SoundHound AI(SOUN) - 2024 Q4 - Annual Report

Financial Performance - The consolidated revenues for the year ended December 31, 2024, were $84.7 million[434] - For the year ended December 31, 2024, revenues increased to $84.693 million, up 84.5% from $45.873 million in 2023[458] - The net loss for 2024 was $350.681 million, compared to a net loss of $88.937 million in 2023, reflecting a substantial increase in losses[458] - The company reported a net loss of $(88,937) thousand for the year ended December 31, 2023[462] - The net loss for SoundHound AI, Inc. was $350.681 million for the reporting period[466] - The net loss for the year ended December 31, 2024 was $(374.469) million, significantly higher than the $(158.339) million loss in 2023[594] Assets and Liabilities - Total assets increased to $553.953 million in 2024, up from $151.122 million in 2023, showcasing significant growth in the company's asset base[455] - The company’s total liabilities increased to $371.300 million in 2024 from $122.954 million in 2023, indicating a rise in financial obligations[455] - As of December 31, 2024, total stockholders' equity was reported at $182.653 million, with an accumulated deficit of $943.060 million[465] - The company had an accumulated deficit of $943.1 million as of December 31, 2024[482] Cash Flow and Liquidity - Cash and cash equivalents rose to $198.240 million as of December 31, 2024, compared to $95.260 million in 2023, indicating improved liquidity[455] - Total cash, cash equivalents, and restricted cash equivalents at the end of 2024 were $198.9 million, up from $109.0 million in 2023[471] - The company incurred net cash used in operating activities of $108.9 million in 2024, compared to $68.3 million in 2023[469] - The company had net cash provided by financing activities of $210.9 million in 2024, compared to $168.2 million in 2023[469] Acquisitions - The Company completed the acquisition of Amelia Holdings, Inc. for total consideration of $98.6 million, with $98.9 million of developed technology and $68.6 million of customer relationships recorded as intangible assets[439] - The company completed the acquisition of Synq3, Inc. on January 3, 2024, and Amelia Holdings, Inc. on August 6, 2024, in cash and stock transactions[481] - The Company acquired SYNQ3 for a total purchase consideration of $15.8 million, which included $3.9 million in cash and 5,755,910 shares of Class A Common Stock[562] - The total purchase price for the acquisition was $98.608 million, which included cash paid of $8.420 million and contingent earnout consideration of $66.269 million[586] Stock and Equity - The weighted-average common shares outstanding increased to 338,462,574 in 2024 from 229,264,904 in 2023, indicating dilution due to increased share issuance[458] - The total shares outstanding as of December 31, 2023, was 216,943,349[462] - The total number of common stock shares issued after the Business Combination was 196,503,710, including 11,300,000 shares from the PIPE Investment[560] - The Company has authorized the issuance of 500,000,000 shares of capital stock, including 455,000,000 shares of Class A Common Stock and 44,000,000 shares of Class B Common Stock[550] Research and Development - Research and development expenses for 2024 were $70.555 million, up from $51.439 million in 2023, reflecting the company's commitment to innovation[458] - The Company aims to enhance its Generative AI Foundation Model and expand the platforms for its voice AI technology[13] - The Company is focused on launching new product offerings and expanding its information and technology capabilities[14] Risks and Challenges - The Company faces risks related to the integration of recent acquisitions and the effectiveness of internal controls over financial reporting, which were found to have material weaknesses[425] - The Company is exposed to market risks primarily due to fluctuations in foreign currency exchange rates[416] - The Company expects to continue incurring substantial losses in the foreseeable future, primarily funded through equity or debt financings[482] Revenue Recognition and Accounting - The Company has identified significant judgment in revenue recognition processes, impacting financial reporting[434] - The Company recognizes revenue under ASC 606 when a customer obtains control of promised goods or services, reflecting the consideration expected to be received[512] - The Company estimates expected credit losses based on historical experience and relevant information, adjusting the allowance for credit losses through earnings[494] Stock-Based Compensation - Stock-based compensation expenses amounted to $33.145 million[466] - The company reported stock-based compensation of $33.1 million in 2024, compared to $27.9 million in 2023[469] - The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options, requiring subjective assumptions such as expected term and price volatility[523] Audit and Compliance - The company has been audited by PricewaterhouseCoopers LLP since 2023, ensuring compliance with U.S. federal securities laws[442] - The Company has not declared or paid dividends to date and does not anticipate declaring dividends, resulting in an expected dividend yield of zero[525]