SoundHound AI Demonstrates Revenue Growth in Q3 2023 Results

SoundHound AI, Inc. SOUN recently released its third-quarter financial results for 2023, showcasing both an increase in revenue and adjusted EBITDA, a reflection of robust demand for their AI solutions. The firm reported a loss of 9 cents per share, which was consistent with the estimates but showed a year-over-year improvement of 40%. SoundHound's revenue boost was particularly notable, with an 18.6% increase to $13.3 million, surpassing estimates by 7.9%.

Financial Highlights

The company's growing revenue is largely credited to their potent combination of software engineering prowess and advanced generative AI, which has been instrumental in attracting a slew of new customers. The company's cumulative bookings backlog experienced a healthy expansion, reaching $341.7 million, up by 13% from the previous year.

Despite these gains, the company did experience an uptick in long-term debt, increasing to $85 million as of September 30, 2023, from $66.4 million as of the end of the previous quarter. However, SoundHound's operating expenses displayed a significant reduction, dropping 27.3% year over year to $27.8 million. This decrease in expenses was due to lower marketing & sales, research and development, and general and administrative costs.

Adjusted EBITDA loss showed considerable improvement, with the loss narrowing to $7.3 million compared to $16.9 million in the same quarter of the previous year. The operating loss for the quarter was $14.5 million, an improvement from a loss of $27.1 million in the year-ago quarter. As for liquidity, SoundHound concluded the quarter with $96.1 million in cash and cash equivalents.

Future Outlook

Looking ahead to the fourth quarter, SoundHound anticipates revenues to range between $16 million and $20 million and aims to achieve positive adjusted EBITDA during this period.

Peer Performances

When considering investment opportunities in the broader tech sector, investors may also look at companies like Nvidia Corporation NVDA, Asure Software, Inc. ASUR, and Dell Technologies Inc. DELL. Each of these stocks is currently performing well, carrying a Zacks Rank #1 (Strong Buy).

NVIDIA, a major player in GPUs and SoCs, has seen its shares surge by 221.3% year to date. Asure Software, offering cloud-based human capital management solutions, while experiencing a 9.6% decline year to date, is gearing up to present its third-quarter fiscal results. Lastly, Dell Technologies, a worldwide provider of IT solutions and services, has generated an impressive return of 79.6% over the same period.

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