Core Viewpoint - A class action securities lawsuit has been filed against SoundHound AI, Inc. alleging securities fraud that affected investors between May 10, 2024, and March 3, 2025 [1][2]. Group 1: Lawsuit Details - The complaint claims that SoundHound AI, Inc. made false statements regarding its internal controls over financial reporting, which impaired its ability to account for corporate acquisitions [2]. - It is alleged that the company overstated its remediation efforts concerning material weaknesses in its internal controls [2]. - The lawsuit indicates that SoundHound's reported goodwill following the Amelia Acquisition was inflated and would require correction [2]. - The company is expected to incur additional time and costs to properly account for the SYNQ3 and Amelia Acquisitions due to these weaknesses [2]. - The allegations suggest an increased risk of the company failing to file certain financial reports with the SEC in a timely manner [2]. - As a result, the company's public statements were deemed materially false and misleading throughout the relevant period [2]. Group 2: Next Steps for Investors - Investors who suffered losses during the specified timeframe have until May 27, 2025, to request appointment as lead plaintiff [3]. - Participation in the lawsuit does not require serving as a lead plaintiff, and there are no out-of-pocket costs for class members [3]. Group 3: Firm Background - Levi & Korsinsky, LLP has a history of securing hundreds of millions of dollars for shareholders and has extensive expertise in complex securities litigation [4]. - The firm has been recognized in ISS Securities Class Action Services' Top 50 Report for seven consecutive years as one of the leading securities litigation firms in the United States [4].

Financial Performance - Revenues for Q1 2025 reached $29,129,000, a significant increase of 151.5% compared to $11,594,000 in Q1 2024[17] - Operating expenses totaled $98,968,000 in Q1 2025, up from $40,123,000 in Q1 2024, reflecting a 146.2% increase[17] - Net income for Q1 2025 was $129,932,000, compared to a net loss of $33,009,000 in Q1 2024, marking a turnaround of $162,941,000[17] - The company reported a basic net income per share of $0.33 for Q1 2025, compared to a loss of $0.12 per share in Q1 2024[17] - For the three months ended March 31, 2025, the company reported a net income of $129.9 million, a significant improvement from a net loss of $33.0 million in the same period of 2024[23] - For the three months ended March 31, 2025, the net income attributable to common shareholders was $129.2 million, compared to a net loss of $33.4 million in the same period of 2024, representing a significant turnaround[168] - The basic net income per share for Q1 2025 was $0.33, while the diluted net income per share was $0.31, compared to a basic and diluted net loss per share of $(0.12) in Q1 2024[168] Assets and Liabilities - Total current assets increased to $295,051,000 as of March 31, 2025, up from $255,520,000 at the end of 2024, representing a growth of 15.5%[16] - Total liabilities decreased to $190,543,000 as of March 31, 2025, down from $371,300,000 at the end of 2024, a reduction of 48.7%[16] - Cash and cash equivalents rose to $245,809,000 as of March 31, 2025, compared to $198,240,000 at the end of 2024, an increase of 23.9%[16] - The total stockholders' equity increased to $396,993,000 as of March 31, 2025, up from $182,653,000 at the end of 2024, a growth of 117.8%[16] - The company had an accumulated deficit of $813.1 million as of March 31, 2025, highlighting ongoing financial challenges despite recent income[29] Cash Flow and Financing - The company experienced a net cash used in operating activities of $19.2 million for the three months ended March 31, 2025, compared to $21.9 million for the same period in 2024, indicating a slight improvement in cash flow management[23] - The company reported a net cash provided by financing activities of $67.0 million for the three months ended March 31, 2025, compared to $142.7 million in the same period of 2024, reflecting a decrease in financing activity[23] - Cash paid for interest was $2,000 for the three months ended March 31, 2025, a significant decrease from $3.5 million in the same period of 2024[25] - The company anticipates seeking additional funding through debt or equity financing arrangements to support ongoing operations[30] Acquisitions - The company completed the acquisition of Synq3, Inc. on January 3, 2024, and Amelia Holdings, Inc. on August 6, 2024, as part of its strategy to expand its technology offerings[28] - The Company acquired SYNQ3 for a total purchase consideration of $15.8 million, which includes $3.9 million in cash and 5,755,910 shares of Class A Common Stock[50] - The acquisition of SYNQ3 is expected to expand the Company's AI customer service solutions and significantly extend its market reach[50] - The Company acquired Amelia Holdings for a preliminary purchase consideration of $98.6 million, including 3,809,520 shares of Class A Common Stock and $8.4 million in cash[61] - The acquisition of Amelia is expected to strengthen the Company's position in voice and conversational AI and expand its market reach into new industries[60] Revenue Streams - The company generates revenues through three pillars: Product Royalties, Service Subscriptions, and Monetization, with the majority of current revenue coming from the first two pillars[203][211] - Revenue from hosted services reached $21.9 million, up 146.5% from $8.9 million in the prior year[94] - Service subscriptions generated $24.6 million, a substantial increase from $3.6 million in the same quarter of 2024[96] - The company recognized $10.3 million in revenue from deferred revenue at the beginning of the reporting period, compared to $1.9 million for the same period in 2024[99] Stock and Equity - The company issued 4,248,900 shares of Class A common stock under the Second Equity Distribution Agreement, raising $66,283,000[18] - The Company raised approximately $25.0 million in cash proceeds from the issuance of 835,011 shares of Series A Convertible Preferred Stock at $30.00 per share[130] - The total unrecognized stock-based compensation expense related to unvested RSUs was approximately $135.1 million as of March 31, 2025, expected to vest over a weighted average period of 2.82 years[161] - The total unrecognized stock-based compensation expense related to unvested Performance-Based RSUs was approximately $6.2 million as of March 31, 2025[160] Legal and Compliance - The company is involved in ongoing legal proceedings, including a settlement agreement requiring a payment of $1.8 million related to a litigation case[112] - The company recorded a liability of $2.8 million for potential sales tax exposure as of March 31, 2025, compared to $3.1 million as of December 31, 2024[116] Market Strategy and Outlook - The company expects monetization revenue to increase significantly in the future as it builds out and scales its voice-enabled ecosystem[208] - The company aims to provide a superior ecosystem with definable privacy controls, which are increasingly important in the Voice AI industry[198] - The company believes that its technology offers better terms for customers, allowing them to maintain brand control and innovate without outsourcing to third-party assistants[195] - The company anticipates that its disruptive three-pillar business model will create a monetization flywheel, increasing adoption and expanding its addressable market[208] - The company has expanded its global reach, localizing its solution to include 25 languages, indicating a strategy for international market development[213]

Core Viewpoint - The Gross Law Firm has issued a notice to shareholders of SoundHound AI, Inc. regarding a class action lawsuit due to alleged misleading statements and material weaknesses in financial reporting [1][3]. Summary by Relevant Sections Class Period and Allegations - The class period for the lawsuit is from May 10, 2024, to March 3, 2025 [3]. - Allegations include: - Material weaknesses in SoundHound's internal controls over financial reporting, affecting the company's ability to account for acquisitions [3]. - Overstatement of remediation efforts regarding these internal control weaknesses [3]. - Inflated reported goodwill following the Amelia Acquisition, which would require correction [3]. - Additional time and expense needed to account for the SYNQ3 and Amelia Acquisitions [3]. - Increased risk of failing to timely file financial reports with the SEC [3]. - Public statements made by the company were materially false and misleading [3]. Next Steps for Shareholders - Shareholders are encouraged to register for the class action by May 27, 2025, to participate in the case [4]. - Registration includes enrollment in a portfolio monitoring software for status updates throughout the case lifecycle [4]. Law Firm's Commitment - The Gross Law Firm aims to protect investors' rights and ensure companies adhere to responsible business practices [5]. - The firm seeks recovery for investors who suffered losses due to misleading statements or omissions that led to stock inflation [5].

Core Viewpoint - SoundHound AI reported strong revenue growth in Q1 2025 but continued to incur significant losses, leading to a stock decline due to revenue falling short of Wall Street expectations [2][3]. Financial Performance - Q1 2024 revenue was $11.6 million, while Q1 2025 revenue increased to $29.1 million, representing a 151% growth [3]. - GAAP operating income flipped from a loss of $28.5 million in Q1 2024 to a positive income of $128.1 million in Q1 2025 [3]. - GAAP net income also flipped from a loss of $33 million in Q1 2024 to a positive income of $129.9 million in Q1 2025 [3]. - Adjusted net income showed a widening loss from $20.2 million in Q1 2024 to $22.3 million in Q1 2025, a 10% increase in losses [3]. - GAAP earnings per share (EPS) improved from a loss of $0.12 to a profit of $0.31, while adjusted EPS narrowed its loss from $0.07 to $0.06 [3]. Cash Flow and Liquidity - The company used $19.2 million in cash for operations, slightly better than the negative $21.9 million in the same period last year [7]. - Free cash flow was negative $19.3 million, compared to negative $25.7 million in the prior year [7]. - SoundHound ended the quarter with $246 million in cash and cash equivalents and no long-term debt, with a cash burn rate that allows for approximately 12.7 quarters of operation [7]. Growth Strategy - Recent acquisitions have contributed to revenue growth, although the organic growth rate remains unclear [5]. - The company has diversified its customer base, with no single customer accounting for more than 10% of revenue in the quarter [5]. Future Guidance - For full-year 2025, revenue is expected to range from $157 million to $177 million, indicating an annual growth of 85% to 90% [9]. - The company aims to achieve positive adjusted EBITDA by the end of 2025, following a previous guidance that was not met [15][9]. Competitive Landscape - The conversational AI market is competitive, with significant players including large tech companies, raising questions about SoundHound's ability to grow revenue and achieve profitability [17][18].

Core Viewpoint - SoundHound AI, Inc. reported a quarterly loss of $0.06 per share, which was better than the Zacks Consensus Estimate of a loss of $0.07, indicating a positive earnings surprise of 14.29% [1] Financial Performance - The company posted revenues of $29.13 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 3.57%, but showing significant growth from $11.59 million in the same quarter last year [2] - Over the last four quarters, SoundHound AI has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - SoundHound AI shares have declined approximately 53.8% since the beginning of the year, contrasting with the S&P 500's decline of 4.3% [3] Future Outlook - The company's earnings outlook will be crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is -$0.06 on revenues of $37 million, and for the current fiscal year, it is -$0.16 on revenues of $165.76 million [7] Industry Context - The Computers - IT Services industry, to which SoundHound AI belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]

Financial Data and Key Metrics Changes - Q1 revenue was $29.1 million, representing a 151% year-over-year increase [28][33] - GAAP gross margin was 37%, down year-over-year, while non-GAAP gross margin was 51% [34] - Non-GAAP net loss was $22.3 million, with a non-GAAP net loss per share of 6 cents [39] Business Line Data and Key Metrics Changes - The number of active restaurants using Voice AI ordering solutions is nearing 13,000 locations, handling approximately 10 million interactions per quarter [30] - The company activated more than 1,000 new live restaurant locations in a single quarter, a tenfold increase compared to the previous year [29] - The automotive business is expected to grow, with a strong pipeline of new OEMs and a focus on voice commerce solutions [34][47] Market Data and Key Metrics Changes - The company is seeing balanced contributions across various industries, including automotive, restaurants, financial services, healthcare, and hospitality [46] - The automotive sector, which previously comprised 80% of the business mix, is now a low double-digit percentage, indicating diversification [49] Company Strategy and Development Direction - The company is focused on expanding its voice commerce ecosystem, leveraging existing restaurant and OEM networks to unlock new revenue opportunities [22][24] - The introduction of the AgenTic AI platform is expected to accelerate deployment and enhance customer value across various industries [52] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of AI momentum and business traction despite macroeconomic volatility [41][94] - The company reaffirmed its 2025 revenue guidance of $157 to $177 million, with expectations for sequential improvement in adjusted EBITDA [40][42] Other Important Information - The company has no debt and ended the quarter with $246 million in cash and equivalents [39] - Significant investments in R&D and sales and marketing were made, reflecting a commitment to growth and innovation [35][36] Q&A Session Summary Question: Contribution from different verticals - Management noted a balanced contribution across industries, with optimism about growth in automotive and restaurant sectors [46][47] Question: Maturity of AgenTic technology - Management clarified that while AgenTic is a newer concept, the company has been developing related technologies for over ten years, providing a competitive advantage [57][58] Question: Impact of economic conditions on restaurant business - Management indicated that both good and challenging economic conditions drive interest in their technology for efficiency and revenue generation [66] Question: Changes in competitive landscape - Management acknowledged increased competition but emphasized their technological maturity and established customer base as key differentiators [68] Question: Gross margin modeling for the year - Management stated that gross margin is expected to improve as the business mix shifts and automation is implemented [72][73] Question: Retention rates within Amelia - Management reported ongoing improvements in retention rates post-acquisition, with a focus on customer success and expanding use cases [78][80] Question: M&A environment and outlook - Management confirmed that no M&A is needed to achieve current outlook but remains open to strategic opportunities [84][89] Question: Economic macro environment as a revenue catalyst - Management believes that the generational shift in technology will continue to drive demand for their solutions, regardless of economic conditions [94][96]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $29.1 million, representing a 151% increase year over year [5][28][33] - GAAP gross margin was 37%, down year over year, primarily due to the impact of recent acquisitions [34] - Non-GAAP gross margin was 51%, adjusted for noncash amortization and employee stock compensation [34] - Non-GAAP net loss was $22.3 million, with a loss per share of 6 cents [39] Business Line Data and Key Metrics Changes - The number of active restaurants using Voice AI ordering solutions reached nearly 13,000 locations, handling approximately 10 million interactions per quarter [30][31] - The company activated over 1,000 new live restaurant locations in a single quarter, a tenfold increase compared to the previous year [29] - The automotive sector saw a relative softness this quarter due to macroeconomic uncertainties, but the company remains optimistic about future contributions from this vertical [46][48] Market Data and Key Metrics Changes - The company is experiencing balanced contributions across various industries, including automotive, restaurants, financial services, healthcare, and hospitality [45] - The automotive business, which previously comprised 80% of the company's revenue mix, is now a low double-digit percentage, indicating diversification [48] - The company is seeing strong momentum in the restaurant sector, with significant penetration in pizza and drive-thru operations [49] Company Strategy and Development Direction - The company is focused on leveraging its AI technology to drive innovation and efficiency across various sectors, including voice commerce and agentic AI [10][12][23] - The recent acquisitions are expected to enhance the company's capabilities and market position, particularly in the restaurant and automotive sectors [6][35] - The company aims to achieve adjusted EBITDA profitability by the end of 2025, with a commitment to disciplined cost management [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of AI momentum and business traction despite macroeconomic volatility [40][41] - The company is optimistic about the growth potential in voice commerce and the expansion of its serviceable markets [33][40] - Management noted that the trends in AI and voice technology are creating favorable conditions for business growth [26][41] Other Important Information - The company has a strong pipeline of new OEMs and is optimistic about the voice commerce solution's potential [34][39] - The company is actively working on improving retention rates and customer success following the acquisition of Amelia [72] Q&A Session Summary Question: How should the company think about the levels of business from different verticals? - The company has seen balanced contributions across industries, with optimism about growth in both automotive and restaurant sectors [45][46] Question: How mature are the AgenTic solutions being deployed? - The company has been developing agentic behavior for over ten years, and the solutions are now live and in production [55][56] Question: Could economic uncertainty impact the restaurant business? - The company believes that both good and challenging economic conditions drive interest in their technology for efficiency gains [61][62] Question: Have there been changes in the competitive landscape? - The company has seen more players enter the market but maintains a mature state in technology and customer integration [64][65] Question: How should investors model gross margin for the rest of the year? - The company expects gross margin improvements as it digests acquisitions and shifts its business mix [67][68] Question: What are the retention rates within Amelia? - The company is working to improve retention rates and has seen a pathway to strengthen gross retention and net retention [71][72]

SOUNDHOUND AI, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) | | | March 31, | | December 31, | | --- | --- | --- | --- | --- | | | | 2025 | | 2024 | | | | (Unaudited) | | | | ASSETS Current assets: | | | | | | Cash and cash equivalents | $ | 245,809 | $ | 198,240 | | Accounts receivable, net of allowances of $1,538 and $726 as of March 31, 2025 and December 31, 2024, respectively | | 20,177 | | 23,159 | | Contract assets and unbilled receivable, net | | 21,419 | ...

Core Viewpoint - A class action securities lawsuit has been filed against SoundHound AI, Inc. alleging securities fraud that affected investors between May 10, 2024, and March 3, 2025 [1][2]. Group 1: Allegations of Fraud - The lawsuit claims that SoundHound AI, Inc. made false statements regarding material weaknesses in its internal controls over financial reporting, which impaired its ability to account for corporate acquisitions [2]. - It is alleged that the company overstated its remediation efforts concerning these material weaknesses, leading to inflated reported goodwill following the Amelia Acquisition [2]. - The complaint indicates that SoundHound AI, Inc. would likely require additional time and resources to account for the SYNQ3 and Amelia Acquisitions due to these weaknesses [2]. - The lawsuit also suggests that these issues increased the risk of the company being unable to file certain financial reports with the SEC in a timely manner [2]. - As a result, the company's public statements were deemed materially false and misleading throughout the relevant period [2]. Group 2: Legal Process and Participation - Investors who suffered losses during the specified timeframe have until May 27, 2025, to request appointment as lead plaintiff, although participation in any recovery does not require this role [3]. - Class members may be entitled to compensation without incurring any out-of-pocket costs or fees, with no obligation to participate [3]. Group 3: Firm Background - Levi & Korsinsky, LLP has a history of securing hundreds of millions of dollars for shareholders and has been recognized as one of the top securities litigation firms in the United States for seven consecutive years [4].

Core Viewpoint - A securities class action lawsuit has been filed against SoundHound AI, Inc. for allegedly making false and misleading statements regarding its financial reporting and internal controls during the Class Period from May 10, 2024, to March 3, 2025 [1]. Group 1: Allegations Against SoundHound - The complaint claims that SoundHound had material weaknesses in its internal controls over financial reporting, which affected its ability to account for corporate acquisitions [3]. - It is alleged that SoundHound overstated its remediation efforts regarding these internal control weaknesses [3]. - The reported goodwill from the acquisition of Amelia Holdings, Inc. in August 2024 was inflated and would require correction due to these weaknesses [3]. - SoundHound is expected to incur additional time and costs to properly account for its acquisitions, including Amelia Holdings, Inc. and SYNQ3 [3]. - The issues raised increased the risk of SoundHound failing to file certain financial reports with the SEC in a timely manner [3]. - Overall, the public statements made by SoundHound were deemed materially false and misleading throughout the relevant period [3]. Group 2: Legal Process and Participation - Investors in SoundHound have until May 27, 2025, to seek appointment as a lead plaintiff representative in the class action [4]. - A lead plaintiff acts on behalf of all class members and is typically the investor or group of investors with the largest financial interest [4]. - The decision to serve as a lead plaintiff does not affect an investor's ability to share in any recovery from the lawsuit [4].