SoundHound AI, Inc.

Good day and thank you for standing by. Welcome to the SoundHound first quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I will now hand the conference over to your speaker today. Scott Smith, Head of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining our first quarter 2025 conference call. With me today is our CEO, Kayvon Mahajer. and our CFO, Nitesh Charan. We'll begin with some short remarks before moving to Q&A. We'd also like to remind everyone that we'll be making forward-looking statements on this call. Actual results could differ materially from those suggested by our forward-looking statements. Please refer to our filings with the SEC for a detailed discussion of the risks and uncertainties that could affect our business and for discussion statements that qualify as forward-looking statements. In addition, we may discuss certain non-GAAP measures. Please refer to today's press release for more detailed financial results and further details on the definitions, limitations, and uses of those measures and reconciliations from GAAP to non-GAAP. Also note that the forward-looking statements on this call are based on information available to us as of today's date. We undertake no obligation to update any forward-looking statements except as required by law. Finally, this call is being audio webcast in its entirety on our investor relations website. An audio replay will be available following today's call. With that, I would like to turn the call over to our CEO, Kayvon Mahajer. Please go ahead, Kayvon.

Thank you, Scott, and thank you to everyone for joining the call today. SoundHound had another strong quarter in Q1 with over $29 million in revenue. representing an increase of over 151% year-over-year. Our bold moves with product investments and growth initiatives in 2024 are paying dividends. We've been investing in Polaris, our multimodal, multilingual foundation model, and it has proven to be a real differentiator against our closest peers. We are seeing that our average latency per query is as much as four times better. In noisy environments, we excel. and are consistently finding that our sentence accuracy is around twice as good in those environments. Our word error rate is up to 35% better, and we have almost 30 languages in a mature state, which is not only ahead of others, but significantly decreases any barriers to expand internationally, in particular with our customer service solutions. Our growth initiatives in 2024 are taking shape. we acquired SYNC3 with the objective of introducing innovative and advanced technology to the restaurant partners and customers and driving business expansion beyond that. With Amelia, we similarly saw lots of synergies and huge opportunity. And within less than three quarters, we are seeing outsized growth across the portfolio that has now integrated with sound and voice AI technology, generating excitement from our enterprise customers and delivering on the promise of the upsell and cross-sell opportunities we identified as part of the acquisition. And then look at Allsets, where the team has been tasked with bringing AI voice commerce to the market, and they're already making great strides in building technology that is attracting interest from huge global brands. To give more precise examples of our success, harvesting the synergies we achieved. Our first acquisition in 2024, SYNC3, has already upgraded the majority of its locations to our Polaris model. We have been able to grow their locations by over 30% and upsell Sanhans products to their growing customer base. Our second acquisition, Allset, is bringing the growing merchant locations and brands to the automotive customers that we have accumulated over the past decade to create the largest voice commerce ecosystem of its kind, allowing drivers to transact and order food while driving. And our latest Amelia acquisition is upgrading to Polaris, just launched a new agentic AI platform is entering new industries and is already upselling its solutions to our merchant customers. We cannot be more thrilled. Our strategy is working. Many environmental factors and developments in the technology landscape are also playing to our favor right now. A recent report from Stanford University highlighted a number of these trends. AI performance continues to improve exponentially, creating opportunities for solution builders like us. Systems are also becoming more affordable and accessible, whether that's hardware cost or improvements in energy efficiency. The cost of adoption is being driven further down. At the same time, enterprise investment is rapidly on the rise, with no business wishing to be left behind the pace of change. And to meet this enthusiasm, we are seeing more use cases move from the lab to real life right across industries. Closer to home, we've also made a number of observations from our own specific standpoint. Selective buyers and users are driving disruptive trends, many of which are creating more strong tailwinds for SoundHound. I would like to touch on four of these key trends. First, in automotive, we are seeing a notable shift away from OEMs partnering with big tech platforms for their in-vehicle voice offerings. Over recent months, we've been in discussions with a number of automakers who have proactively approached us looking for a partner like Soundham to help them differentiate and innovate and replace their big tech solutions. Second, in restaurants and hospitality, we are seeing a similar kind of movement. Operators are looking to migrate from cumbersome legacy answering systems to AI ordering solutions in order to future-proof their businesses. Third, clear momentum is growing around the idea of voice commerce. Notably, consumers are showing a strong appetite for this new convenient modality, and the technology is ready to deliver. A new ecosystem of technology providers is rising to meet that demand, and of course, SoundHound is already out in front with our groundbreaking voice commerce ecosystem. And lastly, the quality of voice AI technology is a true differentiator for customer service AI agents. While the hype around agentic AI persists, Marrying sophisticated AI agents with next-generation voice technology is having the net effect of appending the traditional IVR space. Now, customers can speak and actually be heard. We consider ourselves the best position vendor to benefit from these trends. And given this context, it's unsurprising that our pipeline is the largest it's ever been, and our TAM continues to expand, giving us confidence that we have a massive opportunity to significantly grow our business for years to come. Of course, one of the most significant waves of fresh AI-driven disruption comes from agentic AI. Just this morning, we sent out a press release with the exciting details of the latest version of our Amelia AI platform, Amelia 7.0. The platform is powered by a proprietary multi-process agentic framework, branded Agentic Plus, which allows businesses to deploy fleets of AI agents capable of understanding, reasoning, and completing actions. These AI agents can orchestrate amongst each other and perform tasks entirely autonomously without the need for human intervention. As a complete AI agent platform, Amelia gives businesses access to a whole range of agents that can retrieve and provide information, complete tasks and procedures, and allow consumers and external parties to complete commercial transactions with the business. Our AI agents use a combination of deterministic and large language models. giving the best of both worlds with control and flexibility. The platform also allows for optional human escalation intervention for peace of mind. It is also fully interoperable with a whole range of available integrations. Notably, we also believe this is the only agent platform to equip enterprise-ready autonomous agents with world-class voice AI, enabling these smart AI agents to reason and perform complex tasks with human-like interactions thanks to our incredible advanced speech recognition. This means that our AI agents are not only fast, intelligent, and labor-saving, they engage in a way that employees and consumers will actively prefer. Imagine calling your doctor, reordering your prescription of a hard to pronounce medication, paying for a recent visit, and making a new appointment. This is all done beyond agents that effortlessly understand what you're saying thanks to our advanced voice AI and orchestrating with a network of further sub-agents to instantly schedule, reorder, and complete a billing transaction. While others continue to talk about the promise of agentic AI, we are walking the walk and already delivering it in the real world. This is underscored by the trust our customers put in us and our solutions. Let me now share some of the great customer wins, renewals, and expansions in Q1. In restaurants, in Q1, we scaled and reached thousands of locations with a large pizza chain that we signed just last year, providing our answering and ordering solutions to ensure no inbound customer calls goes unanswered. Further locations were also added with existing brands, including Habit Burger, Casey's, Barhouse Subs, Five Guys, White Castle, and McAllister, among others. We also continue to expand across Burger King UK locations together with Acrelic, a global technology company that is reinventing the customer experience with some of the biggest brands in the world. In automotive, we joined forces with Tencent Intelligent Mobility, part of the cloud and smart industries group at the multinational conglomerate Tencent, to bring world-class conversational AI to the intelligent cockpits of global auto brands. Also, multiple OEMs now are running pilots and POCs with our voice commerce solution. I will talk about this in more detail later on. In healthcare, three highly regarded companies in the healthcare space chose to renew and expand with us again this quarter. This included a prominent medical billing company, a healthcare provider that brings test results to the patients at home, and a healthcare provider in the Midwest that owns and operates a dozen hospitals. These customer validations prove that our technology is adding value to our customers and it also shows that our business is sustainable and recurring. Additionally, we are pleased to note that three of the new deals we won in Q4 have already gone live with our solutions. In retail, we signed to launch exciting strategic pilots with multiple top U.S. fitness chains, unlocking potential for over 15,000 locations. We are also hoping to expand market reach through new pilot agreements and ongoing discussions with leading home services franchises, positioning Sanhan Smart Answering as a transformative solution for multi-unit operations. In energy, we have now launched a new AI agent with the large utilities company we signed in Q4 last year, helping them to transform the customer experience. Furthermore, we have been forging new strategic partnerships to expand our reach into this space. Just last week, we announced that we are joining forces with PowerConnect AI, a purpose-built AI platform for the energy and utility industry to launch a new era of intelligent omni-channel voice experiences designed specifically for this vertical. In information technology, we renewed with a large multinational conglomerate based out of Tokyo, offering a number of services in various industries and another large Tokyo-based company that offers IT services, system integration, cloud computing, and information security. In telecom, we had an exciting renewal this quarter with a large British multinational telecommunications company helping to power its employee IT support desk with our best-in-class AI agents. In travel and hospitality, we signed a new deal with a leading resort developer in Latin America offering concierge for inbound and outreach services, creating repeatable business across some of the largest hotel brands in the world. We also expanded with one of the largest hotel chains in the world, offering full-service hotels and resorts. In financial services, we have continued to have strong traction with some of the largest financial services companies in the world, including a win with one of the world's largest insurance companies in Europe, and significant renewals and expansions for our employee experience solutions across four financial institutions in Q1. As a reminder, we currently work with seven of the ten largest global financial institutions. Together with Channel Partners, we had wins including with a well-known global agriculture OEM, a global tax preparation company, and a North American travel and hospitality company focused on all-inclusive vacation and resort management. Additionally, we expanded services with a large systems integrator and renewed with a Japan-based multinational IT and services corporation that resell our solution to their clients and manage services offerings. Now let me update you on our voice commerce solution, which opens up a brand new commercial channel for consumers and businesses and delivers on the promise of transactional voice AI that has never been executed before. Our voice commerce initiative is strategically designed to leverage our existing restaurant and merchants together with our OEM networks to unlock new revenue opportunities within our established ecosystem. By enabling seamless voice-powered transactions, like ordering food while driving, we not only enhance the business outcomes for our partners, but also create additional revenue streams for SoundHound while providing additional convenience to the consumer. Moreover, our unique positioning is enabling us to expand voice commerce to OEMs outside of our existing network and also beyond food ordering to services like table reservations, hotel booking, and prepaid parking. This expansion fuels consumer adoption, which in turn attracts more OEMs and merchants, reinforcing the flywheel effect and driving growth across our royalty and subscription businesses. We unveiled this solution at CES earlier this year and gained massive interest from OEMs and restaurants. We also continued the momentum at NVIDIA GTC 2025, where we once again showcased the power of voice AI commerce and its transactional capabilities. Last quarter, we talked about the many intercept OEMs pursuing POCs with our voice commerce solution. And I'm happy to report that we are working with the innovation team within some of the largest automakers in the world to bring our vision to life. Indeed, we've never seen OEMs move so fast for a product. We also already have over 15 large restaurant chains plugged into our network, and aside from the interest from OEMs and restaurants, we also already have partners signed up for reservations and parking services. Another very promising development that could help us monetize voice commerce in the near term is the interest we are seeing from larger technology platforms that don't want to manage restaurant relationships directly themselves, but want our voice solution available to their users as a safe, convenient, hands-free option when ordering food from their vehicles or devices. So as you can see, in just a short period of time, we have seen some very promising opportunities with voice commerce, and we are excited to explore more opportunities that this ecosystem is quickly creating. In closing, it's becoming increasingly clear that the trends we are starting to see play out with voice AI are creating the right conditions for our business to take advantage and thrive. Whether it's voice-enabled agentic AI, our new voice commerce solution, or our Polaris multilingual foundation model, we are clearly at the forefront of this generational shift in technology. Existing enterprise brands are renewing with us at a high rate, and OEMs and restaurant brands are approaching us at an equally high pace. Our three-pillar strategy is resonating with all businesses, and we are starting to see the integration of Amelia turn to amazing cross and upsell opportunities. With that, I'll now turn the call over to Nitesh to talk about our financial performance, key growth drivers, and business outlooks.