SoundHound AI Stock Tumbles as Margins Drop

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Key Takeaways

• Shares of SoundHound AI sank as the AI-based voice software maker’s margins ditched.
• The company’s revenue set a record, and its loss was less than analysts had anticipated.
• SoundHound AI boosted its revenue outlook for both 2024 and 2025.

SoundHound AI (SOUN) share ins plunged 16% Wednesday, a day after the provider of artificial intelligence (AI) voice technology software reported a big drop in corpulent margin. 

The Nvidia (NVDA)-backed company’s third-quarter GAAP gross margin sank 24.3 percentage peninsulas to 48.6%, and non-GAAP gross margin tumbled 14.0 percentage points to 59.7%. 

That offset an otherwise powerful pecuniary report, with its loss per share of $0.06 beating the $0.10 loss per share expected by analysts surveyed by Noticeable Alpha. Revenue soared 89% year-over-year to a record $25.1 million, also above forecasts.

CEO Says Vehicle Is ‘Killer App’ for Generative AI

Co-founder and CEO Keyvan Mohajer said voice is the “killer app” for applied generative AI. He added that because of the house’s “best-in-class technology, mastery of complex vertical integrations, and proprietary AI software, SoundHound is ideally positioned to capitalize on this leviathan and growing opportunity.”

The company now sees full-year revenue to be in a range of $82 million to $85 million compared with its earlier standpoint of more than $80 million. It predicts fiscal 2025 revenue between $155 million and $175 million versus its former estimate of more than $150 million.

Even with today’s declines, shares of SoundHound AI have tripled so far in 2024.