Record Quarter
Revenue hit $62 million, up 45% from a year ago and 40% from the prior quarter. That is 10 times the revenue reported in the first quarter as a public company, in Q2 of 2022, about four years ago. Profit measures also improved both from the prior quarter and from a year ago. The full-year outlook was raised. The market for agentic AI (AI that acts on its own to complete tasks) for enterprises is expected to reach almost $1 trillion by 2030, and the company aims to capture a good portion of it. Where the business sits now looks small against where it should be in a few years.
The OASYS Platform
Many of the wins came from a new platform called OASYS, which stands for Orchestrated Agent System - agentic AI for enterprises. It has been decades in the making and shows well in demos and in RFPs (requests for proposals, where a client asks vendors to bid). One deal was an 8-digit commitment, meaning double-digit millions of dollars, signed in under 90 days from the first meeting to contract signing. Other similar deals closed in Q2.
Every business will need an AI agent. Companies once needed a website, then a mobile app, and now they need AI agents. You build an agent once and deploy it everywhere: to answer the phone, sit on the website, run on the mobile app, and reply to messages. OASYS is built to do exactly that.
Voice Commerce
Voice commerce is a vision first formed in 2019, talked about for years, and rolling out this year. The company powers devices like cars, TVs, and IoT (internet-connected) devices as their AI assistant. It also automates businesses: drive-throughs, where the waiting-line voice you hear is its AI, and merchant phone lines for restaurants and other sellers.
Voice commerce ties these together. While driving and using your car's voice for navigation, weather, or air conditioning, you can order from a drive-through by speaking to the car. No need to find the drive-through, wait in line, or reach the kiosk. The AI in the car, powered by SoundHound, talks to the merchant's AI, also powered by SoundHound. This is faster and more convenient for the user. It also creates net new leads for merchants, since these are cars already on the road - a moment that can be turned into money. That revenue gets shared with the carmaker, the TV maker, and other device makers, building an ecosystem where everyone gains. The food-ordering case is one example; you can also book appointments and run other transactions.
A new automotive brand that was not a past customer signed a contract to go live with voice commerce. A prominent TV maker, also a new brand, is signing to go live.
Voice commerce could grow into a bigger revenue driver than the voice assistants themselves, because it handles the actual transaction. The business runs on three pillars. The first pillar, started years ago, powers devices. The second, added a few years later, is AI customer service. The third is voice commerce, expected to create a flywheel effect and mark a turning point. It already helps win pillars one and two indirectly: more device makers sign up because they buy into the voice commerce vision, and more merchants use the AI for customer service for the same reason.
The TV matters because it is the largest screen in the most social setting of the home, which puts it on top for commerce. Its legacy input is limited to buttons for up, down, and changing channels. Unlock it with voice input and audio-visual output, and a large commerce opportunity opens up.
Winning in China
A seven-figure deal was signed with an automotive infotainment software company in China. Winning there is hard because China has strong local technology vendors that clients usually prefer. A Silicon Valley company must win by a large margin. Clients test the technology and judge the platform's maturity and capabilities, and the company won by a wide margin against both local vendors and legacy vendors. China's auto industry is booming, and the plan is to be where the winners are. The portfolio spans healthcare, pharmaceuticals, banking and financials, telecoms, autos, and devices.
Three Forces Behind Adoption
Question: With voice AI adoption, what is the demand, given that frustrated users often just want to speak to a human, and many companies deploy AI agents without even knowing what they are?
Three forces are working in the company's favor.
First, the technology. SoundHound pioneered voice AI and coined "speech to meaning," combining speech recognition and natural language understanding and running them together in real time, the way the human brain works. It also folded in generative AI, LLMs, and agentic advances quickly. What was science fiction is now reality. No further breakthrough is needed, no AGI (artificial general intelligence, AI as capable as a human). Everything needed is in the OASYS platform, so delivery is faster.
Second, the enterprise mindset. A few years ago the company knocked on doors and won small proof-of-concept projects from a customer's innovation budget, then had to prove value. Now clients knock on its door, because AI transformation is a mandate and the money comes from their IT budget. The company just has to be chosen. Demand is a step change from a few years ago.
Third, a cultural shift in consumer acceptance of AI. People are used to calling an insurance company or bank, hitting old automation, and using tricks to escape it - press zero, say "operator," ask for a human. That was because legacy automation was very limited. The new agentic version is far more capable. There is no wait time; it picks up right away, works 24/7, speaks any language, stays patient, and has access to many features, APIs, and documentation, so it can handle complex tasks. Consumers are seeing how capable AI is and adopting it. Together these three forces are a tailwind for the business.
Question: Does the voice commerce contract with the major electronics maker involve a company whose name starts with an S?
No name was given. Partners and their brands are treated with respect and described only in general terms. People are eager to know, but the answer was to stay tuned.
