SoundHound AI Stock Drops After Job Cuts, Despite Stronger Sales Forecast

what happened

Dow Jones Newswires reports that SoundHound AI shares fell after the voice AI company disclosed plans to reduce its workforce by roughly 27%. The company also forecasts revenue of $250 million to $260 million this year, lifting the low end from $230 million. In late trading on Thursday the stock dropped 11% to $3.81, after closing the regular session down 1.4% at $4.26. Shares are down 57% so far this year.

For the third quarter, SoundHound posted a loss of $46.4 million, or 10 cents a share, versus a loss of $109.3 million, or 27 cents, a year earlier. Excluding certain one-time items, the adjusted loss was 5 cents a share, in line with FactSet analyst estimates. Revenue rose 48% to $62.4 million, ahead of the $61.7 million analysts expected. The restructuring carries pre-tax charges of $18 million to $22 million, mostly booked in the fourth quarter.

why it matters

The key question for investors is whether the cuts pay off. The company has identified $120 million in annualized cost synergies, with more than $80 million of actions expected before the new year. It also exited some contracts with negative gross margins inherited from earlier acquisitions, while the stock has been under pressure all year.

market impact

SoundHound AI shares: job cuts and a higher revenue outlook push in opposite directions

• ↔SoundHound AI shares mixed — job cuts and a raised revenue forecast pull the stock in opposite directions

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