SoundHound AI: Weak Numbers Under The Surface
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SoundHound AI's reported growth is misleading as pro forma revenues declined by 10% in Q3, indicating underlying business weaknesses. The Amelia acquisition contributed more to revenue than expected. Despite beating EPS estimates, the adjusted EBITDA loss doubled, and the share count increased, inflating the market cap to nearly $3 billion.
November 13, 2024 | 6:30 pm
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SoundHound AI's Q3 results reveal a 10% decline in pro forma revenues, despite reported growth. The Amelia acquisition contributed more to revenue than expected. EPS estimates were beaten, but adjusted EBITDA loss doubled, and share count surged, inflating market cap to $3 billion.
The decline in pro forma revenues by 10% indicates underlying business weaknesses, which is a negative indicator for investors. Although EPS estimates were beaten, the doubling of adjusted EBITDA loss and increased share count suggest financial instability. The inflated market cap due to the share count surge could lead to a negative short-term impact on the stock price.
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IMPORTANCE 80
RELEVANCE 100