SoundHound Stock Drops Despite Beating Analyst Expectations and Teasing Generative AI Chatbot
- SoundHound reported a 2022 fourth-quarter earnings loss of $0.15, beating the predicted $0.17 loss.
- SoundHound’s $9.5 million in revenue was also above the $8.8 million anticipated by analysts.
- SoundHound projected a 2023 revenue of between $43 million and $50 million, with analyst projections of $46.1 million landing in the middle.
- SoundHound previewed a generative AI audio assistant called SoundHound ChatAI to be announced soon.
SoundHound (SOUN) beat stock analyst expectations in both revenue and earnings but saw its stock price dip in the wake of the financial report. The voice AI firm reported a loss of $.015, two cents better than predicted, and $9.5 million in revenue, beating the $8.8 million anticipated. Nonetheless, SoundHound’s stock price fell from $3.09 Wednesday morning to $2.21 at the end of Thursday. The same thing happened to the stock last quarter before it eventually rallied in February. SoundHound has been undergoing major changes even as it pushes out new and updated features. The company raised $25 million in equity financing from an unknown set of investors, but only after reducing staff from around 450 to 200 people in two rounds of layoffs.
“We closed 2022 on a strong note, and we are entering 2023 in a position of strength. Customer engagement is robust, we are rolling out waves of industry-defining innovations, and the market demand for our solutions is high,” SoundHound CFO Nitesh Sharan said in a statement. “We have taken the necessary steps to significantly improve our operating efficiency, strengthen our financial foundation, and we have a clear line of sight to near-term profitability and sustained long-term growth.”
With a goal of reaching profitability this year, SoundHound has begun combining its tech with generative AI, an area that has exploded in popularity in recent months. SoundHound recently updated its Dynamic Interaction conversational AI feature with generative AI in a manner designed to evoke OpenAI’s ChatGPT generative AI chatbot. SoundHound is continuing that effort with plans for a generative AI chat service called SoundHound ChatAI. The new software will be employed for both enterprise and consumer use and leverage multiple large language models.
“[SoundHound ChatAI] ushers in a new phase of bot-enabled conversational AI that used to only exist in science fiction. By combining the power of software engineering and machine learning regenerative AI, we can finally deliver the visual assistant experience that users have been desiring for decades,” Mohajer said during the earnings call. “To really deliver this ultimate assistant experience, you need to have the generative AI large language models, and you need to have the existing assistant domains that people demand, with a voice interface on top of it, and there’s only a handful of companies that can take advantage of the situation and SoundHound is the most agile because we are able to move pretty fast.”