SoundHound AI(US:SOUN) The Motley Fool·2024-11-17 21:15Financial Performance - SoundHound AI reported a 89% year-over-year revenue increase to $25 1 million in Q3, surpassing analyst expectations of $23 million [2] - The company's adjusted EPS improved to a loss of $0 04, better than the $0 06 loss a year ago and the $0 07 loss expected by analysts [2] - SoundHound raised its full-year revenue guidance for 2024 to $82-85 million from over $80 million, and for 2025 to $155-170 million from over $150 million [7] Business Growth - Cumulative subscriptions and bookings backlog doubled year-over-year, exceeding $1 billion including the Amelia acquisition, with an average contract duration of six years [3] - The company achieved double-digit growth in both automotive unit volume and unit pricing, while transitioning to more SaaS-like revenue streams [4] - SoundHound expanded its restaurant vertical, securing seven of the top 20 quick-service operators and signing a new deal with a top-three global pizza chain [5] Strategic Developments - The acquisition of Amelia enabled SoundHound to enter new verticals including telecom, healthcare, insurance, retail, and banking, while renewing contracts with a US military branch and a major payment card services company [6] - The company is integrating Amelia's technology to address gaps and expand into more verticals, potentially divesting lower-margin business segments [8] - SoundHound is developing its Polaris foundation model, built on billions of real conversations, with plans to incorporate Amelia's data to enhance future AI models [9] Market Position and Valuation - SoundHound's stock has risen approximately 200% year-to-date despite the recent dip following Q3 results [1] - The company trades at a forward price-to-sales multiple of 15 times 2025 analyst estimates, which is not considered particularly cheap [10][11] - SoundHound is positioned as a speculative growth stock with significant potential to become an AI voice ecosystem leader across industries [12]