SoundHound AI (SOUN) stock fell 6% on Mar. 4 after the company said it was delaying the filing of its 10-K report.
In an SEC filing, SoundHound said it needs more time to prepare the financial statements due to the “complexity of accounting” for two separate acquisitions that happened last year.
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The company completed the acquisition of Synq3, Inc. on Jan. 3, 2024, and Amelia Holdings, Inc. on Aug. 7. Sync3 is a provider of voice AI to the restaurant industry, and Amelia develops conversational AI platforms.
“As previously disclosed, the Company has identified material weaknesses in its internal control over financial reporting. These material weaknesses continue to exist as of December 31, 2024,” the company added in the filing.
The company expects to file the report no later than Mar. 18.
After surging more than 800% in 2024, SoundHound is now down almost 50% year-to-date.
SoundHound’s recent stock movements
SoundHound is a California-based company that focuses on white-label voice artificial intelligence that enables businesses to create custom voice assistants.
The stock gained a remarkable 9x in 2024, driven by demand for its AI voice-technology software.
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Well-known AI assistants like Apple’s Siri and Amazon’s Alexa are tied to tech giants, limiting companies’ control over branding and data.
That’s where SoundHound saw an opportunity. Its clients span industries from Mercedes-Benz to IHG Hotels and Spotify.
AI chip giant Nvidia (NVDA) was a previous shareholder of SoundHound, but it disclosed in February that it had sold its stake, which caused SoundHound stock to plunge 28% on Feb. 14.
Despite the selling, Nvidia remains SoundHound’s partner. SoundHound has built an in-vehicle voice assistant that uses a large language model powered by Nvidia’s Drive technology.
On Feb. 27, SoundHound released a strong year-end performance, which led to a 17% rally in its stock price during the following session.
The company reported a fourth-quarter loss per share of 5 cents, better than Wall Street’s consensus estimate of an 8-cent loss. Revenue for the quarter came in at $34.5 million, surpassing expectations of $33.7 million.
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“We had a breakthrough year, expanding our leadership position in voice and conversational AI through major customer wins, expanded partnerships, groundbreaking generative AI innovation, and strategic acquisitions,” said SoundHound’s CEO, Keyvan Mohajer.
The company “closes the year with nearly $200 million in cash and no debt,” according to a press release.
For fiscal year 2025, SoundHound raised its revenue outlook to a range of $157 million to $177 million, up from its previous forecast of $155 million to $175 million.
Analyst still bullish on SoundHound stock
Wedbush analyst Daniel Ives reaffirmed an outperform rating and $22 price target on SoundHound stock, citing “strong momentum heading into FY25.”
“We believe that SOUN is a long-term winner in the AI Revolution as the innovative tech stack provides various use cases for Chat AI integrations,” he said.
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“The company remains an under-appreciated pure-play AI company that is making significant strides in taking share across the landscape with its enterprise AI software platform,” he added.
After surging more than 800% in 2024, SoundHound is now down almost 50% year-to-date.
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