SoundHound AI, Inc.

Thank you for standing by. Welcome to SoundHound AI Q2 2026 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 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Scott Smith, Investors Relations.

Good afternoon, and thank you for joining our second quarter 2026 conference call. With me today is our CEO and co-founder, Keyvan Mohajer, and our CFO and co-founder, James Hom. We will begin with some short remarks before moving to Q&A. We would also like to remind everyone that we will 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 a discussion of the 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. Audio replay will be available following today's call. With that, I'd like to turn the call over to our CEO, Keyvan Mohajer. Please go ahead, Keyvan.

Thank you, Scott, and thank you to everyone for joining the call today. I'm delighted to report an outstanding second quarter. Coming off an already strong Q1, the team executed flawlessly in Q2. This was not only a record Q2, but our largest all-time quarter with $62 million in revenue. Revenue was up 45% year-over-year, 40% sequentially, and 10 times higher than Q2 four years ago, which was our first quarter as a public company. We also improved all key profitability metrics. Our growth margin improved, our adjusted EBITDA improved, and our EPS improved both year-over-year and sequentially. Our results were beyond our own expectations, and a significant part of that is attributed to OASIS, SoundHound's self-learning agentic AI platform, With Oasis, we are winning in demos, we are winning in RFPs, we are winning in pilots, and we are winning as we scale with our customers in production. Oasis demos are absolutely delighting new and existing customers, and it shows in our renewal rates and our exceptional win rates. Because of our standout technology, we are now moving quickly with our prospects from demo to contract, signing in a matter of months. and we're also converting pilots to large implementations at a record pace. We recently signed an eight-figure commitment in less than 90 days from the initial demo to contract signature. This is all while enterprise markets for conversational and agentic AI grows exponentially with every quarter that passes. In a recent report, Gartner projected that agentic AI software spending will hit nearly $1 trillion by 2030 with a compound annual growth rate of over 60% between 2025 and 2030 as enterprises scale adoption. We have everything we need to seize a sizable portion of this. We continue to invest in growth and convert on the massive pipeline we built to start the year. And even with those key investments, we have maintained a disciplined approach to spending, achieving a 33% improvement in adjusted EBITDA this quarter. We saw success across all key metrics and every part of our business. SoundHound's enterprise AI business is fundamentally changing the market, emerging as a clear leader in what was once a fragmented landscape. SoundHound's excellence in conversational AI for enterprise also recently received heavyweight validation, with SoundHound being named as a leader by analyst firm Gartner in their magic quadrant for conversational AI platforms. We expect this high-profile recognition to drive even greater momentum with enterprise buyers who rely on Gartner to validate market leaders with both a strong vision and proven ability to execute. Looking ahead, we are poised to increase our scale again with the acquisition of LivePerson, which is expected to close by the end of this year. When it does, we will accelerate our leadership position and extend our footprint in conversational AI with 25 of the Fortune 100 brands and a significant increase in the number of enterprise brands using our platform across a range of verticals. Our track record shows that our repeatable M&A formula is working. We've been able to realize high-potential turnaround opportunities with our technical innovation and financial discipline. We look forward to repeating our process with Lightperson. Our success in Q2 was driven in large part by our new OASIS platform, which we demoed extensively with existing customers and prospects before launching publicly in May. Early reactions confirmed what we already knew. This is a category-leading enterprise AI platform that addresses the critical pain points that large multinational businesses face when trying to deliver a quality AI-based customer experience consistently across billions of interactions. One large healthcare company leader told us they evaluated other options and found Oasis was the most intuitive and easiest to navigate. Oasis has a unique feature where AI builds AI, and they were able to create agents using this feature in just a few minutes which took much longer in other platforms. Agentic AI is an important step change for our industry. Previously, technology stacks were vertically integrated, meaning that, for example, phone-based customer service was attached to telephony channels or product-based conversations were limited to the product platform itself. OASIS is built for a new era in which the AI conversational layer is no longer attached to a specific modality or channel. It lives independently with cross-channel orchestrated agents are built for any and every touchpoint, including physical environments. This means that AI agents built on OASIS can power enterprises and businesses of all sizes, in-vehicle voice assistants, restaurant and retail voice AI transactions, and complex customer tasks across our multiple verticals. SoundHound is a company that puts its customers first, supported by products that deliver tangible value. That's why we are proud that our biggest Q2 deals are with customers that chose OASIS. And as we continue to onboard and upgrade customers, introducing them to features that enable AI to build and continually optimize agented workflows on their behalf, we are expanding our capabilities to support our rapid growth across key verticals. One area we are seeing very strong traction is in healthcare, with one top 20 provider quadrupling their stand with us in Q2. We also added Champion Pair Solutions, a managed healthcare services organization based in California, and either expanded or renewed with five additional healthcare organizations. And we continue to strengthen our presence in banking and financial services, renewing or expanding contracts with two of the top seven global banking institutions as well as one of the largest global insurers. At the same time, we are seeing strong demand from regional banks and credit unions who look to leverage our platform to scale customer service efficiently and extend operating hours. We recently partnered with a top tier regional credit union, and help them introduce automated AI agents without compromising their famously high standard of customer service or sacrificing containment rates. And in Q2, we announced that Qualitas, one of our insurance customers in Latin America, now uses TramHound AI agents to handle over 100,000 calls per month, an increase of 150% over four years, with our automated agents interacting with customers over issues like car assistance requests, and Broken Glass Claims, handling the complexities from the initial call to the claim resolution. These are very human moments of need, and the message is clear. End customers are not resistant to automation. They are only resistant to bad service. This momentum in highly regulated industries like healthcare and financial services underscores our enterprise readiness. and with built-in guardrails and rigorous agent evaluation, SamHound's platform provides the security and traceability needed for mission-critical AI workflows. Because of its trusted foundation and our growing credentials, we are seeing our vertical-specific strength built across a number of other critical industries including telecommunications and energy and utilities. A notable component of SamHound's ongoing success is the excellent traction our solutions are getting in Asia. In each of the last five consecutive quarters, we have signed major deals in the region, and we are seeing particular success with the automotive sector in China, a market that has been notoriously difficult for Silicon Valley companies to compete in. Time and time again, large Chinese OEMs are choosing SamHound because of our mature, flexible, proprietary stack and due to the pure play nature of our offering. The Chinese automotive industry is booming, and where the winners are, we will be there. In Q2, we signed a seven-figure deal with a large infotainment software company to provide agentic AI solutions, and we also had an IoT win with an established automotive maintenance and diagnostic company that will use our AI agents to boost operational productivity onsite. Both customers will integrate with our OASIS platform, which expands their possibilities for taking any built-for-purpose agent and deploying it across multiple channels. Elsewhere in the region, We also signed the six-figure unit expansion with Indian two-wheeler company Ultraviolet. And we entered an agreement with another large OEM customer to roll out real-time generative AI features to vehicles in India, the first LLM-enabled voice technology the brand has rolled out in the country. Our ability to outpace our competitors in high-impact Asian markets is not accidental. These companies consistently partner with us based on the performance of our agentic technology Our broad vertical expertise and our growing experience within the region. And the same story holds for automotive globally. In Q2, we expanded with a number of our major OEM customers, including Stellantis in Europe. We saw overall higher unit adoption and added live generative AI capabilities. And Hyundai, one of our prominent automotive customers in the U.S., Latin America, and India, who is adding generative AI enhancements which allow end users, to retrieve LLM-powered search results and ask multi-layered questions on the go. We continue to innovate and see opportunity and growth across restaurants and retail. Our agentic AI solution for SMBs, which we call Smart Answering, more than doubled year-over-year in Q2, largely driven by excellent platform performance and increasingly sophisticated capabilities that allow for outbound calls to help businesses with retention, new registration, and win-back campaigns. We also signed three major U.S. restaurant chains in the quarter. In Q2, restaurant renewal rates reached 100% for key accounts, while client location counts grew with major brands including Jersey Mike's, Five Guys, IHOP, and a prominent pizza brand with thousands of locations that are now live with more than 75% of their total locations. Last earnings, I talked about one well-known QSR customer that had conducted an analysis and reported that drive-through locations deploying SoundHound's AI solutions are generating greater revenue than comparable locations that don't currently use it. I'm delighted to say that those metrics continue to improve across locations, which is fueling the path to broader expansion. Our restaurant AI solutions get better and better. and customers and businesses alike have become even more confident of their capabilities and consistency. This is proving to be fertile territory for cross-selling using our land and expand strategy with our Oasis platform, which allows us to also provide IT helpdesks and guest relations services to our existing restaurant base. By positioning SoundHound as a one-stop shop for AI, we aim to become central to the AI strategies of our top restaurant clients, thereby growing our total applicable market. Another part of our business that is experiencing rapid expansion is voice commerce. In Q2, we saw strategic advancements engaging with some of the biggest global manufacturers across automotive and IoT, all of whom were excited about the prospect of this new monetization channel and what it can do for their business and the end-user experience. I'm delighted to reveal that our first commercial project will launch soon. In Q3, we will begin to pilot direct in-vehicle transactions with the world-renowned automotive brand with a recently signed contract. We are integrating these vehicle-native voice commerce capabilities seamlessly into the car's navigation system via the OASIS agentic AI platform with a broader public launch to follow. And later this year, we will launch with a global electronic manufacturer who will initially utilize SoundHound technology to enable agentic transactions, including retail and restaurant purchases, right from the television screen In homes across the U.S. without the need for a phone, tablet, or even an app. With voice commerce, we are observing an accelerating interest within the automotive industry to implement agentic AI for a broader range of use cases, as well as monetizable transactional opportunities with OEMs adjusting their business models to accommodate it. It's amazing what we are doing. We are transforming the way OEMs can improve the user experience and monetize their products while delighting their customers. Our leadership position in the space is unprecedented, and we are leading the charge to a shift in the way OEMs are looking at the next-generation capabilities. The breadth of our tech suite and the depth of our stack have made us hugely appealing to enterprise clients looking for consistency across all their channels and operations. OASIS delivers on this with a single pane of glass view, alongside capabilities like AI builds AI, which splashes build times from months to minutes and saves vital resources. And we always say innovation is in our DNA, so those businesses already adopting OASIS can expect features to be added and existing capabilities to grow even more powerful. Last quarter, I gave an update on our investment in our R&D. OASIS will be powered by Polaris, SoundHound's own speech translation model that consistently outperforms its competitors. are also making the calculated investment to augment Polaris with our own specialized LLMs and speech synthesis built using our own rich interaction data. We expect the result of this investment will be better quality and lower cost for our customers and more control, independence, higher profit margin, and differentiation for SoundHound. I am proud to say that we have made incredible progress with this thanks to the strength of our engineering teams which also bring together Some of the best minds from the pioneer companies we've acquired over the last few years. Our S&D customers are now entirely on our own stack using our models, independent of frontier models. And we are about to go live with one of our largest healthcare customers after seeing significant improvements by making the switch. Once again, this is not just about cost savings, but also improvement in quality, such as accuracy and latency. As we lean deeper into our specific verticals, being able to tune and deploy models using our own data has huge advantages for cost, efficiency, accuracy, and AI safety. Turning to M&A and building on what we said last quarter, we are excited that our previously announced agreement to acquire live percent is advancing. We recently secured all key regulatory clearances and continue to expect the deal to close before the end of the year. Bringing the two companies together could compound the winning strategy we have proven. We've now done this with Think3, Allset, Emilia, and Interactions, and it has become a repeatable formula for us. With each, we get faster and more efficient at integrating the strengths of the businesses. Our first acquisition took about two years to fully turn around, and our most recent is demonstrating early signs of acceleration in just a few quarters. What makes us confident that we can do this again and even faster with 5% is Oasis. Oasis is built specifically to unify the technology from every company we've acquired onto one platform, harvesting the years of innovation Sandhorn has developed, coupled with the great innovation these companies created. Put simply, this is an amazing opportunity to bring true end-to-end, omnichannel conversational AI to some of the most recognizable enterprise brands in the world. and combining decades of customer relationships and data with the speed and innovation Oasis unlocks. We are proud of the strategy, energized by the team we are bringing on board, and confident this position SamHound for its next chapter of scale and leadership in agentic AI. I already spoke of a number of customer highlights this quarter. But let me list out a few more of the key deals we had across a diverse number of verticals, including financial services, insurance, telecommunications, healthcare, pharmaceuticals, and restaurants. They included Rakuten Securities, one of Japan's largest online brokerages, serving over 6 million accounts. The company offers purchase, sales, and brokerage of securities throughout the world. A global asset management firm providing investment management and research services worldwide to investors. A major international financial services organization headquartered in Canada that offers life and health insurance, wealth solutions, and asset management. An insurance company that offers individuals, professionals, and businesses casualty insurance products. An American healthcare customer that provides technology, pharmacy care, and direct healthcare services globally. A leading provider of practice management and electronic health record solutions customized for the eye care industry. A leader in in-home nursing services, pediatrics therapy, enteral nutrition, and ABA therapy healthcare. A rehab facility offering nursing care for short-term rehab, respite care, and long-term care facilities. A global biopharmaceutical leader in one of the world's largest generic drug manufacturers. A British multinational telecommunications company operating networks in 15 countries. A large QSR specializing in seafood to adopt San Juan Drive-Thru solutions. A major QSR known for American-style Mexican food. A sushi restaurant known for its rock music and concert-themed menus. Also in restaurants, Ruby Tuesday, Happy Burger, Red Lobster, Toshi's Tacos, and Lady Dog. We also continued to make progress with channel partners. We entered into a partner agreement with a large global IT services and consulting provider specializing in comprehensive enterprise digital transformations. We also entered into a multi-year partnership with a Latin America-based company to deliver Sanhon technology to their vast network of customers spanning over 20 countries. In closing, we had an exceptional Q2, and our results demonstrate the incredible momentum Sanhon is building, achieving a strong revenue performance, disciplined cost management, and industry-leading platform validations. The demand for our solutions is at an all-time high. Enterprises, in particular, are looking for high ROI voice and agentic AI solutions, and our OASIS platform delivers just that. Our expanding IoT ecosystem and in-house model innovation position us to lead in this new era of enterprise automation. We are excited about the progress we are seeing with the planned acquisition of LivePercent, which we expect to be in the second half of this year. With that, I'll now turn the call over to my co-founder, James, to talk about our financial performance, key growth drivers, and business outlooks.