SoundHound AI Shares Soar on Strong Q1 Results and Raised Outlook

SoundHound AI's shares surged 19% after reporting Q1 2024 results that beat analyst expectations, with revenue up 73% year-over-year to $11.6 million. The company raised its full-year 2024 revenue guidance range to $65 million to $77 million, driven by expanding market presence and operational efficiency.

author-image
Trim Correspondents
New Update
SoundHound AI Shares Soar on Strong Q1 Results and Raised Outlook

SoundHound AI Shares Soar on Strong Q1 Results and Raised Outlook

SoundHound AI Inc (NASDAQ: SOUN) shares surged over 19% on Wednesday after the company reported impressive first-quarter 2024 results that beat analyst expectations. The voice-enabled AI technologies innovator posted revenue of $11.6 million, a 73% year-over-year increase, exceeding the average analyst estimate of $10.1 million. SoundHound AI also narrowed its non-GAAP net loss per share to 7 cents, in line with analysts' mean outlook.

Why this matters: The surge in SoundHound AI's shares reflects growing investor confidence in the company's ability to capitalize on the rapidly evolving voiceAI market, which has significant implications for various industries. As voice AI technology becomes increasingly integral to customer service and other applications, companies like SoundHound AI are poised to play a critical role in shaping the future of AI adoption.

The strong revenue growth was driven by expanding market presence and operational efficiency. SoundHound AI ended the quarter with a robust cash balance of $226 million, which will help sustain operations and fuel future growth and R&D investments. The company also raised the lower end of its full-year 2024 revenue guidance range to $65 million to $77 million, reflecting confidence in its growth trajectory.

CEO Keyvan Mohajer stated, "Voice AI is quickly becoming a must-have tool for customer service, and that's reflected in the demand we're seeing for subscriptions." SoundHound AI made several new deals in the quarter, including partnerships with Church's Chicken and Applebee's. The company also collaborated with Nvidia to deliver in-vehicle voice-enabled generative AI responses. Stellantis is using SoundHound's voice AI technology in vehicles in Japan.

Despite the strong results, SoundHound AI's valuation remains elevated, with a price-to-sales ratio of nearly 24 times and an enterprise value-to-revenue ratio of 33.4 times. However, shares of SOUN stock have risen about 25% in the past month and over 170% year-to-date in 2024, reflecting investor optimism in the company's growth prospects.

SoundHound AI's Q1 performance comes amid a broader surge in USstock marketindex futures, driven by expectations of interest rate cuts. Shares of other companies reporting strong results, such asGen Digital,Taiwan Semiconductor Manufacturing, andVictoria's Secret, also rose on Friday. As the voice AI market rapidly evolves, SoundHound AI appears well-positioned to capitalize on the growing demand for voice-enabled solutions across industries.