SoundHound AI(SOUN) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Q4 2024 revenue reached $35 million, representing over 100% year-over-year growth, achieving the top-end of the revenue guidance range for the full year [7][39] - Full-year revenue grew by 85%, totaling$ 85 million [39] - Cumulative subscriptions and bookings backlog reached nearly $1.2 billion, up over 75% year-over-year [44] - GAAP gross margin was 40%, down year-over-year, while non-GAAP gross margin was 52% [54] - Non-GAAP net loss was$ 19 million, with a non-GAAP net loss per share of $0.05 [66] Business Line Data and Key Metrics Changes - Automotive unit growth was impacted by macro pressures, but projections for 2025 indicate continued strong growth [51] - Significant growth in the restaurant sector, with major customers like Burger King going live in the UK [17][52] - Expansion in healthcare with notable wins including Duke Health and Englewood Health [16] - New industry entry in energy with a large electric utility contract [20][41] Market Data and Key Metrics Changes - Company works with 30% of top quick-service restaurants and 70% of top financial institutions globally [40] - Customer concentration improved, with the largest customer representing slightly over 14% of revenue in 2024, down from nearly half in 2023 [42][53] Company Strategy and Development Direction - Company has introduced a three-pillar business strategy: voice assistant, AI customer service, and voice commerce ecosystem [11][37] - Focus on expanding into new verticals beyond restaurants, including healthcare, financial services, government, military, and energy [108] - Emphasis on leveraging Agentic AI to enhance capabilities and drive efficiencies [21][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory, expecting revenue in 2025 to range from$ 157 million to $177 million [69] - Anticipated ramp in revenue throughout the year, with a shift towards more predictable recurring revenue streams [70] - Commitment to achieving adjusted EBITDA profitability by the end of 2025 [72] Other Important Information - Company showcased innovations at CES, including collaborations with major partners like NVIDIA and Lucid Motors [27][28] - Strong presence in the automotive sector with ongoing POCs and partnerships with multiple OEMs [15][94] Q&A Session Summary Question: Recent breakthroughs in AI model efficiency - Management confirmed that advances in AI models allow for improved accuracy and reduced costs, with potential for edge computing [76][78] Question: Details on backlog duration and verticals - Backlog duration is slightly over six years, with balanced growth across automotive, restaurant, healthcare, and energy sectors [81][82] Question: Typical time to revenue for POCs - POCs can be executed quickly, especially in automotive, with revenue generation linked to unit shipments [92][96] Question: Economic impact of the new energy deal - The energy deal is multi-year with accelerated cash collection, indicating strong economic benefits [104][105] Question: Prioritization of secondary verticals - Company prioritizes based on potential customer benefits and market opportunities, leveraging existing technology across multiple sectors [123][125]