SANTA CLARA, Calif. - SoundHound AI , Inc. (NASDAQ: NASDAQ:SOUN), known for its voice AI solutions, has acquired Amelia, an enterprise AI software firm, for $80 million in cash and equity. The transaction, which includes a partial payment and assumption of Amelia's debt, plus potential future earnouts, is expected to position SoundHound AI as a dominant force in the voice and conversational AI market.
The acquisition, announced today, brings together SoundHound AI’s voice AI technology with Amelia’s enterprise AI capabilities, aiming to serve a broad array of industries, including finance, healthcare, and retail. With this move, SoundHound AI intends to expand its customer service offerings, leveraging Amelia's established relationships with multinational corporations and its recognition as a leader in conversational AI by Gartner (NYSE:IT) for two consecutive years.
The combined entity will have nearly 200 marquee customers, with no single client accounting for more than 10% of total revenue. The company forecasts that its combined revenue in 2025 will surpass $150 million, with Amelia contributing over $45 million in recurring AI software revenue.
The deal is anticipated to be accretive to SoundHound AI’s earnings in the second half of 2025, with significant revenue and cost synergies expected to drive growth and profitability in the following years. At closing, the combined company will have approximately $160 million in cash and $39 million in debt.
SoundHound AI’s CEO and Co-Founder, Keyvan Mohajer, expressed enthusiasm for the acquisition, citing a shared passion for AI-driven customer support solutions. Lanham Napier, President of Amelia and Co-Founder of BuildGroup, also voiced optimism about the combined company's potential to lead in the conversational AI customer support space.
This article is based on a press release statement.
In other recent news, SoundHound AI, a voice artificial intelligence technology company, has been making significant strides in its business operations and financial performance. The company reported a robust 73% surge in revenue, with earnings surpassing $11 million. It also raised its full-year revenue guidance to between $65 million and $77 million, indicating confidence in its future performance.
SoundHound AI announced a partnership with Beef 'O' Brady's, a family sports pub franchise, to implement an AI-powered voice ordering system. This technology is designed to handle high call volumes and multiple orders simultaneously, enhancing the efficiency of the ordering process. The company also recently acquired Allset, an online ordering platform, as part of its expansion strategy within the restaurant sector.
In terms of financial developments, SoundHound AI has prepaid its $100 million debt in full, thereby augmenting its cash reserve to about $180 million. The company also converted all its series A preferred stock into class A common stock, resulting in approximately 2,134,631 new shares of common stock. These financial maneuvers underscore SoundHound AI's commitment to financial stability and growth.
Furthermore, SoundHound AI has set a target to achieve adjusted EBITDA profitability by 2025. The company's financial health is further evidenced by a backlog of $682 million, indicative of customer commitment and long-term contracts.
InvestingPro Insights
As SoundHound AI, Inc. (NASDAQ: SOUN) embarks on its strategic acquisition of Amelia, investors and industry watchers are keenly observing the company's financial health and market performance. The recent deal aligns with SoundHound's growth trajectory and its efforts to cement its place in the voice and conversational AI market. Here are some insights from InvestingPro that shed light on the company's current financial landscape:
SoundHound AI holds a market capitalization of $1.42 billion, signaling a strong presence in the market. Despite facing challenges in profitability, with an adjusted P/E ratio in the last twelve months as of Q1 2024 at -15.13, the company showcases a robust revenue growth of 51.31% in the same period. This growth narrative is further bolstered by a significant quarterly revenue increase of 72.86% in Q1 2024, underpinning the company's potential for scalability and expansion, particularly following the Amelia acquisition.
InvestingPro Tips highlight that analysts are optimistic about the company's sales growth in the current year, which is a positive sign for potential investors considering the company's ambitious revenue forecasts post-acquisition. Moreover, SoundHound AI's liquidity position is strong, with more cash than debt on its balance sheet, and liquid assets exceeding short-term obligations, providing the company with a solid foundation for managing its financial commitments and investing in growth opportunities.
It's noteworthy that the stock has experienced significant volatility, with a large price uptick over the last six months, showing a 120.51% return. This volatility reflects the dynamic nature of the tech sector and the market's reaction to SoundHound AI's strategic moves and performance indicators. For those interested in a deeper dive into the company's prospects, InvestingPro offers additional tips, including a total of 11 more tips available at https://www.investing.com/pro/SOUN, which could provide valuable guidance for making informed investment decisions.
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