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Date

Thursday, May 7, 2026, 5 p.m. ET

Call participants

  • Chief Executive Officer — Keyvan Mohajer
  • Chief Financial Officer and Co-Founder — Nitesh Sharan
  • Chief Operating Officer — Mike Zagorsak

Takeaways

  • Revenue -- $44.2 million, up 52% year over year, with growth driven by financial services and automotive segments.
  • Automotive and IoT AI organic growth -- Up 88% excluding acquisition impacts, reflecting segment strength.
  • Gross margin -- GAAP gross margin at 31%; non-GAAP at 50%, affected by one-time third-party vendor costs that will not recur.
  • Operating expenses -- R&D: $26.2 million, up 6%; Sales & Marketing: $19.2 million, up 60%; G&A: $25.7 million, primarily due to M&A-related costs, all year-over-year increases tied largely to integrations and legal expenses.
  • Customer concentration -- No customer accounted for more than 10% of revenue in the quarter, demonstrating diversification.
  • Profitability -- Adjusted EBITDA loss was $26.7 million, with a GAAP net loss of $25 million and non-GAAP net loss of $26.6 million; per-share non-GAAP net loss was $0.06.
  • Balance sheet -- Quarter-end cash and equivalents of $216 million and no debt.
  • LivePerson acquisition -- Definitive agreement announced for acquisition, expected close in the second half of the year, expanding reach to over 30 countries and substantially increasing enterprise customer base.
  • OASIS platform launch -- Introduction of a new orchestrated agent platform allowing ‘AI-built AI’ for multichannel deployment, positioned as a core differentiator and unifier for acquired technologies.
  • 2026 revenue outlook -- Revenue expected in the $225 million-$260 million range, with seasonality expected to even out as recurring business grows.
  • 2027 revenue targets, post-acquisition -- Projected achievable revenue of $350 million-$400 million, including a minimum of $100 million from LivePerson’s global customer base, with a stated path to $500 million leveraging the combined company’s existing customers.
  • AI model investment -- Stated investment in proprietary foundation models, capped at less than 1% of market cap, with anticipated significant future cost savings and avoidance of third-party dependency.
  • Major new deals -- Signed a seven-figure global automotive contract; executed an expansion in Latin America with a multinational OEM; secured agreements with Walmart (NYSE:WMT) TV brand ONN and several global brands across QSR, retail, financial, and healthcare sectors.
  • Operational efficiencies -- Actions taken to drive cost efficiencies in cloud spend, legacy system consolidation, and vendor optimization; benefits expected in upcoming quarters.

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Risks

  • GAAP gross margin temporarily reduced by true-up costs of third-party expenses from a vendor used for digital-first business. These costs will not recur in future periods.
  • GAAP net loss includes the impact of a $39 million non-operating, non-cash charge tied to acquisition-related contingent liabilities and quarter-on-quarter stock price change.
  • Non-recurring charges related to recent acquisitions contributed to increased G&A and may obscure underlying cost trends until full synergy realization.

Summary

SoundHound AI (SOUN +3.63%) reported revenue of $44.2 million with 52% growth, supported by broad vertical and geographic expansion and enhanced by the recent launch of the OASIS AI platform. Management highlighted the definitive agreement to acquire LivePerson (NASDAQ:LPSN), targeting integration-driven customer expansion across more than 30 countries and projecting the combined entity could unlock a $500 million revenue base from existing relationships. The company detailed a phased migration of all acquired and legacy customers onto OASIS, citing proprietary model investments as a lever for both improved margin and competitive differentiation. Management emphasized a disciplined approach to M&A, a track record of turning distressed acquisitions into profitable units, and projected post-acquisition revenue targets reaching up to $400 million in 2027, with at least $100 million from LivePerson’s long-tenured accounts.

  • Keyvan Mohajer cited a “massive pipeline” of opportunities, with management stating, “The driving force behind this growth continues to be the high usage of our products and solutions.”
  • The company reported that “no customers contributing greater than 10% of our revenues for the quarter,” highlighting risk mitigation via customer diversification.
  • A Fortune 100 insurance client achieved “over $10 million in quarterly labor savings” and “over 21 million customers” served via SoundHound AI platforms, illustrating measurable enterprise ROI.
  • “drive-through locations deploying our voice AI solutions are generating greater revenue than comparable locations that do not use SoundHound AI technology,” according to customer-conducted analysis, underscoring product adoption impact in QSR.
  • Management framed the transition to proprietary AI models as key to margin expansion: “the cost saving of avoiding frontier models at runtime will be far more than the cost to create this independence within a short span of time.”

Industry glossary

  • Agentic AI: Artificial intelligence systems autonomously executing multi-step tasks, making decisions, and improving through learning, beyond simple conversational interfaces.
  • OASIS: SoundHound AI’s unified orchestration platform designed to enable rapid deployment and continuous self-improvement of AI agents across digital and physical channels.
  • Polaris: SoundHound AI’s proprietary speech foundation model, benchmarked by management as more accurate than external large language models in enterprise use cases.
  • Voice commerce: Technology enabling in-app or device-based voice transactions, e.g., ordering goods or services via voice-enabled automotive or consumer devices.
  • QSR: Quick service restaurant, an industry vertical referenced for AI application in high-volume food service environments.

Full Conference Call Transcript

Keyvan Mohajer; our CFO and Co-Founder, Nitesh Sharan; and our COO, [inaudible]. We will begin with some short remarks before moving to Q&A. I would also like to remind everyone that we will be making forward-looking statements on this call. Actual results could differ materially from those suggested by our forward-looking statements. Please refer to our filings with the SEC for a detailed discussion of the risks and uncertainties that could affect our business and for a discussion of the statements that qualify as forward-looking statements. In addition, we may discuss certain non-GAAP measures.

Please refer to today's press release for more detailed financial results and further details on the definitions, limitations, and uses of those measures and reconciliations from GAAP to non-GAAP. Also note that the forward-looking statements on this call are based on information available to us as of today's date. We undertake no obligation to update any forward-looking statements, except as required by law. Finally, this call is being audio webcast in its entirety on our Investor Relations website. An audio replay will be available following today's call. With that, I would like to turn the call over to our CEO, Keyvan Mohajer. Please go ahead, Keyvan.

Keyvan Mohajer: Thank you, Scott, and thank you everyone for joining the call today. SoundHound AI, Inc. started the year strong with top line growth exceeding 50%. And excluding the impact of all acquisitions, our automotive and IoT AI business was up 88% year over year. Overall, we are seeing increased demand for our AI and our enterprise solutions; this is reflected in the massive pipeline we continue to build. Two weeks ago, we announced we entered into a definitive agreement for the acquisition of LivePerson, a digital messaging pioneer and a leader in the conversational AI space, serving hundreds of enterprise and mid-market customers.

The combined company will work with enterprise customers across more than 30 countries, including 12 of the top 15 global banks, four of the top five global airlines, four of the top five global automakers, and 10 leading global providers. This accumulated customer base includes 25 of the Fortune 100 companies. We expect the deal to close in the second half of the year, marking our fifth strategic acquisition, while continuing a disciplined and deliberate approach to developing a full-service enterprise AI business. With the addition of LivePerson, SoundHound AI, Inc. will have over 120 years combined customer relationships and enterprise integrations as well as data from tens of billions of real-world interactions.

We now have a proven track record when it comes to M&A—a repeatable formula of turning pre-merger decline to post-merger growth by taking complementary business models and technology stacks and integrating them with SoundHound AI, Inc.'s own, emerging together as a formidable force in conversational and agentic AI. Our first acquisition has undergone a complete turnaround in under two years and is on the path of continuous growth. And while we are less than 12 months into our latest acquisition, we are already seeing an acceleration in that pace, with this portion of our business meeting its Q1 revenue forecast. Our process is getting faster and more efficient, and we are ready to deliver another success story with LivePerson.

With all of these companies, we have identified a common thread to bring success and a substantial return on investment for our stakeholders. They are great businesses; each one has amazing teams, incredible solutions, and has built strong customer relationships. In each case, synergies with our highly focused pillars of our business were clear, and SoundHound AI, Inc. was able to give them the resources and the collaboration they needed to thrive. We believe that LivePerson can be a transformational turnaround opportunity. Upon closing the acquisition, SoundHound AI, Inc. will immediately seek to address the three critical areas required by their customers. First is strengthening their financial status. Second is accelerating the modernization of their platform.

And third is delivering faster innovation. In addition, one of the most frequently requested capabilities from LivePerson’s customer base is Voice AI, which SoundHound AI, Inc. can offer immediately. By offering SoundHound AI, Inc. Voice AI to LivePerson customers and the unified digital and voice omnichannel solution to customers, we believe the combined business is expected to reach $500 million based on the existing customer base alone. And with all of our combined businesses, we continue to harvest cost synergies and revenue synergies with cross-selling and upselling.

While acquisition is not a requirement for our success, it provides a strategic opportunity for SoundHound AI, Inc. to accelerate the expansion of our customer base, bring advanced and additive capabilities to our platform, and to further scale and accelerate the trajectory of our leadership position. Moves like this are a key piece of a much larger vision for SoundHound AI, Inc., and turning specifically to the technical synergies arising from our acquisitions, I want to comment on our big news earlier in the week. For those who may have missed the headlines, on Tuesday, we officially announced OASIS, our orchestrated agent system.

This category-leading platform breaks away from old static, build-and-deploy models that require businesses to dedicate considerable resources to constant, time-consuming maintenance. With OASIS, AI itself can build entire fleets of AI agents in minutes, based on existing documentation and integrations. And those agents will autonomously and continuously refine themselves. What once took businesses months can now take just minutes, significantly lowering their operational costs. Like the human brain, OASIS continues to get better the more it is used, and is intelligent enough to take the initiative, evaluating the performance gaps, and then proactively suggesting and building fixes for its human operators to approve. But OASIS is not just about efficiency gains. It is also about opportunity.

A business can use the platform to build an AI agent once and deploy it anywhere—across phone, text, web chats, in-store kiosks, social media, TVs, and in-vehicle. The channel diversity SoundHound AI, Inc. offers is unmatched by competitors in the space and will truly allow brands to redefine where and how they interact with their customers. This is truly a platform built for a new era.

AI agents will traverse digital and physical spaces, handling complex customer contact center inquiries, reducing the need for human escalation, enhanced by continuously improving AI agents trained on historical data and built by AI; managing workflows like prescription refills or IT service requests; offering real-time assistance to employees on the retail sales floor; executing transactions in the vehicle like ordering coffee on the road; providing outbound customer outreach with personalized offers and incentives based on customer data; handling orders in high-volume sales environments like the drive-through; and solving disputes for customer service contact centers, turning complaints into opportunities.

OASIS is a platform that unites SoundHound AI, Inc.’s core technology with the collective strength of our various acquisitions to deliver one unified engine. This marks an important evolution for who we are as a business, moving to a single powerful agentic AI ecosystem. OASIS serves as the orchestration and intelligence layer that allows our customers to move beyond deploying individual SoundHound AI, Inc. products toward a more integrated and user-friendly experience. To understand how powerful this new platform will be for businesses, it is helpful to understand the kind of ROI our current platform is delivering for global enterprise clients. One Fortune 100 insurance company was able to achieve over $10 million in quarterly labor savings.

For that same customer, our AI successfully served over 21 million customers, fully automating a significant portion of those interactions while maintaining over 96% routing accuracy. Additionally, our agents processed over 1 million financial transactions and generated more than $5 million in savings through enhanced customer self-service. Unsurprisingly, this customer has already been testing our new OASIS platform in beta, alongside a number of our large enterprise customers. As another example of undeniable value creation, one of our QSR customers conducted a careful analysis and reported that drive-through locations deploying our voice AI solutions are generating greater revenue than comparable locations that do not use SoundHound AI, Inc. technology.

Our AI is functioning as a powerful efficiency tool for operators and their employees, allowing them to deliver fast, accurate service—a vital advantage in today’s challenging macroeconomic environment where every transaction matters. You can see we are driving measurable value for our clients and their end users alike. While our acquisitions have provided the opportunity for significant cost synergies, I also want to talk about where we are making the right and responsible investments. OASIS will be powered by Polaris, SoundHound AI, Inc.’s own speech foundation model that consistently beats big tech competitors in accuracy and performance by a large margin.

We now see further opportunity to take our foundation model to the next level and include specialized LLMs and speech synthesis with a level of quality beyond state of the art. As a result, OASIS at runtime does not need to depend on any third-party frontier models. Every interaction can be powered by SoundHound AI, Inc.’s own models, giving us higher quality, more control, and significant cost savings. Of course, when necessary or required by a customer, OASIS can orchestrate across any model, and our customers can continue to have the benefit of flexibility. But we expect for the majority of cases, OASIS will utilize SoundHound AI, Inc.’s own models.

This is the right time for us to be making this investment for the following reasons. First, due to our years of R&D and data accumulation, this is a contained and responsible investment. Unlike some companies that are throwing billions to avoid missing out, we know what we are doing. We know our training recipe. We have the data, and our models will be specialized for what they will be used for. Importantly, we believe that models that handle a customer service inquiry do not need to also solve quantum physics problems or answer history questions in haiku.

We will create models that have the right parameters to outperform the frontier models at a lower cost in their target applications, like resolving customer queries, processing orders, refilling prescriptions, or executing card transactions. Second, we have reached a scale that makes this investment a clear winner. Once the traffic from our various acquisitions migrates to OASIS and upgrades to agentic, the cost saving of avoiding frontier models at runtime will be far more than the cost to create this independence within a short span of time. This is a contained and calculated investment expected to be less than 1% of our market cap this year and time-bounded.

We expect it will pay off by an order of magnitude in cost savings for SoundHound AI, Inc., and even more so in value creation as it will elevate SoundHound AI, Inc.’s standing as a pure-play AI company with the full stack of models for the growing number of industries we serve. That brings me to Q1, which saw a number of strong deals across a number of those industries. Across automotive and IoT, we signed a new seven-figure commitment with a prominent Japanese auto manufacturer to deploy our voice assistant across vehicles globally. We also expanded into South America with a prominent multinational OEM, and signed an agreement to integrate SoundHound AI, Inc.

Voice AI into Walmart TV brand ONN. And we continue to make progress with voice commerce as multiple TV and well-known automotive brands integrate our first-of-its-kind solution. Q1 also saw strong traction across large restaurant, retail, and consumer brands. A major QSR reported growing ROI from SoundHound AI, Inc.’s drive-through technology, with AI-enabled locations consistently generating more revenue than those without our AI technology. Also in restaurants, we are seeing an increase in cross-sell wins and a strong uptick in the adoption of SoundHound AI, Inc. Voice Insight product, which provides operators with deep and valuable analysis of customer interactions and staff responses.

In consumer enterprise, we have now deployed AI solutions with three major global fitness apparel brands, representing the majority of market share in that category. And in retail, we signed deals with a national residential and commercial service company, a large swim school, and multiple boutique fitness chains—a total opportunity to deploy our AI solutions in approximately 1,600 locations. We also signed deals across a diverse number of verticals, such as banking, financial services, insurance, utilities, energy, telecommunications, health care, pharmaceutical, life sciences, technology, software, and IT services.

They included one of the largest insurance companies in the US and a Fortune 100 company representing an eight-figure deal; one of the world's largest banks that serves millions of customers in over 100 global markets; one of the largest technology companies in the world, expanding services into Europe; a New York-based global financial services platform company; an American multinational financial services corporation headquartered in Denver, Colorado; a multinational conglomerate that offers a number of products and services across its multiple business groups; a top 10 US credit union; a major insurance corporation headquartered in Texas and operating in all 50 states; two electricity providers headquartered in Texas and Kansas, respectively, both serving residential and business customers; a large telecommunications provider supporting customers in 25 states; a specialized US health care organization operating in multiple states; Allina Health, a health care provider with over 90 clinics, 12 hospital campuses, and 13 retail pharmacies; a large US-based health care network specializing in medical, surgical, and cosmetic dermatology operating across 14 states and over 150 locations; a Japanese multinational company operating across sectors including energy, digital systems, mobility, and industrial infrastructure.

And with our channel partners, we continue to expand our ecosystem. We announced a breakthrough partnership with ManpowerGroup, working with them on their strategy to bring AI agent capabilities to market. We agreed to a partnership with an American multinational corporation that designs, builds, and manages infrastructure services. And we added new business with the following: a leading global IT services and consulting company providing digital transformation, AI, and cloud computing solutions; one of the largest information technology services and consulting companies in the world headquartered in France; and a Japanese-headquartered company that offers IT services, system integration, cloud computing, and information security.

In short, we are seeing great traction because our technology is delivering real value across a wide range of verticals. And with the planned acquisition of LivePerson, we expect our customer base to expand further. LivePerson brings hundreds of long-tenured enterprise relationships, many spanning over a decade, adding to our expanding customer roster, which includes thousands of restaurants, leading global automakers, and enterprise customers across financial services, health care, insurance, energy, and retail. Combined with LivePerson, we will have one of the most comprehensive customer footprints in the conversational AI sector. In closing, we had a strong start to 2026.

This is happening because our disruptive technology, breakthrough innovation, and hyper-responsiveness to customers is resonating, and we continue to scale across our broadening enterprise portfolio. We are growing our top line, are making the right investments with clear ROI while exploring cost synergies. We are innovating faster than ever. And most importantly, we are giving our customers what they want, thanks to our years of experience, relationships, integrations, and data. We are excited about the planned acquisition of LivePerson and the synergies that the two companies can bring to market. The momentum in our space continues to accelerate, and we are being proactive and leading the charge to go after further market share gains.

With that, I will now turn the call over to my co-founder, Nitesh, to talk about our financial performance, key growth drivers, and business outlook.

Nitesh Sharan: Thank you, Keyvan, and good afternoon, everyone. In Q1, we had $44.2 million in revenue, up 52% year over year. Each quarter that passes is another mile marker on our journey, and our pace is increasing at every turn. Innovation and disruption in our industry is not showing any signs of slowing down, and SoundHound AI, Inc. continues to pioneer new breakthroughs. We orchestrate and arbitrate a comprehensive array of models, and this enables us to build new agentic and voice AI solutions that deliver the best possible outcomes for our customers. And now with our unified platform OASIS, we have just taken an important step forward in advancing our leadership position.

The technological differentiation, breadth of coverage and capabilities, and scalable infrastructure position us well for continued market and mindshare capture. Our Q1 was heavy on enterprise momentum across financial services and automotive, as well as health care, restaurants, and technology, which also made strong contributions. The driving force behind this growth continues to be the high usage of our products and solutions. With that, let me discuss the first quarter financial results in more detail. As I mentioned earlier, Q1 revenue was $44.2 million, up 52% year over year. The growth was driven across multiple verticals, led by financial services and automotive.

And our broad-based expansion once again enabled us to realize strong customer diversification, with no customers contributing greater than 10% of our revenues for the quarter. Our enterprise AI business performed particularly well and continued to be the largest contributor to revenue. In automotive, we doubled the number of units committed with the prominent Japanese manufacturer, and while we continue to accelerate our Asia business, we also saw a new expansion in the Latin American market. Our restaurant business also contributed, highlighting upsell and cross-sell among existing customers, as well as an uptick in Voice Insights adoption.

In Q1, our GAAP gross margin was 31%, and adjusted for non-cash amortization of purchased intangibles and employee stock compensation, our non-GAAP gross margin was 50%. The decrease this quarter was in part due to some true-up costs of third-party expenses from a vendor we use for our digital-first business. These costs will not recur in future periods, and without them, margins would have improved year over year. We also continue to drive efficiencies by modernizing infrastructure, optimizing cloud spend, consolidating legacy systems, and improving the efficiency of our core platforms, including shifting from third-party solutions to our own in-house ones.

R&D expenses were $26.2 million in Q1, up 6% year over year, largely due to acquisitions and related headcount and development costs. Sales and marketing expenses were $19.2 million in Q1, reflecting a 60% year-over-year increase, primarily driven by acquisitions. Outside of that, the bulk of our investments here continue to be go-to-market efforts via direct and indirect sales, as well as customer success to increase retention. We continue to elevate our brand and market presence to generate demand and convert more opportunities into pipeline, reflecting a 39% year-over-year increase. G&A expenses were $25.7 million in Q1, primarily driven by various legal, advisory, and other costs related to our acquisitions.

We also saw headcount increases from acquisitions but also added additional resources to support necessary functions as we continue to grow. Q1 expenses included several nonrecurring charges. As we shared in prior quarters, we have identified cost synergies as a result of our acquisitions, and we took several steps to achieve them in Q1, the impact of which will be realized in the next two quarters, with more synergies still being explored. Therefore, we expect recurring costs to generally improve this year. That said, as Keyvan mentioned, we are making calculated and time-bound investments this year in our foundation models with a clear and near-term ROI expected. We predict that this investment will temporarily offset our cost actions.

The two together will keep our expenses at an appropriate level. Basically, we are reducing expenses in many areas and channeling the savings to the appropriate investment opportunities with a clear ROI. We had non-cash employee stock compensation of $20 million and depreciation and amortization, including the amortization of intangibles, of $10 million in Q1, all of which are included in our GAAP results. Adjusted EBITDA was a loss of $26.7 million. GAAP net loss of $25 million, and GAAP net loss per share of $0.06 were impacted by the change in fair value of contingent liabilities of approximately $39 million.

This relates to the acquisitions we have completed and is a non-operating and non-cash expense, and primarily reflects the quarter-on-quarter fluctuations in our stock price. As such, this item has been excluded from our non-GAAP results. Non-GAAP net loss was $26.6 million, and non-GAAP net loss per share was $0.06 in the quarter. This adjusts for items such as non-cash depreciation and amortization, M&A transaction costs, and stock-based compensation. Our balance sheet remains strong, with cash and equivalents at quarter end of $216 million with no debt. With that, let me discuss our financial outlook. We started 2026 with strong momentum. Our pipeline continues to build across several verticals.

We have a strong foundational customer base to expand upon through full-portfolio upsell and cross-sell, and we continue to aggressively release new agentic and voice AI capabilities to dramatically improve customer outcomes. We also expect OASIS to bring game-changing synergies by unifying our products and solutions into one platform. For 2026, we still expect our revenue to be in the range of $225 million to $260 million. As in prior years, there will be a ramp in revenue through the year given the breadth of our customer base, underlying seasonality, and expected large deal timing both for renewals and new deals. That said, we expect the seasonality to even out as our recurring mix of businesses continues to grow.

Overall, this outlook affirms our expectation of another year of very strong growth. We are excited to have announced the LivePerson acquisition and to eventually combine the teams together to bring great solutions to the market and increase value for our customers. The opportunity is large, and in 2027, assuming the acquisition closes in the second half of this year, we expect that the achievable revenue range will be at minimum $350 million to $400 million, with at least $100 million of global contribution from LivePerson's long-tenured customers.

And by offering our Voice AI to LivePerson's customers, and the unified digital and voice omnichannel solution to SoundHound AI, Inc.'s customers, the combined business is expected to reach $500 million based on the existing customer base alone. We remain committed to delivering accelerated growth while being mindful of our journey to profitability. Our strong cash position and debt-free balance sheet gives us the capacity to remain prudent in appropriately balancing growth with profit maximization. We will continue to drive scale through targeted investments and go after growth aggressively where we see opportunity and real ROI. Our mindset has always been AI first. We weave that into everything we do.

This allows us to automate our customers' complex processes and make them more human-like to better serve their customers. New opportunities are opening up before us every day, and we look forward to continuing to share those with you. With that, we will now move to Q&A. Thank you.

Operator: At this time, we will conduct a question and answer session. To ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please standby while we compile the Q&A roster. Our first question comes from the line of Gil Luria from D.A. Davidson. Gil, your line is now open.

Gil Luria: Thank you. Good afternoon. I wanted to ask for you to expand on the M&A strategy here. You touched on it a little bit at the outset, but I think it will help investors get into your mindset, especially if you are making larger and larger acquisitions with this particular approach. Most investors are used to public technology companies buying smaller, growing technology companies at high multiples, but that is not your approach. You are buying companies at a very attractive valuation that you can take their customers and grow from there and be selective about that, which is a very different approach. So especially now as we are talking about LivePerson, would you mind expanding on that?

Why that is the strategy that you are embarked on? And the implications of that for you and your growth.

Keyvan Mohajer: Yes. Thanks for the great question, Gil. So first off, we are very proud of our acquisition strategy to date, and we think we have done really well. And you are right, it is a unique strategy, and it has worked really well for us. And we are getting better at it, so we think we can do it even better and faster with LivePerson. SoundHound AI, Inc. has spent 20-plus years in technology innovation, and that is an area of strength for us. So we have not had the need to go pay expensive dollars for technology acquisition or teams. That is our DNA. In enterprise AI, things take time. Adoption takes time.

You have to develop a relationship with brands. You have to be part of their infrastructure. You have to go through procurement. You start small even after you win the deal, and then you scale with them. That takes time. And what we have learned is that those relationships and the time of integration and scale is very important and very valuable. And that opened our eyes to the M&A strategy. And then as we were exploring that, we found amazing opportunities that I think are amazing for us as SoundHound AI, Inc., not necessarily for a lot of other buyers.

We find companies that have a great team and a great business, really strong customer relationships, and they are deeply integrated with their customers with a long history. But for some reasons, they are going through some stressful situations, and the combination really unlocks the value that was trapped. And it really is that collaboration between two teams that, you know, we come together and we give them what they need to really thrive. And it is really a collaboration. I would not say that we are the only savior for their business. These are amazing teams. We collaborate together. And it is really amazing turnaround opportunities. Our first acquisition was just about two years ago—same story. Great team.

Great technology. Great solution. Great customer base. But they were declining. Within two years, they are on a continuous growth path. So we have completely turned them around with really strong growth. And we think we can do it with LivePerson. We can do it better and faster. Our last acquisition is just a few months ago, and we are already seeing signs of turnaround with them. With LivePerson, there are three really important areas that we can address immediately: financial stability, faster innovation, and faster modernization of their platform. And that kind of story gets fixed quickly. Of course, we have to execute after that.

And if you exclude all of our acquisitions, our core auto and analytics business was up 88% year over year. So we are doing really well organically with our core business, and we are doing a good job turning around these businesses. And with the 52% growth year over year, that included some business components that are recent and had decline in them, and we did a great job, and we are very optimistic about our outlook.

Gil Luria: Got it. So just to take that forward, asking the question: “Oh, this acquisition had X revenue a year ago, and now it has less than X revenue this year,” is not really the right question because you are taking businesses that are either declining or in distress and you are being selective about what you are obtaining. So with that in mind, LivePerson is a public company, and the expectations are for them to generate $200 million of revenue this year.

And I believe your statement is that you are going to retain at least $100 million of that, which is to say, you do plan on some attrition of that business moving forward before you start turning it around and growing again. Is that a correct understanding of your approach to LivePerson?

Mike Zagorsak: Hey, Gil. I will take this one. This is Mike Zagorsak, Chief Operating Officer. I thought I would jump in on the follow-up on that question. Just building on a lot of what Keyvan said, as Keyvan mentioned, this will be our fifth acquisition. So we have built a bit of a foundation for integration. Ultimately, when we step back and look at each scenario, we try to account for all the variables. So it is a combination, as you can imagine—ARR, churn rate, pipeline. So in cases where there is a marked decline, we certainly factor that in. We try to approach our path forward with the appropriate amount of conservatism.

Ultimately, it is a matter of execution—integrating the business, achieving a new baseline of stability. And of course, we did announce our agentic platform OASIS two days ago. That is truly a way to unify a lot of SoundHound AI, Inc.’s legacy business as well as the businesses of the companies we brought on board. So no longer does the technology stack become siloed in the organization or even in the channel. It is a conversational AI platform where you build an agent once, and it is omnichannel. That becomes part of our integration path. And again, as Keyvan mentioned, we approach M&A with a best-of mindset. We combine what each company excels at. It is not one-sided.

So we approach it humbly and conservatively, but with a goal for transformational turnarounds. We have certainly started to see that, and our goal with LivePerson is very much the same. Even though we are approaching it with the appropriate long-term revenue targets in mind, our goal is to always exceed those expectations while making sure that we can hit what we are putting out there.

Gil Luria: Got it. Makes sense. Thank you very much.

Keyvan Mohajer: Thank you.

Operator: Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. Our next question comes from the line of Vijay Devar for Mike Latimore from Northland Capital Markets. Vijay, your line is now open.

Vijay Devar: Yeah. Hi. This is Vijay Devar for Mike Latimore. Couple of questions. What are the best near-term prospects for OASIS? Is it Amelia-based or the other companies? Or the channel? Is it the new customers or established customers? Any comments around that please?

Keyvan Mohajer: Yeah. This is Keyvan. I will take this one. So we had, for example, a Fortune 100 insurance company that we had a renewal with in Q1. It was an eight-digit size deal. They are getting great results from our agent platform. Companies like that would be the first wave of beta users because it would make a very big impact to the quality and to their business, and to our business. But there is a wave of upgrades and migration of the existing customers starting with the larger ones. We are doing it very carefully because some of these integrations have been in place for years with thousands of incremental optimizations.

But all the new customers we expect will use OASIS going forward. And with OASIS, what used to take months now can be done in minutes. Because the concept behind OASIS is “AI builds AI.” We used to have to take their documents, their APIs, their specs, and allocate resources and spend months to work with them to build. Now we provide the vision to our AI, and our AI builds the AI that can be deployed in multiple channels—in voice, in chat, in cars, and so on. Now it is not just AI-built AI. It is also self-learning.

So once it goes live, the data that comes in, all the interactions that the AI sees, it can improve itself, but it does not automatically improve itself because there is concern of AI going in the wrong direction. It presents the improvements that it has designed for itself to a human operator for approval. And that is something that used to take constant maintenance with a large set of resources and now can be done automatically, again with the human oversight to make sure we keep the AI in check. So going forward, we expect all of our customers to start using OASIS, which will improve the quality, improve the speed of delivery, and improve profitability.

Vijay Devar: And how many Amelia customers might migrate to agentic AI this year?

Keyvan Mohajer: So maybe I will step back a little bit because our new platform is OASIS. OASIS combines all the great innovations of all the companies that have come together—SoundHound AI, Inc., Interactions, Amelia, and others. If you look at the history of conversational AI for service, it was deterministic, then it was generative AI, then it was agentic, and now for us, it is OASIS. We have designed OASIS with all the great qualities that I mentioned—AI-built AI, self-learning, and so on. But we have also designed it to help us with integration of these various acquisitions. We do not want to kill the innovation that has taken place for 20 years in one acquisition in favor of another platform.

We want to actually inherit all the great qualities. We designed the infrastructure of OASIS to be able to bring all of those innovations. So I will give you an example. Our last acquisition was Interactions. They have a patented way for human oversight of AI. When AI knows it is not able to handle a question, instead of transferring to a human, it asks a human to help it overcome that particular challenge—almost like, “Let me check with my supervisor.” It goes to ask a human what it should do in this case, and then it goes back and the AI continues to handle the call. That is a very important innovation for a lot of their customers.

Our other customers really value it. That innovation is coming into OASIS. Think of OASIS as a combination of the best of Amelia, the best of SoundHound AI, Inc., the best of Interactions, and hopefully the best of LivePerson in the future. We expect ultimately all customers will migrate to OASIS. We are not sharing the exact number or the exact time frame, but it is the biggest priority for the company to migrate everyone to OASIS, migrate the teams to integrate and work on OASIS, and OASIS is going to be the foundation of our technology and solutions going forward.

Vijay Devar: Thank you.

Operator: Thank you. Our next question comes from the line of Leo Carpio from Joseph Gunnar. Leo, your line is now open.

Leo Carpio: Good afternoon, gentlemen. I just wanted to focus on competitive positioning. How are you thinking right now in terms of the competitive environment? Now you have these large language model providers. They are still focusing on native voice AI and agentic capabilities. Are they still being a pressure, or are you seeing them—or are you thinking you have a competitive moat at this point? I have a follow-up question.

Keyvan Mohajer: Yeah. So I will categorize two types of competitors. There are the big tech players and some of the frontier model providers, and then there are the newcomers. I will address both and how SoundHound AI, Inc. is positioned against both of those. First of all, what you are seeing is our customers do not want a vendor. They need a partner. Because there is a mandate for AI transformation. They do not want an API. They want someone that can fit with them, listen to their pain points, address the pain points, help them dream big, and help them achieve those dreams. And SoundHound AI, Inc. absolutely does that.

We position ourselves as a partner for the transformation, not a vendor with some documentation. That really eliminates some of the big tech players or the frontier model providers, because that is not their business—to be a partner for hundreds and hundreds of enterprise customers. Sometimes they run science projects or some proof of concept, but we do not really see them as a head-to-head competitor. Then there are a number of companies that we call them “Lego makers.” They do not have their own technology. They are using an API for this, an API for that—a bunch of APIs to create a solution.

We win against them in terms of quality because SoundHound AI, Inc. has its own foundation models. And SoundHound AI, Inc. brings the best model from all the frontier models when needed. We promise to bring the best solution and best model to our customers no matter where it comes from, but for the majority of cases, our own model. We have our own Polaris speech foundation model. It beats the accuracy of all the other models we have tried. When we benchmark, it is 35% more accurate or more. Our customers have tested, and it has actually been better—sometimes they report 80% more accurate.

Because SoundHound AI, Inc. has a DNA of the core technology itself and is a partner to our customers, we win on technology and we win on the partnership.

Mike Zagorsak: I would just add—this is Mike again. One more thing to add, because I wanted to tie it into a previous question on our M&A strategy and how that actually makes us more competitive, which is why the timing of this question is really good. Between M&A growth and customer acquisition and OASIS, what we are offering is scale—a proven level of scale. We operate at a level of scale that is significant. It is global. It is enterprise. So customers have the confidence that we can deliver for them. We are doing it across industries and verticals. We are production-tested, meaning that we actually do not just work across the phone. We are in noisy environments.

We work in vehicles. We are truly omnichannel. And that presents distribution opportunities. So if you envision an agentic future built on OASIS where it is a build-one-agent, deploy-anywhere, working with a company that can do it at scale in environments and across channels, that creates a very compelling package. Narrowed down to any one particular execution or industry type, for a pure-play AI company to be able to do all those things is resonating with customers.

Leo Carpio: Okay. And then turning to the auto units, have you been seeing any pricing pressure? I know automakers are trying to consolidate the AI vendors that they use. Are you seeing that impact as you start gaining more share in that area?

Keyvan Mohajer: Actually, we are seeing the opposite. There is the pre-GenAI solution in the automotive business that has been around for a number of years, and they love our solution, both cloud and on the edge, and content across all the vehicle domains for car control and so on. Then we have the GenAI upgrade, and that was an upgrade moment. We basically gave our customers the choice of staying with the pre-GenAI version with the royalties they were paying us or upgrading, and they pay us more for it. It is one of those rare moments in the automotive industry where you are able to increase the revenue per unit. Then we kept the force behind that.

We offered live GenAI after that. We had the GenAI version, and then live GenAI is with GenAI plus live information. If people are asking for current news or something that happened today, we have it live, generalized, and other upgrades that a lot of our customers are signing up for. We are benefiting from increased revenue per unit. A lot of that actually becomes renewable. Instead of a one-time fee, for the cloud they pay for a certain duration, and then there is a renewal after that. So that is another opportunity for growing revenue.

Then the next milestone is agentic and OASIS, and that is going to bring even more capabilities, including voice commerce, which is something we have talked about for a while. As I mentioned in my prepared remarks, and in our press release today, we have a number of automakers and TV makers integrating our voice commerce, which is our agentic solution for devices, but it brings commerce opportunities. So while you are driving, you can order coffee in the morning. You can order food for pickup on your way home. Ultimately, you can book parking or other types of reservations. That is a high-level opportunity that brings revenue for us—more revenue for the carmakers and more leads for the merchants.

That agentic upgrade is also going to bring more revenue.

Leo Carpio: And I apologize, I just have one more question. Regarding LivePerson—this is going to be your fifth acquisition—what is the biggest lesson that you learned from integrating Amelia and Interactions that you are going to be applying to LivePerson?

Keyvan Mohajer: Oh, we have learned a thousand lessons. It is not just one thing. We keep getting better at it every time. The first acquisition—I would say after two years, we see a complete turnaround. It is on a path of growth. The revenue is growing. There are a lot of complementary cross-sell opportunities between, let us say, our first acquisition and our third acquisition. And the last one, which was not long ago, we are seeing the same signs within a year that we saw in the first one in two years.

It is not just about one thing—again, it is a thousand things: integrating better, integrating faster, getting to know what they have, getting to know the team, meeting them, respecting all the innovation they have done, respecting individuals in the company and their vision, and getting in front of customers together. In many cases, they become our leaders. We find amazing gems in these organizations with a lot of potential, and we put them in charge of different business units and different teams, and that has been working really well.

Leo Carpio: Okay. Thank you.

Operator: Thank you. Next question comes from the line of Scott Buck from Titan Partners. Scott, your line is now open.

Scott Buck: Hi. Good afternoon, guys. Thanks for taking my questions. I just have one today. As I think about the path to sustainable profitability, beyond scaling revenue, what are going to be the biggest drivers? Is it mix shift? Is it improved efficiencies, pricing power? How does that break down over time?

Keyvan Mohajer: Yeah. With our acquisitions, we get revenue opportunities, and we also get cost synergy opportunities. Some of it is very obvious, like redundant cloud providers, for example, or redundant vendors. We are constantly exploring those. In fact, we talked about it a couple of quarters ago. We took certain actions in Q1 for those cost reductions, and we expect to see the impact of that in the next one or two quarters. So it is a combination of exploring good cost synergies and revenue growth, but also making the right investments. Another thing I mentioned in my prepared remarks was we have a strategy of a very calculated, responsible investment in our foundation models.

Historically, we have been very strong in speech and translation models, which we call Polaris. Polaris will be powering OASIS. We now see an opportunity to enhance our foundation models to cover specialized language models and speech synthesis. This is the right time for us to do this because of the scale that we have. As we migrate all these customers to OASIS, the cost of leveraging frontier models, for example, can be substantial. Making this investment now will be a fraction of the cost that we would experience if we migrated all of our traffic to OASIS using third-party models, and in a very short span of time, it will have the return on the investment.

Our COGS will go down, and our costs will go down because of this investment that we are making today. And SoundHound AI, Inc. will have the full stack of models to power the full agent experience of every interaction from our customers. That type of innovation is going to reduce cost and improve profitability.

Scott Buck: Perfect. That is helpful. That is all I had, guys. I appreciate it. Thank you.

Keyvan Mohajer: Thank you, Scott.

Operator: Thank you. This concludes the question and answer session. Thank you for your participation in today’s conference. This does conclude the program, and you may now disconnect.