SoundHound AI (SOUN) Q3 2025 Earnings Transcript

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Date

Thursday, November 6, 2025 at 5 p.m. ET

Call participants

• Chief Executive Officer — Keyvan Mohajer
• Chief Financial Officer — Nitesh Sharan
• Chief Communications Officer — Scott Smith

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Risks

• Automotive segment pressure -- Nitesh Sharan stated, "there was continued pressure in the automotive business, driven by global tariffs and the broader industry softness," indicating segment headwinds, though partly offset by diversification.
• Significant GAAP net loss -- Reported net loss of $109.3 million for Q3 2025 and net loss per share of 27¢ for Q3 2025, negatively impacted by a $66 million noncash change in the fair value of contingent liabilities arising from acquisition-related factors and quarter-on-quarter stock price increases.

Takeaways

• Total year-to-date revenue -- $114 million in revenue for the first three quarters of the year, up 127%; the company raised its full-year 2025 revenue outlook.
• Q3 revenue -- $42 million in revenue for Q3 2025, reflecting 68% year-over-year growth; growth was attributed to all three business pillars and both direct and channel partner sales.
• Gross margin -- Gross margin reached 43% for Q3 2025; non-GAAP gross margin (excluding noncash amortization of purchase intangibles and stock compensation) was 59%. Both were up from the prior quarter.
• Adjusted EBITDA -- Adjusted EBITDA loss was $14.5 million, reflecting ongoing investment in growth and product development.
• Cash position -- $269 million in cash and equivalents at quarter-end, with no debt, underscoring maintained balance sheet strength.
• Recurring revenue profile -- CFO Nitesh Sharan stated, "The vast majority of our revenue is recurring," with diversified contract structures including recurring, reoccurring (e.g., automotive royalties), fixed, and outcome-based models.
• Acquisition of Interactions -- The company completed the acquisition of Interactions, a customer service and workflow orchestration provider, and is already integrating technology stacks to pursue cost and revenue synergies.
• IOT and robotics deal -- Signed agreement with a large Chinese company to embed SoundHound AI’s Chat AI into "double-digit millions" of smart devices over two to three years, with an explicit customer commitment, according to Keyvan Mohajer.
• Key Q3 customer expansions -- Notable new contracts and expansions across automotive, financial services, retail, energy, healthcare, insurance, and IT services, including signed deals with a globally recognized sports car company and multiple EV and commercial fleet OEMs.
• Voice commerce progress -- Product pilots showing successful end-to-end order placement from vehicles; management expects production launches with four OEMs in 2026 and stated, "Going live to consumers is now imminent."
• Polaris foundation model -- Management reported a threefold reduction in error rates after transitioning clients to the Polaris platform, as stated during the Q3 2025 earnings call, and asserted cost and iteration-cycle advantages over legacy vendors.
• Amelia 7 platform migration -- The company expects about 75% of customers to be on Amelia 7 by mid-2026, with a significantly expanded initial adopter set and new capabilities (version 7.3) released in-quarter.
• Customer base diversity -- No customers contributed more than 10% of year-to-date revenue, reflecting reduced concentration risk.
• Full-year 2025 revenue outlook -- Raised guidance to a range of $165 million to $180 million for the full year 2025; adjusted EBITDA for Q4 2025 is expected to reach break-even at the higher end of the revenue range, with single-digit millions of loss at lower end.
• Acquisition synergy guidance -- Management expects $20 million annual run-rate in acquisition cost synergies to be realized more fully in 2026.

Summary

SoundHound AI (NASDAQ:SOUN) delivered accelerated growth, reporting $42 million in quarterly revenue for Q3 2025 and $114 million in revenue year-to-date, while raising annual revenue guidance to a range of $165 million to $180 million for 2025, based on broad-based adoption across industries. Management emphasized the company's ability to transition large enterprise customers to its proprietary Polaris model, which it claims significantly reduced client error rates and led to cost efficiencies. The completed acquisition of Interactions was highlighted as a catalyst for new workflow orchestration offerings and deeper penetration within Fortune 100 accounts. Product innovation continued with the upgrade to Amelia 7.3 and full-scale pilots of voice commerce, with first production launches forecast for 2026. Gross margins, both reported and non-GAAP, improved in Q3 2025. The company reaffirmed a strong cash position with no debt, and outlined plans to achieve near breakeven profitability entering 2026 as cost synergies are fully realized.

• Management stated, "We have now demonstrated our M&A playbook multiple times, learning from each acquisition, getting faster and stronger every time."
• "Within any given AI agent workflow, there may be certain functions that are more appropriate to complete with predictable deterministic automation, especially when personal security is in play," indicating proprietary hybrid approaches.
• Enterprise contracts and major deployments now include "seven out of the top 10 global financial institutions," with new signings and renewals in Q3 2025.
• Recurring and outcome-based SaaS pricing models have expanded with embedded, usage, or interaction-based tiers, aligning pricing to client value creation.
• SoundHound AI is "nearly fully integrated with two tech platform giants," according to Keyvan Mohajer to expand voice ordering access to millions of additional users.

Industry glossary

• Agentic AI: AI systems designed to orchestrate complex tasks autonomously, incorporating multi-agent workflows, deterministic automation, generative AI, and human escalation as needed for enterprise use cases.
• Polaris: Proprietary multimodal, multilingual foundation model developed by SoundHound AI for real-time speech recognition and language understanding with claimed cost and accuracy advantages.
• Voice commerce: Platform enabling users to make purchases, reservations, and payments through conversational voice interactions in connected vehicles or IoT devices.
• Containment rate: The percentage of customer interactions resolved by automated systems without the need for human agent intervention.
• Amelia 7: SoundHound AI's flagship agentic AI platform for enterprise voice automation, supporting configurable workflows and real-time speech-to-speech capabilities.

Full Conference Call Transcript

Scott Smith: Good afternoon, and thank you for joining our third quarter 2025 conference call. With me today is our CEO, Keyvan Mohajer, and our CFO, Nitesh Sharan. We will begin with some short remarks before moving to Q&A. We 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 discussion 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 to everyone for joining the call today. Q3 marks another quarter of precise execution against our plan. Enterprise AI adoption is booming globally, and SoundHound AI, Inc. is strengthening its leading position by anchoring its deployments in millions of endpoints across highly diversified industries and customers, with much more potential remaining in the near and long-term horizon. In just the first three quarters of the year, we have already achieved a record year in revenue of $114 million, up 127%, and we are raising our outlook once again. This quarter, we also celebrated our twentieth year as a company.

We started in a Stanford dorm room with the mission to voice-enable the world with conversational intelligence. Our long-term focus, dedication, and strategic execution have paid off, as the opportunities before us are now advancing at an exponential rate. Two decades of technical innovation have given us the speed and agility to truly capitalize on these opportunities. Our deep understanding of AI has allowed us to achieve market readiness rapidly while many others are still experimenting. Indeed, we are already in the market, achieving real success and creating measurable value for our customers with our technology as the driving force. We have a track record of groundbreaking work and being highly responsive to new technological advancements.

We pioneered speech-to-meaning over ten years ago, which combines speech recognition and language understanding in real-time to deliver superior speed and accuracy. Likewise, we pioneered deep meaning understanding over ten years ago and were the first voice technology company to enable the processing of complex and compound conversations while others were still delivering simple limited commands. Our work a decade ago paved the way to leading the world in the agentic experiences we are seeing today. We were the first to go into production with a voice-enabled genetic AI assistant in automotive within weeks of LLMs becoming a proven architecture in language understanding, and years ahead of big tech.

And this year, we were one of the first in the world to introduce a fully agentic platform for enterprise businesses, Amelia 7. Importantly, thanks to our years of IP accumulation and our mature platform, we are able to combine deterministic flows with machine learning models, the latter still lacks the reliability to go from proof of concept into production. This advantage has enabled us to deploy faster, scale faster, and also avoid the explosion in model costs that other companies are battling today. Now let me give you an update on Polaris, our most recent groundbreaking work. SoundHound AI, Inc.'s multimodal multilingual foundation model Polaris continues to prove its superiority in accuracy, speed, and cost.

As we move more Amelia platform clients from third-party legacy vendors to use Polaris, we are able to reduce the error rate by as much as three times. Our customers are thrilled. Transitioning them to Polaris will help us drive down engineering and hardware and achieve faster iteration cycles to improve our speech foundation models. We also continue to add support for new languages and have innovated new methods to provide speech model customization with a rapid turnaround time and minimal deployment overhead. We have innovated new training methodologies that reduce the cost of training and amounts of data required while significantly improving model accuracy.

Notably, we are one of the very few companies that can support our customers in the environment of their choice, whether it is in our cloud, in their cloud, on the edge, or on-prem, as well as a hybrid combination. Polaris, in our view, is another significant disruption that widens the gap between us and the competition in our journey to realize SoundHound AI, Inc.'s vision. While innovation is clearly a major source of strength and the foundation of our growth story, we have also demonstrated repeatable success with our acquisition strategy.

Within twelve to eighteen months of our key acquisitions to date, we were able to convert their pre-merger decline to post-merger growth and turn them into leaders in their field as a fully integrated business unit within SoundHound AI, Inc. While acquisition is not a requirement for our success, it provides a unique opportunity for SoundHound AI, Inc. to change the equation and accelerate our trajectory. We have been able to find great businesses with amazing teams, strong customer relationships, and solutions highly aligned with our three pillars of business, and arm them with what they needed to thrive, including SoundHound AI, Inc.'s strong IP.

Replacing their legacy tech dependencies with SoundHound AI, Inc.'s in-house models that are more accurate, faster, and less costly, with twenty years of data and innovation behind them. Improving their customer experiences while reducing their costs, strong financial backing for innovation and expansion, and proven scale, strong brand, and credibility. This quarter, we acquired Interactions, a pioneer in customer service and workflow orchestration, and we are already moving fast to combine functions to create a comprehensive and dynamic contact center and customer service offering that incorporates a full spectrum of automation and human-assisted capabilities. We have now demonstrated our M&A playbook multiple times, learning from each acquisition, getting faster and stronger every time.

Just as we did with our past acquisitions, we are now integrating our strong IP and replacing their dependencies on third-party models with more accurate, faster, and less costly SoundHound AI, Inc.-built models. With our robust financial position, we can give them the resources they need for innovation and expansion. With this latest combination, we expect to achieve the results we achieved through previous acquisitions, harvesting cost synergies by moving their stack into our own cloud and realizing the revenue synergies with cross-selling and upselling. With that, let me now talk about some specific customer highlights in Q3.

In IoT and robotics, we had a significant win, signing a deal with a large Chinese company that offers intelligence-based interaction in hardware and software products. We agreed to integrate SoundHound AI, Inc.'s Chat AI into double-digit millions of AI-enabled smart devices, which will initially be distributed in the Indian market, leveraging our strong language in Indian languages. In automotive, we continue to see strong adoption and have begun to deepen our market penetration beyond global light vehicles. We are excited to now be working with a major globally renowned sports car brand to develop a unique personality for its in-vehicle assistant. Additionally, Jeep vehicles rolled out our category-leading Chat AI voice assistant in Europe.

Our work with existing EV customers, including Lucid, Tug, and others, is seeing promising results. TAG has just recently expanded throughout the German market. We have also signed multiple deals with prominent two-wheeler companies based in the expansive Indian market, as well as a multinational commercial fleet vehicle company based out of Italy that manufactures light, medium, and heavy vehicles, including trucks, vans, and buses. In financial services, we continue to work with seven out of the top 10 global financial institutions, with three buying additional services and two signing renewals. We also signed a new enterprise technology deal with a prominent organization supporting credit unions throughout the United States.

In energy, we signed new contracts with a large utilities company that generates, transmits, distributes, and sells electricity in the United States, and a Texas-based electricity provider serving millions of customers. In retail and consumer goods, we had a net new upsell with a major multinational brand with an extensive product portfolio of food, beverage, and consumer goods. Through our smart answering solution, we won deals with one of the fastest-growing global health clubs in the United States and a US-based global franchise that offers state-of-the-art training facilities for elite athletes. In restaurants, one of our most established verticals, we are a market leader and continue to see strong adoption with our cutting-edge solutions.

Notably, we signed a deal to deploy our AI ordering solutions with a nationally recognized full-service restaurant chain and have franchise wins with Firehouse Subs, Five Guys, and McAlister's Deli. We are now fully rolled out in all Mod Pizza, Habit Burger, Red Lobster, and Torchy's Tacos locations, in addition to existing brands, Chipotle and Casey's. Pete's Coffee expanded further with employee assist, which will now be deployed in all company-owned locations. Earlier this year, we introduced a new product called Voice Insights, targeting brands that require a precursor to full automation, for example, due to missing APIs and infrastructure.

Voice Insights is our AI-powered solution that analyzes customer and employee interactions in real-time in order to measure efficiency, satisfaction, and other metrics that can help restaurants improve their operations. We are seeing strong interest from our customer brands and prospects, with several brands already in the process of rolling it out within just months of being introduced. In healthcare, we launched with a large precision medicine provider to pioneer an inbound and outbound agentic AI solution, the first of its kind in the healthcare space. We also signed with a US-based regional hospital system to deploy the Amelia platform, and we renewed our relationship with one of the leading healthcare companies for wholesale medical supplies.

In insurance, French insurer Apivia Cortage announced that it would deploy Amelia 7 to bring agentic AI to its contact centers. We also renewed with a global insurance company that provides services to multinational corporations and a highly regarded Mexico-based insurance company specializing in auto insurance. In telecommunications, we signed a large well-known communications provider that offers fiber Internet, digital television, and other services to residential and business customers in over 20 US states. In IT services, we renewed a multiyear contract and upsold to one of the largest Internet domain registry and web hosting companies in the world.

We also won a deal with a leading provider of managed cybersecurity services, cloud, and IT infrastructure solutions based out of the United States. With channel partners, we entered into a strategic partnership with leading technology services distributor, Telarus, to bring Amelia 7 and Autonomix to their enterprise CX and EX landscape. Additionally, we signed a multiyear deal with a longstanding partner that specializes in CRM, AI, and workforce engagement management. We entered into a reseller agreement with Box AI, a company that offers purpose-driven customer experience solutions, and entered into strategic partnerships with two of the leading software and service providers of full suite StudioGym Health, wellness club management.

Many of these important deals and partnerships are the result of our success and growing leadership in enterprise AI. I am excited to talk more about this increasingly important focus area for SoundHound AI, Inc. as we lean in on agentic AI with our differentiating agentic plus framework. With our acquisition of Interactions, we have added a number of preeminent Fortune 100 companies across various industries to our already strong portfolio of global brands. For example, we now offer our solutions to one of the largest footwear and apparel brands in the world, to a Silicon Valley-based platform giant, and to some of the major names in automotive, energy, financial services, insurance, healthcare, technology, and telecommunications.

Not to mention that we have added hundreds of new patents that we can leverage to increase our innovation modes. We see enterprise AI as one of the biggest near-term opportunities, so we are aggressively expanding our product suites and our customer engagement in that space. On that note, we have just updated the Amelia 7 platform to version 7.3, introducing some capability upgrades that have already been wowing customers and prospects, including major improvements to conversational latency and barging handling to deliver an even more natural and intuitive voice experience for customers. The Amelia 7 platform, which offers enterprise-grade agentic AI, is already making a real impact where it has been deployed.

We are now expanding its availability globally and already seeing brand new logos in our pipeline. Much of this interest is driven by our unique approach to agentic AI, what we call our agentic plus framework. It is an agentic system designed for enterprises that balances the power of multi-agent orchestration and generative AI with essential business requirements and controls. While many internal AI projects stall in the pilot phase, our approach consistently brings use cases to market within days or weeks rather than months. Within any given AI agent workflow, there may be certain functions that are more appropriate to complete with predictable deterministic automation, especially when personal security is in play.

And there are times when human escalation is necessary or required by our customers. The complexity and sensitivity of enterprise use cases demand a highly intelligent, hybrid agentic system that delivers safe, efficient end-to-end orchestration. Agentic plus provides exactly that—a practical, scalable framework that brings forward-looking AI use cases into real-world operation today. This is where we see the true value unlock in enterprise AI transformation. As with all of our solutions, this advanced technology has been built upon decades of R&D, troves of data, and an understanding of what motivates our customers.

Our platform is LLM agnostic with relevant enterprise integrations, and SoundHound AI, Inc.'s trademark agility means we will adapt and upgrade Amelia 7 at the pace of AI innovation. We aim to always remain at the cutting edge for our customers. That brings me on to voice commerce. VoiceCommerce is our highly anticipated solution that seamlessly brings conveniences like food ordering and recent additions such as parking payments and restaurant reservations into the vehicle for the convenience of drivers, as well as other IoT devices like TVs. We have now taken POCs to advanced stages with a number of OEMs and merchants and have already successfully placed live voice orders from cars and completed the transaction.

We are looking forward to seeing these go into full production in 2026. We have four OEMs showing strong interest in this groundbreaking technology, with others following very closely. One of them, in particular, is poised to be the first to market together with a large USR. We have also completed the integration with a larger paid parking service provider and a restaurant reservations company. We are on track to have some exciting announcements early next year. In addition, Voice Commerce is driving new conversations with smart TV manufacturers, and in particular, we are in talks with two prominent global manufacturers to enable consumers to order food or other services while watching TV, simply by speaking to the device.

More to come on that in the near future. We are nearly fully integrated with two tech platform giants in order to offer our voice ordering to their many millions of users. Going live to consumers is now imminent. More to come on this opportunity. We believe this is a proof point that our decades of relentless innovation are delivering technology that is ready for mass adoption, even by big tech. We will have a prominent presence at CES once again in January, showcasing our solutions with participation from several partners. We look forward to seeing some of you there. In closing, we continue to deliver strong results.

Some of the largest companies in the world are coming to us for solutions to address their AI goals. We are at the very beginning of addressing the massive market opportunity in front of us. We are a pioneer in voice and conversational AI, and the expertise we have gained over the past decades is becoming recognized more and more every day. We are delivering value-driven, agentic AI solutions to our customers, and we are ready to offer a voice commerce solution no other company has been able to bring to market. With that, I will now turn the call over to Nitesh to talk about our financial performance, key growth drivers, and business outlook.

Nitesh Sharan: Thank you, Keyvan, and good afternoon, everyone. Q3 revenue was $42 million, up 68% year over year. We continue to deliver strong growth, led by product and technological differentiation in a rapidly expanding market. Reflecting on our performance so far this year, we have now successfully delivered the pillar two scaling that we had anticipated and communicated last year. From financial services to healthcare to technology and retail, on top of our existing footprints in automotive and restaurants, we have embedded our leading-edge voice and conversational AI suite deeply into a wide cross-section of market-leading services.

The disruptive innovation curve that extends from deep learning and transformer architectures to large language and reasoning models into agentic AI solutions portends societal and economic transformation for decades to come. That said, the existing state of AI points vividly to call center and customer service disruption as a current epicenter of this transformation, and our solutions are strategically positioned to capitalize. Our organic and strategic investments have positioned us well to succeed here. From full automation that outperforms humans to human-assist capabilities that drive contact center agent efficiencies, we now run the gamut to support enterprises as they deliver best-in-class customer support or outbound lead generation. We have an agentic-first architecture leveraging our own state-of-the-art models alongside best-of-breed partners.

With the acquisition of Interactions, we have now added workflow optimization capabilities to our enterprise agentic solutions, stitching the fabric needed to enable companies to effectively adopt AI and deliver productivity and returns. Our deepening broad-based partnerships are a testament that our offerings are resonating. We have said before, this is the era where natural language conversations will enable humans to more seamlessly interact with technology, and voice AI is the killer app. Our heritage of innovation is our right to win. We continue to see that play out in Q3. In pillar one, we extended our penetration into China with a large IoT win, as we capitalized on that country's lead in the global robotics race.

In restaurants, another quarter of adding 1,000 locations, including most notably with a leading pizza provider, an expansion beyond ordering with our employee assist and voice insight solutions provided both rapid unit and price expansion. In enterprise, our steady retention and rates were supported by significant improvements in customer outcomes. In fact, relative to incumbent solutions, our early agentic AI customers are seeing up to tenfold improvement in containment rates, 25% higher end-user net promoter score, and 15% higher customer satisfaction. We are achieving these results even faster with up to 35% less effort to design and deploy our agentic AI service. We are now consistently eclipsing 1 billion queries a month, up nearly 10x since we went public.

Before I move to the quarterly numbers, I want to talk about our pace of investment. The speed of innovation has been rapid the past several years. Now it is about accelerating the adoption curve and customers' realization of AI's mass benefits. The winners will entrench themselves where value can be derived for many years to come. That is why we are aggressively investing to fortify and expand our moats while deepening our customer relationships. This has been taking the form of go-to-market investments as well as product capability expansion, and we expect to continue to keep the foot on the accelerator.

That said, from a financial profile perspective, we are also moving from our past where our investments were building the future and foreshadowing scale to our present, where our growth and scale fully cover our costs. More specifically, as we exit 2025 and enter 2026, in part a result of executing on substantial acquisition synergies, we expect continued hyper-growth to be coupled with a breakeven profitability profile. I will share more when we discuss the outlook. For now, let me discuss the third-quarter financial results in more detail. Q3 revenue was $42 million, up 68% year over year. All three pillars grew double digits, and we saw strength in both direct sales and through channel partners.

We had a big IoT win for pillar one, and enterprise and restaurants helped drive outperformance in pillar two. While there was continued pressure in the automotive business, driven by global tariffs and the broader industry softness, there are signs of improvement, especially when considering the momentum we are seeing around pillar three voice commerce. As we have substantially diversified our industry mix over the past two years, any individual sector's impact on our growth is much more muted now. Across our business lines, we also expanded geographic reach and product coverage. We continue to see strong customer diversification where year-to-date, we do not have any customers contributing greater than 10% of our revenue.

In Q3, our GAAP and non-GAAP gross margins were both up from the prior quarter. Our GAAP gross margin was 43%, and adjusted for noncash amortization of purchase intangibles and employee stock compensation, our non-GAAP gross margin was 59%. We continue to drive efficiencies in cloud spend as we deepened our acquisition integrations, and we continue to realize cost savings from shifting from third-party solutions to our own home-built ones. R&D expenses were $22.8 million in Q3, up 17% year over year, largely due to acquisitions and related headcount and data center costs. We continue to invest in innovation to maintain our technological leadership.

Our speech foundation model, Polaris, is delivering outstanding results, and we are now deploying it broadly across our customer base. We are also advancing our agentic AI capabilities in real-time speech-to-speech models, leveraging our deep expertise in conversational architectures and machine learning to deliver industry-leading speed and accuracy. Sales and marketing expenses were $16.4 million in Q3, reflecting a 96% year-over-year increase primarily driven by acquisitions. As seen in our results over the last few quarters, we have invested heavily in the channel, which is paying dividends. We have also continued to build up direct sales and are also driving demand and lead generation activities while speeding the journey from pipeline to close.

G&A expenses were $24.3 million in Q3, reflecting a 43% year-over-year increase, primarily driven by our acquisitions. We had roughly $5 million in one-time M&A-related costs. Aside from that, we continue to drive operational efficiencies throughout and improve our control environment. We had noncash employee stock compensation of $19.7 million and depreciation and amortization, including the amortization of intangibles, of $8.6 million in Q3, all of which are included in our GAAP results. Adjusted EBITDA was a loss of $14.5 million, OI and E was $7.1 million of income for the quarter.

GAAP net loss of $109.3 million, and GAAP net loss per share of 27¢ were negatively impacted by the change in fair value of contingent liabilities, of approximately $66 million. This relates to the acquisitions we have completed and is a nonoperating and noncash expense, and primarily reflects the quarter-on-quarter increase in our stock price. As such, this item has been excluded in our non-GAAP results. Non-GAAP net loss was $13 million, and non-GAAP net loss per share was 3¢ in the quarter. This adjusts for items such as noncash depreciation and amortization, M&A transaction costs, and stock-based compensation. Our balance sheet remains strong, with cash and equivalents at quarter-end of $269 million and no debt.

With that, let me discuss our financial outlook. I will complete a thought I started earlier about where we are in the longer term of this business. Keyvan started these prepared remarks by noting our recently celebrated twentieth anniversary as a company. He and our founding team started on a path of breakthrough science, tackling the challenge of hard AI, innovation that provides more seamless and natural access so humans can harness the power of technology for our collective benefit. Notably, through pioneering advances in voice AI. Breakthrough science is challenging. It takes time and requires tenacity and resilience to persist through the cycles of revolution, setbacks, and further evolution.

That was our company's existence for the first fifteen years, and it manifested in financials that were heavy in R&D spend. The last five years as a company have been about commercialization, product deployment, customer traction, and scale. That set the stage for the acceleration into the high-growth part of the S curve, where we are now. Within this high-growth stage, we are crossing the chasm to where we expect our inflows to exceed outflows. That transition, like all others, is not linear or uniform, but they are progressive and ultimately compounding. That is the setup of our business as we look towards 2026.

With that broad context, for the full year 2025, we now expect revenue to be in the range of $165 to $180 million. For Q4, we expect to be adjusted EBITDA profitable at the higher end of the revenue outlook and in the single-digit millions of loss at the lower end. We see additional acquisition cost synergies of $20 million on an annual run rate basis, to be realized more fully in 2026, which will set us up well as we align our organization with the massive tailwinds behind us. Accordingly, our early expectations for 2026 are to continue delivering high growth, commensurate with levels we have been compounding over the past several years.

We expect to do so with near breakeven profitability levels because we want to reinvest when we foresee outsized returns. AI is fundamentally transformative. We have the assets and capabilities to deliver this transformation for our customers, but we will stay aggressive in our approach because we believe the potential value capture merits it, where expected returns are well in excess of the risk-adjusted cost of capital. With that, we will now move to Q&A. Thank you.

Operator: At this time, we will conduct the question and answer session. To ask a question, you will need to press 11 on your telephone. Wait for your name to be announced. To withdraw your question, please press 11 again. 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. First, I wanted to ask about the eight-figure Chinese robotics deal. Is it too much for us to think of this as maybe a humanoid robotics? It seems like that may be a good application for low latency voice-to-meaning, and therefore, a very interesting new development. And then the other part of that question is the double-digit millions over what time frame?

Keyvan Mohajer: Yeah. It is a robotic company. This particular product is not humanoid, but the deal does pave the way to experiences that you are imagining. This one is more of a device that you can carry, like a wearable, but not wearable, but in that category. The double-digit million is in the next two to three years.

Gil Luria: Got it. Hope to be invited to the demo that goes humanoid.

Keyvan Mohajer: Yeah. Yes. Sorry to add that. It is actually a commitment number from them. It is not just our estimate.

Gil Luria: Got it. And then the second one on the Interactions acquisition, where do you specifically think it will have an impact? And what do you expect the financial impact to be for the balance of the year and into next year?

Nitesh Sharan: Yeah. Hey, Gil. So the first part, there are nice adjacencies and sort of going deeper with our enterprise vertical. They have strength across some of their customers overlap in our automotive and our smart tech services. They have a really deep retail footprint and several of the verticals that we are in. The application of the technology, particularly around the workflow orchestration, or they have sort of intent analysts that really complement some of the more complicated enterprise use cases. You could take also financial services and healthcare. So there is a really nice complement to the existing portfolio.

In terms of contribution, I mean, this is a pattern of our M&A that is similar to what we have seen where we have brought companies that have amazing customer long-term contracts, customer relationships, trust, but frankly, in some cases, legacy technology that we are able to partner and bring our own innovation on top of and recalibrate the growth curve. So this is one that we are pretty excited about how we can regrow them together. They are all contemplated in our outlook. I think you will notice a little nudge up in our expectations, particularly with respect to next year. It is an important acquisition.

I think it is one that we are excited about what we are going to do. Most importantly, to your first part, just really excited to complement that it brings both on a tech platform as well as sort of industry overlap.

Gil Luria: Great. Thank you.

Operator: Thank you. Our next question comes from the line of James Fish from Piper Sandler. James, your line is now open.

Caden (for James Fish): Hi. This is Caden on for Fish. Was just wondering, could you provide a percentage of what you are seeing come from term license versus SaaS within Amelia at this point? And then anything to call out for a one-time revenue this quarter? Thanks.

Nitesh Sharan: Sure. Hi, Caden. You know what? I can give you more of the general trending, and we have continued to grow our recurring footprint with Amelia, and we have noted in prior quarters that there were sort of greater one-time type license deals. We talked about that last time. Much smaller footprint this quarter. So I think with respect to Amelia, it continues to be more heavily penetrated towards the recurring. But most importantly, as we look at the shift to agentic and just really what the technology is able to do now integrating LLMs with our deterministic flows, the footprint is you embed, you get a recurring basis, but it is more outcome-based. Contracts and pricing.

So as we can continue to deliver outcomes, for example, in hospitality, we can book more reservations or in maybe a healthcare setting, book more appointments. The economic model is one that is advantageous that we can scale. So it will be recurring plus outcome-based generative incremental revenue. That is sort of the model also with respect to how we comment on restaurants and high order completion rates. Some of our pricing is just a fixed per location amount. More and more customers are seeing that there is real sharing of economic upside if we can say it is more based on real returns to the customer, the pricing will follow.

Operator: Thank you. Our next question comes from the line of Mike Latimore from Northland Capital Markets. Mike, your line is now open.

Vijay Devar (for Mike Latimore): Yeah. Hi. This is Vijay Devar for Mike Latimore. Would you tell me how many customers have committed to upgrading to Amelia 7 right now? I think the number was around 15 last quarter.

Nitesh Sharan: Yeah. We are continuing to grow it. The 15 was sort of a selected first set of customers, and that has progressed really, really well. That was an initial cohort, and they were sort of our early adopter group. That group, that number just continues to grow. We are migrating with others. We have expanded that set quite significantly. We are in active conversations with a number of them. Ultimately, our target here is that about 75% of our customers, we expect to be moving onto Amelia 7 probably by mid-next year. So we are sort of thinking of the trajectory of moving towards that.

Ultimately, all of our new customers are going to get into that, are going to be migrated onto Amelia 7. We are trying to make sure there is a fair migration path for all our customers. Obviously, every customer is different, and we need to be thoughtful about their journeys and be very sensitive to their own end customers. Ultimately, we are trying to orchestrate across all other platforms so we make sure that there is interoperability with other agentic platforms. We are really thoughtful about just onboarding and pace.

So continuing to see great momentum, lots of exciting conversations, and most importantly, I have mentioned in my prepared remarks just the outcomes or the feedback we are getting, whether it is in promoter score, customer satisfaction, or even just the containment rate improvements, like they are real positive outcomes early days. So we are trying to be aggressive in how we migrate.

Vijay Devar: Well, that is pretty interesting. So second one, on what percent of your revenue is recurring presently?

Nitesh Sharan: The vast majority of our revenue is recurring. I guess I will group it. We talk about recurring and reoccurring. Like, I have mentioned, I think, a couple of times around our automotive business where we have licensed recognition as cars are shipped. We get recognition for the voice capabilities, and we get a royalty on that. So maybe I will count that as reoccurring as long as these mega OEMs keep shipping cars. Under the contract duration, we get revenue. We have, in the prior question from Caden around Amelia, it is recurring largely. There is SaaS. Oftentimes, they are fixed price up to certain levels of interactions.

If the customer activity grows above an interaction level, then it gets priced to the next level up. We do, from time to time, have certain recognition. When we deploy an edge, where our obligation to the customer is to pass over that license, then there is immediate revenue recognition. So the vast majority is recurring, SaaS-like. But there is a diversification in the product suite. As I mentioned in the other question you asked, more and more, we are finding the trends towards outcome-based. Again, the reason is the AI solutions work, they can deliver more value, and can align to the economic interest of the customer. So it makes sense for us to price accordingly.

Vijay Devar: Thank you very much.

Operator: Thank you. Our next question comes from the line of Scott Buck from H. C. Wainwright and Company. Scott, your line is now open.

Scott Buck: Hi. Good afternoon, guys. Thanks for taking my questions. So you listed off kind of eight or nine industry verticals in the release and talked through them. I am curious, do you feel like you have enough across each of those to continue to grow them? Or if not, how are you kind of prioritizing where your attention goes near term?

Nitesh Sharan: Sure. I could start. Okay. Add. I mean, I guess to think about it, I get this question to be open, and we get this question a lot. Like, are you doing too much? Or you know? And I kind of not trying to be flippant. But, like, if you start hearing us talk about investing in nuclear energy, maybe that is the fair place to say we are extending a little too far. We are a horizontal platform. We start with the premise of we have, like, the pioneering vision was in voice AI.

We believe that is the major shift that we are going to enable humans to interact with technology predominantly through natural conversations and voice, the way we are talking right now. We will be able to get many, many things done. So we think, first and foremost, in terms of the ultimate vision, we are that can pervade across many, many industries. Again, we got traction in automotive, restaurants, moving into healthcare, financial services. Setting appointments, booking reservations, doing money transfers, all of that is just on the horizontal platform. When we are deploying our technology, and we have mentioned previously, whether it is Polaris or some of the other capabilities, we are best of breed.

We are market-leading even against unlimited resource competitors, where we outperform on our speech recognition technology and how we bring real-time speech-to-speech for understanding and conversation. So I think, when you think of us as a platform provider, that is sort of, like, the premise. Again, I would say that is where our focus is. That is where we determine. As long as we are playing in the game of conversational voice AI, that is the right focus. Now is fair. Yeah. There are different applications, especially when you go into workflow integrations. Different ecosystems have different appointment reservation systems or order-taking or point-of-sale systems in the restaurant. There are, in many of these industries, fragmentation.

We do have to be thoughtful about how deep we can go and who we partner with. We have talked in the past about our partnering strategy in restaurants, for example, where some of the drive-through opportunities require hardware partnerships. We are excited that we work with the likes of Samsung and Dell, and HME and PAR and others. We think that is a great complement. We could go to market together. With respect to the integration with the menu structures, excited that we partner with the likes of Square, Toe, Solo, Oracle MicroSynphony, on and on. That is an example of where we kind of go.

Here is where our software extends, and here is where we want to use partners to go deeper. That same application in some of the announcements we made today with some of the channel partners going deeper into healthcare. That is how we calibrate. So I think there is a lot of room. I take the premise, Scott, to your point of, like, hey. We are a hustling relative to the certainly, the big tech, smaller scale company. We have to be very judicious with our limited resources. I actually think that is a strength of ours because it does force prioritization. It forces us to focus on where our main strengths are.

But that is definitely something we are constantly calibrating around.

Scott Buck: Great. I appreciate the added color there. Second, I am just curious about the voice command or voice commerce launching in '26, laid out in the release. Is that something that you are sharing marketing responsibilities for? Does that fall on the OEM? I guess, what does that rollout look like?

Keyvan Mohajer: Well, we have talked about voice commerce for a number of years. We showcased it in January 2025, end-to-end, and it was very well received. Immediately after that, we had multiple OEMs that started running pilots and POCs, and several brands, merchant brands, like national and global brands, are participating. Those are all going really well. It is moving forward. We are getting more traction. But there are some that are actually eager to go live. Some want to be the first to go live. So we feel very confident that it is going to happen.

Not everything is in our control because the OEM has to do something, but a lot of the work is being done by us, actually, the whole integration of the voice AI and the merchant experience is done by us. We have done an end-to-end. We are able to drive a car to the car, place an order, go pick it up from the store. All of that is done. We will have more to show at CES, and hopefully more to share about the timing of an actual log in production around that time.

Scott Buck: Okay. Perfect. That is all I had, guys. I appreciate the time. Thank you.

Keyvan Mohajer: Thank you.

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

Leo Carpio: Good afternoon, gentlemen. A couple of quick questions. First, on the competitive environment. Can you give us an update on the competitive environment? Are you still facing off against the vendors that we have talked about in the past? How have the large LLMs been competing in this space? I mean, have they started to encroach? But, ultimately, how deep is your competitive moat? And then turning secondly onto the contracts that you have won, have you been seeing any pricing pressure at all? Or are you pretty much getting the pricing that you asked for at this stage of the adoption curve? Thanks.

Keyvan Mohajer: Yes. So I will talk about the competition. First of all, the space is extremely attractive, and you hear more and more names, and that is more of a validation. We have had competitors in our whole life of twenty years and had bigger competitors in the past. The particular space we are going after, enterprise AI, customer service, we feel we are the leader because of the twenty years of innovation. We have our own technology. Most of the new players have their own technology, so they are using APIs and models from third-party, and they have to kind of stick it together and make it work. A lot of these models make really good POCs and good demos.

But when you go to production, they have issues. We are able to actually go from demo to deployment in production faster, with a higher quality. That is thanks to our twenty years of experience, having our own models, lower cost, higher accuracy, better latency, more integrations that we have accumulated over the years, and some through the acquisition. We feel very confident about the space. Some of the names that you may hear in the market could end up being our customers because they need models from companies like SoundHound AI, Inc., and as they go through their choices, they will learn that models like Polaris outperform the competition.

It beats the big tech and some of the industry giants by as much as 30-40% in accuracy. Several times in latency, we can learn it at a lower cost.

Nitesh Sharan: I think your second question was around pricing. I am going to make the general point, and Keyvan can certainly add color. I think in a lot of these sort of eras where we are shifting from old tech to new tech, people are really sort of there is pressure on if you provide legacy technology to drop prices, and it becomes a little bit of a price battle. The key is we are demonstrating our innovation is where you can showcase price value and alignment, and that is where you can protect on pricing. We have shown that and said that, I think, in prepared remarks today and previously. Around where we are seeing pricing expansion.

A lot of that is because we are bringing, we are layering on top generative AI intersection, the first company to bring generative AI into the vehicle, Stellantis early last year. We are seeing that with the Gen capabilities. You need to be competitive in an ecosystem, as Keyvan noted, increasingly competitive. The use case opportunities and expansions are so tremendous. If you are in hospitality and you believe through a nice conversational engine that delights the customer, you can actually upsell a reservation or provide more services. Then you are willing to pay more. That is a little bit of the transition we are in.

I do not want to disparage in certain parts, certainly because we are across industry, there are different stories for different sectors and different solutions. There are macroeconomic dynamics that play into it. I would just say largely, there is a transition of pricing architectures. Ultimately, for those who can provide real innovation and product quality, ultimate ASP expansion is available. That is a little bit of both sides of that equation from a pricing dynamic that we are navigating through right now.

Leo Carpio: Thank you very much.

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.

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