remains customer it Our opportunity position strength, invest extend source to and that reach, the we our our grow, Throughout position strong. capital to and strength, of been a because affords our footprint. has us strategically, want

the business. of and automotive backlog bookings value It current to to our and subscriptions grow measure we cumulative is and as our customer continues further scale contracts. Our restaurant a partnerships customer metric deepen gives activity

midstream acquisition, team and our healthcare, again key double we substantially Excluding all Amelia year its this inclusion portfolio aligning broadening of are enterprise the base. banking, is The the their own utilizes we to increases financial insurance, reported prior expansion and period quarter, bookings, our Amelia and is measure say, customer in services, this in it a customer meaningful metrics. Suffice our into and book-of-business. more what to

the results billion X year, combined $X customer year-over-year. share a report me how we excess was we measure, and like-for-like a detail. this are approximately our be we that, would appropriate full basis, on describe about collectively in annual discuss our talking will quick metric metrics said, one financials we XX% let $XX.X with and of now more if metric third As more early most comprehensively. With progress duration quarter when to across on revenue now the next years. That up million, enterprise, making the we in QX of

growth, we expansion by We continue automotive driven AI solutions in to see and generative double-digit unit quarter, and overall double-digit unit product price the our saw expansion.

QX, business. scale measure of reminder, key a where XX signed on customers, we our the offerings. quick anniversarying diversification and X now level, top concentration. company scale are like reported benefited restaurants, Last came a year, more of an customers This another highlighted X/X. point-in-time top This at to it diversified more customer, last has customer have represented largest much XX% X as by that in The and have XX% to We logos non-cash so diversification from revenue year, due continued X margin we acquisition. time. year, mix industry over Expressed point-in-time down service seemed customers. customer acquisitions, from X value non over we had comprises SaaS And customer of impact risk a from have was to number XX%. count new such intangibles, we large reduced the that deliver our experienced margin our to diversified have the of business was a contribute than our of just of is restaurants over customers less As the tremendous our and product and and months. In meaningful significant recent from will base. One the quarter. improved to revenue also geographic past our deals. Within further business. we Adjusted important reliance which the gross the that purchase quarter now the with of revenue, GAAP our Thanks was we our for year-over-year XX%, XX way, we our emphasize this within significant area we top automotive expect amortization of XX% investors gross period past,

essential While margins, data cloud from deep recovery anticipate synergies they the data enterprise-grade realize acquired stack weigh and migration, customer businesses center assets. We our on relationships integration margin as rationalization. cost and provide we tech

inference our driven primarily XX% Additionally, reflecting million for a year-over-year tailwind R&D provide our increase, were meaningful a in by deployment. favorable expenses costs $XX.X QX, in reductions acquisitions.

We enhance are customers' delivering experiences. exceed that that and committed their to products our innovative expectations

the in to Keyvan includes results. measurable priority, whole. With push the QX, engines, we and positioned from Our mentioned, exciting acquisitions. a increase were an leading such is as The as solutions SoundHound, a our not $X.X but elevate training breakthrough the Sales of as primarily impact well deliver expenses offerings, and next-generation year-over-year. investing industry to architectures increase marketing advancing to million boundaries integrating model in high-impact focus LLM our and which, are pioneer an due XX% efficient for for as only Initiative, Polaris is voice innovations AI that

and and This go-to-market, restaurants quarter, automotive, in also and invest continue both both across indirect we direct. to

improvements increase are to in generation, improving to drive and million in QX. efficiencies. Non-cash $X.X due costs generation, EBITDA speed continues close also amortization one-time system better and in million The to of transactional non-GAAP $X.X to that emphasis G&A employee be nature. lead is related year-over-year. adjusted was to investments in from Our stock acquisitions, continues and in excluded cost expenses compensation internal The are that and in was process an standardization controls, and rates increase million to growing enhancements non-cash in and with primarily efficiency. G&A ultimately demand QX, earnings. and these increase of particular Note $XX were reflect XXX% intangibles

was the As This for the a of positive $X.X interest debt. operating result, includes QX million. OI&E $XX.X million was $X.X on million a our loss quarter. expense our for

costs, approximately valuation GAAP also million a was per QX. fair loss a stock-based other the for one-time driven intangibles, our amortization of that We non-cash EBITDA and to growth benefit in in related quarter. Adjusted The $XX loss in QX loss and reported primarily this strategic M&A EPS the net our was is acquisitions Note comp, acquisition-related was the Amelia excluded in in of metrics. Net purchase the of one-time on had adjustments, the benefit value tax investments non-GAAP non-cash related $X.XX in of share non-GAAP transaction line Adjusting business. making quarter. to $XX.X was was loss by expense we items, have been allowances release transaction. $XX.X million the million increase $X.XX. year-over-year

most we at-the-market million, announced equity million program. as XX cash and week, outstanding Last Our a of from $XX our $XXX and that new acquisition. of debt we recent have was equivalents remains September

outstanding has The are We savings roughly XX% believe provide have improve economic annual our we and utilized there ATMs balance flexibility current so previously capital achieve. to sheet. cost, debt to

while will helpful as when earnings to our more execute next We I And is we on will that, an discuss regarding And strong said need We a have it breakeven $XX out our to details XXXX $XX capital now lay view. be we share in be our let about achieve a operating call, thoughtful we not me XXXX to to expect position the revenue do profile. With thought in early range financial program. and capital of incremental outlook. million we be million. before, would

businesses. automotive, continue We our agent, to AI and restaurant scale

synergies. And meaningful across drive we see cross-sell integrating portfolio. full for revenue significant upsell are opportunities expect and the We the acquisitions, and to we

be As range in to for expect to million $XXX XXXX revenue such, $XXX a of million. we

drive We our also the to most investment continue to and meaningful capitalize opportunities. rationalize expect on synergies cost portfolio to

of we In move market to priorities aren't factors opportunities we the to driving will towards end expect moving we by on is we and fast to agility urgency. One balance our shortchanging biggest either, with opportunities want with make We capture sure ensuring operate continue to so by EBITDA profitability. be to surface. adjusted of achieve to may accordance, efficiencies underpin which that profitability the our emphasizing like close not obvious XXXX. I'd financials,

Over base, the meaningfully our geographic past and have industry year, we diversified customer coverage. and product set,

the is into We generational have solidified that base our only foundational and and beginning. capital reach extended what shifts clearly just are technological

concurrently is way growth is while steadily financial sustainable now that design, partly situated and we we portend a pathway our linear. said suggest our we derisking thinking this disruptor. to That are does, are alpha will drive aren't we It are that are you, though, better to we That for certainly always exponentially. fundamentally the several elevated by profile, move not we doesn't have as because Another before to long-term. I be vectors. will Thank beta view Q&A. accelerating that times

Operator

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

Gil Luria

some incorporate the into of you ones businesses to that of going possibility a to X months the Amelia to those that parts SoundHound. discontinue And which fact you talked acquisition, announced was when looking at are you the that you're acquired. ago, the may you had you future there various about want business decide

give a of worth business perspective be be sense for retaining? you can how the then you going months' Amelia for what's And X much us going on that? accounting and that, you're discontinuing? the work may to the to be much of How With

Nitesh Sharan

Gil. Sure,

right, the in. in we're fair, of we're be to And months So you're process X still that.

lot there's a learning together. that In been we've the team bringing fact, and

we're in keep Ozempic There's real I absolutely talked we're of upsell cross-sell, accelerate deep high is this in directly terms do. And that There sort there's convergent lot is that going have we product to one they one of to space. we're with which conversations of we're have a our margin, opportunity this and pieces, think excited integration stacks that They to going the we've future that's about technology going customers. question, composition integrations, multiple your across of will about. integrations to accelerate.

conversations, about in big conversations. The time facing X enablement we admittedly sort of in will think employee-facing one that solutions what's AIOps. absolutely to double gets tech that into is about double enterprise sort with customer on accelerate lot down down own our still we're saw think we And That's talked of about more full the the is proprietary probably where capability. maybe opportunity we contemplation also a I one talked displacement where have we're in. of areas of That One parties. where they grow around pieces deeper of was last previously excited sort provide many investment going highly that. There suite can of and voice employee solution third future another and those and hold. an called us we is of area facing brands professional They we a services. and

pass-through how. I'll binary to in services question just related what about out. is more support, second the The isn't and It's where and is strategic actually support. escalation call think The professional I or it

want into in be So journey. over margin we'll deeper And But standardize quite don't that not time that the quarters, to at definitely stuff see positive more time hundreds more of that and services example, going is full have professional doing we openly, coming for we'll a you're that integrations to really we to more so share every the clip. large services you, faster. What lower are professional doing that with interactions, of probably that and have a over go thousands go but progress. we a deployment do answer monetizable these for return enterprises of interactions, is

for the is connection. refine how automate margin On benefit customers. the quickly models is probably And proposition grade we customer We value delivery from understated and question which direct to an that certainly, that we support, lower come the of the improve and escalation is, can our benefit with today. assets ultimate that enterprise really data

that more also that the learning, we're will less, automated. probably So will growing. believe starting but already We it become gate, become of out business

end on So software of a in those that we We're because probably profile think to have certainly number outside A bits it and answer precise ultimately, want a much our industry-by-industry easier. some I've look, being through think, customer-by-customer. But we side here. in I of parts if exercise. look the I don't next and are hardware a integration, and We bytes which at to where takes is the something a the deployment drive-thrus, want to some lot I deploying of is year tight certainly But a bit faster. range We the but puts Amelia conversations are. you question we a these day is business. business this the what gave of the sense are previously, asked, -- that bit to of with up that our going things lift to need keep going every said still we happening are integration are to restaurant be be scales, up in

thinking you to a update. so through hopefully, actively give an gives going But things. flavor you little every that bit of to how we're we're And quarter, try

Gil Luria

second question, I'd And talk the Yes, appreciate to the like about technology. then it.

you how it could specific benchmarks trained GPUs? How of to it and better? making products your If model How model, of comparing benchmarks you're parameters models you many big that the to how you assess a foundational much a what are? can on? and talking understand was What other it about us contribute help cluster are important benchmark what

Keyvan Mohajer

Thank Yes, you that question. the I'll take for one.

have almost And have for for ton we've data we data. So training. models X been And of building a we decades.

standardized there out tests actually real and interactions difficult also there. that evaluation better our are an give performance. asset for have a But life more data are have tests we from indication We to of us

We and that have that benchmarks we not is speed. and there speech We understanding error actually benchmark benchmarks. have recognition the natural speech word Speech usually there's then -- latency beat provide many recognition, also are and language recognition. rates companies

to then recognition. And when of language shift so in we been to that measure, with natural you comes has terms and It big understanding, intent beat And generally, technology accuracy We are tech the recognition one few and used LLMs. consistently speed of in-house. a in speech be would it that there has the on.

are understand our measuring LLMs understand, because they if you incorrectly. but are they one we what And does, OpenAI vendors. look always sometimes hallucination, at of Now

own our And future across that arbitrate innovation can other like. OpenAI of XX% XX%, But forgiving in is it But it We their audience their really We amazingly, techs. users of they what the forgiving. say, apps. does their blowing glimpse mind tech. LLMs. consumer-facing have work in is the We audience use of put our because work their is XX%, not doesn't audience if a let's getting what looks XX% is time. And front

AI hallucination an agent you're cannot You XX%, for providing be an enterprise. XX% when

lot innovation to and equation So we into a our our reduce IP spend to of hallucination. the own bringing the time equation own that

So our because that and SoundHound really in data goal experience XXX% the is of have. area and the shines that we

You asked about GPU costs.

models again, almost been for we've X So decades. building

building and data collecting ton a spent models. have We

a for to go we the increasingly accumulated we have spending But us company us. iterate That more to are already and on that's of is compare investment get to to of if have. hundreds just starting, So on that you dollars started. raise millions models they GPUs

Operator

of of from Wainwright Scott Co. Buck Our comes next the & line question H.C.

Scott Buck

I'm that retail of your great. what want 'XX or release. broader industry But the auto? restaurants look First you're capacity by color like opportunities one, there moving allocating breakout of Any to those, resources in and say, and would could towards how or and you of kind as I between included provide within curious be appreciate looks one the maybe you kind I of you each the vertical kind

Nitesh Sharan

Sure. Thanks, Scott.

and So scaling long building EV way, opportunity, the grow. of to automotive history with faster, that so by our seeing continuing of adding, confidence. scale are partners is our EVs We've we've and do we that been can on gives relationships new lot side. a we particularly about see the talked partners us

want doing on the we keep driving device So to that that and side.

to were the of -- where where marginally our pace, we've think I I go at, really this. kind we outsized see talked about we're if

be growth. service the customer talking in in to deploy those is absolutely see of and opportunity dynamics as of to our more you're year X take And ecosystem into expect that You just I'll actually outpaced broadly, about. the midst Pillar them bit AI our But next partners, a business our across again agents industry this unpack that we opportunity.

of restaurant current X thousands about that fleets, give here we indication We the or reality about. a of very But a So about is locations. into our working that these to click, are lot have double with prepared the excited it's tens QSR across one sort deployment on locations. we're XX talk of Many QSRs we hundreds the one, remarks sort very, the opportunity, talked of those that they contracts of of top working of of when already of we're scope we with.

lot lot these So a unlocking see the largely more in a same set. of and menu sort time restaurants of we

order it So you XX you right, get get completion to plus rate.

You you've it's have scalable got all drive-thru, a packaging in got the the a if opportunity. place, combined, structure you've hardware

quarters. now mean, so been for I we've about And one talking several that

restaurant opportunities now industries new think when about, bank, for a financial we another of And example, as doing center we other we're in very for enterprise you money enterprise both the can I high volume those employee-facing get institution opportunity continue continues be customer--facing. or again, talked us. Certainly exciting large very, that there's a just well here extend. to or the spaces, such large as to some

if more with to about that so I in another called will a customers integration we it's medium-term is that roots IT stack. be those budgets, into of have question That should I us the the AIOps, think solution can to of and So -- we scale one take a more mentioned tech we internally prior our continue internal big allow penetrate. Over deepen and with briefly just integrating healthcare answer a very, with dentists, generically, to excited optometrists, I your very one also about. questions, we're front-end but think medical both Today opportunities, we're of sort companies, insurance the different several just more the of demand. industry the and more and for happened for appointments report, what largest we it, -- your see for lot there's a It's there. more getting in understanding areas, centers

first play. We I'd voice for omni-channel a openly, we now but more them. we're trying quite So an more platform have us, couple those shift natural believe to play. But that are horizontal say conversations, really we're and to a of

consumers see deploy we where can benefit that from this, to so that. we're And going

are easily addressable of our some industries. And like solutions across Answering Smart actually

across of restaurants, financial we frankly, deploying healthcare, technology services, more. about across lot So the see even a scale but it's opportunity horizontally and getting

Scott Buck

appreciate My it Or from the something of from fourth the something one 'XX? increased all higher business? acquisitions? Great. just is both from it legacy directly the outlook, you're the Is of pushing the that's seeing that on I -- you're seeing is one X for Nitesh. and detail, second it combination that quarter

Nitesh Sharan

them X, both combination also the but of coming separately, It's a together.

the the to continue we're to We're more be about all business like and answering scale total opportunity. prior the smaller a has in really still time. just major your even share disrupting incumbent excited gaining We lot market share a the automotive and question, player of

we think more grow. we can So a that there's and lot deploy

restaurant partnerships, and I and from the a we're respect cross-sell, across. And we're but upsell opportunity with really just the ton is to then enough tremendous. get acquisitions, the growth more to On those scaling mentioned side, more with time adding organic partners units I think the already all of

both M&A. the a across we do So and of those, all see, across great absolutely opportunity it's organic

Scott Buck

Well, the I appreciate guys. Great. added color

Operator

line Our the of Mattson Ladenburg next of question Thalmann. comes Glenn from

Glenn Mattson

that that $XX there. Correct then for you'd a if So the me to square $XXX like quarter, was I for ballpark your next curious, guidance, -- like if I'm if I year. annualize And you midpoint that, that's so of saw of range. million had quarter. Amelia relation in to there quarter think the to you million perhaps away I'm kind Can like you that's were filing wrong this just in the full be

in explain me understand you relation some or that there's perhaps -- some in built seasonality. just help me number? there help guidance Can there's cushion maybe the So to

Nitesh Sharan

Yes.

EBITDA I a One are towards and It's think, pursue of adjusted question, growth talked about actually think looking terms indicated not things what how couple is positive. going forward to I we're Gil's and get that like growth, there's there also of in is. about, just of trying it's going I sort profitability. there. mix we to we're at certain in things

be we're mindful think totally don't profile. both to So But I growth the and sort trying that's off. of margin

I we're our there some a still more SaaS. greater SaaS, business business, is in share but as towards moving think, is our of seasonality

of giving end we of at grow. And So to hopefully you higher that see think won't if to stabilize unpack guidance way, gave the it so of to give a outpace sort of the ourselves in it, end and are bit continuing to there and lower to the be I it, right We we're a you'll of this see I maybe the breathe make deliver but the the we bit range. continue it's to just investments for long estimates term. prudent a want we out the and room

to of invest ship, get recalibrated. we go work lot to us sort to the of and out of have right our those all integration a to attractive, numbers. through we lot with you're size things to actually for on to it were had We around But right the of starting disclosure some get acquisitions yes, disclosures. calibration at in recently see that And the prices the to I there's the a into So respect that coming the will come feel market details to business. say, place,

so we're integration. past things that lot the with real of And best a always the indicator time. the driving isn't why are the future. the And doing we're that's of looking at Those

a how it. So hopefully that gives you more we're sense of little driving

Glenn Mattson

is the sense wind talk of to you've it's helpful. little about Yes, your procure the all business just Can equipment with you deployments, going X and just the or that talk from top everything process yes, that's you said Can just franchisees or you on something whatever get larger then about of the the to past deployment? a to it's now. just that like time sometimes the side, board talked if these And the harder everything. QSRs the how in think on to I and XX install actual

Nitesh Sharan

something -- second I'll were there the the -- kind franchisees. on you're Yes, different there a to there of up prepared of think you've and I sale and lot Keyvan locations, is. with that were conversation if are of about Yes, a point integrations repeat there's a flavors maybe excited we're -- got different systems remarks of right, that franchise are lot that brought of required. have

in acquisition. getting new and that customer activated the franchise are because different investing now than we've motion is sales So and right people sales

from investing are so big to corporate sure have partners MSAs make how have And that that with have we we those we with with to multiple footprints franchises, of support deploy. do conversations large

we our earliest post location if a high drive-thru challenges last a a to really So month, be activated, lot deploy not permit more and that's our team one get year of was team a completion of certain visual Keyvan to agile mentioned one get how it start footprint coming a their let the scaling one and retrofit locations. in quarter our And rate Castle footprint with you multi And process. partners. approach is could cases, creative creative White that was in. And order customers with very using a the this they frankly, was something And got retrofitting it of in a and up quickly, exciting definitely we're that our the quickly hardware and get technology. really because then and the things could to of some got have

with to that partnering those for we're many vendors the all Keyvan So way going are headsets, that types of screens, required the it's that drive-thru. And for that's noted we're the innovations calibrate both we're doing that hardware of capabilities it.

So continues. I pace our say, would

relative We last this continue quarter. drive forward, to try to aggressively to

we more I think it I'll maybe continue we're ecosystem ago going and more customers, you the we that thing, the and we this more we restaurant we're limited humility, as hit the franchises going I with scale industry and full more we and up us are really, to this, I the driving the with do trying and I of the team we is we And okay, even so last and how and say last move challenge these? And now but mindful set you to getting absolutely interest really to conversations we time, partner learn solidified confident X, that so brought were be XX constraint is terms we a frankly from faster conversations all with say top believe have, And of to year continue to and have just leader right edit to didn't out this. And and like feel the this, and it's top going us. to ask partnership if XX coming top would resources, when momentum, expectation. just and in guess much learn. to prioritize exactly we sourcing this of

and here and consumers. goal certainly to our customers exceed delight expectations their is Our end

I the year And momentum. super the And world where so about that's on net-net, in down would we're just we're feeling going. year, this But We driving by here. this just after, really we're years We're next is battle. moving trend where constantly X a it's continued to that is good excited trying summarize is saying the about the just road, calibration think spots. what that the investing right absolutely

Glenn Mattson

very That's one could in just backlog. on housekeeping Nitesh. I quick squeeze If helpful, the

that backlog the last some point, that new remember to I give because or figure dollar year, number there you -- you only last us use at point. year Is think after but Xx had just? I the hard can for I don't you think, you converted said Is the case? a

Nitesh Sharan

trying so I and you're got it. XXX, just which I Amelia don't to was was to we mid-XXX what think But year go it a with do think it Yes, normalize bear, It's you the to the the reported last after different you over doubling would had rough way reported very conform right point the XXX, of they then we reason now raise as it. is can brings was I of measuring bigger math. and

as well I it's of more in across or the restaurant parts to locations. side, to a share penetrate, that more continue say, customers, next activating Really the sort to not business. in north the nice probably but continue but I the billion diversification. I But signing was that, Amelia the if So conveyed we'll combined of more like be base. remarks what we just, strength put time, would growth up but but were of $X probably, we to outpaced multiple outpaced see we're growth, only not side customer as prepared

Operator

question Carpio the Joseph Leo of next comes from line Our Gunnar. of

Leo Carpio

I the couple quarter. First, questions. congratulations of have a on

there. what's more sectors the sector seek little The bit you industries and your to energy color you're could appetite It as more wanting like little first any sounds a probably question comment? put a appealing? the you deeper explore voice consolidate that retail to on is, in M&A look And AI space, or

Nitesh Sharan

horizons, Sure, Leo. muscle quarter that last partnerships, new mentioned of first in Yes, a imperative. is AI in the Amelia, this LLM, generative have quarter, the of seen conversational is we And space. believe question. I'll much I benefits the the believe that. strategic which programmatic calibrating I SYNQX, and having with Thanks and we're what we've part for AI, Allset, before, this that, M&A attractive take fast-moving industries may like getting quickly really and we're stronger. especially It's really

we moving like mean each earnings when and time, have now so This call, as are, almost actually team that that lot we've growing banking a a doesn't the it. what who and to That expanding a companies are compare Keyvan deep get we and inbounds on is thing business. that built, I hundreds of great compare we're judicious. Ultimately envelope. I amazing the As to a we doesn't innovators pushing us, the have have we last that have sending toolkit. and particular, for of foundation, few, quickly said an right actively dependent and built we were we're just patents, stack, team how we're That just ideas, the have sourcing constantly technological but And in other a dedicated relationships both we but are but also anything, mean this do we of and do And rooted, lot in theses tech of verticals. major have the to go partners done question was do And we leverage driving deep into getting is, faster? that customer that able year. to restaurants we one were deep and

mindful. forward, be So we'll going

we're there's integration a a I the ones lot done. of in good at work digest lot spot. a we've think There's of and to the

teams. So be we the also want to of and we're thoughtful asking measured about what

players else understand could we put all looking there. looking, So we different do head who a going do. like, good who ultimately in be but our There's lot partners dialogue, be to to or and is constantly, or not of M&A. and It's the actively new -- that's not suppliers. we're the part so angles, to There close might fan. we're always planning not We're shop going the be actively also strategic out and of lens up that in is just

that's guess we horizontal are do I X, can part X. So part different, going industries. have solutions, hit after we we on because different

the mentioned agent energy a that the capabilities one bringing. you yes, was. we're for and of and lot there's of pipeline think what I lot solutions, forget I need other a there's But our side conversational particularly

at. that massive are Again, multi-trillion TAMs. now on. So and I dollar we that spaces healthcare, that Energy, multi-trillion it we'll is. whatever think is something or services, automation Financial These will if about, focus think for are ripe talking an look $XX we're trillion These also TAM. are that you industry-wise, area dollar. TAM

prioritizing always will where to Our by resources fit. highest suited are and edit and best capabilities governed be and capacity our growth

Leo Carpio

LLM the of Okay. OpenAI, there existing or And companies Anthropic, like plans then any AI, partnerships, relationships with are them? with to large speaking collaborate

Keyvan Mohajer

for in one we do about questions ChatGPT as queries our trends vendors, lot to, we news, are also the that arbitrate historical we like architecture have can ChatGPT questions. And we by certain use A we perplexity. but LLMs. -- we've if go brought OpenAI of we we you multiple use our and Well, models our our to then can answer into cars, publicly disclosed of and disclosed and things can let's own models assistant handled real that across been digital have models, say, use

and I we've agnostic, So be our mentioned, to own model. our build are to kind also Foundation we LLN architecture building tried as Polaris of

Leo Carpio

Last top the indicated what's what lot a you the X global restaurants crack chains? you've calls, getting given working and conversations? X of the pillar, think quarter -- roster the you're you top is with, do restaurant inbound you the the that of been in that point the then of And restaurants, to into need extra Okay.

Keyvan Mohajer

a increased the number of Well, that in has top we are the X and lot quarter-over-quarter. XX,

are winning logos. new yes, we So,

announced We all AI that the XXX surpassed it also also have disclosed recently believe the And we in we AI. with thing we together. for calls past, purely restaurants. remarks, we that processing are to mentioned we is going another inbound leader are We our during in and million that bring

So and restaurants we automotive and then beyond. products, power and power we TV not

We to demonstrate are those going service devices, at bring that customer going solutions we and to into the are CES.

So powered when our car, your driving talking that's you're your to AI. by already you're car

in the So why tune drive prices, you powering the the should to the talk It's line? to talk the by drive-thru of do agent navigation, basically the car, you sports the advance You to and into agent And before get ask of get it also restaurant, if your AI car. you And place you're order car to there. you radio, us. you actually course. agent talks stock for of the have your ask to to drive-thru control, can of able powered the be car all drive-thru, to weather, in restaurant. And

So be just it won't at demonstrate And food. limited ordering CES. that to we'll

of do all You tickets, commerce. can voice sorts book appointments, buy

Leo Carpio

again on Congrats quarter. right. All the

Operator

at further the program. you I'm does showing questions conference. participation concludes Thank This time. today's for no your this in

may disconnect. You now

SoundHound AI (SOUN) 12 Nov 242024 Q3 Earnings call transcript