SoundHound AI Secures New Financing to Strengthen Balance Sheet; Pre-Announces Outperformance
SoundHound AI, a global leader in voice artificial intelligence, announced further steps to strengthen its balance sheet and fully fund its business plan in anticipation of being GAAP operating cash flow positive by the end of 2023.
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On Friday, January 20, the Company closed $25 million in preferred equity financing. The oversubscribed financing includes investments from a diverse set of financial and strategic investors, both from the current shareholder base and new capital providers. The preferred equity is convertible into shares of Class A common stock under certain circumstances, including automatic conversion on or after the one year anniversary of the issuance date if certain price conditions are met. Refer to the Current Report on Form 8-K filed on January 24, 2023 for more information regarding the terms of the preferred equity.
The Company is also in the process of refinancing its current debt with a new minimally dilutive facility that is expected to provide incremental capital and defer current amortization payments.
When combined with recent cost reductions that are expected to result in operating cost savings in excess of $60 million, the announced financing plan provides robust liquidity for the company to achieve its business plan.
Additionally, SoundHound pre-announces strong preliminary 2022 results with revenue of approximately $31 million, at the high-end of its prior guidance, and gross margins in excess of 70%1. The Company expects revenue growth in 2023 to accelerate to approximately 50% year-over-year due to its strong customer base, well over $300 million bookings foundation, and increasing demand for its voice AI-enabled customer service products. Full year 2022 results and 2023 formal guidance will be released with the company’s upcoming earnings announcement.
In the past year, SoundHound has announced a number of key partnerships and integrations, including an agreement with Qualcomm to bring SoundHound voice AI to its Snapdragon platforms, an expanded partnership with Snap, and new deals with VIZIO, Square and Toast. SoundHound also signed a multi-year agreement with Hyundai, and announced an expansion of the Company’s Stellantis relationship in Europe, as well as a series of collaborations in the automotive space, including with LG, HARMAN International, DPCA, and DMI.
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SoundHound believes that burgeoning market demand and significant advances in technology are creating the conditions for an explosion in conversational AI, and SoundHound’s next-generation products and services are at the center of this revolution.
SoundHound , a leading innovator of conversational intelligence, offers an independent voice AI platform that enables businesses across industries to deliver best-in-class conversational experiences to their customers. Built on proprietary Speech-to-Meaning® and Deep Meaning Understanding® technologies, SoundHound’s advanced voice AI platform provides exceptional speed and accuracy and enables humans to interact with products and services like they interact with each other—by speaking naturally. SoundHound is trusted by companies around the globe, including Hyundai, Mercedes-Benz, Pandora, Qualcomm, Netflix, Snap, Square, LG, VIZIO, KIA, and Stellantis
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