(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
| Exhibit Number | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL) | |||||||
| November 12, 2024 | SoundHound AI, Inc. | ||||||||||
| By: | /s/ Keyvan Mohajer | ||||||||||
| Name: | Keyvan Mohajer | ||||||||||
| Title: | Chief Executive Officer | ||||||||||
Three Months Ended (thousands, unless otherwise noted) | September 30, 2024 | September 30, 2023 | Change | ||||||||||||||||||||||||||
| Revenues | $ | 25,094 | $ | 13,268 | 89 | % | |||||||||||||||||||||||
| GAAP gross profit | $ | 12,193 | $ | 9,678 | 26 | % | |||||||||||||||||||||||
| GAAP gross margin | 48.6% | 72.9% | (24.3) | pp | |||||||||||||||||||||||||
| Non-GAAP gross profit | $ | 14,983 | $ | 9,776 | 53 | % | |||||||||||||||||||||||
| Non-GAAP gross margin | 59.7% | 73.7% | (14.0) | pp | |||||||||||||||||||||||||
| GAAP operating loss | $ | (33,767) | $ | (14,530) | 132 | % | |||||||||||||||||||||||
| Non-GAAP adjusted EBITDA | $ | (15,869) | $ | (7,308) | 117 | % | |||||||||||||||||||||||
| GAAP net loss | $ | (21,751) | $ | (20,197) | 8 | % | |||||||||||||||||||||||
| Non-GAAP net loss | $ | (14,958) | $ | (13,622) | 10 | % | |||||||||||||||||||||||
| GAAP net loss per share | $ | (0.06) | $ | (0.09) | $ | 0.03 | |||||||||||||||||||||||
| Non-GAAP net loss per share | $ | (0.04) | $ | (0.06) | $ | 0.02 | |||||||||||||||||||||||
Nine Months Ended (thousands) | September 30, 2024 | September 30, 2023 | ||||||||||||||||||
| Cash flows: | ||||||||||||||||||||
| Net cash used in operating activities | $ | (75,755) | $ | (54,395) | ||||||||||||||||
| Net cash used in investing activities | (12,292) | (334) | ||||||||||||||||||
| Net cash provided by financing activities | 115,445 | 155,175 | ||||||||||||||||||
| Effects of exchange rate changes on cash | (16) | — | ||||||||||||||||||
| Net change in cash and cash equivalents | $ | 27,382 | $ | 100,446 | ||||||||||||||||
Three Months Ended (thousands) | September 30, 2024 | September 30, 2023 | ||||||||||||||||||
GAAP gross profit1 | $ | 12,193 | $ | 9,678 | ||||||||||||||||
| Adjustments: | ||||||||||||||||||||
| Amortization of Intangibles | 2,691 | — | ||||||||||||||||||
| Stock-based compensation | 99 | 98 | ||||||||||||||||||
| Non-GAAP gross profit | $ | 14,983 | $ | 9,776 | ||||||||||||||||
| GAAP gross margin | 48.6% | 72.9% | ||||||||||||||||||
| Non-GAAP gross margin | 59.7% | 73.7% | ||||||||||||||||||
Three Months Ended (thousands) | September 30, 2024 | September 30, 2023 | ||||||||||||||||||
| GAAP net loss | $ | (21,751) | $ | (20,197) | ||||||||||||||||
| Adjustments: | ||||||||||||||||||||
Total other expense, net1 | (1,525) | 4,106 | ||||||||||||||||||
| Income taxes/(benefits) | (10,491) | 1,561 | ||||||||||||||||||
| Depreciation and amortization | 5,365 | 530 | ||||||||||||||||||
| Stock-based compensation | 9,060 | 6,692 | ||||||||||||||||||
| Change in fair value of contingent acquisition liabilities | (1,356) | — | ||||||||||||||||||
| Acquisition-related expenses | 4,829 | — | ||||||||||||||||||
| Non-GAAP adjusted EBITDA | $ | (15,869) | $ | (7,308) | ||||||||||||||||
Three Months Ended (thousands) | September 30, 2024 | September 30, 2023 | ||||||||||||||||||
| GAAP net loss attributable to SoundHound common shareholders | $ | (21,751) | $ | (20,844) | ||||||||||||||||
| Adjustments: | ||||||||||||||||||||
| Depreciation and amortization | 5,365 | 530 | ||||||||||||||||||
| Stock-based compensation | 9,060 | 6,692 | ||||||||||||||||||
| Change in fair value of contingent acquisition liabilities | (1,356) | — | ||||||||||||||||||
| Acquisition-related expenses | 4,829 | — | ||||||||||||||||||
| Income tax effects related to acquisitions | (11,105) | — | ||||||||||||||||||
| Non-GAAP net loss | $ | (14,958) | $ | (13,622) | ||||||||||||||||
GAAP net loss per share1 | (0.06) | (0.09) | ||||||||||||||||||
| Adjustments | 0.02 | 0.03 | ||||||||||||||||||
Non-GAAP net loss per share1 | (0.04) | (0.06) | ||||||||||||||||||
| September 30, 2024 | December 31, 2023 | ||||||||||
| (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 135,606 | $ | 95,260 | |||||||
Accounts receivable, net of allowances of $1,874 and $203 as of September 30, 2024 and December 31, 2023, respectively | 13,570 | 4,050 | |||||||||
Contract assets and unbilled receivable, net of allowance for credit losses of $118 and $17 of September 30, 2024 and December 31, 2023, respectively | 24,639 | 11,780 | |||||||||
| Other current assets | 7,394 | 2,452 | |||||||||
| Total current assets | 181,209 | 113,542 | |||||||||
| Restricted cash equivalents, non-current | 811 | 13,775 | |||||||||
| Right-of-use assets | 3,860 | 5,210 | |||||||||
| Property and equipment, net | 1,541 | 1,515 | |||||||||
| Goodwill | 111,730 | — | |||||||||
| Intangible assets, net | 182,579 | — | |||||||||
| Deferred tax asset | 30 | 11 | |||||||||
Contract assets and unbilled receivable, non-current, net of allowance for credit losses of $195 and $177 of September 30, 2024 and December 31, 2023, respectively | 14,596 | 16,492 | |||||||||
| Other non-current assets | 3,298 | 577 | |||||||||
| Total assets | $ | 499,654 | $ | 151,122 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 17,758 | $ | 1,653 | |||||||
| Accrued liabilities | 22,599 | 13,884 | |||||||||
| Operating lease liabilities | 1,832 | 2,637 | |||||||||
| Finance lease liabilities | 74 | 121 | |||||||||
| Income tax liability | 2,677 | 1,618 | |||||||||
| Deferred revenue | 20,096 | 4,310 | |||||||||
| Other current liabilities | 5,142 | — | |||||||||
| Total current liabilities | 70,178 | 24,223 | |||||||||
| Operating lease liabilities, net of current portion | 2,241 | 3,089 | |||||||||
| Deferred revenue, net of current portion | 7,570 | 4,910 | |||||||||
| Long-term debt | 39,694 | 84,312 | |||||||||
| Contingent acquisition liabilities (Note 17) | 74,450 | — | |||||||||
| Income tax liability, net of current portion | 5,004 | 2,453 | |||||||||
| Other non-current liabilities | 4,530 | 3,967 | |||||||||
| Total liabilities | 203,667 | 122,954 | |||||||||
| Commitments and contingencies (Note 7) | |||||||||||
| Stockholders’ equity: | |||||||||||
Series A Preferred Stock, $0.0001 par value; 1,000,000 shares authorized; 0 and 475,005 shares issued and outstanding, aggregate liquidation preference of $0 and $16,227 as of September 30, 2024 and December 31, 2023, respectively | — | 14,187 | |||||||||
Class A Common Stock, $0.0001 par value; 455,000,000 shares authorized; 336,481,401 and 216,943,349 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | 33 | 22 | |||||||||
Class B Common Stock, $0.0001 par value; 44,000,000 shares authorized; 32,735,408 and 37,485,408 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | 3 | 4 | |||||||||
| Additional paid-in capital | 980,150 | 606,135 | |||||||||
| Accumulated deficit | (684,461) | (592,379) | |||||||||
| Accumulated other comprehensive income | 262 | 199 | |||||||||
| Total stockholders’ equity | 295,987 | 28,168 | |||||||||
| Total liabilities and stockholders’ equity | $ | 499,654 | $ | 151,122 | |||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Revenues | $ | 25,094 | $ | 13,268 | $ | 50,150 | $ | 28,726 | |||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Cost of revenues | 12,901 | 3,590 | 22,550 | 7,396 | |||||||||||||||||||
| Sales and marketing | 8,363 | 4,471 | 19,560 | 14,424 | |||||||||||||||||||
| Research and development | 19,545 | 12,806 | 50,161 | 38,726 | |||||||||||||||||||
| General and administrative | 17,031 | 6,931 | 36,833 | 20,644 | |||||||||||||||||||
| Change in fair value of contingent acquisition liabilities | (1,356) | — | 1,724 | — | |||||||||||||||||||
| Amortization of intangible assets | 2,377 | — | 3,603 | — | |||||||||||||||||||
| Restructuring | — | — | — | 3,751 | |||||||||||||||||||
| Total operating expenses | 58,861 | 27,798 | 134,431 | 84,941 | |||||||||||||||||||
| Loss from operations | (33,767) | (14,530) | (84,281) | (56,215) | |||||||||||||||||||
| Other expense, net: | |||||||||||||||||||||||
| Loss on early extinguishment of debt | — | — | (15,587) | (837) | |||||||||||||||||||
| Interest expense | (1,109) | (5,442) | (10,859) | (11,273) | |||||||||||||||||||
| Other income (expense), net | 2,634 | 1,336 | 9,087 | (302) | |||||||||||||||||||
| Total other expense, net | 1,525 | (4,106) | (17,359) | (12,412) | |||||||||||||||||||
| Loss before provision for income taxes | (32,242) | (18,636) | (101,640) | (68,627) | |||||||||||||||||||
| Provision for income taxes | (10,491) | 1,561 | (9,558) | 2,307 | |||||||||||||||||||
| Net loss | $ | (21,751) | $ | (20,197) | $ | (92,082) | $ | (70,934) | |||||||||||||||
| Cumulative dividends attributable to Series A Preferred Stock | — | (647) | (416) | (2,206) | |||||||||||||||||||
| Net loss attributable to SoundHound common shareholders | $ | (21,751) | $ | (20,844) | $ | (92,498) | $ | (73,140) | |||||||||||||||
| Other comprehensive income: | |||||||||||||||||||||||
| Unrealized gains on investments | 57 | 168 | 63 | 197 | |||||||||||||||||||
| Comprehensive loss | $ | (21,694) | $ | (20,029) | $ | (92,019) | $ | (70,737) | |||||||||||||||
| Net loss per share: | |||||||||||||||||||||||
| Basic and diluted | $ | (0.06) | $ | (0.09) | $ | (0.28) | $ | (0.33) | |||||||||||||||
| Weighted-average common shares outstanding: | |||||||||||||||||||||||
| Basic and diluted | 360,385,812 | 242,022,268 | 326,166,633 | 222,760,880 | |||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Cash flows used in operating activities: | |||||||||||
| Net loss | $ | (92,082) | $ | (70,934) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation and amortization | 8,115 | 1,941 | |||||||||
| Stock-based compensation | 23,292 | 20,639 | |||||||||
| Loss on change in fair value of ELOC program | — | 1,901 | |||||||||
| Amortization of debt issuance cost | 1,586 | 3,532 | |||||||||
| Non-cash lease amortization | 2,218 | 2,383 | |||||||||
| Foreign currency gain/loss from remeasurement | (97) | — | |||||||||
| Change in fair value of contingent acquisition liabilities | 1,724 | — | |||||||||
| Loss on early extinguishment of debt | 15,587 | 837 | |||||||||
| Deferred income taxes | (11,494) | — | |||||||||
| Other, net | 633 | 262 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable, net | (1,247) | 38 | |||||||||
| Other current assets | (3,049) | (461) | |||||||||
| Contract assets | (7,018) | (9,987) | |||||||||
| Other non-current assets | (1,198) | 690 | |||||||||
| Accounts payable | 823 | (635) | |||||||||
| Accrued liabilities | (2,058) | 1,906 | |||||||||
| Other current liabilities | 331 | — | |||||||||
| Operating lease liabilities | (2,612) | (2,772) | |||||||||
| Deferred revenue | (8,993) | (5,532) | |||||||||
| Other non-current liabilities | (216) | 1,797 | |||||||||
| Net cash used in operating activities | (75,755) | (54,395) | |||||||||
| Cash flows used in investing activities: | |||||||||||
| Purchases of property and equipment | (560) | (334) | |||||||||
| Payment related to acquisitions, net of cash acquired | (11,732) | — | |||||||||
| Net cash used in investing activities | (12,292) | (334) | |||||||||
| Cash flows provided by financing activities: | |||||||||||
| Proceeds from the issuance of Series A Preferred Stock, net of issuance costs | — | 24,942 | |||||||||
| Proceeds from sales of Class A common stock under the ELOC program, net of issuance costs | — | 71,454 | |||||||||
| Proceeds from sales of Class A common stock under the Sales Agreement and Equity Distribution Agreement | 287,271 | — | |||||||||
| Proceeds from exercise of stock options and employee stock purchase plan | 11,064 | 8,837 | |||||||||
| Payment of financing costs associated with the Sales Agreement and Equity Distribution Agreement | (7,182) | — | |||||||||
| Proceeds from the issuance of debt, net of issuance costs | — | 85,087 | |||||||||
| Payments on Term Loan and Amelia Debt | (175,602) | (35,029) | |||||||||
| Payment to settle contingent holdback liabilities from SYNQ3 acquisition | (17) | — | |||||||||
| Payments on finance leases | (89) | (116) | |||||||||
| Net cash provided by financing activities | 115,445 | 155,175 | |||||||||
| Effects of exchange rate changes on cash | (16) | — | |||||||||
| Net change in cash, cash equivalents, and restricted cash equivalents | 27,382 | 100,446 | |||||||||
| Cash, cash equivalents, and restricted cash equivalents, beginning of period | 109,035 | 9,475 | |||||||||
| Cash, cash equivalents, and restricted cash equivalents, end of period | $ | 136,417 | $ | 109,921 | |||||||
| Reconciliation to amounts on the condensed consolidated balance sheets: | |||||||||||
| Cash and cash equivalents | $ | 135,606 | $ | 96,146 | |||||||
| Non-current portion of restricted cash equivalents | 811 | 13,775 | |||||||||
Total cash, cash equivalents, and restricted cash equivalents shown in the condensed consolidated statements of cash flows | $ | 136,417 | $ | 109,921 | |||||||
| Supplemental disclosures of cash flow information: | |||||||||||
| Cash paid for interest | $ | 4,448 | $ | 7,945 | |||||||
| Cash paid for income taxes | $ | 1,677 | $ | 1,645 | |||||||
| Noncash investing and financing activities: | |||||||||||
| Conversion of Series A Preferred Stock to Class A common stock | $ | 14,187 | $ | 10,555 | |||||||
| Issuance of Class A Common Stock to settle commitment shares related to the ELOC program | $ | — | $ | 915 | |||||||
| Issuance of Class A Common Stock to settle obligations under Amelia Debt | $ | 11,817 | $ | — | |||||||
| Issuance of Class A Common Stock to settle contingent holdback consideration of SYNQ3 acquisition | $ | 189 | $ | — | |||||||
| Deferred offering costs reclassified to additional paid-in capital | $ | 220 | $ | — | |||||||
| Non-cash debt discount | $ | — | $ | 4,136 | |||||||
| Property and equipment acquired under accrued liabilities | $ | 62 | $ | — | |||||||
| Fair value of Class A common stock and deferred equity consideration issued for SYNQ3 acquisition | $ | 9,687 | $ | — | |||||||
| Fair value of contingent earnout consideration under SYNQ3 and Amelia acquisitions | $ | 73,236 | $ | — | |||||||
| Fair value of contingent holdback consideration under SYNQ3 acquisition | $ | 427 | $ | — | |||||||
| Fair value of deferred cash consideration under other acquisition | $ | 195 | $ | — | |||||||