SoundHound AI, Inc. Q2 FY2025 earnings call

Key managerial messages and operational highlights:

• Strong Quarter: Q2 was the all-time strongest with $43M revenue, up 217% YOY.
• Acquisitions: Acquisitions integrated successfully, turning them into growth engines; net revenue retention jumped from <90% pre-acquisition to >120% post-acquisition.
• Polaris Model: SoundHound's Polaris foundation model drives accuracy, speed, and cost savings, with over 3B queries per quarter.
• Agentic AI: Launched Amelia 7, an advanced agentic AI platform, with 15 large enterprise customers migrating to it.
• Voice Commerce: Developing an ecosystem for seamless transactions in vehicles and devices, with pilots and POCs in progress.
• Customer Highlights: Expanded relationships with Fast Casual, IHOP, Red Lobsters; won new automotive and healthcare customers; signed with leading financial institutions and retailers.

In Q2 2025, SoundHound achieved $43 million in revenue, a 217% year-over-year increase. Segment performance:

• Enterprise AI: Contributed significantly, with growth across verticals like financial services, healthcare, etc.
• Automotive: Saw strong growth, including a major win in China with a prominent auto brand.
• Restaurants: Scaled rapidly with over 14,000 locations using Voice AI ordering solutions, adding 1,000 locations and 1 million new interactions in Q2, maintaining market leadership.

Management's forward-looking guidance:

• Revenue Outlook: Increased 2025 revenue guidance to $160M-$178M, driven by momentum in all pillars.
• Lumpiness: Acknowledges potential lumpy nature of major deals but expects continued strong growth in the second half.
• Acquisitions: Guidance does not include potential future acquisitions, based on current in-house operations.

Discussed risks:

• Tariffs: Secondary impact from tariffs on auto shipments affecting royalty-based revenue.
• Regulations: Potential regulations impacting AI selling processes and pricing optimization.

Q: How to rank vertical contributions to sequential growth?

A: Keyvan Mohajer states momentum is across the board, with enterprise leading, restaurants scaling, and auto showing global growth, driven by cross-sector product integration.

Q: Opportunities to improve selling process or optimize pricing?

A: Keyvan mentions using AI internally to improve processes, with exploration of outbound sales and marketing but noting regulatory considerations.

Q: 3Q vs 4Q revenue modeling and key growth drivers in second half?

A: Keyvan expects Q4 to be bigger than Q3, with growth driven by Amelia software sales, phone ordering, professional services, and continued cross-sector growth.

Q: Voice Commerce update and royalty opportunity in auto?

A: Voice Commerce has indirect revenue impact via flywheel effect, and auto royalty opportunities come from cloud services, edge solutions, Generative AI, and Voice Commerce, with tariffs having secondary impact.

Q: QSR vertical and larger opportunities like McDonald's?

A: SoundHound works with 7 of the top 20 QSRs, sees significant scale opportunity, and differentiates via agility, custom solutions, and Voice Commerce.