SoundHound AI, Inc. (NASDAQ:SOUN) Q3 2023 Earnings Call Transcript

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So for us, there’s also a little bit of diversification that we get diversity of that contribution across the globe. So, like in the autos, we participate with same brand in America and we stay with that the same brand in the Asia and Europe, et cetera.

Vivek Palani: Okay. The next question is, can you please elaborate on any partnerships that are generating strong leads or bookings?

Nitesh Sharan: Sure. I’ll give you maybe a little bit of context on – again, back to the autos, maybe I’ll back up a step. So in the auto space, we’ve talked about partners like Hyundai and Stellantis. These are long-term partners for us. We scale differentiated, added new capabilities. We got cloud capabilities in the cockpit of the car. We’ve extended to edge, hybrid. We’re providing different capabilities with Stellantis. They publicly announced in Europe, our amazing technological leap ahead with the generative AI solution where hopefully, you could take a peek at some of what they published in terms of the capabilities of what we’re bringing to car to ask a whole array of different things. You’re on a long drive and you have young kids in the back and you want your car to tell your kids a story to put them in a bed like you can do that.

You can ask directions. You can find out what happened in the game yesterday. So we’re expanding and those are going to be critical pillars for us for a long time. And by the way, I think we mentioned it a lot in the prepared remarks beyond auto, some of the non-auto product companies, the IoT space of the TV manufacturers that we talked about coffee makers that we’re excited to be partnering with. So on Pillar 1, as we characterize voice-enabling products. There’s a lot of great customers and partners that are contributing meaningfully to our bookings number. Pillar 2, the restaurant side, actually kind of – we’re kind of – and I mentioned this in the prepared remarks that we dimensionalized a little bit more on the ARR side and I noted a couple of points there.

So last time we talked about, we were building partnerships with at scale, full deployment across their ecosystems with the restaurants that we worked with, White Castle one notable one. This time we talked about Jersey Mike’s and others. Last time, we were at about 1,500 locations that has gone up to 4,500 locations. The ARR last time I mentioned was $10 million, that’s gone up to $25 million. So just to give you a sense of the pace, that is rapidly growing. So that will be an increasingly part of our book of business. But frankly, we’re not stopping there. It’s beyond even restaurants into more customer service verticals that we can go after, personal care and onwards. And ultimately, what we’re trying to do is build – and we’ve talked about this before in our 3-pillar strategy is bring Pillar 1 voice-enabled products together with voice-enabled services and Pillar 2 and provide Pillar 3, monetization opportunities.

And when you see the intersection of being able to drive around and access the type of food or drink that you want, when you want, how you want it, you can see how that can build over time. So hopefully, that gives you a little characterization probably a little bit more than you were asking for.

Vivek Palani: Yes. That helps. Thanks. Thanks and have a nice rest of the day.

Nitesh Sharan: All right. Thank you very much.

Operator: Thank you. One moment please for our next question. And our next question comes from the line of Scott Buck with H.C. Wainwright.

Scott Buck: Hi, good afternoon, guys. Thanks for taking my questions. I guess, first, could you help give a little color on how we should expect the kind of cadence of maturation for a relationship like Olo? I mean, is this something that takes 6 to 9 months just to educate before you can actually push out to some of their individual vendors?

Keyvan Mohajer: That 6 to 9 months is behind us. So we already did the integration and the partnership and when we announced actually whether at the maturity level, We are already live with merchants that use Olo in production.

Scott Buck: Perfect. That’s helpful.

Keyvan Mohajer: And that gives us access to 77,000 locations that use Olo.

Scott Buck: Perfect. And then, just given the momentum on the restaurant side, do you guys have the capacity to implement where you need to? Or is there a fair amount of hiring you need to do there to help you out with that process?

Keyvan Mohajer: No, absolutely, we are ready. And in fact, I think we are – I believe, the only player in this market that is able to serve SMBs. So, most of our peers have to only target brands that have thousands or high hundreds of locations because onboarding is a massive undertaking for them. But for us, a lot of those steps are automated. So we can actually sign up a single location, sandwich shop and we can onboard them very quickly and we have quite a few of those.

Scott Buck: Great. I appreciate that, Keyvan. And then last one, just quick. Any negative impacts from the auto workers strike here in the U.S. over the last few months?

Nitesh Sharan: No, no direct impact. First, I’d say on the immediate, we don’t work with the big three in the U.S. Stellantis is a big partner for us in Europe and we haven’t seen an extension impact to them. Maybe in terms of opportunities, maybe that conversation slowed a little bit. But like, no, we don’t – there’s no direct impact. To the extent that things permeate down, we haven’t really seen an impact from that. We’re watching it. It seems like things are moving constructively. But yes, I mean, there is for us, no, no is the short answer.

Scott Buck: Great. I appreciate that, Nitesh. Congrats on the progress, guys. Thanks again.

Nitesh Sharan: Thanks so much, Scott.

Operator: Thank you. Ladies and gentlemen, thank you for participating. This concludes today’s program. You may now disconnect.

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