Q4 2023 SoundHound AI Inc Earnings Call

February 29, 2024

Good day, and thank you for standing by.

Operator: Good day, and thank you for standing by. Welcome to the SoundHound Q4 2023 Earnings Conference. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one, one on your telescope. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one, one again.

Welcome to the somehow in queue for 2023 earnings conference call.

At this time all participants are in a listen only mode.

After the speaker's presentation, there will be a question and answer session.

To ask a question during the session you'll need to press star one one on your telephone.

You are an automated message advising your hand is raised.

To withdraw your question. Please press star one one again.

Operator: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Scott Smith, Head of Investor Relations. Please go ahead.

Please be advised that today's Congress is being recorded.

Oh, and I would like to hand, the conference over to your speaker today.

Scott Smith.

Type of Investor Relations. Please go ahead.

Scott Smith: Good afternoon, and thank you for joining our fourth quarter and full year 2023 conference. With me today is our CEO, Keyvan Mohajer, and our CFO, Nitesh Sharan. We'll 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, and 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. 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 definition, limitations, and uses of those measures and reconciliation from GAAP to non-GAAP.

Good afternoon, and thank you for joining our fourth quarter and full year 2023 conference call.

With me today is our CEO cable massager and our CFO an attached garage.

You'll begin with a short remarks before moving to Q&A.

Scott Smith: We would also like to remind everyone that we will be making forward-looking statements on this call, and 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. 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 definition, limitations, and uses of those measures and reconciliation from GAAP to non-GAAP.

We would also like to remind everyone that will be making forward looking statements on this call.

Actual results could differ materially from those suggested by a forward looking statements.

Please refer to our filings with the SEC or a detailed discussion of the risks.

Certainties that could affect our business.

N for discussion statements that qualify as forward looking statements.

In addition, we may discuss certain non-GAAP measures.

Scott Smith: Please refer to today's press release for more detailed financial results and further details on the definition, limitations, and uses of those measures and reconciliation from GAAP to non-GAAP.

Please refer to today's press release for more detailed financial results and further details are the definition.

Limitations and uses of those measures and reconciliation from gap too long yet.

Scott Smith: Also note that the forward-looking statements made on this call are based on the information available to us as of today's date, and 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.

Also note that the forward-looking statements made on this call are based on the information available to us as of today's date, and 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.

Also note that the forward looking statements on this call are based on the 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 elites entirety on our Investor Relations website and.

An audio replay will be available following today's call.

With that I would like to turn the call over to our CEO cable manager. Please go ahead Kevin.

With that, I would like to turn the call over to our CEO, Keyvan Mohajer. Please go ahead Keyvan.

Thank you Scott.

Keyvan Mohajer: Thank you Scott, and thank you to everyone for joining the call. Once again, we broke a new quarterly record for revenue this quarter. We surpassed $17 million and was up 80% year-over-year.

And thank you to everyone for joining a call today.

Once again, you broke your new cooperative <unk> revenue this quarter after $90 million and 80% year over year.

Yeah, we need a new customers and expanding the existing one.

Keyvan Mohajer: We are winning new customers and expanding the existing ones. We continue to create value for our customers, their customers, and their employees while delighting users with our technology. At the same time, we're also driving efficiency with an 80% year-over-year improvement in adjusted EBITDA. At SoundHound, we've made two important predictions for the future of AI. The first is that AI customer service will be as necessary for every business as Wi-Fi and electricity. Second, [inaudible] will become the primary way we connect with the devices around us. We believe voice and conversation is the most natural way to interact with technology, and fortunately for product creators, they can bring their product to life by simply adding a tiny, inexpensive microphone. These predictions are the foundation of our three pillars business strategy. Let me start with our first pillar where we power products such as cars, TVs, and IoT devices. We have a mature history in pillar one.

We are winning new customers and expanding the existing ones. We continue to create value for our customers, their customers, and their employees while delighting users with our technology. At the same time, we're also driving efficiency with an 80% year-over-year improvement in adjusted EBITDA.

Continue to create value for our customers customers and actually while you're likely user without technology.

At the same time, so you're all set driving efficiency and 80% year over year improvement in that <unk>.

At SoundHound, we've made two important predictions for the future of AI. The first is that AI customer service will be as necessary for every business as Wi-Fi and electricity. Second, [inaudible] will become the primary way we connect with the devices around us. We believe voice and conversation is the most natural way to interact with technology, and fortunately for product creators, they can bring their product to life by simply adding a tiny, inexpensive microphone. These predictions are the foundation of our three pillars business strategy. Let me start with our first pillar where we power products such as cars, TVs, and IoT devices. We have a mature history in pillar one.

Somehow you've made too important predictions for the future.

The first is that AI customer service.

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Believe voice I'm conversation is the most natural way to interact with technology. Unfortunately for Carter creators he can bring the product line.

Adding a tiny inexpensive microphones.

These predictions are the foundation of our three pillars.

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Let me start with our first pillar where we power products such as cars, TVs, and IoT devices. We have a mature history in pillar one. We went from zero to over 20 automotive brands in just a few years. These brands represent over 25% of the automotive industry, and we've added several brands just in the last few months. We powered TVs from legacy giants such as Vizio to exciting new innovators such as [inaudible]. We are in millions of devices and process billions of queries from cars, TVs, and other forms of IT devices. Our customers choose us because they believe our technology is the best and we help them protect the brand, users, data, and because we partner with them to differentiate and innovate.

Let me start with that first.

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Keyvan Mohajer: We went from zero to over 20 automotive brands in just a few years. These brands represent over 25% of the automotive industry, and we've added several brands just in the last few months. We powered TVs from legacy giants such as Vizio to exciting new innovators such as [inaudible]. We are in millions of devices and process billions of queries from cars, TVs, and other forms of IT devices. Our customers choose us because they believe our technology is the best and we help them protect the brand, users, data, and because we partner with them to differentiate and innovate. Then something incredible happened. The introduction of large language models and generative AI created a positive disruption in our business, while the big tech companies were disoriented and have been scrambling to make their own models which could take years.

We went from zero to over 20 automotive brands in just a few years. These brands represent over 25% of the automotive industry, and we've added several brands just in the last few months. We powered TVs from legacy giants such as Vizio to exciting new innovators such as [inaudible]. We are in millions of devices and process billions of queries from cars, TVs, and other forms of IT devices. Our customers choose us because they believe our technology is the best and we help them protect the brand, users, data, and because we partner with them to differentiate and innovate.

We went from zero to over 20 automotive brand just a few years.

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Added several Graham just in the last few months.

The power Tv's from legacy giant easier to exciting new innovator Kelly.

You already millions of devices are Crawford billions of <unk> C DS and other forms of iced tea devices.

Our customers to them because they believed our technologies the back and we help them protect the bran user data and because you partner with them to differentiate and you know.

Then something incredible happened.

Then something incredible happened. The introduction of large language models and generative AI created a positive disruption in our business, while the big tech companies were disoriented and have been scrambling to make their own models which could take years. We were able to strictly integrate multiple generative AI models within a matter of weeks.

The introduction of large language model and <unk> created the poverty disruption Ignacio.

While the big Tech companies like disoriented and have been scrambling to make their own model. This could take years.

Keyvan Mohajer: We were able to strictly integrate multiple generative AI models within a matter of weeks. Our integration was clever due to our years of experience and technology foundations and that introduced a SoundHound chat AI product with generative AI. SoundHound Chat AI can integrate with real-time domains and can go back and forth between multiple models seamlessly in a single conversation, and is able to utilize even multiple models for a single query. For example, they drive off the car and can ask for real-time weather, request sightseeing recommendations that match the weather conditions, ask follow-up questions, then request to start navigation to one of the recommended destinations by simply referring to it,

We were able to strictly integrate multiple generative AI models within a matter of weeks.

We were able to swiftly integrate multiple Jennifer I modeled within a matter of.

Our integration what clever due to our years of experience and technology Foundation that introduced a townhome choppy I call back.

Our integration was clever due to our years of experience and technology foundations and that introduced a SoundHound chat AI product with generative AI. SoundHound Chat AI can integrate with real-time domains and can go back and forth between multiple models seamlessly in a single conversation, and is able to utilize even multiple models for a single query. For example, they drive off the car and can ask for real-time weather, request sightseeing recommendations that match the weather conditions, ask follow-up questions, then request to start navigation to one of the recommended destinations by simply referring to it, such as, can you navigate me to the second option you recommended. SoundHound Chat AI has seen rapid adoption.

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For example drive off the car and also can act or ryokan weather.

Request sightseeing recommendations that match the weather conditions.

Follow up question, then request to start navigation one off the recommended explanation.

Simply referring to it.

Keyvan Mohajer: such as, can you navigate me to the second option you recommended. SoundHound Chat AI has seen rapid adoption. Launched in early 2023, we are one of the first companies to show how generative AI could be integrated into a voice [inaudible] while others are still only making broad claims to generate headlines, we've building applications for generative AI. Thanks to our proprietary technology, which helps mitigate hallucinations and other issues that are inherent in unharmed generative AI models, our applications are already live in production and in the hands of consumers across the world.

such as, can you navigate me to the second option you recommended. SoundHound Chat AI has seen rapid adoption.

Okay can you navigate me to the second option you recommend.

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Launched in early 2023, we are one of the first companies to show how generative AI could be integrated into a voice [inaudible] while others are still only making broad claims to generate headlines, we've building applications for generative AI. Thanks to our proprietary technology, which helps mitigate hallucinations and other issues that are inherent in unharmed generative AI models, our applications are already live in production and in the hands of consumers across the world.

Launched in early 2023.

One of the first companies to show how jealous.

I could be integrated into avoid.

While others are still only making broad claims to generate headlines.

We'd be building application oriented.

Thanks to our proprietary technology, which helps mitigate hallucinations and other issues that are inherent an honest survey I models are applications are already live in production I need to have the consumers are comfortable.

Let me highlight a few examples of our momentum and project I'm <unk>.

Keyvan Mohajer: Let me highlight a few examples of our momentum and progress with SoundHound AI. Immediately after it became generally available, other brands saw the potential to increase in-car voice AI usage and improve the user experience using our product. That's because this is not just a simple API integration, but a seamless back and forth between large language models, content domains, and the onboard features of the car, such as the navigation system.

Immediately after it became generally available auto brands.

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Using our product.

That's because this is not just a simple API and depression.

Four six be large language model contact domain and the onboard teachers off the car <unk>.

Throughout last year, we piloted our technology across a range of high profile OEM breath.

Keyvan Mohajer: Throughout last year, we piloted our technology across a range of high-profile OEM brands. We found that by adding generative AI capabilities to in-vehicle voice assistants, the frequency with which drivers and passengers engage with them increased multiple times, and user satisfaction increased significantly. The enhanced performance of [inaudible] AI for automotive has created numerous opportunities, and we are proud to announce that it has become the first in-car voice assistant with generative AI capabilities in the world to go live in vehicles beyond just an experimental pilot. Last year, Stellantis started a pilot with ES Automobiles

Throughout last year, we piloted our technology across a range of high-profile OEM brands. We found that by adding generative AI capabilities to in-vehicle voice assistants, the frequency with which drivers and passengers engage with them increased multiple times, and user satisfaction increased significantly. The enhanced performance of [inaudible] AI for automotive has created numerous opportunities, and we are proud to announce that it has become the first in-car voice assistant with generative AI capabilities in the world to go live in vehicles beyond just an experimental pilot.

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Last year <unk> start with a pilot with E S automobiles and due to the incredible results <unk> coin logging production in 18 countries.

Last year, Stellantis started a pilot with ES Automobiles. Due to the incredible results, they are now going live in production in 18 countries. Recently, more brands, such as Peugeot, Opel, and Vauxhall, have announced their plans to utilize SoundHound AI. Even with our strong partnership with Stellantis, we expect many more brands to go live into production. SoundHound Chat AI is increasing the product quality and user delight, but we also expect it to lead to an increase in revenue with a higher royalty rate for customers that choose to accept it.

Keyvan Mohajer: Due to the incredible results, they are now going live in production in 18 countries. Recently, more brands, such as Peugeot, Opel, and Vauxhall, have announced their plans to utilize SoundHound AI. Even with our strong partnership with Stellantis, we expect many more brands to go live into production. SoundHound Chat AI is increasing the product quality and user delight, but we also expect it to lead to an increase in revenue with a higher royalty rate for customers that choose to accept it. SoundHound Chat AI

Due to the incredible results, they are now going live in production in 18 countries. Recently, more brands, such as Peugeot, Opel, and Vauxhall, have announced their plans to utilize SoundHound AI. Even with our strong partnership with Stellantis, we expect many more brands to go live into production. SoundHound Chat AI is increasing the product quality and user delight, but we also expect it to lead to an increase in revenue with a higher royalty rate for customers that choose to accept it.

Recently more brand packets ketchup, Okay, and Vauxhall announced the can I ask you to like to have a <unk>.

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We also expect it to lead to an increase in revenue higher royalty rate for customers or choose blackout.

And on top of a yacht and enabling auto matrix to add value to the drivers experiences with new functionality.

SoundHound Chat AI is enabling automators to add value to their drivers' experiences with new functionality. We believe we are at the very beginning of a refresh that will bring exciting new opportunities for car manufacturers, drivers at SoundHound [inaudible]. In addition to SoundHound Chat AI, we also launched a new incredible product called SoundHound Data Intelligence in the fourth quarter. Drawing on SoundHound's voice AI, it allows automakers to simply and easily voice-enable the car.

Keyvan Mohajer: is enabling automators to add value to their drivers' experiences with new functionality. We believe we are at the very beginning of a refresh that will bring exciting new opportunities for car manufacturers, drivers at SoundHound [inaudible]. In addition to SoundHound Chat AI, we also launched a new incredible product called SoundHound Data Intelligence in the fourth quarter. Drawing on SoundHound's voice AI, it allows automakers to simply and easily voice-enable the car.

You believe you're at the very beginning of the refresh that little green exciting new opportunities for Carmen, Oxford driver like downtown at the <unk>.

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In addition to SoundHound Chat AI, we also launched a new incredible product called SoundHound Data Intelligence in the fourth quarter. Drawing on SoundHound's voice AI, it allows automakers to simply and easily voice-enable the car. This means that drivers can use voice and conversation to ask about settings, special features, troubleshooting, and more without having to spend time and effort leafing through a cumbersome printed document. SoundHound Vehicle Intelligence is another innovation that we expect will improve product quality and increase our revenue. We're working closely with well-known EV brands and have been gaining strong traction with luxury brands as well. For example, we run the business for a prominent U.S.-based EV major to voice-enable their full fleet of market-leading [inaudible]. In addition, we significantly extended and increased the volume of our existing committed contracts with a large auto union until 2037.

Drawing on on both at Yahoo allows auto makers with it seems to be an easy devotion April the car I'm, adding all these needs.

Keyvan Mohajer: This means that drivers can use voice and conversation to ask about settings, special features, troubleshooting, and more without having to spend time and effort leafing through a cumbersome printed document. SoundHound Vehicle Intelligence is another innovation that we expect will improve product quality and increase our revenue. We're working closely with well-known EV brands and have been gaining strong traction with luxury brands as well. For example, we run the business for a prominent U.S.-based EV major to voice-enable their full fleet of market-leading [inaudible]. In addition, we significantly extended and increased the volume of our existing committed contracts with a large auto union until 2037. Creating value in a pillar one category is not just limited to automotive.

This means that drivers can use voice and conversation to ask about settings, special features, troubleshooting, and more without having to spend time and effort leafing through a cumbersome printed document. SoundHound Vehicle Intelligence is another innovation that we expect will improve product quality and increase our revenue. We're working closely with well-known EV brands and have been gaining strong traction with luxury brands as well. For example, we run the business for a prominent U.S.-based EV major to voice-enable their full fleet of market-leading [inaudible]. In addition, we significantly extended and increased the volume of our existing committed contracts with a large auto union until 2037.

The drivers can use voice I'm conversation <unk>.

About getting facial features troubleshoot and more without having to spend time and effort <unk> printed documents.

And they can intelligence is another innovation that'd be expecting the group product quality and increased already.

You are working closely with well known easy brand and have been gaining strong factions with luxury brands as well for example, we want a business or a prominent U S. H E D major to both enable the <unk> market leading <unk>.

In addition, we significantly extended and increase the volume of our existing communist contract with a large auto and yet <unk> two seven at 37.

Creating value in a pillar one category is not just limited to automotive. We also like to put technology into smart TVs and many IoT devices. For example, we integrated our AI voice assistant with Telly, a new disruptive smart TV provider. Another customer, Vizio, an integrated platform for cutting-edge smart TVs is a strong opportunity with our monetization model using voice commerce, such as ordering food, groceries, and supplies on the [inaudible].

<unk> one category is not just limited talking about it we also likely it's our technology to smart T V and many I O T devices.

Keyvan Mohajer: We also like to put technology into smart TVs and many IoT devices. For example, we integrated our AI voice assistant with Telly, a new disruptive smart TV provider. Another customer, Vizio, an integrated platform for cutting-edge smart TVs is a strong opportunity with our monetization model using voice commerce, such as ordering food, groceries, and supplies on the [inaudible]. For IoT devices, the use cases are endless, and we are working with more companies every day to extend or go into production in multiple areas, such as with large appliance manufacturers [inaudible]. We are also thrilled that in Q4 we have a notable revenue contribution from a preeminent AI [inaudible]. Although these companies have been a close partner for us for a number of years, this was the first time we generated licensing revenue from the partnerships.

We also like to put technology into smart TVs and many IoT devices. For example, we integrated our AI voice assistant with Telly, a new disruptive smart TV provider. Another customer, Vizio, an integrated platform for cutting-edge smart TVs is a strong opportunity with our monetization model using voice commerce, such as ordering food, groceries, and supplies on the [inaudible].

For example, integrated on AI wake up.

Kelly and new disrupted Martini provider.

Another customer <unk> and integrated platform for cutting edge Martini.

<unk> opportunity, we dark monetization models using voice hammered protect ordering food groceries on supply and the T V.

The largest screen.

Social setting up every.

For IoT devices, the use cases are endless, and we are working with more companies every day to extend or go into production in multiple areas, such as with large appliance manufacturers [inaudible]. We are also thrilled that in Q4 we have a notable revenue contribution from a preeminent AI [inaudible]. Although these companies have been a close partner for us for a number of years, this was the first time we generated licensing revenue from the partnerships. And we expect more value will be realized from these partnerships.

R. I O T devices that you get it wrong.

And you're working with more companies everyday to extend or go into production in multiple area, which act with large appliance manufacturers alcott airplanes provided <unk>.

Verbal copy machines Antioch amount anyhow.

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Although this company has been a close partner.

For a number of years you spent the first time, we generated licensing revenue from department shape and do you expect more value will be realized from this partnership.

Keyvan Mohajer: And we expect more value will be realized from these partnerships. Moving on to pillar two, where we offer AI customer services for businesses such as restaurants, home services, personal care, and professional care. As we predicted a year ago, AI customer service is now outperforming [inaudible]. User adoption is on the rise and consumers are increasingly choosing to interact with conversational AI due to its reliability and extended capability. We believe disruption in the customer service industry will be one of the first major commercial applications for generative AI and large language. It is also becoming affordable and accessible to merchants of all sizes. Businesses are beginning to see AI as a necessity, just like Wi-Fi and electricity. We now have a proven scale in pillar two as well.

And we expect more value will be realized from these partnerships. Moving on to pillar two, where we offer AI customer services for businesses such as restaurants, home services, personal care, and professional care. As we predicted a year ago, AI customer service is now outperforming [inaudible]. User adoption is on the rise and consumers are increasingly choosing to interact with conversational AI due to its reliability and extended capability. We believe disruption in the customer service industry will be one of the first major commercial applications for generative AI and large language. It is also becoming affordable and accessible to merchants of all sizes. Businesses are beginning to see AI as a necessity, just like Wi-Fi and electricity.

And we expect more value will be realized from these partnerships.

Moving on to pillar two, where we offer AI customer services for businesses such as restaurants, home services, personal care, and professional care. As we predicted a year ago, AI customer service is now outperforming [inaudible].

Moving out to <unk> that'd be all for AI customer services or businesses, such as restaurants, Homeservices personal care unprofessional theory.

As we predicted a year ago <unk> customer service is now outperforming us.

User adoption is on the rise and consumers are increasingly choosing to interact with conversational AI due to its reliability and extended capability. We believe disruption in the customer service industry will be one of the first major commercial applications for generative AI and large language. It is also becoming affordable and accessible to merchants of all sizes. Businesses are beginning to see AI as a necessity, just like Wi-Fi and electricity.

User adoption is on the rise and consumers are increasingly choosing to interact with <unk> conversation on AI due to reliability and extend it to it but.

<unk> disruption in the customer service industry will be one of the first major commercial applications or generate a I am large language model.

It is also becoming affordable and accessible to <unk>.

Businesses are beginning to see <unk> and then just.

Just like <unk> and <unk>.

We now have a proven scale in pillar two as well. Today, our technology lies in about 10,000 merchant locations. We are fully engaged with over 100,000 locations in our pipeline, and we have over 30 million businesses in our near term addressable market. We're at the very beginning of what generative AI will bring to the world, and we're emerging as a market leader by offering applications in the real world. There are two very clear reasons that we believe we are leading things.

We now have a proven scale until after you as well.

Keyvan Mohajer: Today, our technology lies in about 10,000 merchant locations. We are fully engaged with over 100,000 locations in our pipeline, and we have over 30 million businesses in our near term addressable market. We're at the very beginning of what generative AI will bring to the world, and we're emerging as a market leader by offering applications in the real world. There are two very clear reasons that we believe we are leading things.

Hey, I'll technologies lie in about 10000 <unk> locations.

Fully engaged with over 100000 locations pipeline.

We have over 30 million businesses in or near <unk>.

You're at the very beginning <unk> and your emerging at the market theater like offer your application real royalty.

There are two very clear reason <unk> you're needing.

Keyvan Mohajer: First, our solutions are built on proprietary technology, and we alone own the entire technology. Second, our solutions are fully up-to-date, and therefore easily scalable and capable of serving brands of all sizes, from the largest brands in the world to your local favorite shop on the corner.

First our <unk> our solutions are built on proprietary technology.

And be alone on the Empire technologies.

Second our solutions are fully automated and therefore easily scalable and change your bill of serving brands of all time.

The largest <unk> your local favorite shop on the corner.

We are offering easy to use easy to put my solution that make a real and immediate.

Keyvan Mohajer: We are offering easy-to-use, easy-to-implement solutions that make a real and immediate difference. I'll share some examples across our various offerings. Our SoundHound Smart Ordering product uses voice AI to support businesses by answering all inbound phone calls, taking customer food orders, and answering numerous questions, allowing restaurants to free up their staff to focus on making food and engaging customers [inaudible]. [inaudible], a chain with over 2,000 locations, went live in Q4 with smart ordering and is rolling out at a rapid pace. Targeted for an initial 50 locations, we've already reached that goal today, and we expect them to expand the partnership based on the solid results today. [inaudible], our first drive-thru offering, continues to ramp up production. We are on pace to reach our goal of 100 lanes by the end of 2024.

We are offering easy-to-use, easy-to-implement solutions that make a real and immediate difference. I'll share some examples across our various offerings. Our SoundHound Smart Ordering product uses voice AI to support businesses by answering all inbound phone calls, taking customer food orders, and answering numerous questions, allowing restaurants to free up their staff to focus on making food and engaging customers [inaudible].

I'll say some examples.

Alright.

Our style, how smart ordering product using voice AI and to support businesses by answering all inbound phone call. They can customers food ordered and answering numerous questions along restaurants to free up there fast to focus on making food and engaging the customers in the store.

[inaudible], a chain with over 2,000 locations, went live in Q4 with smart ordering and is rolling out at a rapid pace. Targeted for an initial 50 locations, we've already reached that goal today, and we expect them to expand the partnership based on the solid results today. [inaudible], our first drive-thru offering, continues to ramp up production. We are on pace to reach our goal of 100 lanes by the end of 2024.

Yeah, he might change over 2000 locations.

<unk> and Q4 with Margot during and is rolling out at a rapid pace.

Are gonna put an initial 50 locations you've already restarted go out today, and we expect them to expand their partnership based on the <unk> today.

<unk>, our first drive through offering continue to ramp up production you're on pace to reach our goal of hundred link by the end of 2024 so.

Keyvan Mohajer: So far, we are also seeing our order processing of under 60 seconds, which is significantly faster compared to [inaudible]. In Q4, more large restaurant chains chose to integrate our AI ordering tools to help automate in-store operations, including [inaudible] Chicken and a large hamburger chain located in the South, which has approximately 2,700 locations we can integrate our solutions into. With these larger deals for our voice AI solutions, we are also seeing a number of customers look to bundle these solutions with our other offerings. For example, to deploy our new SoundHound product called Employee [inaudible] as restaurants look for multiple offerings to gain efficiency in ordering and with employees. SoundHound Employee [inaudible] is a game-changer for businesses. It uses conversational voice AI to support restaurant employees like a co-pilot across a variety of tasks via their headset. For example, it can provide ingredients and allergen information to customers and also train employees with step-by-step instructions to ensure the product is prepared correctly without them ever having to remove their gloves, consult a manual, or distract another staff member, significantly reducing the stress on the workers.

So far, we are also seeing our order processing of under 60 seconds, which is significantly faster compared to [inaudible]. In Q4, more large restaurant chains chose to integrate our AI ordering tools to help automate in-store operations, including [inaudible] Chicken and a large hamburger chain located in the South, which has approximately 2,700 locations we can integrate our solutions into. With these larger deals for our voice AI solutions, we are also seeing a number of customers look to bundle these solutions with our other offerings.

So far we are also seeing our order processing under 60 seconds, which is significantly faster compared to humans.

Q for more large restaurant chain choke to integrate our <unk> solution to automate in store operations, including Cherkessov chicken and a large hamburger chain located in new <unk>.

Approximately 2500 locations, we can integrate our solution.

We did a larger vehicle or or what yeah solutions. We're also seeing a number of customers.

Bundled the furniture with our other offers for example, you deploy our new product called <unk> address frankly for multiple offerings, beginning <unk> ordering them <unk>.

For example, to deploy our new SoundHound product called Employee [inaudible] as restaurants look for multiple offerings to gain efficiency in ordering and with employees. SoundHound Employee [inaudible] is a game-changer for businesses. It uses conversational voice AI to support restaurant employees like a co-pilot across a variety of tasks via their headset. For example, it can provide ingredients and allergen information to customers and also train employees with step-by-step instructions to ensure the product is prepared correctly without them ever having to remove their gloves, consult a manual, or distract another staff member, significantly reducing the stress on the workers.

<unk> Yeah. This is a game changer for businesses.

Did you this conversation on <unk> like a co pilot.

Alright, yep at the other headset.

<unk> and can provide ingredients and other than information to customers you can also train employees.

The instructions to ensure the product is prepared correctly without them ever having to remove the club consult the manual or distract another staff member.

Kennedy, reducing the stress on the on the <unk>.

Another incredible cannot product dynamic interaction is on multimodal <unk> <unk> drive throughs or anything <unk>.

Keyvan Mohajer: significantly reducing the stress on the workers. Another incredible SoundHound product, Dynamic Interaction is our multi-modal, full-duplex voice interface for kiosks, drive-throughs, or any device. We are working with a number of partners and customers, and our pipeline keeps growing. For example, Krispy Kreme has selected Dynamic Interaction.

significantly reducing the stress on the workers.

You're working with a number of apartment our customers and our Python keeps growing for example, Krispy Kreme has selected dynamic.

Another incredible SoundHound product, Dynamic Interaction is our multi-modal, full-duplex voice interface for kiosks, drive-throughs, or any device. We are working with a number of partners and customers, and our pipeline keeps growing. For example, Krispy Kreme has selected Dynamic Interaction.

As we can see of course, all your restaurants solution is taking shape and major brand from convenience stores to multinational restaurant chains are taking notes.

The <unk> the proof that order processed experienced and accuracy of the order while at the same time improving their bottom line.

Today, we have restaurants solutions logging all 50 U S states and now you're expanding internationally.

Keyvan Mohajer: As you can see, our portfolio of restaurant solutions is taking shape, and major brands, from convenience stores to multinational restaurant chains, are taking notice. They come to us to improve their order process, experience, and accuracy of the order, while at the same time improving their bottom line. Today, we have restaurant solutions live in all 50 U.S. states and now we're expanding internationally. With 25 languages in our arsenal,

25 languages Arsenal you believe you have a matthew opportunities to go beyond.

Countries.

Net smart answering this is our phone answering solution that goes beyond restaurants and can be used by any company in any industry.

This product you're empowering business with all parts and how they respond to customers on the phone how long have your password every business opportunity while it also mitigating.

Smart answering and having multiple calls at 124 seven.

Immediately you'll tear that spam calls getting out of a waste of time for any dizziness.

Keyvan Mohajer: we believe we have a massive opportunity to go beyond the restaurant industry. Next, Smart Answering is our phone answering solution that goes beyond restaurants and can be used by any company and any industry. With this product, we are empowering businesses of all types in how they respond to customers on the phone, allowing them to capture every business opportunity while also mitigating. Smart answering can handle multiple calls at once, 24-7, and conveniently filters out spam calls, saving hours of wasted time for any decision.

It also provides antimetric pocket accurately intelligent messaging app important part of our question. In addition to bareboat answers around policies, our product services pricing and more.

You're already lives with customers with smart Anthony and the feedback is.

<unk>.

Even the smart answer experiences pull the automated you can easily offer these products smaller businesses that means putting that back.

And to massively increase our ability to scale and offer a solution with no touch onboarding or any dizziness.

Letting itself service e-commerce approached into one and D early adopters.

Let me talk about <unk>.

Following up on the announcement of acquisition of the three you begun.

Keyvan Mohajer: It also provides asymmetric fonts, and captures intelligent messaging that asks important follow-up questions in addition to verbal answers around policies, hours, products, services, and pricing. They're already live with customers with smart answering, and the feedback is terribly positive. Even the smart answering experience is fully automated, and to massively increase our ability to scale and offer a solution with no cash onboarding for any business, we are piloting a self-service e-commerce approach in Q1 and seeing early adoption. Let me talk about the, following up on the announcement of our acquisition of and the integration of their exceptional team with SoundHound. SYNC3 brings more than 20 national and multinational chains, spanning drive-thru, app-based, and casual dining, as well as convenience stores, to SoundHound's past growing companies. Examples include Chipotle, Casey's, Applebee's, Panda Express, Papa John's, and iFood.

Begun the integration of exceptional team gets townhouse.

<unk> brings more than 20 national or multinational chain spending drive through I've scheduled in charge of the on the statement as well as convenient stores townhouse app growing customer base.

Examples include cheaper plan, Casey Appleby and to express Papa Johns and iPhone.

Because our voice AI fully autonomous and does not just you mentioned the loop to perform you're also able to rapidly scale deployment without any degradation in quality.

For instance, it seems <unk> recently completed the rollout avoid ordering 220 400 K C General stores, which also is one of the largest piece of change in the U S.

Joint pain, you're combining nearly two decades of stamina innovation the decade dusting three industry expertise and established relationships too.

Together, you would accelerate the deployment of bleeding edge as it reacted abilities to the industry, while ensuring that our technology always works to preserve the best <unk> our customer their customers.

More broadly.

The combination next <unk> preeminent global provider avoid jaco restaurant significantly extending our market.

Although the only closed the transaction in Q1 of this year you are already seeing tremendous momentum with your customers and the ability to offer. The addition of solution protect dynamic interaction smart answering and so yes. It it.

Keyvan Mohajer: Because our voice AI is fully autonomous and does not use humans in the loop to perform, we are also able to rapidly scale our deployment without any degradation in quality. For instance, with SYNC3, we recently completed the rollout of voice AR ordering to 2400 KT general stores, which is also one of the largest pizza chains in the world. Together, we are combining nearly two decades of SoundHound AI innovation, decades of SYNC 3 industry expertise, and established relationships. Together, we will accelerate the deployment of leading edge-relative AI capabilities to the industry, while ensuring that our technology always works to preserve the best interests of our customers, their customers, and society more broadly. The combination makes SoundHound the preeminent global provider of voice-activated ayahuasca restaurants, significantly extending our market.

As soon as you are already taken cause you're moving at a rapid pace.

As I mentioned earlier, we have three pillars royalty promotional products.

Subscription from what kind of book services.

Birchler is monetization from connecting those services to those products.

For example driver.

<unk>, who will be able to use their voice to order food by just talking to the car and can do so before arriving at the restaurant.

Or they can make an appointment to get a haircut book apply or for some other types of transactions.

We believe this will create a few shut off the voice commerce ecosystem and found out within a unique position to realise decision X R strong footprint both devices.

With our expanded National restaurant <unk>, you see an exploration of <unk> strategy transactions and knew the card <unk> and audio C D by.

We believe this is a powerful business model.

Could I see it again value all participants.

You would collect S T for generating new leaf or merchant and activate any transaction.

Keyvan Mohajer: Although we only closed the transaction in Q1 of this year, we are already seeing tremendous momentum with their customers and the ability to offer them additional solutions such as dynamic interaction, smart answering, and employee engagement. The synergies are already taking hold, and we are moving at a rapid pace. As I mentioned earlier, we have three... Royalty from Bush Enabled Products, Tufts Jefferson, Frank Boyce, and a book category.

The store or restaurant benefit from a new customer dechanneling get direction at the auto makers and the device maker sure update economics.

Most importantly, the end user will have the convenience of using their voice to get things done.

You are excited to see our first call your customers using both medical services continue to grow.

Allow us to begin I left this newcomer scrubbed.

In closing a revenue has grown on average October 50% over the last four years. This incredible growth during challenging times and against global markets headwind is it <unk> strong foundation demand for our technology and great partnership <unk> some.

Some of the most well known <unk> <unk>.

Keyvan Mohajer: The third pillar is monetization, from connecting those services to those. For example, drivers of a SoundHound-enabled car will be able to use their voice to order food by just talking to their car, do so before arriving at the restaurant, or they can make appointments to get a haircut, book a flight, or perform other tasks. We believe this will create the future of voice commerce. We are in a unique position to realize this vision and due to our strong footprint in both devices and with our expanded national restaurant. Thank you very much. We believe this is a powerful business model that offers significant value to all participants. Collect a fee for generating new leads for merchants and calculating transactions. The store or restaurant benefits from a new customer being channeled in their direction, and the automakers and the device makers take a share of this economy.

Forward the effect to maintain your strong growth and see massive opportunities to accelerated even further beyond that this year.

<unk> evolution, creating tailwind in our favour <unk>.

Believe that <unk> has a unique advantage with its own IP to the ketchup experience building trust with global customers at 12 of data and it's cracked record of innovation move at an event or wait for.

You remain at the forefront of conversation about AI and that's why we have been working on <unk>.

Our multimodal multilingual.

<unk> ambition model.

Another important for us at the policeman ourself at one of the leading a major force in this new era.

With that I will now turn the call over to the Tech talk about our financial performance equal.

<unk> and also for the remainder of the year.

Thank you, Kevin and good afternoon, everyone.

Q for revenue increased by 80% year over year.

We finished 2023 with accelerating momentum and we are <unk> exceptionally strong interest from enterprise businesses.

Keyvan Mohajer: Most importantly, the end user will have the convenience of using their voice to get what they want. We are excited to see our portfolio of customers using voice and adult services continue to grow, allowing us to begin to pilot this new Hummer Solar. In closing, our revenue has grown on an average of over 50% over the last four years. This incredible growth during challenging times and against global market headwinds is a testament to our strong foundation, demand for our technology, and great partnerships we've built with some of the most well-known brands. Going forward, we expect to maintain this strong growth and see massive opportunities to accelerate it even further. I'm Lee Iyar. Evolution is creating heaven in our.

Notably within the restaurant not his hector's.

In fact.

Demand for sound out solutions is so high that we now have a healthy weight lift a restaurant merchants and we're calibrating our resources.

To ensure we deliver for the customers.

While we continue to be mindful of her pathway to profitability delivering against this demand is paramount.

Exceptional growth, we realized with coupled with cost containment.

We focused on cough disciplined this past year and will continue to do too.

For the air adjusted EBITDA improved by over 50%.

Q for Ah results were even better with 80 per cent improvement.

Excluding certain costs that were necessary to fuel our growth and transformation brings it close to the positive Q for adjusted EBITDA target, we laid out last quarter.

Nitesh Sharan: We believe that SoundHound has a unique advantage with its own IP, two decades of experience building trust with global customers, a trove of data, and a track record of innovation to move fast and invent our way forward. You remain at the forefront of conversational AI, and that's why we have been working on Polaris, our multi-modal, multi-lingual, generative AI foundation model, another important tool for us as we position ourselves as one of the leading and major forces in this new era. With that, I'll now turn the call over to Nitesh to talk about our financial performance, eGrowth drivers, and also for the remainder of the webinar. Thank you, Keyvan, and good afternoon, everyone.

For example, the near term my pack of switching too big for audit from Pwc <unk>, So I'll be coming a large accelerated filer and upgrading some of our internal tools contributed to the majority of these costs.

We expect these expense pressures to lessen as we go forward.

The underlying drivers behind the remainder of the expenses are positive indicators of our teachers.

First.

We saw some tremendous growth opportunities in the second half of the year that we chose to invest it.

We saw a significant demand from enterprise restaurant in particular.

Second.

With a great opportunity to Inorganically accelerate our go to market motion capture a sizeable and meaningful restaurant customer portfolio.

Nitesh Sharan: Q4 revenue increased by 80% year-over-year. We will finish 2023 with Accelerating Momentum. And we are seeing exceptionally strong interest from enterprise businesses, most notably within the restaurant and car industries. In fact, Demand for SoundHound solutions is so high that we now have a healthy waitlist of restaurant merchants, and we're calibrating our resources to ensure we deliver for the country. While we continue to be mindful of our pathway to profitability, delivering against this demand is paramount. The exceptional growth we realized was coupled with cost containment. We focused on cost discipline this past year and will continue to do so.

The acquisition of <unk>, clearly positions us as the leader in the restaurant AI space.

Lastly.

We accelerated investments and our administrative functions, notably around internal processes and control to ensure we haven't even stronger foundation for the sustained longterm growth, we expect to deliver.

We fundamentally re Architected this company in 2023.

We are more efficient more focused even more nimble and aggressively driving disruption in growth across voice enabled products and services.

Accordingly, we.

Updating a metric we have previously shared and what we call cumulative subscription and bookings backlog, which includes our previously reported cumulative bookings backlog also now include new subscription revenue streams that we're focused on.

Nitesh Sharan: For the year, Adjusted EBITDA improved by over 50%, and in Q4, our results were even better, with an 80% improvement. Excluding certain costs that were necessary to fuel our growth and transformation brings us close to the positive Q4 adjusted EBITDA target we laid out last quarter. For example, the near-term impact of switching to Big4 Audit from PwC mid-year while becoming a large accelerated filer and upgrading some of our internal tools contributed to the majority of these costs. We expect these expense pressures to lessen as we go forward.

You must have bookings backlog takes into account the prior quarter and balance plus new bookings in the current quarter minus associated revenue recognized.

He must have looking backlog is still derive from committed customer contract and this definition remains the same as the previous one.

Subscription backlog takes into account customers, where we are the leading our exclusive provider and as soon as a four year ramp to fully scale, but the total five year duration.

We have incorporated reasonable assumptions about adoption percentages with lower percentages applying to pilot and proof of concept customers.

We believe we can outperform these assumptions given the faster Rollouts. We are currently experience and expectation to work with these partners for much longer.

Similar to the previous definition, we do not include expected auto renewals for a pillar one customers. This allows us to combine our pillar one until her two businesses into a single unifying metric.

Nitesh Sharan: The underlying drivers behind the remainder of the expenses are positive indicators of our First... We saw some tremendous growth opportunities in the second half of the year that we chose to invest in. We saw significant demand from enterprise restaurants, in particular.

As we have communicated before our cumulative bookings backlog, mainly represented our pillar one businesses.

[noise] pillar to we have previously noted that a R. R standardize of the annual subscription like potential these contracts.

Nitesh Sharan: We saw a great opportunity to inorganically accelerate our go-to-market motion and capture a sizable and meaningful restaurant customer portfolio. The acquisition of SYNC3 clearly positions us as the leader in the restaurant AI space. Lastly, we accelerated investments in our administrative functions, notably around internal processes and controls, to ensure we have an even stronger foundation for the sustained long-term growth we expect to deliver.

But also indicating the better stability and predictability building in our financial model.

That said two different metrics on two different timescales doesn't synthesise, our full potential in an easy to understand manner. So we believe this updated figure is more representative of a medium term revenue potential.

Ultimately, we are addressing a greater than 100 billion dollar rapidly growing market. So this new metric gives you a view of the tangible customer activity, we have one within that larger opportunity said.

Nitesh Sharan: We fundamentally re-architected this company in 2023; we are more efficient, more focused, even more nimble, and aggressively driving disruption and growth across voice-enabled products and services. Accordingly, we are updating a metric we have previously shared, called Cumulative Subscription and Bookings Backlog, which includes our previously reported Cumulative Bookings Backlog to also now include new subscription revenue streams that we are focused on. Cumulative Bookings Backlog takes into account the prior quarter and balance, plus new bookings in the current quarter minus associated revenue recognition.

In Q3, I mentioned are cumulative bookings backlog with $341 million with automotive being largest constituent.

I also mentioned that separately and the restaurant vertical that at full scale out we would have 4500 location signed up in roughly $25 million in a R.

When we look at the combined potential of our signed up customers at the end of 2023, okay.

With pillars wanted to.

Are cumulative subscriptions and bookings backlog was $661 million up nearly 100 per cent year over year on an apples to apples basis, thanks to growth and pillar, one and the incredible list of customers. We have added until her too.

Let me now get specific under financial results for the fourth quarter and full year.

In queue for revenue was $17.1 million of 80 per cent and within our guidance for the quarter.

Nitesh Sharan: Cumulative bookings backlog is still derived from committed customer contracts, and this definition remains the same as the previous. Subscription backlog takes into account customers where we are the leading or exclusive provider and assumes a four-year ramp to fully scale with a total five-year duration. We have incorporated reasonable assumptions about adoption percentages with lower percentages applying to pilot and proof of concept. However, we believe we can outperform these assumptions given the faster rollouts we are currently experiencing and our expectation to work with these partners for much longer. Similar to the previous definition, we do not include expected auto renewals for our Pillar 1 customers.

Four year revenue at $45.9 million, but also within the outlooks at at the beginning of the year.

Revenue growth in Q4 was predominantly driven by automotive royalties with strong increase in unit offset by slight decreases in ever selling prices due to a higher volume of edge licenses that generally have a lower royalty then our cloud licenses.

Note that particularly with some of our new generative AI solutions and ultimately with monetization. We think there are meaningful opportunities per unit price expansion.

We also benefited in the quarter by a strong multiyear commitment a minimum guarantee volumes of our edge solution with an automotive partner and the new I P licensing opportunity with one of the preeminent AI chipmakers don't Kayvon referenced earlier.

Over the full year 2023, we increased auto units by 68% and active cloud users by 55 per cent versus the prior year.

Nitesh Sharan: This allows us to combine our pillar one and pillar two businesses into a single unifying metric. As we have communicated before, our cumulative bookings backlog mainly represents our pillar 1 businesses. In Pillar 2, we have previously noted that ARR standardizes the annual subscription-like potential of these contracts, while also indicating the better stability and predictability building in our financial model. That said, two different metrics on two different timescales don't synthesize our full potential in an easy-to-understand manner, so we believe this updated figure is more representative of our medium-term revenue potential. Ultimately, we are addressing a greater than $100 billion rapidly growing market. So this new metric gives you a view of the tangible customer activity we have achieved within that larger opportunity. In Q3, I mentioned our cumulative bookings backlog of $341 million, with automotive being the largest constituent.

And over the last four years, we have delivered an overall compounded annual growth rate of greater than 50%.

In queue for a gross margins, where 77.2% up over 600 basis points year over year, largely resulting from the greater scale in our business.

Helped drive gross margins about 75 per cent for the full year also up over 600 basis points here over here as we increase our revenue sequentially every quarter and at the same time improved our cloud in data center efficiency throughout the year.

R. D expenses were $12.7 million in queue for a decrease of 41% year over year, resulting largely from our corporate restructuring actions earlier in the air.

Despite the expense reduction we continue to invest in disruptive innovation and expand our existing suite of products with solutions like dynamic interaction smart answering employee assessed vehicle intelligence and sound <unk>.

Nitesh Sharan: I also mentioned that separately, in the restaurant vertical, that at full scale, we would have 4,500 locations signed up and roughly $25 million in AR. When we look at the combined potential of our signed-up customers at the end of 2023, across both pillars one and two, our cumulative subscriptions and bookings backlog was $661 million, up nearly 100% year-over-year on an apples-to-apples basis, thanks to growth in Pillar 1 and the incredible list of customers we have added in Pillar 2. Let me now get specific on our financial results for the fourth quarter and full year. In Q4, revenue was $17.1 million, 80% of 80%, and within our guidance for the quarter. Full-year revenue of $45.9 million was also within the outlook set at the beginning of the year.

Sales and marketing expenses were $4.5 million in queue for a decrease of 34% year over year also due to the after mentioned restructuring.

We continue to invest in go to market and customer engagement I mentioned earlier, we are seeing tremendous momentum and heightened customer demand largely resulting from the investments we have been making in sales and marketing <unk>.

We will continue to invest in high R. O Y demand generation in brand awareness to ensure we further build upon the current traction.

TNA expenses were $7.6 million in queue for an increase of three per cent year over year <unk>.

The increase in G&A reflects two elements some of which was not contemplated when we guided last quarter first.

Part of our spending was related to diligence negotiation and closing of the acquisition of think three second we accelerated investment and financial and nonfinancial processes at an internal controls to support requirements Understock 404, B as we became a large accelerated filer.

In total these additional expenses as compared to prior Q4 amounted to over $3 million.

Nitesh Sharan: Revenue growth in Q4 was predominantly driven by automotive royalties, with a strong increase in units offset by slight decreases in average selling prices due to a higher volume of edge licenses that generally have a lower royalty than our cloud licenses. Note that, particularly with some of our new generative AI solutions and ultimately with monetization, we think there are meaningful opportunities for unit price expansion. We also benefited in the quarter from a strong multi-year commitment of minimum guarantee volumes for our Edge solution with an automotive partner and a new IP licensing opportunity with one of the preeminent AI chip makers that Keyvan referenced earlier. For the full year 2023, we increased auto units by 68% and active cloud users by 55% versus the prior year.

The primary factor is not fully encompassed in her previously provided adjusted EBITDA outlook.

Across all operating expenses non-cash employee stock compensation was $6.5 million in queue for <unk>.

As a result are operating loss for Q4 was $12.4 million, which reflects an improvement of 57% year over year.

Likewise for the full year, we saw improvements in our operating loss of 35 per cent S. S. As we successfully grew the business while maintaining cost discipline.

Oh, I need with $4 million isn't that expense for the quarter.

A net loss with $18 million in queue for an improvement of 42% year over year.

This led to a net loss per share in Q4 of seven cents compared to 15 cents and the previous year, an improvement at 53 per cent.

Adjusted EBITDA, which excludes non-cash charges of stock compensation acquisition cost restructuring and depreciation and amortization was the loss of $3.7 million in Q4, 2023, which was an 80% year over year improvement and a sizeable dollar reduction down from an 18.8 million dollar loss in Q4.

2022.

Net cash used an operating activities for the entire year end of 2023 was about $68 million, improving roughly 27% year over year, our cash position that year and was approximately $109 million of which $95 million in cash and equivalents.

Given additional actions we have taken in early 2024, our current total cash balance is in excess of $200 million or capital position is unequivocally a source of strength and gives us the security and Optionality, we need to drive the business forward.

With that.

Let me discuss our outlook for 2024.

We are committed to continuing to fuel strong growth with cost discipline and returns focus.

We expect to expand with our existing automotive partners and add pillar one customers, we expect our pillar to businesses to grow meaningfully an increase from less than 10% of our total revenue in 2023 to more than 20 per cent in 2024.

We see the overall top line growing to within a range of $63 million to $77 million with $70 million at the mid point target.

Nitesh Sharan: We continue to invest in and go to market for customer engagement. As mentioned earlier, we are seeing tremendous momentum and heightened customer demand, largely resulting from the investments we have been making in sales and marketing. We will continue to invest in high ROI demand generation and brand awareness to ensure we further build upon the current track. G&A expenses were $7.6 million in Q4, an increase of 3% year over year. The increase in G&A reflects two elements, some of which were not contemplated when we guided last quarter. First,

As we look further ahead to 2025, we believe we will cross $100 million in revenue and deliver it adjusted EBITDA profitability.

Our gross margins have been in the range of 70 to 80 per cent, providing a strong indicator of our software business profile.

Since we just completed the acquisition of <unk> three.

While we work on migrating their cloud in AI infrastructure to our own.

We expect to have a temporary decrease in gross margins due to some of these duplicative expenses.

In addition, while the majority of Saint <unk> revenue as AI driven they also have a legacy call center operation, which their team has been gradually upgrading with AI.

We expect to further accelerate this migration, which will ultimately calibrate their gross margins two hours overtime.

Nitesh Sharan: Part of our spending was related to diligence, negotiation, and closing of the acquisition of SINC 3. Second, we accelerated investment in financial and non-financial processes and internal controls to support requirements under SOX 404B as we became a large accelerated pilot. In total, these additional expenses, as compared to prior Q4, amounted to over $3 million and were the primary factors not fully encompassed in our previously provided Adjusted EBITDA Outlook. Across all operating expenses, non-cash employee stock compensation was $6.5 million in Q4.

As a result, we expect the combined company will show a one time gross margin decrease in the early part of 2024 with steady improvement towards our historical levels, because we get to the latter half of 2024 and beyond.

All though we see this acquisition is roughly EBITA neutral over 2024 and accretive beyond.

Lastly, let me comment unexpected revenue seasonality for the ear.

Or makes a business will shift through the air as I described to greater makes a pillar too.

But we will start to your more automotive heavy just as we enter 2023 as such we remain affected by the seasonality in the automotive sector, which tends to be hiring Q4 and lowering Q1.

Nitesh Sharan: As a result, our operating loss for Q4 was $12.4 million, which reflects an improvement of 57% year-over-year. Likewise, for the full year, we saw improvements in our operating loss of 35% as we successfully grew the business while maintaining cost dissipation. OI&E with $4 million of net expense for the quarter. A net loss of $18 million in Q4, an improvement of 42% year over year. This led to a net loss per share in Q4 of $0.07 compared to $0.15 in the previous year, an improvement of 53%. Adjusted EBITDA, which excludes non-cash charges of stock compensation, acquisition costs, restructuring, and depreciation and amortization, was a loss of $3.7 million in Q4 2023, which was an 80% year-over-year improvement and a sizable dollar reduction, down from an $18.8 million loss in Q4 2022.

Again in 2024, we see our quarterly revenue building through the year and back and waited we believe we can grow our business roughly 50 per cent year on year each quarter.

Let me close by re articulating our excitement about what lies ahead generative AI enlarge language models have created a generational technological shift the old way without <unk>.

Customers are increasingly realizing they need partners like sound <unk> to help pave the way forward.

We are bouncing the massive longterm opportunity with the inherent near term volatility.

To navigate towards our goals.

And we are bringing conversational voice AI to consumers everywhere. So they can seamlessly access the information and services they covet through the products and devices. They most interact with.

Thank you we will now move to Q&A.

As a reminder to ask a question. Please for star one one on your telephone and wait for your name to be announced.

Draw. Your question. Please press star one one again.

<unk> well, we can pile to Q&A roster.

Our first question comes from Dan Ives with Wedbush Your lines now.

Yeah. Thanks for your good quarter.

Can you talk about do you expect more strategic partnerships from.

From a distribution perspective to happen over the next six nine months like is that is that gonna be a big focus from a good market.

Hi, there yeah, that's definitely in the second killer too we see that is a big contributor we have partnerships with for example, although I'm toast and Oracle [noise] mm mm square as channel partners.

And they help us reach a larger number of merchants.

<unk> we also.

Our customers are very large for example would be just fine an extended to 2037.

He's one of the largest automakers that's a lot of.

This man for a very long time, so I just with a lot of trust.

Okay, and then can you talk about how the conversation with customers is changing I mean, no. It seems like the visions been there, but now you're starting to actually see the.

Nitesh Sharan: Let me discuss our outlook for 2020. We are committed to continuing to fuel strong growth with cost discipline and returns focus. We expect to expand with our existing automotive partners and add Pillar One customers. We expect our Pillar 2 businesses to grow meaningfully and increase from less than 10% of our total revenue in 2023 to more than 20% in 2024. We see the overall top line growing to within a range of $63 to $77 million, with $70 million as the midpoint target. As we look further ahead to 2025, we believe we will cross $100 million in revenue and deliver adjusted EBITDA profitability. Our gross margins have been in the range of 70% to 80%, providing a strong indicator of our software business profile. Since we just completed the acquisition of SYNC 3.0, while we work on migrating their cloud and AI infrastructure to our own. We expect to have a temporary decrease in gross margin due to some of these duplicative expenses.

The traction.

How does it feel like it's more strategic in terms of conversations you have and whether it's on restaurant otters. Maybe you can just compare conversation today. The you know you've been six months ago.

It's it's totally different than the demand is going through the roof and we actually have five you're dealing with more demand than ever before you have for example.

<unk> customers like multinational change with tens of thousands of locations, we actually have to put them on hold to deal with someone who's <unk>. So it's a temporary problem that you're dealing with but it can be a really good position to be in so customers are not coming to us, whereas maybe 12 months ago or even nine months ago, we were actually going after them knocking on their door you're not nothing.

On our door.

Great. Thanks.

Thank you Dan.

Thank you.

One moment for our next question.

Our next question comes from jewelry with Davidson your life.

Thank you good afternoon, one product question one financial question.

The product question check company, what's the nature of that revenue are they incorporating your technology and a chip and then when they sell a into devices, you're getting a license revenue or is it a different type of arrangement and.

Nitesh Sharan: In addition, while the majority of SYNC 3's revenue is AI-driven, they also have a legacy call center operation, which their team has been gradually upgrading with AI. We expect to further accelerate this migration, which will ultimately calibrate their growth margins to ours over time. As a result, we expect the combined company will show a one-time growth margin decrease in the early part of 2024 with steady improvement towards our historical levels as we get to the latter half of 2024 and beyond. Overall, though, we see this acquisition as roughly EBITDA neutral over 2024 and accretive beyond.

How does that scale once once it's in the what the chipmakers incorporated the technology.

Yeah. This is actually what it what another channel partnerships.

With a direct revenue for the company paid us for our I P and we've known this company for a number of years or a close Franco's partner.

This was the first time the general revenue from the relationship so you're incredibly excited about it and we expect more positive things to come out of it in the future, but that's as much as we can sure today.

Got it. So then maybe another project question you mentioned, the large or a <unk> a high profile, we'd be maker in the U S.

Does that mean that you can now send the technology and over the air update because part of your gating factor. So far has been incorporating into new cars only as they ship, but some I T. Greasy makers based on the U S. At least the three that I'm thinking about uhm allow for over the.

Nitesh Sharan: Lastly, let me comment on expected revenue seasonality for the year. Our mix of business will shift through the year, as I described, to a greater mix of Pillar 2. But we will start the year more automotive-heavy, just as we end in 2023. As such, we remain affected by the seasonality in the automotive sector, which tends to be higher in Q4 and lower in Q1.

<unk> updates they already have a microphone built in so does this type of deal make it possible for you to deploy your software a little more quickly and too fat to a bigger set of automobiles as opposed to only the ones that get checks.

Nitesh Sharan: Again, in 2024, we see our quarterly revenue building through the year and being back-end weighted. We believe we can grow our business roughly 50% year on year each quarter. Let me close by re-articulating our excitement about what lies ahead. Generative AI and large language models have created a generational technological shift.

Yeah absolutely.

For especially for our cloud, we give you could replace some existing solution or sometimes they don't have a solution. So we could actually go through legacy cards and and power them to.

This particular case he would be for new cars and all the cards that have already been sold and then maybe one thing to add Gill I think [noise].

Nitesh Sharan: The old way is out; customers are increasingly realizing they need partners like SoundHound to help pave the way forward. We are balancing the massive long-term opportunity with the inherent near-term volatility to navigate towards our goal. And we are bringing conversational voice AI to consumers everywhere so they can seamlessly access the information and services they covet through the products and devices they most interact with. Thank you.

Your question is about like pace of scale. The other thing we're super excited about his cave I mentioned the prepared remarks was around generative AI opportunities that were already adding with existing customers. So it sort of a build on top and it really unlocked. So many different use cases for us and there's tremendous demand. So I think the opportunity of scaling faster and doing more per unit revenue per unit is a big opportunity for us.

Got it so then.

New match on the new backlog metric I want to make sure I understand that the duration. So it sounds like on the subscription side you defined the duration of the five year duration, what's the duration.

Operator: We will now move to Q&A. As a reminder... For a question, please press star 1 1 on your telephone. Don't wait for your question to be answered. For all your questions, please press star 1 1 again.

Dan Ives: Stand by while we compile the Q&A. Our first question comes from Dan Ives with Wedbush. Your line is now open.

The book inside on the other side that pillar one that used to be I believe six years is it still the six years or or you know harmonizing. It is also a five year duration.

Keyvan Mohajer: Yeah, thanks. Good quarter. Can you talk about, do you expect more strategic partnerships from a distribution perspective to happen over the next six, nine months? Is that going to be a big focus from a go-to-market perspective? Definitely, in our Pillar 2, we see that as a big contributor.

No great question. It the the current one is is basically because they're committed contracts over the duration. So it's not like we're harmonizing, we're actually based on whatever's in a contract so.

Keyvan Mohajer: We have partnerships with, for example, Olo and Toast and Oracle and Square as channel partners, and they help us reach a larger number of merchants. And in Pillar 1, our customers are generally very large. For example, we just signed an extended deal up to 2037 with one of the largest automakers. That's a lot of commitment for a very long time, so it shows a lot of trust. Okay, and then can you just talk about how the conversation with customers is changing? I mean, you know, the vision's been there, but now you're starting to actually see the track. How does it feel like it's more strategic in terms of the conversations you're having, whether it's in restaurants, cars, maybe you could just compare conversations today to, you know, even six months ago? It's totally different.

Q4, and Q4, we actually had some deals that extended it. So I'd say the average of that I think when you take the weighted average at a full portfolio, it's still about that six and a half.

But the actual device side the products I did extend because we got some deals that extended the duration of the device.

Below one products or the way the like you said on the <unk>.

[noise] subscription side made it five to standardize but on the just like we used to do with came up the book and backlog, we just tie to whatever the contract length is.

Okay that makes sense.

It does thank you.

Thanks Gill.

[noise]. Thank you one moment for our next question.

Oh.

Our next question comes from Scott talk with H C. When writing your lines now one of them.

Good afternoon <unk>. Thanks for taking my questions first I was hoping I could get a little more color on your visibility into 25, and maybe why you're comfortable putting out the target today.

Yeah, I think it's a it's a couple of different things one is.

Building, and we're making choices to sort of build a multiyear roadmap and and that will not play in short term quarter to quarter or even two quarters, though so I think we with the pipeline. We're building with the customers were working with with the.

The investment, we're making to try to scale, we're getting increasing confidence beyond just.

Yeah, and we thought it made sense frankly, we threw last year into this you restarted giving mile markers only up until the one year Mark info.

I think it with the the the bookings backlog type metric that we were talking about there's a lot of good visibility and frankly, it's sort of like where we're sitting today in February.

Operator: One moment for our next question. Our next question comes from Gil Luria with D.A. Davidson. Your line is now open. Thank you. Good afternoon.

Gil Barnum Luria: I have one product question and one financial question. The product question: chip company, what's the nature of that revenue? Are they incorporating your technology in a chip, and then when they sell it into devices, you're getting license revenue, or is it a different type of arrangement?

Early in the year and we know there's just a lot more pipeline interaction that regaining so so we felt confident enough to sort of give an early read of 2025, which will obviously calibrate as we go forward, but I think it's really is a sentiment of confidence and commitment we're seeing from our customers.

That's helpful. Now does that include any additional M&A or any.

Keyvan Mohajer: How does that scale once the chip maker has incorporated the technology? Yeah, this actually was not a channel partnership; it was a direct revenue for the company, which paid us for our IP. We've known this company for a number of years; they're a close friend, and close partner. This was the first time we generated revenue from their relationship, so we're incredibly excited about it, and we expect more positive things to come out of it in the future, but that's as much as we can share today.

Potential deal you would do in the future would be on top of.

Those figures.

It doesn't require it I mean, we yes I would.

Say, we're super excited about the <unk> acquisition of what it can bring so from from that vantage point. It is the one plus one equals a lot more than two opportunity we have with them and then in terms of future opportunities will continue to look we we think it's a very dynamic market with a lot of potential.

<unk> organically and then even possibly inorganically. So we certainly have nothing on the horizon to talk about there, but the the numbers we laid out do not require it if if something structurally change their you know I'd also would obviously as you know very well depends on the flavor and the size and the type of emanated, possibly could be others or something we do changes that architecture that ramble.

Keyvan Mohajer: So then maybe another product question. You mentioned a large or a high-profile EV maker in the U.S. Does that mean that you can now send the technology in over-the-air updates? Because part of your gating factor so far has been incorporating it into new cars only as they ship. But some, I think the EV makers based in the U.S., at least the three that I'm thinking about, allow for over

We'll let you know.

Great and then Unthink three I'm curious if you could give us something in terms of dollar terms, maybe what the Upselling cross selling revenue synergy opportunity is there or or even as you know maybe a percentage of their legacy revenue.

Keyvan Mohajer: They already have a microphone built in. So does this type of deal make it possible for you to deploy your software a little more quickly and to a bigger set of automobiles as opposed to only the ones that get shipped? Yeah, absolutely. Especially for our clouds, we could replace an existing solution, or sometimes they don't have a solution. So we could actually go to legacy cards and power them, too.

Yeah I'll take.

Let me try to think of the best way to unpack. It I mean, we first of all they bring this great portfolio of customers. We articulated you know so the likes of Chipotle Papa Johns Applebee's firehouse satisfied were just as.

Just as amazing are some customers that were early days of having some of those conversations we certainly had a thesis when we when we acquired them as to what the possibilities could be and I'll. Just tell you early days are even more exciting of what we can do together to your point cross selling our solution, bringing together different voice solutions.

Nitesh Sharan: In this particular case, it would be for new cards and older cards that have already been sold. And then maybe one thing to add, Gil. I think, you know, a part of your question is about the pace of scale. The other thing we're super excited about, as Keyvan mentioned in his prepared remarks, was around generative AI opportunities that we're already adding to existing customers. So it's sort of a build on top, and it really unlocks so many different use cases for us.

Upselling some of the employee says capability smart answering there's so many conversations going on so I'm.

I'm getting a little bit to later to give you a better tangible visibility, but the roadmap. We've laid out we believe we will be a big contributor on that the impact I mentioned, the margins and particularly if they've been evolving this sorta call center business to AI that is an evolution will work two together. There is definitely is you know anytime when the two companies come together, there's a lot of work to integrate and.

Nitesh Sharan: And there's tremendous demand, so I think the opportunity of scaling faster and doing more per unit, revenue per unit, is a big opportunity for us.

We're in the middle of that Uhm, but longterm I mean, <unk> I just wanted to clarify.

Gil Barnum Luria: So then on the new backlog metric, I want to make sure I understand the duration. So it sounds like on the subscription side, you define the duration as a five-year duration. What's the duration on the booking side, on the other side, on pillar one? That used to be, I believe, six years.

Clarify again, we're talking you know.

The restaurant space that for US is billions and billions of dollars of annual revenue opportunity and we're just scratching at the surface of it and together you know I think we can go faster in capturing a greater and greater share. We also think when we look out at the competitive landscape. It's mostly greenfield, we don't think people out there have comparable taconite and certainly what we're seeing.

Nitesh Sharan: Is it still six years, or are you now harmonizing it as also a five-year duration? No, great question. The current one is basically because they're committed contracts over the duration, so it's not like we're harmonizing; we're actually based on whatever's in the contract. So in Q4, we actually had some deals that extended it. So I'd say the average of that, I think when you take the weighted average of the full portfolio, it's still about six and a half.

In terms of fully automated solutions and most <unk>. Most importantly, the restaurant demand is just I mean, it's exactly what they need they have labor shortage, they have cost pressures and they need consistency of service and this is a solution that fits very well. So in terms of the organic opportunity is a tremendous with Saint <unk>, we're very excited about the synergies and.

The upside Uhm and then the revenue outlook and even maybe to your first question.

I was coming to get it gives us confidence to give you a call it of put a flag in the ground on what we think early signs of 2025 are but I will just tell you we wouldn't but.

Nitesh Sharan: But the actual device side, the product side did extend because we got some deals that extended the duration of the device, so the pillow one product. So the way, like you said, we've, on the subscription side, made it five to standardize, but on the, just like we used to do with cumulative booking backlog, we just tie to whatever the contract length is. Hope that makes sense. It does. Thank you. Thank you. One moment for our... Our next question comes from Scott Buck with H- Wainwright, Now what?

Put that out there if we didn't think we could we could do that and even more.

Yeah, well I appreciate the attic taller guys. Congrats again on a quota.

Thank you. Thank you.

Thank you one moment for our next question.

Our next question comes from Glen matching with Lundberg down your lifestyle.

Hi, guys. Thanks for taking the question. So I just wanted to talk about more about the.

Comment that was made that perhaps some customers in the restaurant side of it put on hold for a little bit in terms of because demand is kind of just overflowing your ability to kind of fill it right now so.

Scott Christian Buck: Hi, good afternoon, guys. Thanks for taking my questions. First, I was hoping I could get a little more color on your visibility into 25 and maybe why you're comfortable putting out a target today. Yeah, I think it's a couple of different things.

I'm curious if that means that there's gotta be more hiring involved or maybe it was more of a learning process is your kind of scaled up for more smaller mom-and-pop, so national chains, and whatnot and perhaps there's there's a learning curve for both sides of the equation whereby.

Nitesh Sharan: One is, you know, we're building and we're making choices to sort of build a multi-year roadmap and that we're not playing short term quarter to quarter, even two quarters. So I think with the pipeline we're building, with the customers we're working with, with the, you know, investment we're making to try to scale, we're building increasing confidence beyond just this year. And we thought it made sense, frankly, that through last year into this year, we're sort of giving mile markers only up to the, you know, one year mark.

The process of implementing the the software will get faster overtime or that kind of thing maybe you could just give us some color on on your thoughts there.

Yeah, I'll I'll start sorry, the <unk> first of all say yeah. We're constantly learning. This is a new market, we're disrupting regrowing, where we're improving everyday I think we're learning a lot frankly also with the acquisition Wanna. Thank Saint <unk> has been really good at is scaling very quickly and I think we can come together.

Nitesh Sharan: And so, I think with the bookings backlog type metric that we were talking about, there's a lot of good visibility. And frankly, it's sort of like where we're sitting today in February, early in the year, and we know there's just a lot more pipeline and traction that we're gaining. So we felt confident enough to sort of give an early read on 2025, which will obviously calibrate as we go forward. But I think it's really a sentiment of confidence and commitment we're seeing from our customers. That's helpful. Now, does that include any additional M&A or any other benefits to the winners? Thank you everyone so much for joining us today. We hope you have a great day, opportunities organically, and then even possibly inorganically. So we certainly have nothing on the horizon to talk about there, but the numbers we laid out do not require it. If something structurally changed there, you know, obviously, as you know, it depends very well on the flavor and the size and the type of M&A that possibly could be out there.

And drive improvement coupled.

Sort of the building that one of the beauties of our solutions getting software. It can really scale very quickly once you kind of get the integration with point of sale system to get menu ingestion some of those things done right.

And the quicker you know every time, we add a new customer it really expand the market of other customers. We can go to that we could really rapidly accelerates. So there's a lot of positive sort of build a fax here that we can build and we can continue forward with on the investment side. Yeah. I mean, we definitely want to go after the the growth when the <unk>.

Amanda is there we don't want to say no to any customer we wanted to be thoughtful of the roadmap. So we will absolutely look at our hiring and make sure that it's if it were calibrate again and you know.

I wanted to jump in before Kayvon just to put my point of view like it's always gonna be cost disciplined focused and so forth and will be very judicious, but I think that.

We know the opportunity there we're not gonna, we're not gonna <unk>.

<unk> change it by any stretch of the imagination. So we're certainly going to invest to make sure we're capitalizing on the demand.

Yeah, that's correct.

All that and I.

Nitesh Sharan: So something we do changes that architecture, that ramp, we'll let you know. Sure, that's great. And then on SYNC 3, I'm curious if you could give us something in terms of dollar terms, maybe what the upselling, cross-selling, revenue synergy opportunity is there, or even as, you know, maybe a percentage of their legacy revenue. Yeah, I think. Let me try to think of the best way to un

I would just add that the the hold that I mentioned, you were talking about data <unk>, not not really months or anything beyond that.

Great. Thanks for that color and then last for me just on the amount of that.

I'm, taking the tests you said that you know historically been 70, 80% gross margin and I guess theoretically you get to that kind of north of $100 million 2025 revenue target and you put out today.

A lot of the growth will be on the on the restaurant that are dissatisfied which theoretically would be I think higher margin and auto so would would would you ever model towards the higher end of that range for 2025.

Nitesh Sharan: I mean, first of all, they bring this great portfolio of customers. We articulated, you know, for the likes of Chipotle, Papa John's, Applebee's, Firehouse Subs, Five Guys, just as, you know, just as amazing are some customers that were in the early days of having some of those conversations. We certainly had a hypothesis when we acquired them as to what the possibilities could be, and I'll just tell you that the early days are even more exciting as to what we can do together.

I won't guide gross margin for 2025 I'll leave the guidance.

But I will give you some color commentary to dimensionalize. It so absolutely longterm we are.

Software business and so the the margin profile should certainly be well north of 70, and I really think the EBIT margin should be 30% plus and that's at scale fully penetrated I'd say what appears on the road, we want to make sure. We're investing in the near term and then I would also say from our interior specific question on gross margin it.

Nitesh Sharan: And to your point, cross-selling, our solutions, bringing together the different voice solutions, upselling some of the employee assist capabilities, smart answering. There are so many conversations going on. So, you know, I'm going to a little bit punt on that later to give you better tangible visibility.

Nitesh Sharan: But the roadmap we've laid out, you know; we believe SYNC3 will be a big contributor to that. The impact I mentioned of margins and, particularly, as they've been evolving the sort of call center business to AI, that is an evolution we'll work on together. There is definitely, as you know, any time when the two companies come together, there's a lot of work to integrate, and we're in the middle of that. But long term, I mean, I just want to clarify again.

I don't think it's as clean as Pelosi vs. Total one cause it kind of depends even within pillar one whoever edge solutions are very high margins.

So so it kind of depends on the mix across both but I do think that will be marching past back to the 70% range and then part of it will also be.

This is gonna be new where we bring on the call Center business, which will continue to I think we've look at pillar to in the restaurants and sort of the first gate on major disruption across customer service I think it resetting the prepared remarks generative AI in particular, one of the major disruptive areas is customer service with very natural conversations to enable consumers to just see.

Nitesh Sharan: We're talking, you know, a restaurant space that for us is billions and billions of dollars of annual revenue opportunity, and we're just scratching the surface of it. And together, you know, I think we can go faster at capturing a greater and greater share. We also think that when we look out at the competitive landscape, it's mostly greenfield. We don't think people out there have comparable tech, not certainly what we're seeing in terms of fully automated solutions. And most importantly, the restaurant demand is just, I mean, it's exactly what they need. They have labor shortages, they have cost pressures, and they need consistency of service, and this is a solution that fits very well.

Mostly access information and services that they want so.

With that and the reason I mentioned that is.

We we believe that we can scale that really quickly and we can leverage the call center capability to get the data and the the actual production life customer interactions that will help improve our motto. So there's going to be a bit of a journey to extend beyond restaurants into different vertical and finding that right mix between maybe there is an advantage because it costs.

Really demands a little call center support as you know if you go from like we can do the base 80 per cent of the answering and maybe some part isn't like those are things as we grow into <unk> will calibrate on so that's why I can't give you a precise answer right now I will tell you, though yes, longterm, we absolutely should be growing back in the 70 per cent range, but.

Nitesh Sharan: So in terms of the organic opportunity is tremendous with SYNC3, we're very excited about the synergies and the upside. And then the revenue outlook, and even maybe to your first question, us coming together gives us confidence to give you a call and put a flag in the ground on what we think the early signs of 2025 are. But I would just tell you, we wouldn't put that out there if we didn't think we could do that and even more. Well, I appreciate the added color, guys.

But we need to keep going through the work and kind of get closer to that finish line to give you an exact on 2025 will be.

Right. Thanks to report to understand thanks, and congrats on the corner.

Thank you.

As a reminder to ask a question. Please press star one one on your telephone.

Scott Christian Buck: Congratulations again on the quarter. Thank you. Our next question comes from Glenn Matz. Lindenberg-Thalman, your lines are now open.

One moment for our next question.

Our next question comes from Mike Lattimore with North one in capital markets. Your lines now offers.

Glenn Matz: Hi guys, thanks for taking the question. So I just wanted to talk a little more about the comment that was made that perhaps some customers on the restaurant side of it put it on hold for a little bit in terms of, because demand is kind of just overflowing, your ability to kind of fill it right now. I'm curious if that means that there's got to be more hiring involved or maybe it's more of a learning process as you've kind of scaled up from more smaller mom-and-pops to national chains and whatnot, and perhaps there's a learning curve for both sides of the equation whereby the process of implementing the software will get faster over time or that kind of thing maybe you could just give some color on Scott Smith, Bryan First of all, we're constantly learning.

Great. Thanks, Congrats on an excellent year here.

Okay. Thanks.

Yep.

Last quarter, you have added a lot of in a restaurant when like White Castle Jersey, My ex crispy cream.

What percentage of those opportunities do you think you might get deployed by your random sort of what are the keys to getting there whether it's internal internal worker leveraging third party.

Yeah.

It depends on the customer so.

Drive through is a little different than phone ordering.

We've publicly last year may join announcement with White castle about our opportunities scale and 200 locations this year and we're.

On the pace and that has.

Some requirements of the the drive through setup on the hardware side and and so that's a bit of the gating pacing there a company that has.

For corporate ownership, so that's a little bit easier to fully deploy.

Nitesh Sharan: This is a new market, we're disrupting, we're growing, and we're improving every day. I think we're learning a lot, frankly, also with the acquisition. One of the things SYNC 3 has been really good at is scaling very quickly, and I think we can come together and drive improvement. One of the beauties of our solutions in software is that it can really scale very quickly once you kind of get the integration with point-of-sale systems, get menu ingestion, some of those things done right. Every time we add a new customer, it really expands the market of other customers we can go to that we could really rapidly accelerate. So there's a lot of positive sort of ripple effect here that we can build on and that we can continue forward with.

Get into another type of customer that has franchisees again that one of the gaining points.

It might've been opportunities phone ordering.

They are they have I think over 2000 locations at scale and kind of went out of the gate with 50 locations that were.

Pushing through and so this can move really rapidly.

So I guess not to answer your question too much but it kind of depends on the shape and flavor of the customer and we are getting faster every week that goes by where learning and were pacing it faster and faster. So we're hopeful that and and this is kind of why maybe one dimensionality of the answer would be the the assumptions we.

As in the subscriptions estimate that we gave sort of five year, which we believe it you know conservatively will ramp.

Over four years, and we use the five year duration.

Nitesh Sharan: On the investment side, yeah, we definitely want to go after growth. When the demand is there, we don't want to say no to any customer. We want to be thoughtful about the roadmap. So we will absolutely look at our hiring and make sure that we're calibrating it. I wanted to jump in before Kayvon just to put my point of view.

So I mean, if you want to use the four year that I conveyed as the measure I think that's conservative again, we're going faster than that but that's maybe not.

<unk> does that too high expectations too early that's probably a fake place to think.

Okay excellent and uhm.

Six three.

I think they had something like 10000 locations.

I believe did you feel like you could apply your tech to all those locations or is there a per cent that's already kind of happy with what they have with it.

Nitesh Sharan: It's always going to be cost discipline focused and so forth, and we'll be very judicious. But I think that we know the opportunity there. We're not going to shortchange it by any stretch of the imagination. So we're certainly going to invest to make sure we're capitalizing on the demand. Yeah, that's all that. And I would just add that the whole that I mentioned, we are talking about days and weeks, not really months or anything beyond that. Great, thanks for that color!

Yeah, but I mean, the solution is already great and but there is they can be better than upgrade opportunity by combining what they have with what we have and members opposite opportunities by offering things like smart answering unemployed <unk>.

Missing customers I'm pursuing both of those.

And I also had it might there is also an efficiency opportunity for us as we sort of migrate their back end systems the cloud system.

To our technology. So it's also sort of back and not only just our front end and that that's a that's a cost.

Glenn Matz: And then last for me, just on the model side, I think, Nitesh, you said that historically, 70, 80% gross margin. And I guess, theoretically, if you get to that kind of north of $100 million 2025 revenue target that you put out today, a lot of the growth will be on the restaurant side or the SaaS side, which theoretically would be, I think, higher margin than the auto. So would you have a model towards the higher end of that range for 2025? I won't guide the growth margin for 2025. I'll leave the guidance as I laid it out, but I will give you some color commentary to dimensionalize it.

Opportunity for us.

And then I guess just the basic for answer the question what what do you think stink three contributed to 24 and and what is current <unk>.

So in 24, we.

It kind of depends on the synergies and so forth, but they have good book of business that we're growing the reason, we're having a bit as some of it is the AI and call center that we're going to migrate the call center to AI, We're gonna.

Great. So there's a few choices through the integration again, we're still pretty early in the integration process, but we're excited about the the fleet of.

Partners that they haven't really mostly about the synergies that we think we can build but it's all contemplated in our guidance and we think together, we can accelerate even faster than we could've alone.

Nitesh Sharan: So, you know, absolutely long term, we are, you know, a software business. And so the margin profile should certainly be well north of 70. And we think the EBIT margins should be, you know, 30% plus, and that's at scale fully penetrated, I'd say, multiple years down the road. We want to make sure we're investing in the near term. And then I would also say, to your specific question on growth margin, I don't think it's as clean as, you know, pillar two versus pillar one, because it kind of depends. Even within pillar one, some of our edge solutions are very high margins, so it kind of depends on the mix across both.

Sure Count I think it's.

It's probably take 270 ish I don't know the number right in front of me on.

The class a side is probably where we are we have.

Think I mentioned the prepared remarks from capital raising that we've done this year to get the balance sheet over $200 million of.

Cash, though uhm, so that is about where we are mmm.

Alright, Thanks, a lot.

Thanks, Mike.

Thank you one moment for our next question.

Our next question comes from <unk>, No blood was Cantor Fitzgerald, you're lying.

I got it thanks for taking my question.

Alright.

It was nice that you kind of gave us some info on I guess a year over year growth in auto units I was wondering if you could maybe give us some type of indication for how many units or devices. Your <unk>. Your technology is currently embedded in.

And if that's something you know you could foresee given us on a more frequent basis going forward.

You are in the millions.

<unk>, you're considered disclosing the exact number one challenge you've got some of our customers don't give us unique device ivy's. So then it makes it more difficult to accurately.

Measure so.

<unk> looked like one device, but it might be a million devices.

There are ways to incorporate that but definitely you are the millions of cars on television and I T devices. The other measure we do give when when you put it in the press release, but instead.

Nitesh Sharan: So there's going to be a bit of a journey to extend beyond restaurants into different verticals and finding that right mix between maybe there is an advantage because the customer really demands a little call center support, as you know, if you go from, we can do the base 80% of the answering, and maybe some parts aren't. Like, those are things as we grow into pillar two we'll calibrate on. So that's why I can't give you a precise answer right now.

The queries, which is another sort of an indicator indicator of usage.

Usage in activity and that has been growing it's been growing we've been given that number for a couple of years now and crossing three and a half billion sort of run rate is an indication of the breath and also just the usage curve increases.

That we're excited about.

Got it and then on maybe the restaurant business I guess.

Glenn Matz: I will tell you, though, yes, long term, we absolutely should be growing back in the 70% range, but we need to keep going through the work and kind of get closer to that finish line to give you an exact figure on what 2025 will be. Right, thanks. Yeah, a lot of booby parts, I understand.

Any update the how many units you guys are currently deployed in and what you're targeting for it for end of this year, I think <unk> or White castle near.

Are you expecting to be in you know over 100 by the end of the year, but maybe more broadly speaking.

Giving you kind of expect pillar to to be north of <unk>.

Nitesh Sharan: Thanks and congratulations on the course. Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone. One moment for our next... Our next question comes from Mike Latimore. Northland Capital Markets, your line is now open.

20 per cent of the business this year.

Yeah.

Break apart.

We are.

We do with think three now have but.

Thousands and thousands right they brought a big Arsenal of restaurants, the likes of customer names I gave a little earlier.

Michael James Latimore: Great. Yes, thanks. Congratulations on an excellent year here. Okay, Mike.

And then we're always growing and have these massive deals that are currently.

Michael James Latimore: Thanks. Yep. So in the last quarter, you highlighted a lot of, you know, restaurant wins, like White Castle, Jersey Mike's, and Krispy Kreme. You know, what percent of those opportunities do you think you might get deployed by year-end? And sort of what are the keys to getting there, whether it's, you know, internal work or leveraging third-party partners. Yeah, it depends on the customer. So, you know, drive-thru is a little different than phone ordering.

We're working on that.

Tens of thousands of of potential opportunities. So I think the best way to and I will say the pricing can range you know if you're kind of on the phone ordering it could be in the hundreds of dollars per location, if you're in drive through remarkably north of thousand so kind of really and are more advanced state can be.

Beyond that so attack so.

And location are gonna kind of be driven by the integration paced. We believe we are unpacking and addressing a market that has hundreds of thousands of the location. So what we have today is a small fraction and I'll tell you in the U S alone, it's 1 million food establishment, so and globally multiples of that so we are going to grow from.

Nitesh Sharan: We know we made a public announcement last year with White Castle about our opportunity to scale into 100 locations this year. And we're, you know, on pace. And that has some requirements of the drive through setup on the hardware side. And, and so that's a bit of the gating pacing. They're a company that has full corporate ownership, so that's a little bit easier to fully deploy, get into another type of customer that has franchisees again, one of the gating points. Jersey Mice is an opportunity for phone ordering.

The 10000 range.

By the end of the year quite meaningfully and then hopefully will be soon talking about hundreds of thousands it we're in and and the revenue numbers will follow.

Thank you I appreciate it.

Nitesh Sharan: They have, I think, over 2,000 locations at scale and kind of went out of the gate with 50 locations that we're pushing through. And so this can move really rapidly. So I guess, not to dance around your question too much, but it kind of depends on the shape and flavor of the customer.

Thanks bread.

Thank you.

Showing no further questions at this time.

This concludes today's conference call. Thank you for participating.

Disconnect.

So there was no way.

Mmm.

[music].

Nitesh Sharan: And we are getting faster. Every week that goes by, we're learning, and we're pacing it faster and faster. So we're hopeful that – and this is kind of why maybe one dimensionality of the answer would be the assumptions we used in the subscriptions estimate that we gave, sort of a five-year duration, which we believe, you know, conservatively will ramp over four years, and we use the five-year duration. So, I mean, if you want to use the four-year duration that I conveyed as the measure, I think that's

Keyvan Mohajer: We're going faster than that, but that's maybe to not set too high expectations too early. That's probably a safe place to think. Yeah, and all that. And on sync three, I think they had something like 10,000 locations.

Keyvan Mohajer: I believe you could apply your tech to all those locations, or is there a percent that's already got a happy location? I mean, the solution is already great, but there's an upgrade opportunity by combining what they have with what we have. And then there are opportunities by offering things like smart answering and employee assistance to existing customers, and we are pursuing both of those. And I said, Mike, there's also an efficiency opportunity for us as we sort of migrate their back end systems, the cloud systems migrate to our technology. So it's also sort of back and not only just our front end, and that that's a cost and opportunity process. I guess it's just a basic financial question.

Nitesh Sharan: What do you think Stink 3 contributes in 24? And what is its current share? So, in 24, it kind of depends on the synergies and so forth, but they have a good book of business that we're growing. The reason we're hedging a bit is some of it is the AI and call center, that we're going to migrate the call center to AI. We're going to upgrade. So, there are a few choices through the integration. Again, we're still pretty early in the integration process, but we're excited about the fleet of partners that they have and, really, mostly about the synergies that we think we can build. But it's all contemplated in our guidance, and we think together we can accelerate even faster than we could have alone.

[music].

Nitesh Sharan: Share count, I think it's probably, I think 270-ish, I don't have the number right in front of me, on the class A side is probably where we are. We have, I think I mentioned the preparer mark, some capital raising that we've done this year to get the balance sheet over $200 million of cash, so that is about where we are. All right, great. Thanks a lot.

Michael James Latimore: Thank you. Please take a moment for our next question. Our next question comes from Brett Knoblauch, with Cantor Fitzgerald. Your line is now open. Hi guys, thanks for taking my question. It was nice that you kind of gave us some info. I got the year-over-year growth in auto. I was wondering if you could maybe give us some type of indication for how many units or devices your technology is currently embedded in, and if that's something you could foresee giving us on a more frequent basis going forward. We are in the millions.

Brett Anthony Knoblauch: It's we are considered disclosing the exact number. One challenge is that some of our customers don't give us unique device IDs. So then, it makes it more difficult to accurately measure.

Keyvan Mohajer: So it might all look like one device, but it might be a million devices. There are ways to interpolate that, but definitely, we are talking about millions of cars and TVs and IoT devices. The other measure we do give, and we put it in the press release, but, you know, it's the queries, which is another, you know, sort of an indicator of usage and activity. And that has been, you know, been growing and growing. We've been given that number for a couple of years now, and crossing the three and a half billion sort of run rate is an indication of the breadth and also just the usage curve increases that we're excited about. I got it. And then on maybe the restaurant business, I guess, any update on how many units you guys are currently deployed in and you know, what you're targeting for the end of this year, I think, or White Castle, you're expecting to be in, you know, over 100 by the end of the year. But maybe more broadly speaking, given you kind of expect pillar two to be north of, you know, 20% of the business this year. Yeah, I'll break apart.

Keyvan Mohajer: So, kind of, in our more advanced state, could be well beyond that, so, units and locations are going to kind of be driven by the integration pace. We believe we are unpacking and addressing a market that has hundreds of thousands of locations. So, what we have today is a small fraction.

Keyvan Mohajer: And I'd say in the U.S. alone, there are a million food establishments, and globally, multiples of that. So, we are going to grow from, you know, the 10,000 range by the end of the year quite meaningfully, and then, you know, hopefully, we'll be soon talking about hundreds of thousands that we're in, and the revenue numbers will follow. Thank you, much appreciated. Thanks, Brett.

Brett Anthony Knoblauch: Thanks. Showing no further questions at this time, whose call is it today? Thank you for this.

Operator: Thank you. Thank you. Thank you. No way.

Operator: The Nitesh Sharan, Scott Smith, Brett Knoblauch, Bryan Vaniman, Keyvan Mohajer, Vivekanandhan Palani, Gil Luria, SoundHound The Nitesh Sharan, Scott Smith, Brett Knoblauch, Bryan Vaniman, Keyvan Mohajer, Vivekanandhan Palani, Gil Luria, SoundHound, ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Good day and thank you for standing by. Welcome to the SoundHound Q4 2023 Earnings Conference. At this time, all participants are in a listen-only mode.

Scott Smith: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is where it is. To call your question, please press star 1 1 again. Please be advised that today's conference is being held. I would now like to hand the conference over to your speaker today. Scott. Patryln Bouchard, Please go ahead. Good afternoon, and thank you for joining our fourth quarter and full year 2023 conference. With me today is our CEO, Keyvan Mohajer, and our CFO, Nitesh Sharan. We'll 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, and actual results could differ materially from those suggested by our forward-looking statements.

[music].

Scott Smith: 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. In addition, we may discuss certain on-gap measures. Please refer to today's press release for more detailed financial results and further details on the definition, limitations, and uses of Those Measures in Reconciliation.

Unknown: Also note that the forward-looking statements made on this call are based on the information available to us as of today's meeting, and we undertake no obligation to update any forward-looking statements except as required by law. Finally, this call is being webcast in its entirety on our Investor Relations website, and 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. Thank you, Scott, and thank you to everyone for joining the call. Once again, we broke a new quarterly record for revenue this quarter. It surpassed $17 million and was up 80% year-over-year. We are winning new customers and expanding, and we continue to create value for our customers, their customers, and their employees while delighting users with our technology. At the same time, we are also driving efficiency with an 80% year-over-year improvement in adjusted... As SoundHound, we've made two important predictions for the future of... The first is that AI customer service will be as necessary for every business as Wi-Fi and NFC. The second is that speaking will become the primary way we interact with our devices.

Keyvan Mohajer: Thank you, Scott, and thank you to everyone for joining the call. Once again, we broke a new quarterly record for revenue this quarter. It surpassed $17 million and was up 80% year-over-year.

Keyvan Mohajer: We are winning new customers and expanding, and we continue to create value for our customers, their customers, and their employees while delighting users with our technology. At the same time, we are also driving efficiency with an 80% year-over-year improvement in adjusted... As SoundHound, we've made two important predictions for the future of... The first is that AI customer service will be as necessary for every business as Wi-Fi and NFC. The second is that speaking will become the primary way we interact with our devices.

Keyvan Mohajer: We believe voice and conversation is the most natural way to interact with technology, and fortunately for product creators, we can bring their product to life by simply adding a tiny, inexpensive microphone. Predictions are the foundation of our three pillars of our strategy. Let me start with our first pillar, for retired products such as cars, TVs, and IoT. We have a mature history in Pilar.

Keyvan Mohajer: We went from zero to over 20 automotive brands in just a... These brands represent over 25% of the automotive industry, and we've added several brands just in the last few years. He powered TVs from legacy giants such as Vizio to exciting new innovators such as Netflix. We are in millions of devices and process billions of queries from cars, TVs, and other forms of IT. Our customers choose us because they believe our technology is the best, and we help them protect the brand, users, and data, and because we partner with them to differentiate. Then something incredible happened. The introduction of large-language models and generative AI created a positive disruption in our community, while the big tech companies were disoriented and have been scrambling to make their own models. We were able to swiftly integrate multiple generative AI models within a matter of, Our integration was clever due to our years of experience and technology, and that introduced a SoundHound chat AI product with generative. SoundHound Chat AI can integrate with real-time domains and can go back and forth between multiple models seamlessly in a single conversation, and is able to utilize even multiple models for a single query. For example, they drive off the car and can ask for real-time weather, and request sightseeing recommendations that match the weather conditions. Ask follow-up questions, then request to start navigation to one of the recommended destinations by simply referring to it.

Keyvan Mohajer: The introduction of large-language models and generative AI created a positive disruption in our community, while the big tech companies were disoriented and have been scrambling to make their own models. We were able to swiftly integrate multiple generative AI models within a matter of, Our integration was clever due to our years of experience and technology, and that introduced a SoundHound chat AI product with generative. SoundHound Chat AI can integrate with real-time domains and can go back and forth between multiple models seamlessly in a single conversation, and is able to utilize even multiple models for a single query. For example, they drive off the car and can ask for real-time weather, and request sightseeing recommendations that match the weather conditions. Ask follow-up questions, then request to start navigation to one of the recommended destinations by simply referring to it.

[music].

Keyvan Mohajer: Such as, can you navigate me to the second option you're, SoundHound Chop A Yard has seen rapid adoption since it was launched in early 2020. You are one of the first companies to show how AI could be integrated into a voice, while others are still only making broad claims to generate headlines, and building applications for generative AI. Thanks to our proprietary technology, which helps mitigate hallucinations and other issues that are inherent in unharnessed AI models, our applications are already live in production and in the hands of consumers across the world. Let me highlight a few examples of our momentum and progress with SoundHound Chapter. Immediately after it became generally available, other brands saw the potential to increase overall voice AI usage and improve the user experience using our products.

Keyvan Mohajer: That's because this is not just a simple API integration but a seamless back and forth between large language models, content domains, and the onboard features of the car, such as navigation. Throughout last year, we piloted our technology across a range of high-profile OEMs. We found that by adding Jersey's AI capabilities to in-vehicle voice assistance, the frequency with which drivers and passengers engage with it increased by multiples, and user satisfaction increased. The enhanced performance of FanHandShot AI for automotive has created numerous, And we are proud to announce that it has become the first in-car voice assistant with generative AI capabilities in the world to go live in vehicles beyond just an experimental pilot. Last year, DeLonte started a pilot with ES Automobiles.

Welcome to the somehow in Q4 2023 earnings conference call.

At this time all participants are in a listen only mode.

After the speaker's presentation, there will be a question and answer session.

To ask a question during the session you will need to press star one one on your telephone.

Keyvan Mohajer: Due to the incredible results, they are now going live in production in 18 countries. Recently, more brands, such as Peugeot, Opel, and Vauxhall, have announced their plans to utilize SoundHound. Even with our strong partnership with Celantis, we expect many more brands to go live into production. SoundHound Trust AI is increasing its product quality and user delight. But we also expect it to lead to an increase in revenue with a higher royalty rate for customers that choose to accept it. SoundHound's A.I.

You will then hear an automated message advising your hand is raised.

To withdraw your question. Please press star one one again.

Please be advised that today's conference is being recorded.

I would now like to hand, the conference over to your speaker today.

Scott Smith.

Head of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining our fourth quarter and full year 2023 conference call with.

With me today is our CEO cave on the harsher and our CFO and the texture on them.

Keyvan Mohajer: is enabling automakers to add value to their drivers' experiences with new functionality. We believe we are at the very beginning of a refresh that will bring exciting new opportunities for car manufacturers, drivers, and SoundHounds at the office of the. In addition to SoundHound Chat AI, we also launched a new incredible product called SoundHound Vehicles, and the Board of Courts. Drawing on SoundHound's voice AI, it allows automakers to simply and easily voice-enable the car.

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 definition.

Keyvan Mohajer: This means that drivers can use voice and conversation to ask about settings, special features, troubleshooting, and more without having to spend time and effort leafing through a cumbersome printed document. And our local intelligence is another innovation that we expect will improve product quality and increase our revenue. They are working closely with well-known EP brands and have been gaining strong traction with a lot of their brands. For example, we want the business for a prominent U.S.-based EV major to voice-enable their full fleet of market-leading, In addition, we significantly extended and increased the volume of our existing committed contracts with a large auto union until 2030. Creating value in a pillar one category is not just limited to automation; customers also access our technology through smart TVs and many IoT devices.

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 the 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.

The audio replay will be available following today's call.

With that I would like to turn the call over to our CEO Capon manager. Please go ahead Kevin.

Thank you Scott.

And thank you to everyone for joining the call today.

Once again, you broke in a new quarterly record for revenue. This quarter, we still have been $10 million and was up 80% year over year.

Keyvan Mohajer: For example, we've integrated our AI voice assistant with Telly, a new disruptive smart TV provider, and other customers. Vizio, an integrated platform for cutting-edge smart TVs, is a strong opportunity with our monetization models using voice commerce, such as ordering food, groceries, and supplies on the. This is the largest stream in the most social settings of every city. For IoT devices, the use cases are endless, and we are working with more companies every day to extend or go into production in multiple areas, such as with large appliance manufacturers, telcos, airplanes, robotics, printers, wearables, coffee machines, and kiosks, among others.

We are winning new customers and expanding with existing ones.

Continued to create value for our customer their customer and their belief while delighting users without technology.

At the same time, we are also driving efficiency down 80% year over year improvement in adjusted EBITDA.

As somehow you've made two important predictions for the future.

First is that AI customer service well, yes nessus.

Necessary for every business and Wi Fi and then equity.

The second is that <unk> will become the primary way, we directed the devices around us.

We believe both <unk> and conversation is the most natural way to interact with technology and of course naturally pork product creators they can bring their product to life by simply adding a tiny in extended micra.

Keyvan Mohajer: We are also thrilled that in Q4 we had a notable revenue contribution from a preeminent AI company. Although this company has been a close partner for us for a number of years, this was the first time we generated licensing revenue from them.

These predictions are the foundation of our three pillar strategy.

Let me start with a particular repower product question of car Tvs and Iot devices.

Keyvan Mohajer: And we expect more value will be realized from this partnership. Moving on to Pillar 2, where we offer AI customer services for businesses such as restaurants, home services, personal care, and professional care. As we predicted a year ago, AI customer service is now outperforming, user adoption is on the rise, and users are increasingly choosing to interact with conversational AI due to its reliability and extended capability. We believe disruption in the customer service industry will be one of the first major commercial applications for generative AI and large language, and is also becoming affordable and accessible to merchants of all sizes. All of these businesses are beginning to see AI as a necessity, just like Wi-Fi. We now have a proven scale in Pillar 2.

We have a mature history pillar one.

Went from zero to over 20 automotive brands in just a few years.

These brands represent over 25% drop in light of industry.

Several brands just in the last few months.

The powered Tvs from legacy giant customers easier to exciting new innovator Kelly.

You already millions of devices and profit billions of queries from cars Tvs and other forms of ICD.

Our customers choose them because they believe our technology is the best and we help them protect their brand users data and because we partner with them to differentiate and innovate.

Then something incredible.

The introduction of large language model and AI created a positive disruption and Nokia.

While the big Tech companies like these oriented and have been scrambling to make their own model, which could take years.

We're able to swiftly integrate multiple sandeep AI model within America.

Keyvan Mohajer: Today, our technology is live in about 10,000... We are fully engaged with over 100,000 locations in our pipeline, and we have over 30 million businesses in our near term as a civil market. You're at the very beginning of what Generative AI will bring to the world, and you're emerging as a market leader by offering applications with real-world. There are two very clear reasons that we believe we are leading. First, our solutions are built on proprietary technology, and we alone own the entire technology.

Our integration with clever due to our years of experience at Technology Foundation, and that introduce townhome chop AI product.

Yeah.

Hi, Hamzah AI can integrate real time domain and go back and forth between multiple model in that.

Conversations patient and is able to utilize multiple model for a single correct.

For example, they drive off the car and all apps for real time weather request tightening recommendation that matched the weather condition.

Keyvan Mohajer: Our solutions are fully automated and therefore easily scalable and capable of serving brands of all kinds, from the largest brands in the world to your local favorite shop on the corner. We are offering easy to use, easy to implement solutions that make a real and immediate difference. I'll share some examples across our various offices. Our SoundHound Smart Ordering product uses voice AI to support businesses by answering all inbound phone calls, taking customer food orders, and answering numerous questions, allowing restaurants to free up their staff to focus on making food and engaging customers. Georgie Mike, a chain of over 2,000 restaurants, went live in Q4 with Smart Ordering and is rolling out at a rapid pace.

So up question then request to start an obligation with one of the recommended explanation by simply referring to it.

Okay, and you navigate me to the second option Europe.

<unk> has seen rapid adoption.

Launched in early 2023 go to market.

The first companies to show how that AI can be integrated into a voice assistant.

Others are still only making broad claims to generate headlines.

B building application oriented AI.

Thanks to our proprietary technology, which helped mitigate hallucinations and other issues that are inherent with an unintended AI model. Our applications are already live in production and in the hands of consumers are comfortable.

Let me highlight a few examples of our momentum and profit outcomes.

Keyvan Mohajer: Targeted for an initial 50 locations, we've already reached that goal today, and we expect them to expand the partnership based on the college results. Why Capital? Because our voice AI is fully autonomous and does not use humans in the loop to perform, we are also able to rapidly scale our deployment without any degradation in quality. For instance, with SYNC3, we recently completed the rollout of voice AI ordering to 2,400 KT General Stores, which is also one of the largest pizza chains. Jointly, we are combining nearly two decades of SoundHound AI innovation, decades of SYNC 3 industry expertise, and established relationships. Together, we will accelerate the deployment of leading-edge AI capabilities in the industry while ensuring that our technology always works to preserve the best interests of our customers, their customers, and society more broadly. The combination makes SoundHound the preeminent global provider of voice-activated ayahuasca restaurants, significantly extending our market.

Immediately after it became generally available also brand saw the potential to include <unk> and improve the usage user experience.

Our product.

That's because this is not just a simple API integration, but it's in the back and forth between large language model constant domain and the onboard features of the car navigation system.

Keyvan Mohajer: Our first drive-thru offering continues to ramp up for. You are on pace to reach our goal of 100 lanes by the end of 2018. So far, we are also seeing our order processing under 60 seconds. Nicky can be a factor.

Throughout last year, we piloted our technologies across a range of high profile OEM brands.

Founded by adding digital capabilities to in detail about that it's been.

Keyvan Mohajer: In Q4, more large restaurant chains chose to integrate our AI ordering tools to help automate in-store operations, including Churchill's Chicken and a large hamburger chain located in the South, which has approximately 2,700 locations we can integrate our solutions into. With these larger deals for our voice AI solutions, we are also seeing a number of customers look to bundle these solutions with our other offerings. For example, to deploy our new SoundHound product called Employee Editor, restaurants look for multiple offerings to gain efficiencies in ordering, and SoundHound Employee Advice is a game-changer for business, using conversational voice AI to support restaurant employees like a co-pilot across a variety of paths the other has. For example, it can provide some ingredients and allergen information to customers and also train employees with step-by-step instructions to ensure the product is prepared correctly without them ever having to remove their gloves, consult a manual, or distract another member of staff.

With these drivers and passengers engaged with increased multiple and the user satisfaction increased significantly.

The enhanced performance of finance has AI automotive accretive numerous opportunities.

We're proud to announce that <unk> has become the first in carnival is that we occupy in the world to go live in the age of Jan just connect the excitement of our pilot.

Last year.

Starting with a pilot with Es automobile and due to the incredible results they announced going live in production in 18 countries.

Recently, more Graham <unk> and <unk>.

So announced their plans to utilize <unk>.

Even our strong partnership with the Opex you expect many more brands go live into production this year.

Banks have AI is increasing the product quality and user delight.

We also expected to lead to an increase in revenue with the higher royalty rate for customers that choose to adopt.

And in fact, AI is enabling automakers to add value to their drivers experiences with new functionality.

Keyvan Mohajer: Significantly reducing the stress on the board. Another incredible SoundHound product, Dynamic Interaction, is our multi-modal, full-duplex voice interface for kiosks, drive-throughs, or any device. We are working with a number of partners and customers, and our pipeline keeps growing. For example, Krispy Kreme has selected Dynamite.

We believe we are at the very beginning of a refresh that will bring exciting new opportunities for car manufacturers driver can compound at the OXXO. These units.

In addition to finance have AI, we also launched a new incredible product Cogs and vehicle intelligence in the fourth quarter.

Drawing on path on both.

Allows automakers with MTN easily voice enabled economy.

This means that drivers can use both in conversation about any special features troubleshoot and more without having to spend time and effort. These into a cumbersome printed documents.

Keyvan Mohajer: As you can see, our portfolio of restaurant solutions is taking shape, and major brands from convenience stores to multinational restaurant chains are taking the lead. They come to us to improve their order process, experience, and accuracy of the order, while at the same time improving their bottom line. Today, we have restaurant solutions live in all 50 U.S. And now, you're expanding the internet. 25 languages in our arsenal.

And our medical intelligence is another innovation that we expect will improve product quality and increased already.

We are working closely with well known brands and have been gaining strong traction with luxury brands as well for example, we won the business or a prominent U S based EDI major to voice enable their full fleet market leading data.

Keyvan Mohajer: We believe we have a massive opportunity to go beyond. Next, Smart Answering is our phone answering solution that goes beyond restaurants and can be used by any company and any industry. With this product, you're empowering businesses of all types and how they respond to customers on the phone, allowing them to capture every business opportunity while also mitigating. Smart answering can handle multiple calls at once, 24-7, and conveniently filters out nuisance calls, saving hours of wasted time for any decision.

In addition, we significantly extended and increased the volume of our existing committed contract with a large auto OEM and tier 2000 up 37.

Creating value in our pillar one category is not just limited to automotive we also license our technology to smart Tvs and many Iot devices for.

For example, integrated on AI.

Kelly and new disruptive smart heating provider.

Another customer vizio and integrated platform with cutting edge Martini.

Strong opportunity with our monetization model using voice commerce as ordering food groceries and supply on the TD <unk>.

Typically the largest screen in the model for stockpiling of every.

Our Iot devices the use cases are endless.

And we are working with more companies everyday to extent are going to production in multiple areas such as with large appliance manufacturers Alcoa airplanes, probiotic printer wearables coffee machines and kiosks among many others.

Keyvan Mohajer: And to massively increase our ability to scale and offer a solution with no cash onboarding for any business, we've been piloting a self-service e-commerce approach in Q1 and are seeing early adoption. Let me talk about, following up on the announcement of our acquisition of..., begun the integration of their exceptional team with SoundHound. SYNC3 brings more than 20 national and multinational chains, spanning drive-thru, half-casual, and casual dining, as well as convenience stores to SoundHound's fast-growing customers. Examples include Chipotle, Casey's, Applebee's, Panda Express, Papa John's, and iFood.

We are also thrilled that in Q4, we had a notable revenue contribution from a preeminent occupied.

Although this company has been a close partner for us for a number of years.

First time, we generated licensing revenue from departments and we expect more value will be realized from this partnership.

Moving on to pillar two.

Let me offer AI customer services or businesses, such as restaurants home services personal care and quick question on <unk>.

As we predicted a year ago AI customer service is now outperforming units.

Keyvan Mohajer: Because our voice AI is fully autonomous and does not use humans in the loop to perform, we are also able to rapidly scale our deployment without any degradation in quality. For instance, with SYNC3, we recently completed the rollout of voice AI ordering to 2,400 KT General Stores, which is also one of the largest pizza chains. Jointly, we are combining nearly two decades of SoundHound AI innovation, decades of SYNC 3 industry expertise, and established relationships. Together, we will accelerate the deployment of leading-edge AI capabilities in the industry while ensuring that our technology always works to preserve the best interests of our customers, their customers, and society more broadly. The combination makes SoundHound the preeminent global provider of voice-activated ayahuasca restaurants, significantly extending our market.

User adoption is on the rise and consumers are increasingly choosing to interact with conversational AI do too.

Ability and extended.

Yes.

We believe disruption in the customer service industry will be one of the first major commercial applications or generative AI and large language model.

It is also becoming affordable and accessible to merchants of all types.

Businesses are beginning to see AI and then.

Just like a Wifi and electric.

We now have a proven scale and pillar two as well.

Our technology is live in about 10000 merchant locations.

Fully engaged with over 100000 locations in our pipeline.

And we have over 30 million businesses in our near term addressable market.

You are at the very beginning of what <unk> will bring to the world and we are emerging as the market leader by offering application real world.

Keyvan Mohajer: Although we only closed a transaction in Q1 of this year, we are already seeing tremendous momentum with their customers and the ability to offer them additional solutions such as dynamic interaction, smart answering, and employee access. The synergies are already taking hold, and we are moving at a rapid pace. As I mentioned earlier, we have three... royalty from Bush Enabled Products, substitutions from voice in a book service, and the third pillar is monetization from connecting those services to others, For example. Drivers of a SoundHound-enabled car will be able to use their voice to order food by just talking to their car, and they will do so before arriving at the restaurant.

There are two very clear reasons to have at least we are leading here.

First are our solutions are built on proprietary technology.

And we alone on the Empire technologies.

Second our solutions are fully automated and therefore easily scalable and capable of serving brands offline on.

The largest brand in the world your local favorite shop on the corner.

We are offering easy to use easy to implement solutions that make a real and immediate.

I'll share some examples across our various operations.

Our health Mart ordering product using voice AI to support businesses by answering all inbound Hong Kong, taking customers with orders and anchoring numerous questions, allowing restaurants to free up their staff to focus on making food and engaging the customers in the store.

Keyvan Mohajer: Or they can make an appointment to get a haircut, book a flight, or perform other types of work. We believe this will create the future of voice commerce. SoundHound is in a unique position to realize this vision and due to our strong footprint on both devices, with our expanded national restaurant. Thank you for watching. We believe this is a powerful business model that offers significant value to all participants. CollectSG for generating new leads for merchants and populating transactions. A store or restaurant benefits from a new customer being channeled in their direction, and the automakers and the device makers take a share of this economy. Most importantly, the end-user will have the convenience of using their voice to get what they want. We are excited to see our portfolio of customers using voice and adult services continue to grow, allowing us to begin to pilot this new commerce program. In closing, our revenue has grown on average of over 50% over the last four years. This incredible growth during challenging times and against global market headwinds is a testament to our strong foundation, demand for our technology, and great partnerships we've built with some of the most well-known brands in the world.

The other thing Mike a chain with over 2000 locations went live in Q4 with Margaret and is rolling out at a rapid pace.

<unk> put our initial 50 locations you have already reached our goal today and we expect them to expanded partnership based on the Republic adopted it.

Wildcat, our first drive through offering continues to ramp up production.

Keyvan Mohajer: We believe this is a powerful business model that offers significant value to all participants. CollectSG for generating new leads for merchants and populating transactions. A store or restaurant benefits from a new customer being channeled in their direction, and the automakers and the device makers take a share of this economy. Most importantly, the end-user will have the convenience of using their voice to get what they want. We are excited to see our portfolio of customers using voice and adult services continue to grow, allowing us to begin to pilot this new commerce program. In closing, our revenue has grown on average of over 50% over the last four years. This incredible growth during challenging times and against global market headwinds is a testament to our strong foundation, demand for our technology, and great partnerships we've built with some of the most well-known brands in the world.

<unk> reached our goal of 100 linked by the end of July 24. So.

So far we are also seeing our order processing under 60 seconds, which is significantly factor compared to units.

In Q4, more large restaurant chain to integrate our solution to help automate in store operation, including church's chicken and a large hamburger chain located approximately.

Approximately $20 100 locations, we can integrate our solutions.

With these larger deal for our <unk> solution. We are also seeing a number of customers to bundle. These solutions with our other offerings for example.

Our new product called employee update at restaurants look for multiple offerings.

The ordering and predictability.

<unk> is a game changer for business.

It uses conversational AI to support restaurant employees, but the copilot across a variety of app the other headwind.

Both non potency provides ingredients and allergan information to customers. We can also train employees, we step by step instruction to ensure the product is prepared correctly without ever having to remove the club consult the manual or distract another staff member significantly reducing the stress on the on the work.

Keyvan Mohajer: Going forward, we expect to maintain this strong growth and see massive opportunities to accelerate it even further. The Omni AR revolution is creating Halloween in our lives. I believe that SoundHound has a unique advantage with its own IP, two decades of experience building trust with global customers, a trove of data, and a track record of innovation to move fast and invent our way forward. You remain at the forefront of conversational AI, and that's why we have been working on Polaris, our multi-modal, multi-lingual, generative AI foundation model, another important tool for us as we position ourselves as one of the leading and major forces in this new era. With that, I'll now turn the call over to Nitesh to talk about our financial performance, eGrowth drivers, and also for the remainder of the webinar. Thank you, Keyvan, and good afternoon, everyone.

Another incredible content product dynamic interaction is our multimodal full duplex Washington.

Drive through or any deal activity.

We are working with a number of partners and customers in our pipeline keeps growing for example, <unk> has selected dynamic occurrence.

As you can see our portfolio of restaurant solutions is taking shape and major brands from convenience stores to multinational restaurant chains are taking notes the contour improve their order process experience and accuracy of the order while at the same time, improving our bottom line.

Today, we have restaurant solutions live in all 50 U S States and now you are expanding internationally.

With 25 languages in our Arsenal.

We have a massive opportunity to go beyond these countries.

Net mark answering these are called answering solution that goes beyond restaurants, and can be used by any company in any industry.

With this product we are empowering businesses of all types and how they respond to customers on the phone, allowing us to capture every business opportunity while also mitigating.

Nitesh Sharan: Q4 revenue increased by 80% year over year. We will finish 2023 with accelerating momentum. And we are seeing exceptionally strong interest from enterprise businesses, most notably within the restaurant and auto sectors. In fact, Demand for SoundHound solutions is so high that we now have a healthy waitlist of restaurant merchants, and we're calibrating our resources to ensure we deliver for the country. While we continue to be mindful of our pathway to profitability, delivering against this demand is paramount. The exceptional growth we realized was coupled with cost containment. We focused on cost discipline this past year and will continue to do so.

Mark entering and handle multiple cost at $1 24, seven on D&C repairs outbound call saving hours of wasted time for any business.

It also provides domestic market captured the Pelican messaging App important follow up question. In addition to bareboat answers around policies, our product services pricing and more.

They are already live with customers with smart entering the feedback is critical.

Even the smart answer experiences will be automated and easy operating products to smaller businesses that in the past.

Pulling that back.

And to massively increase our ability to scale and offer a solution with no cash onboarding for any business.

I think its self service e-commerce approach in Q1 and early adopters.

Let me talk about <unk> III.

Following up on the announcement of our acquisition of the three we've begun the integration after the exceptional team at Paramount.

<unk> brings more than 20 national and multinational chain spanning drive thru fast casual and hydro dining segments as well as convenience stores, whose townhouse app growing customer base.

Ample to include Chipotle.

Appleby Andi expressed Papa Johns and iPhone.

Because our voice AI is fully autonomous and does not with human in the loop to perform.

So able to rapidly scale, our deployment without any degradation in quality.

For instance, we've seen three recently completed the rollout.

Ordering to 'twenty 400, Casey General stores, which also is one of the largest pizza chain in the U S.

Nitesh Sharan: The underlying drivers behind the remainder of the expenses are positive indicators of our First. We saw some tremendous growth opportunities in the second half of the year that we chose to invest in. We saw significant demand from enterprise restaurants, in particular seconds. We saw a great opportunity to inorganically accelerate our go-to-market motion and capture a sizable and meaningful restaurant customer portfolio. The acquisition of SYNC3 clearly positions us as the leader in the restaurant AI space.

Jointly we are combining nearly to the hiccups.

Innovation, the decade that stinks, III industry expertise and established relationships.

Together, we will accelerate the deployment of leading edge as it may actually the ability to the industry, while ensuring that our technology always we work to preserve the best interest of our customers their customers.

More broadly.

The combination that compound the preeminent global provider avoid any offer restaurant significantly extending our market.

Nitesh Sharan: Lastly, we accelerated investments in our administrative functions, notably around internal processes and controls, to ensure we have an even stronger foundation for the sustained long-term growth we expect to deliver. We fundamentally re-architected this company in 2023. We are more efficient, more focused, even more nimble, and aggressively driving disruption and growth across voice-enabled products and services. Accordingly, we are updating a metric we have previously shared called Cumulative Subscription and Bookings Backlog, which includes our previously reported Cumulative Bookings Backlog to also now include new subscription revenue streams that we are focused on. Cumulative Bookings Backlog takes into account the prior quarter and balance, plus new bookings in the current quarter, minus associated revenue recognition.

Although we only closed the transaction in Q1 of this year you are already seeing tremendous momentum with their customers and the ability to offer them additional solutions such as <unk>.

And that interaction smart answering and then so yes. It is.

Synergies are already taking hold and we are moving at a rapid pace.

As I mentioned earlier, we have three pillars royalty from both enabled product subscriptions from both technical services and the third pillar is monetization from connecting those services to those products.

For example drivers in.

In April car will be able to use their voice to order food by just talking to that car and can do so before arriving at the restaurant.

Or dependent appointments to get a haircut Luca blight.

Other types of transactions.

We believe this will create the future of the voice commerce ecosystem and townhouses in a unique position to realize this vision as our strong footprint.

Right.

With our expanded national restaurant reach you seen an acceleration of our <unk> monetization strategy, you have transactions and new the car Evs and Iot devices.

We believe this is a powerful business model, which could add significant value to all participants.

You would collect FTE or generating new leads our merchant and populating transaction.

<unk> <unk> benefit from a new customer the channel and the direction and the automakers and the device makers take a share of the economics.

Most importantly, the end user will have the convenience of using their voice to get things done.

We are excited to see our portfolio our customer using both mineral services continued to grow which should allow us to begin piloting e-commerce ecosystem.

Nitesh Sharan: This allows us to combine our Pillar 1 and Pillar 2 businesses into a single unifying metric. As we have communicated before, our cumulative bookings backlog mainly represents our Pillar One businesses. In Pillar 2, we have previously noted that ARR standardizes the annual subscription-like potential of these contracts, while also indicating the better stability and predictability building in our financial model. That said, two different metrics on two different timescales don't synthesize our full potential in an easy-to-understand manner, so we believe this updated figure is more representative of our medium-term revenue potential. Ultimately, we are addressing a greater than $100 billion rapidly growing market. So this new metric gives you a view of the tangible customer activity we have achieved within that larger opportunity. In Q3, I mentioned our cumulative bookings backlog was $341 million, with automotive being the largest constituent.

In closing our revenue has grown on average up over 50% over the last four years. This incredible growth during challenging times and again global market headwinds is a testament to our strong foundation demand for our technology and great partnership.

Some of the most well known brands in the World.

Going forward, we expect to maintain the strong growth and the massive opportunities to accelerated even further beyond that this year.

On the AI Revolution is creating tailwind in our favor.

<unk> has a unique advantage with its own IP two decades of experience building trust with global customers at 12 up data and its track record of innovation and we went our way forward.

You remain at the forefront of conversational AI and that's why we have been working on for Laurence.

Our multimodal multi lingual generic AI Commission model.

Nitesh Sharan: I also mentioned that separately, in the restaurant vertical, that at full scale, we would have 4,500 locations signed up and roughly $25 million in ARR. When we look at the combined potential of our signed-up customers at the end of 2023, across both pillars one and two, our cumulative subscriptions and bookings backlog was $661 million, up nearly 100% year-over-year on an apples-to-apples basis, thanks to growth in Pillar 1 and the incredible list of customers we have added in Pillar 2. Let me now get specific on our financial results for the fourth quarter and full year. In Q4, revenue was $17.1 million, up 80% and within our guidance for the quarter. Full-year revenue of $45.9 million was also within the outlook set at the beginning of the year.

Another important pillar for us at the position ourselves as one of the leading a major force in this new era.

With that I'll now turn the call over to the cash and talk about our financial performance key growth drivers and outlook for the remainder of the year.

Thank you, Kevin and good afternoon, everyone.

Q4 revenue increased by 80% year over year.

We finished 2023 with accelerating momentum and we are seeing exceptionally strong interest from enterprise businesses, most notably within the restaurant and auto sectors.

In fact.

Demand for <unk> solutions is so high that we now have a healthy waitlist of restaurant merchants and we're calibrating our resources to ensure we deliver for the customers.

While we continue to be mindful of our pathway to profitability delivering against this demand is paramount.

The exceptional growth, we realized with coupled with cost containment.

We focused on cost discipline this past year, and we'll continue to do so.

For the year adjusted EBITDA improved by over 50% and in Q4, our results were even better with 80% improvement.

Excluding certain costs that were necessary to fuel our growth and transformation brings us close to the positive Q4, adjusted EBITDA target, we laid out last quarter.

For example, the near term impact of switching to big four audit firm Pwc mid year, while becoming a large accelerated filer and upgrading some of our internal tools contributed to the majority of these costs.

We expect these expense pressures to lessen as we go forward.

The underlying drivers behind the remainder of the expenses are positive indicators of our future.

First we saw some tremendous growth opportunities in the second half of the year that we chose to invest any.

We saw significant demand from enterprise restaurants in particular.

Second word.

We saw a great opportunity to Inorganically accelerate our go to market motion and capture a sizeable and meaningful restaurant customer portfolio.

Nitesh Sharan: And over the last four years, we have delivered an overall compounded annual growth rate of greater than 50%. In Q4, our gross margins were 77.2%, up over 600 basis points year over year, largely resulting from the greater scale in our business. This helped drive growth margins above 75% for the full year, also up over 600 basis points year over year, as we increased revenue sequentially every quarter and at the same time improved our cloud and data center efficiency throughout the year. R&D expenses were $12.7 million in Q4, a decrease of 41% year-over-year, resulting largely from our corporate restructuring actions earlier in the year. Despite the expense reduction, we continue to invest in disruptive innovation and expand our existing suite of products with solutions like Dynamic Interaction, Smart Answering, Employee Assist, Vehicle Intelligence, and SoundHound Chat AI. Sales and marketing expenses were $4.5 million in Q4, a decrease of 34% year-over-year, also due to the aforementioned restructuring. We continue to invest in go-to-market and customer engagement. As mentioned earlier, we are seeing tremendous momentum and heightened customer demand, largely resulting from the investments we have been making in sales and marketing. We will continue to invest in high ROI demand generation and brand awareness to ensure we further build upon the current traction. G&A expenses were $7.6 million in Q4, an increase of 3% year over year. The increase in G&A reflects two elements, some of which were not contemplated when we guided last quarter. First, Part of our spending was related to the diligence, negotiation, and closing of the acquisition of SINC 3. Second, we accelerated investment in financial and non-financial processes and internal controls to support requirements under SOX 404B as we became a large accelerated filer. In total, these additional expenses, as compared to prior Q4, amounted to over $3 million and were the primary factors not fully encompassed in our previously provided Adjusted EBITDA Outlook. Across all operating expenses, non-cash employee stock compensation was $6.5 million in Q4. Again, in 2024, we see our quarterly revenue building through the year and being back-end weighted. We believe we can grow our business roughly 50% year-on-year each quarter. Let me close by re-articulating our excitement about what lies ahead. Generative AI and large language models have created a generational technological shift. The old way is out; customers are increasingly realizing they need partners like SoundHound to help pave the way forward. We are balancing the massive long-term opportunity with the inherent near-term volatility to navigate towards our goal. And we are bringing conversational voice AI to consumers everywhere so they can seamlessly access the information and services they covet through the products and devices they most interact with. Thank you. We will now move to Q&A. As a reminder... Question? Please press star 1-1 on your telephone. Don't wait for it.

The acquisition of <unk>, III, clearly positions us as the leader in the restaurant AI space.

Lastly.

We accelerated investments in our administrative functions, notably around internal processes and controls to ensure we havent even stronger foundation for sustained long term growth, we expect to deliver.

We fundamentally re Architected this company in 2023.

We are more efficient more focused even more nimble and aggressively driving disruption in growth across voice enabled products and services.

Accordingly, we are updating our metric we have previously shared and what we call our cumulative subscription and bookings backlog, which includes our previously reported cumulative bookings backlog.

So now include new subscription revenue streams that we're focused on.

Cumulative bookings backlog takes into account the prior quarter end balance plus new bookings in the current quarter minus associated revenue recognized.

Cumulative booking backlog is still derive from committed customer contracts and this definition remains the same as the previous one.

Subscription backlog takes into account customers, where we are the leading our exclusive provider and assumes a four year ramp to fully scale with a total five year duration.

We have incorporated reasonable assumptions about adoption percentages with lower percentages applying to pilot and proof of concept customers.

We believe we can outperform these assumptions given the faster Rollouts. We are currently experiencing and expectation to work with these partners for much longer.

Nitesh Sharan: We continue to invest in go-to-market and customer engagement. As mentioned earlier, we are seeing tremendous momentum and heightened customer demand, largely resulting from the investments we have been making in sales and marketing. We will continue to invest in high ROI demand generation and brand awareness to ensure we further build upon the current traction. G&A expenses were $7.6 million in Q4, an increase of 3% year over year. The increase in G&A reflects two elements, some of which were not contemplated when we guided last quarter. First, Part of our spending was related to the diligence, negotiation, and closing of the acquisition of SINC 3. Second, we accelerated investment in financial and non-financial processes and internal controls to support requirements under SOX 404B as we became a large accelerated filer. In total, these additional expenses, as compared to prior Q4, amounted to over $3 million and were the primary factors not fully encompassed in our previously provided Adjusted EBITDA Outlook. Across all operating expenses, non-cash employee stock compensation was $6.5 million in Q4.

Similar to the previous definition, we do not include expected auto renewals for our pillar one customers. This allows us to combine our pillar one and pillar two businesses into a single unifying metric.

As we have communicated before our cumulative bookings backlog, mainly represented our pillar one businesses.

Pillar two we have previously noted that a standardized the annual subscription like potential of these contracts, while also indicating the better stability and predictability building in our financial model.

Nitesh Sharan: The increase in G&A reflects two elements, some of which were not contemplated when we guided last quarter. First, Part of our spending was related to the diligence, negotiation, and closing of the acquisition of SINC 3. Second, we accelerated investment in financial and non-financial processes and internal controls to support requirements under SOX 404B as we became a large accelerated filer. In total, these additional expenses, as compared to prior Q4, amounted to over $3 million and were the primary factors not fully encompassed in our previously provided Adjusted EBITDA Outlook. Across all operating expenses, non-cash employee stock compensation was $6.5 million in Q4.

That said two different metrics on two different time scale doesn't synthesize our full potential in an easy to understand manner. So we believe this updated figure is more representative of our medium term revenue potential.

Ultimately, we are addressing a greater than $100 billion rapidly growing market. So this new metric gives you a view of the tangible customer activity, we have one within that larger opportunity set.

In Q3, I mentioned, our cumulative bookings backlog was $341 million with automotive being the largest constituent.

I also mentioned that separately in the restaurant vertical that at full scale out we would have 4500 locations signed up in roughly $25 million.

When we look at the combined potential of our signed up customers at the end of 2023 and.

Across both pillars, one and two.

Our cumulative subscription and bookings backlog was $661 million.

Nitesh Sharan: As a result, our operating loss for Q4 was $12.4 million, which reflects an improvement of 57% year over year. Likewise, for the full year, we saw improvements in our operating loss of 35% as we successfully grew the business while maintaining cost disadvantages. OI&E with $4 million of net expense for the quarter. A net loss of $18 million in Q4, an improvement of 42% year over year. This led to a net loss per share in Q4 of $0.07 compared to $0.15 in the previous year, an improvement of 53%. Adjusted EBITDA, which excludes non-cash charges of stock compensation, acquisition costs, restructuring, and depreciation and amortization, was a loss of $3.7 million in Q4 2023, which was an 80% year-over-year improvement and a sizable dollar reduction from an $18.8 million loss in Q4 2022.

Up nearly 100% year over year on an apples to apples basis, thanks to growth in pillar, one and the incredible list of customers. We have added in pillar two.

Let me now get specific on our financial results for the fourth quarter and full year.

In Q4 revenue was $17 1 million.

Up 80% and within our guidance for the quarter.

Full year revenue of $45 $9 million with also within the outlook at the beginning of the year.

Revenue growth in Q4 was predominantly driven by automotive royalties with strong increase in units offset by slight decreases in average selling prices due to a higher volume of edge licenses that generally have a lower royalty then our cloud licenses.

Note that.

Particularly with some of our new generative AI solutions and ultimately with monetization. We think there are meaningful opportunities per unit price expansion.

We also benefited in the quarter by a strong multi year commitment of minimum guaranteed volumes of our edge solution with an automotive partner and the new IP licensing opportunity with one of the preeminent AI chipmakers Kayvon referenced earlier.

Nitesh Sharan: Net cash used in operating activities for the entire year ended 2023 was about $68 million, improving roughly 27% year over year. Our cash position at year-end was approximately $109 million, of which $95 million was in cash and equivalents. Given additional actions we have taken in early 2024, our current total cash balance is in excess of $200 million. Our capital position is unequivocally a source of strength and gives us the security and optionality we need to drive the business forward. With that, let me discuss our outlook for 2020. We are committed to continuing to fuel strong growth with cost discipline and a returns focus. We expect to expand with our existing automotive partners and add Pillar One customers. We expect our Pillar 2 businesses to grow meaningfully and increase from less than 10% of our total revenue in 2023 to more than 20% in 2024.

Over the full year 2023, we increased auto units by 68% and active cloud users by 55% versus the prior year.

And over the last four years, we have delivered an overall compounded annual growth rate of greater than 50%.

In Q4, our gross margins were 77, 2% up over 600 basis points year over year, largely resulting from the greater scale in our business.

This helped drive gross margins above 75% for the full year also up over 600 basis points year over year as we increased our revenue sequentially every quarter and at the same time improved our cloud and data center efficiency throughout the year.

R&D expenses were $12 7 million in Q4, a decrease of 41% year over year, resulting largely from our corporate restructuring actions earlier in the year.

Nitesh Sharan: We see the overall top line growing to within a range of $63 to $77 million, with $70 million as the midpoint target. As we look further ahead to 2025, we believe we will cross $100 million in revenue and deliver adjusted EBITDA profitability. Our gross margins have been in the range of 70% to 80%, providing a strong indicator of our software business profile. Since we just completed the acquisition of SYNC 3, while we work on migrating their cloud and AI infrastructure to our own. We expect to have a temporary decrease in growth margin due to some of these duplicative expenses.

Sales and marketing expenses were $4 5 million in Q4, a decrease of 34% year over year also due to the aforementioned restructuring.

We continue to invest in go to market and customer engagement.

And earlier, we are seeing tremendous momentum and heightened customer demand largely resulting from the investments we have been making in sales and marketing we will continue to invest in high ROI demand generation and brand awareness to ensure we further build upon the current traction.

G&A expenses were $7 6 million in Q4, an increase of 3% year over year. The increase in G&A reflects two elements some of which was not contemplated when we guided last quarter first.

Nitesh Sharan: In addition, while the majority of SYNC3's revenue is AI-driven, they also have a legacy call center operation, which their team has been gradually upgrading with AI. We expect to further accelerate this migration, which will ultimately calibrate their growth margins to ours over time. As a result, we expect the combined company will show a one-time growth margin decrease in the early part of 2024 with steady improvement towards our historical levels as we get to the latter half of 2024 MBI. Overall, though, we see this acquisition as roughly EBITDA neutral over 2024 and accretive beyond.

Part of our spending was related to diligence negotiation and closing of the acquisition of <unk> III second we accelerated investment in financial and non financial processes and internal controls to support requirements under Sox 404, B as we became a large accelerated filer.

In total these additional expenses as compared to prior Q4 amounted to over $3 million.

The primary factor is not fully encompassed in our previously provided adjusted EBITDA outlook.

Across all operating expenses noncash employee stock compensation was $6 5 million in Q4.

As a result, our operating loss for Q4 was $12 4 million, which reflects an improvement of 57% year over year.

Likewise for the full year, we saw improvements in our operating loss of 35%.

As we successfully grew the business, while maintaining cost discipline.

Okay.

<unk> was $4 million of net expense for the quarter and.

Our net loss was $18 million in Q4, an improvement of 42% year over year.

Nitesh Sharan: Again, in 2024, we see our quarterly revenue building through the year and being back-end weighted. We believe we can grow our business roughly 50% year-on-year each quarter. Let me close by re-articulating our excitement about what lies ahead. Generative AI and large language models have created a generational technological shift.

This led to a net loss per share in Q4 of <unk>.

Compared to 15 <unk> in the previous year, an improvement of 53%.

Adjusted EBITDA, which excludes noncash charges of stock compensation acquisition costs restructuring and depreciation and amortization was a loss of $3 7 million in Q4, 2023, which was an 80% year over year improvement in the sizable dollar reduction down from an $18 $8 million loss in Q4.

2022.

Net cash used in operating activities for the entire year ended 2023 was about $68 million, improving roughly 27% year over year, our cash position at year end was approximately $109 million of which $95 million within cash and equivalents gives.

Nitesh Sharan: Thank you. We will now move to Q&A. As a reminder... Question? Please press star 1-1 on your telephone. Don't wait for it.

Given additional actions we have taken in early 2024, our current total cash balance is in excess of $200 million.

Operator: If there are any questions, please press star 1 1 again, stand by while we compile the Q&A. Our first question comes from Dan Ives with Wedbush. Your line is now open. Yeah, thanks. Good quarter. Can you talk about, do you expect more strategic partnerships from a distribution perspective to happen over the next six, nine months? Is that gonna be a big focus from a go-to-market perspective? Hi there. Yeah, definitely in the second pillar, in our Pillar 2, we see that as a big contributor. We have partnerships with, for example, Olo and Toast and Oracle and Square as channel partners. And they help us reach a larger number of merchants. And in Pillar 1, we also have, our customers are generally very large. For example, we just signed an extended deal until 2037 with one of the largest automakers. That's a lot of commitment for a very long time. So it shows a lot of trust.

Our capital position is unequivocally a source of strength and gives us the security and Optionality, we need to drive the business forward.

With that.

Let me discuss our outlook for 2024.

We are committed to continuing to fuel strong growth with cost discipline and returns focus.

Dan Ives: Can you talk about, do you expect more strategic partnerships from a distribution perspective to happen over the next six, nine months? Is that gonna be a big focus from a go-to-market perspective? Hi there.

We expect to expand with our existing automotive partners and add pillar one customers. We expect our pillar two businesses to grow meaningfully and increase from less than 10% of our total revenue in 2023 to more than 20% in 2024.

Keyvan Mohajer: Yeah, definitely in the second pillar, in our Pillar 2, we see that as a big contributor. We have partnerships with, for example, Olo and Toast and Oracle and Square as channel partners. And they help us reach a larger number of merchants. And in Pillar 1, we also have, our customers are generally very large. For example, we just signed an extended deal until 2037 with one of the largest automakers. That's a lot of commitment for a very long time. So it shows a lot of trust.

We see the overall topline growing to within a range of $63 million to $77 million with $70 million at the midpoint target.

As we look further ahead to 2025, we believe we will cross $100 million in revenue and delivered adjusted EBITDA profitability.

Our gross margins have been in the range of 70% to 80%, providing a strong indicator of our software business profile.

Since we just completed the acquisition of <unk>.

While we work on migrating their cloud and AI infrastructure to our own.

Keyvan Mohajer: Okay, and then can you just talk about how the conversation with customers is changing? I mean, you know, the vision's been there, but now you're starting to actually see the track. How does it feel like it's more strategic in terms of conversations you're having, whether it's in restaurants, or cars? Maybe you could just compare conversations today to, you know, even six months ago. It's totally different. Demand is going through the roof, and we are actually dealing with more demand than ever before. We have, for example, very large customers, like multinational chains with tens of thousands of locations. We actually have to put them on hold to deal with someone who's a little bit bigger. And it really unlocks so many different use cases for us, and there's tremendous demand. So I think the opportunity of scaling faster and doing more per unit, revenue per unit, is a big opportunity for us.

We expect to have a temporary decrease in gross margins due to some of these duplicative expenses.

In addition, while the majority of <unk> revenue is AI driven they also have a legacy call center operation, which their team has been gradually upgrading with AI.

We expect to further accelerate this migration, which will ultimately calibrate their gross margins two hours overtime.

As a result, we expect the combined company will show a onetime gross margin decrease in the early part of 2024 with steady improvement towards our historical levels as we get to the latter half of 2024 and beyond.

Keyvan Mohajer: Demand is going through the roof, and we are actually dealing with more demand than ever before. We have, for example, very large customers, like multinational chains with tens of thousands of locations. We actually have to put them on hold to deal with someone who's a little bit bigger. And it really unlocks so many different use cases for us, and there's tremendous demand. So I think the opportunity of scaling faster and doing more per unit, revenue per unit, is a big opportunity for us.

Although we see this acquisition as roughly EBITDA neutral over 2024 and accretive beyond.

Lastly, let me comment on expected revenue seasonality for the year our.

Keyvan Mohajer: So, it's a temporary problem that we're dealing with, but we're in a really good position to be in. So, customers aren't coming to us, whereas maybe 12 months ago, even nine months ago, we were actually going after them, knocking on their door. They are now knocking on our door. Great, thanks. Thank you, Dan. One moment for our next question. Our next question comes from Gil Luria with DA Davidson. Your line is now open. Thank you. Good afternoon. I have one product question and one financial question. The product question: chip company, what's the nature of that revenue? Are they incorporating your technology in a chip, and then when they sell it into devices, you're getting license revenue, or is it a different type of arrangement?

Our mix of business will shift through the year as I described to a greater mix of pillar two.

But we will start the year more automotive heavy just as we ended 2023 as such we remain affected by the seasonality in the automotive sector, which tends to be higher in Q4 and lower in Q1.

Again in 2024, we see our quarterly revenue building through the year and back end weighted we believe we can grow our business roughly 50% year on year each quarter.

Keyvan Mohajer: They are now knocking on our door. Great, thanks. Thank you, Dan. One moment for our next question. Our next question comes from Gil Luria with DA Davidson. Your line is now open. Thank you. Good afternoon.

Let me close by re articulating our excitement about what lies ahead generative AI and large language models have created a generational technological shift the old ways out.

Customers are increasingly realizing they need partners like <unk> to help pave the way forward.

Keyvan Mohajer: I have one product question and one financial question. The product question: chip company, what's the nature of that revenue? Are they incorporating your technology in a chip, and then when they sell it into devices, you're getting license revenue, or is it a different type of arrangement?

We are balancing the massive long term opportunity with the inherent near term volatility.

To navigate towards our goals.

And we are bringing conversational voice AI to consumers everywhere. So they can seamlessly access to information and services they covered through the products and devices. They most interact with.

Thank you we will now move to Q&A.

As a reminder to ask a question. Please press star one one on your telephone.

Keyvan Mohajer: How does that scale once the chip maker has incorporated the technology? Yeah, this actually was not a channel partnership, with the direct revenue for the company paying us for our IP. And we've known this company for a number of years; they're a close friend, close partner. This was the first time we generated revenue from their relationship, so we're incredibly excited about it, and we expect more positive things to come out of it in the future. But that's as much as we can share today. Got it. So then maybe another product question, you mentioned a large or a high-profile EV maker in the U.S.; does that mean that you can now send the technology in over-the-air updates? Because part of your gating factor so far has been incorporating it into new cars only as they ship, but I think the EV makers based in the U.S., at least the three that I'm thinking about, allow for over- They already have a microphone built in.

Wait for your name to be announced.

Withdraw your question. Please press star one one again.

Please standby, while we compile the Q&A roster.

Our first question comes from Dan Ives with Wedbush. Your line is now open.

Yes, thanks, good quarter.

Can you talk about do you expect more strategic partnerships from a distribution perspective to happen over the next six nine months I guess that.

Is that going to be a big focus from a go to market.

Hi, Dan, Yes, Thats definitely in the second pillar two we see that as a big contributor we have partnerships with.

For example, although until its done Oracle.

On square as channel partners.

Help us reach a larger number of merchants.

One we also.

Our customers are generally very large for example, we just signed an extended through 2037 is one of the largest automakers that's a lot of.

Commitment for a very long time, because a lot of trust.

Okay, and then can you just talk about how the conversation with customers is changing I mean it.

Keyvan Mohajer: So does this type of deal make it possible for you to deploy your software a little more quickly and to a bigger set of automobiles as opposed to only the ones that get shipped? Yeah, absolutely. Especially for our clouds, we could replace an existing solution, or sometimes they don't have a solution. So we could actually go to legacy cards and power them, too? In this particular case, it would be for new cards and older cards that have already been sold. And maybe one thing to add, Gil, I think, you know, a part of your question is about the pace of scale. The other thing we're super excited about, as Keyvan mentioned in his prepared remarks, was around generative AI opportunities that we're already adding with existing customers. So it's sort of a build on top.

It seems like the vision has been there, but now youre starting to actually see.

The traction.

How does it feel like it's more strategic in terms of conversations you have and whether it's on restaurants auditors, maybe you could just compare conversation today to even six months ago.

Keyvan Mohajer: In this particular case, it would be for new cards and older cards that have already been sold. And maybe one thing to add, Gil, I think, you know, a part of your question is about the pace of scale. The other thing we're super excited about, as Keyvan mentioned in his prepared remarks, was around generative AI opportunities that we're already adding with existing customers. So it's sort of a build on top.

It's totally different than the demand is going through the roof and we actually have we are dealing with.

More demand than ever before we have for example.

Large customers, who like multinational change with tens of thousands of applications, we actually have to put them on hold to deal with someone who's a little bit bigger.

Temporary problem that we're dealing with but it can be a really good position to be and so customers are not coming to us, whereas maybe 12 months ago nine months ago, we were actually going after them knocking on their door Jordan I'm knocking on our door.

Great. Thanks.

Thank you Dan.

Thank you.

One moment for our next question.

Nitesh Sharan: And it really unlocks so many different use cases for us, and there's tremendous demand. So I think the opportunity of scaling faster and doing more per unit, revenue per unit, is a big opportunity for us.

Our next question comes from Gil Luria with D. A Davidson your line is now open.

Thank you good afternoon, one product question one financial question.

The product question Chip company, what's the nature of that revenue are they incorporate your technology on the chip and then when they sell it into devices Youre getting a license revenue or is it a different type of arrangement.

Nitesh Sharan: So then on the new backlog metric, I want to make sure I understand the duration. So it sounds like on the subscription side, you define the duration as a five-year duration. What's the duration on the booking side, on the other side, in pillar one? That used to be, I believe, six years. Is it still six years, or are you now harmonizing it as also a five-year duration? No, great question. The current one is basically because they're committed contracts over the duration, so it's not like we're harmonizing; we're actually based on whatever's in the contract. So in Q4, we actually had some deals that extended it. So I'd say the average of that, I think when you take the weighted average of the full portfolio, it's still about six and a half. But the actual device side, the product side did extend because we got some deals that extended the duration of the device, so the pillow is one product.

How does that scale once once it's in the.

Nitesh Sharan: That used to be, I believe, six years. Is it still six years, or are you now harmonizing it as also a five-year duration? No, great question. The current one is basically because they're committed contracts over the duration, so it's not like we're harmonizing; we're actually based on whatever's in the contract. So in Q4, we actually had some deals that extended it. So I'd say the average of that, I think when you take the weighted average of the full portfolio, it's still about six and a half. But the actual device side, the product side did extend because we got some deals that extended the duration of the device, so the pillow is one product.

Whats the chipmakers incorporated that technology.

Yes, actually what another channel partnerships.

Direct revenue for the company paid us for our IP and we've known this company for a number of years that are close to plant close partner.

This was the first time, we generate revenue from the relationships that we are incredibly excited about it and we expect more positive things to come out of it in the future.

But thats as much as we can share today.

Got it. So then maybe another product question you mentioned, the large or high.

High profile EV maker in the U S.

Does that mean that.

You can now send.

And the technology and over the air updates because part of your gating factor. So far has been incorporating into new cars only as they ship, but I think the EV makers based in the U S. At least three that I'm thinking about allow.

Allow for over the air updates they already have a microphone built in so does this type of deal make it possible for you to deploy your software a little more quickly and to a fab to a bigger set of automobiles as opposed to only the ones that get shipped.

Nitesh Sharan: So the way, like you said, on the subscription side, we made it five to standardize, but on the, just like we used to do with cumulative booking backlog, we just tie to whatever the contract length is. Hope that makes sense. Thank you. Let's go. Thank you. Our next question comes from Scott Buck with. Wainwright, Noah. Hi, good afternoon, guys. Thanks for taking my questions. First, I was hoping I could get a little more color on your visibility into 25 and maybe why you're comfortable putting out a target today. Yeah, I think it's a couple of different things.

Gil Barnum Luria: Thank you. Our next question comes from Scott Buck with. Wainwright, Noah. Hi, good afternoon, guys. Thanks for taking my questions. First, I was hoping I could get a little more color on your visibility into 25 and maybe why you're comfortable putting out a target today. Yeah, I think it's a couple of different things.

Yes, absolutely.

For especially if our cloud we could replace an existing solution or sometimes they don't have a solution.

So we could actually go to legacy cars.

Nitesh Sharan: Thanks for taking my questions. First, I was hoping I could get a little more color on your visibility into 25 and maybe why you're comfortable putting out a target today. Yeah, I think it's a couple of different things.

Power them too.

This particular case it would be for new cars.

Older cars that have already been sold.

And maybe one thing to add Gail I think.

To your question is about like pace of scale. The other thing we're super excited about it as Kevin mentioned in prepared remarks was around generative AI opportunities that we're already adding with existing customers. So it's sort of a build on top and it really unlocks. So many different use cases for us and there is tremendous demand. So I think the opportunity of scaling faster and doing more per unit revenue per unit is a big opportunity for us.

Nitesh Sharan: One is, you know, we're building and we're making choices to sort of build a multi-year roadmap, and we're not playing short-term, quarter to quarter, even two quarters. So I think with the pipeline we're building, with the customers we're working with, with the, you know, investment we're making to try to scale, we're building increasing confidence beyond just this year. And we thought it made sense, Through last year and into this year, we're sort of giving mile markers only up to the, you know, one-year mark. And so I think with the bookings backlog type metric that we were talking about, there's a lot of good visibility. And frankly, it's sort of like where we're sitting today in February, early in the year. And we know there's just a lot more pipeline and traction that we're gaining. So we felt confident enough to sort of give an early read on 2025, which will obviously calibrate as we go forward. But I think it's really a sentiment of confidence and commitment we're seeing from our customers. That's helpful.

Got it so then.

On the new met you on the new backlog metric I want to make sure I understand the duration. So it sounds like on the subscription side you defined the duration of the five year duration, what's the duration.

Nitesh Sharan: Through last year and into this year, we're sort of giving mile markers only up to the, you know, one-year mark. And so I think with the bookings backlog type metric that we were talking about, there's a lot of good visibility. And frankly, it's sort of like where we're sitting today in February, early in the year. And we know there's just a lot more pipeline and traction that we're gaining. So we felt confident enough to sort of give an early read on 2025, which will obviously calibrate as we go forward. But I think it's really a sentiment of confidence and commitment we're seeing from our customers. That's helpful.

On the bookings side on the other side of that.

Pillar, one that used to be I believe six years is it still the six years or are you know harmonizing. It is also a five year duration.

No great question.

The current one is basically because they are committed contracts over the duration. So it's not like we're harmonizing, we're actually based on whatever isn't a contract so.

Nitesh Sharan: And we know there's just a lot more pipeline and traction that we're gaining. So we felt confident enough to sort of give an early read on 2025, which will obviously calibrate as we go forward. But I think it's really a sentiment of confidence and commitment we're seeing from our customers. That's helpful.

In Q4 in Q4, we actually had some deals that extended it. So I'd say the average of that I think when you take the weighted average of the full portfolio its still about that six five.

The actual device side the products I did extend because we got some deals that extended the duration of the device.

Below one product so the way the like you said on the subscription side made it five to standardize but on the just like we used to do with cumulative bookings backlog, we just tie to whatever the contract length is.

Nitesh Sharan: Now, does that include any additional M&A or any? Thank you for watching. opportunities organically and then even possibly inorganically. So we certainly have nothing on the horizon to talk about there. But the numbers we laid out do not require it. If something structurally changed there, obviously, as you know, it very well depends on the flavor and the size and the type of M&A that possibly could be out there.

I hope that makes sense.

It does thank you.

Thanks Gail.

Okay.

Thank you one moment for our next question.

Okay.

Our next question comes from Scott Buck with HC Wainwright <unk> co your.

Your line is now open.

Hi, Good afternoon, guys. Thanks for taking my questions.

First I was hoping I could get a little more color on your visibility into 25, and maybe why you are comfortable putting out a target today.

Nitesh Sharan: So something we do changes that architecture, that ramp, we'll let you know. That's great. And then on SYNC 3, I'm curious if you could give us something in terms of dollar terms, maybe what the upselling, cross-selling, revenue synergy opportunity is there, or even as, you know, maybe a percentage of their legacy revenue. Yeah, I think. Let me try to think of the best way to unpack it

Yes, I think it's a couple of different things. One is we are building and we're making choices to sort of build a multiyear road map and that we're not playing short term quarter to quarter or even two quarters or so so I think we with the pipeline. We are building with the customers, we're working with with the well.

The investment, we're making to try to scale, we're getting increasing confidence beyond just this year and we thought it made sense frankly through last year into this year, we're sort of given mile markers only up until.

One year, Mark and so I think with the.

The bookings backlog type metric that we were talking about there is a lot of good visibility and frankly, it's sort of like where we're sitting today in February.

Early in the year, and we know Theres, just a lot more pipeline and traction that we're gaining so we felt confident enough to sort of give an early read on 2025, which we're obviously calibrate as we go forward, but I think it's really a sentiment of confidence and commitment we are seeing from our customers.

Nitesh Sharan: To your point, cross-selling, our solution, bringing together the different voice solutions, upselling some of the employee assist capabilities, and smart answering. There are so many conversations going on. So, you know, I'm going to a little bit punt on later to give you better tangible visibility, but the roadmap we've laid out, we believe SYNC3 will be a big contributor to that. The impact I mentioned of margins and, particularly as they've been evolving this sort of call center business to AI, that is an evolution we'll work on together. There is definitely, as you know, any time when two companies come together, there's a lot of work to integrate, and we're in the middle of that. But long term, I mean, we're, I just want to clarify, again, we're talking about a restaurant space that for us is billions and billions of dollars of annual revenue opportunity, and we're just scratching the surface of it.

That's helpful. Now does that include any additional M&A or any.

Potential deal you would do in the future would be on top of that.

Those figures.

It doesn't require it.

Yes, I will say, we're super excited about the <unk> acquisition and what it can bring so from that vantage point. It is the the one plus one equals a lot more than two opportunity we have with them and then in terms of future opportunities. We will continue to look we we think it's a very dynamic market with a lot of potential.

Opportunity organically and then even possibly inorganically. So we certainly have nothing on the horizon to talk about there but.

The numbers, we laid out do not require it.

If something structurally changed there obviously as you know very well it depends on the flavor and the size and the type of M&A that possibly could be out there is something we do changes that architecture that ramp will will.

Right.

Okay, that's great and then on <unk>.

Three I'm curious if you could give us.

In terms of dollar terms, maybe what the Upselling cross selling revenue synergy opportunity is there or even as you know.

Nitesh Sharan: And together, you know, I think we can go faster at capturing a greater and greater share. We also think that when we look out at the competitive landscape, it's mostly greenfield. We don't think people out there have comparable tech, not certainly what we're seeing in terms of fully automated solutions. And most importantly, the restaurant demand is just, I mean, it's exactly what they need. They have labor shortages, they have cost pressures, and they need consistency of service.

Maybe a percentage of their legacy revenue.

Yes.

Sure.

Let me try to think of the best way to unpack. It I mean, we first of all they bring this great portfolio of customers we articulated.

So the likes of Chipotle Papa John's Applebee's firehouse subs fiber is just this.

Just as amazing are some customers that were early days of having some of those conversations we certainly had a thesis when we when we acquired them as to what the possibilities could be and I will just tell you early days are even more exciting of what we can do together to your point cross selling our solutions, bringing together different voice solutions.

Nitesh Sharan: And this is a solution that fits very well. So in terms of the organic opportunity is tremendous with SYNC3, we're very excited about the synergies and the upside. And then the revenue outlook, and maybe to your first question, us coming together gives us confidence to give you, call it, put a flag in the ground on what we think the early signs of 2025 are. But I would just tell you, we wouldn't put that out there if we didn't think we could do that and even more. Yeah, well, I appreciate the added color, guys. Congratulations again on the quarter. Thank you. Thank you. One moment for our... Our next question comes from Glen Metz. Lindenberg-Thalman, your lines are now open.

Selling some of the employee assess capabilities smart answering theres, so many conversations going on.

Im going a little bit pumped to later to give you a better tangible visibility, but the roadmap. We've laid out we believe think there will be a big contributor on that impact I mentioned, the margins and particularly as they have been evolving the sort of call center business. The AI that is an evolution will work to together there is definitely as you know anytime when two companies come together, there's a lot of work to integrate in.

We're in the middle of that but long term I mean, we're just.

Nitesh Sharan: Thank you. Thank you. One moment for our... Our next question comes from Glen Metz. Lindenberg-Thalman, your lines are now open.

Just wanted to clarify again, we're talking.

The restaurant space that for US is billions and billions of dollars of annual revenue opportunity and we're just scratching at the surface of it and together I think we can go faster and capturing a greater and greater share. We also think when we look out at the competitive landscape. It's mostly greenfield. We don't think people out there have comparable tax not and certainly what we're seeing in terms of <unk>.

Nitesh Sharan: Hi guys, thanks for taking the question. So I just wanted to talk a little more about the comment that was made that perhaps some customers on the restaurant side of it put on hold for a little bit in terms of, because demand is kind of just overflowing, your ability to kind of fill it right now. So I'm curious if that means that there's got to be more hiring involved or maybe it's more of a learning process as you've kind of scaled up from more smaller mom-and-pops to national chains and whatnot, and perhaps there's a learning curve for both sides of the equation whereby the process of implementing the software will get faster over time or that kind of thing. Thank you for your time. Thank you. Thank you. I'll start. Sorry.

Fully automated solutions and most importantly, the restaurant demand is just I mean, it is exactly what they need they have labor shortage, they have cost pressures and they need consistency of service and this is a solution that fits very well so in terms of.

The organic opportunity is a tremendous with St. <unk>, we're very excited about the synergies and the upside.

And then the revenue outlook and even maybe to your first question is coming together gives us confidence to give you a call. It a.

Put a flag in the ground on what we think early signs of 2025, but I would just tell you we wouldn't put that out there. If we didn't think we could we can do that and even more.

Nitesh Sharan: First of all, we're constantly learning. This is a new market; we're disrupting, we're growing, and we're improving every day. I think we're learning a lot, frankly, also with the acquisition. One of the things SYNC3 has been really good at is scaling very quickly, and I think we can come together and drive improvement. One of the beauties of our solutions in software is that it can really scale very quickly once you kind of get the integration with point-of-sale systems, get menu ingestion, some of those things done right. Every time we add a new customer, it really expands the market of other customers we can go to that we can really rapidly accelerate. So there's a lot of positive sort of build-up effect here that we can build and that we can continue forward with. On the investment side, yeah, I mean, we definitely want to go after growth. When the demand is there, we don't want to say no to any customer. We want to be thoughtful about the roadmap. So we will absolutely look at our hiring and make sure that we're calibrating it. I wanted to jump in before Kayvon, just to put my point of view out there. It's always going to be cost discipline focused and so forth, and we'll be very judicious. But I think that we know the opportunity there, and we're not going to shortchange it by any stretch of the imagination.

Yes, well I appreciate the added color guys. Congrats again on the quarter.

Thank you. Thank you.

Thank you one moment for our next question.

Our next question comes from Glenn Mattson with Ladenburg Thalmann. Your line is now open.

Hi, guys. Thanks for taking the question. So I just wanted to talk a little more about the.

Comment that was made that perhaps some customers on the restaurant side have been put on hold for a little bit in terms of because demand is kind of just overflowing your ability to kind of fill it right now so.

I'm curious if that means that there's going to be more hiring involved or maybe it's more of a learning process as you've kind of scaled up for more smaller mom and pop's national chains, and whatnot and perhaps theres a theres a learning curve for both sides of the equation whereby.

The process of implementing the software we've got faster over time or is that kind of thing maybe you could just give us some color on your thoughts there.

Yes.

So I'll start sorry, then Caroline can add on that first of all say, yes. We're constantly learning. This is a new market. We are disrupting we're growing we are improving.

Nitesh Sharan: We want to be thoughtful about the roadmap. So we will absolutely look at our hiring and make sure that we're calibrating it. I wanted to jump in before Kayvon, just to put my point of view out there. It's always going to be cost discipline focused and so forth, and we'll be very judicious. But I think that we know the opportunity there, and we're not going to shortchange it by any stretch of the imagination.

Every day I think we're learning a lot frankly also with the acquisition one of the things <unk> been really good at is scaling very quickly and I think we can come together and drive improvement coupled.

It's sort of building one of the beauties of our solutions getting software. It can really scale very quickly once you kind of get the integration with point of sale systems get menu ingestion some of those things done right.

Nitesh Sharan: It's always going to be cost discipline focused and so forth, and we'll be very judicious. But I think that we know the opportunity there, and we're not going to shortchange it by any stretch of the imagination.

And the quicker every time, we add a new customer it really expands the market of other customers. We can go to that we could really rapidly accelerates. So theres a lot of positive sort of build the fact here that we can build in.

Nitesh Sharan: So we're certainly going to invest to make sure we're capitalizing on the demand. Yeah, that's all that, and I would just add that the whole that I mentioned, we are talking about days and weeks, not really months or anything beyond that. Great, thanks for that color.

Can continue forward with on the investment side.

We definitely want to go after the <unk>.

When the demand is there we don't want to say no to any customer we want to be thoughtful of the roadmap. So we will absolutely look at our hiring and make sure that it's that we're calibrate again.

Nitesh Sharan: And then last for me, just on the model side, I think Nitesh you said that, you know, historically 70-80% gross margin. And I guess, theoretically, if you get to that kind of north of 100 million 2025 revenue target that you put out today, a lot of the growth will be on the restaurant side or the SAS side, which theoretically would be, I think, higher margin than the auto. So would you have us model towards the higher end of that range for 2025? I won't guide the growth margin for 2025. I'll leave the guidance as I laid it out, but I will give you some color commentary to dimensionalize it.

I wanted to jump in before Kevin just to put my point of view, it's always going to be cost disciplined focused and so forth and we'll be very judicious, but I think that.

We know the opportunity there, we're not going to we're not going to.

Short change it by any stretch of the imagination. So we're certainly going to invest to make sure we're capitalizing on the demand.

Yes.

All of that.

I would just add that the hold that I mentioned, you are talking about days and weeks.

Not really months or anything beyond that.

Great. Thanks for that color and then last for me just on the model.

I think because you said that historically had been 70% to 80% gross margin and.

I guess theoretically if you get to that kind of north of a $100 million 2025 revenue target that you put out today.

A lot of the growth will be on the.

Restaurants out of the SaaS side, which theoretically would be I think higher margin than the auto so.

Nitesh Sharan: So, you know, absolutely long term, we are, you know, a software business. And so the margin profile should certainly be well north of 70. And we think the EBIT margins should be, you know, 30% plus. And that's at scale fully penetrated, I'd say, multiple years down the road. We want to make sure we're investing in the near term. And then, I would also say, to your specific question on gross margin, I don't think it's as clean as, you know, Pillar 2 versus Pillar 1, because it kind of depends. Even within Pillar 1, some of our edge solutions are very high margins, so it kind of depends on the mix across both.

Would you have us model towards the higher end of that range for 2025.

I won't guide gross margin for 2025, I'll leave the guidance as I laid it out but I will give you some color commentary to dimensionalize. It so absolutely long term we are.

The software business and so the margin profile should certainly be well north of 70, and we think the EBIT margins should be 30% plus and that's at scale fully penetrated I'd say multiple years down the road, we want to make sure. We're investing in the near term and then I would also say from a to your specific question on gross margin.

I don't think is as clean as pillar two versus pillar, one because it kind of depends even within pillar one.

AD solutions are very high margins.

So it kind of depends on the mix across both but I do think that we'll be marching pass back to the 70% range and then part of it will also be.

Nitesh Sharan: But I do think, yeah, we'll be marching back to the 70% range, and then part of it will also be. This is going to be new where we bring on the call center business, which, you know, we'll continue to. I think we look at pillar two, and the restaurants are sort of the first gate to major disruption across customer service. I think we've said in the prepared remarks, generative AI, in particular, one of the major disruptive areas is customer service with very natural conversations to enable consumers to just seamlessly access information and services that they want. So with that, and the reason I mentioned that is, we believe that we can scale that really quickly, and we can leverage the call center capability to get the data and the actual production live customer interactions that will help improve our model. So there's going to be a bit of a journey to extend beyond restaurants into different verticals and finding that right mix between maybe there is an advantage because the customer really demands a little call center support, as you know, if you go from, we can do the base 80% of the answering, and maybe some parts aren't. Like, those are things as we grow into pillar two we'll calibrate on.

This is going to be new.

Bring on their call center business, which will continue to I think we'd look at pillar, two and the restaurants and sort of the first gate on major disruption across customer service I think we said in the prepared remarks generative AI in particular, one of the major disruptive areas is customer service with very natural conversations to enable consumers to just seamlessly access information in.

Services that they want so with that and the reason I mentioned that is.

We believe that.

We can scale that really quickly and we can leverage the call center capability to get the data and the.

The actual production live customer interactions that will help improve our model, so theres going to be a bit of a journey to extend beyond restaurants into different vertical and finding that right mix between maybe there is an advantage because the customer really demands a little call center support.

If you go from like we can do the base, 80% of the answering and maybe some part isn't that goes or things as we grow into pillar two will calibrate on so that's why I can't give you a precise answer right now I will tell you, though yes long term, we absolutely should be growing back in the 70% range.

Nitesh Sharan: So that's why I can't give you a precise answer right now. I will tell you, though, yes, long term, we absolutely should be growing back in the 70% range, but we need to keep going through the work and kind of get closer to that finish line to give you an exact number on what 2025 will be. Right, thanks. A lot of moving parts, I understand. Thanks and congrats on the quarter.

But we need to keep going through the work and kind of get closer to that finish line to give you exact on what 2025 will be.

Alright, thanks for that I know a lot of moving parts I understand thanks, and congrats on the color.

Thank you.

Operator: Thank you. As a reminder, to ask a question, please press star 11 on your telephone. One moment for our next... Our next question comes from Mike Latimore. Northland Capital Markets, your line is now open. Great. Yeah, thanks. Congratulations on an excellent year here. Hey, Mike.

Thank you.

As a reminder to ask a question. Please press star one one on your telephone.

Well known for our next question.

Our next question comes from.

Mike Latimore with Northland Capital markets. Your line is now open.

Michael James Latimore: Great. Yeah, thanks. Congratulations on an excellent year here. Hey, Mike.

Great. Thanks, Congrats on excellent year here.

Hey, Mike Thanks.

Michael James Latimore: Thanks. Yep. So in the last quarter, you highlighted a lot of, you know, restaurant wins like White Castle, Jersey Mike's, and Krispy Cream. You know, what percent of those opportunities do you think you might get deployed by year end? And sort of what are the keys to getting there, whether it's, you know, internal internal work or leveraging third parties? Yeah, it depends on the customer. So, you know, drive-through is a little different than phone ordering. We know we made a public announcement last year with White Castle about our opportunity to scale into 100 locations this year. And we're, you know, on the pace. And that has some requirements for the drive-through setup on the hardware side. And, and so that's a bit of the gating pacing. They're a company that has full corporate ownership.

Yes Hello.

Since the last quarter, you highlighted a lot of restaurant win like White Castle Jersey, Mike's crispy cream.

What percent of those opportunities do you think you might get deployed by year end and sort of what are the keys to getting there whether it's internal internal work or leveraging third party.

Yes.

On the customer so.

Drive through is a little different than from an ordering.

Nitesh Sharan: We know we made a public announcement last year with White Castle about our opportunity to scale into 100 locations this year. And we're, you know, on the pace. And that has some requirements for the drive-through setup on the hardware side. And, and so that's a bit of the gating pacing. They're a company that has full corporate ownership.

We've publicly last year made a joint announcement with White castle about our opportunity to scale into 100 locations. This year and we are.

On the pace and that has.

Some requirements of the drive thru setup on the hardware side and so that's a bit of a gating pacing, they're a company that has.

Corporate ownership, so that's a little bit easier to fully deploy.

Nitesh Sharan: So that's a little bit easier to fully deploy, get into another type of customer that has franchisees again, and one of the gating points for Jersey Mice is an opportunity for phone ordering. They have, I think, over 2,000 locations at scale and kind of went out of the gate with 50 locations that we're pushing through, and so this can move really rapidly. So I guess, not to dance your question too much, but it kind of depends on the shape and flavor of the customer, and we are getting faster. Every week that goes by, we're learning, and we're pacing it faster and faster, so we're hopeful that – and this is kind of why maybe one dimensionality of the answer would be the assumptions we used in the subscriptions estimate that we gave, sort of a five-year duration So, I mean, if you want to use the four-year period that I conveyed as the measure, I think that's conservative. Again, we're going faster than that, but that's maybe to not set too high expectations too early. That's probably a safe place to think. Yeah. All right. And on 6-3...

Get into another type of customer that has franchisees again that one of the gating point.

Mike is an opportunity phone ordering.

They have I think over 2000 locations at scale and kind of went out of the gate with 50 locations that work well.

<unk> through and so this can move really rapidly.

I guess not to dance your question too much but it kind of depends on the shape and flavor of the customer and we are getting faster every week that goes by we're learning and we're pacing and faster and faster. So we're hopeful that and this is kind of why maybe one dimensionality of the answer would be the assumptions we used in the <unk>.

Descriptions estimate that we gave sort of five year, which we believe conservatively will ramp.

Over four years, and we use a five year duration.

So I mean, if you want to use the four year that I conveyed as the measure I think thats conservative again, we're going faster than that but thats maybe not.

Is that too high expectations too early that's probably a safe place to think.

Nitesh Sharan: Yeah. All right. And on 6-3...

Yes excellent.

Six three.

Keyvan Mohajer: I think they had something like 10,000 locations. Did you feel like you could apply your tech to all those locations, or is there a percent that's already kind of happy with it? The solution is already great, but there's an upgrade opportunity by combining what they have with what we have, and then there's opportunities by offering things like smart answering and employee assistance to existing customers, and we are pursuing both of those. And I said, Mike, there's also an efficiency opportunity for us as we sort of migrate their back end systems, the cloud systems migrate to our technology. So it's also sort of back and not only just our front end, and that that's a cost and opportunity process. And then I guess just a basic financial question. What do you think Stink 3 contributes in 24?

I think we had something like 10000 locations.

I believe did you feel like you could acquire tech to all their locations or is there a percent that's already you're kind of happy with what they have with us.

Yes, I mean this solution is already great and but there is.

There is an upgrade opportunity by combining what they have with what we have and then there is upside opportunities by offering things like smart answering unemployed accessed to existing customers youre pursuing both of those.

And I'd also add Mike there's also efficiency opportunity for us as we sort of migrate their backend systems to cloud systems migrate to our technology. So it's also sort of back end not only just our front end and that's a that's a cost.

Opportunity for us.

Yes.

I guess just the basic fit answer the question what do you think sync three contributing 24.

Keyvan Mohajer: And what is their current share? So, in 24, it kind of depends on the synergies and so forth, but they have a good book of business that we're growing. The reason we're hedging a bit is some of it is the AI and call center that we're going to migrate the call center to AI. We're going to upgrade. So, there are a few choices through the integration.

What is current share count.

So in 'twenty four.

Is it kind of depends on the synergies and so forth, but they have a good book of business that we're growing the reason we are hedging a bit is some of it is the AI and call center that we are going to migrate to call center to AI, we're going to.

Great. So theres a few choices through the integration again, we're still pretty early in the integration process, but.

Nitesh Sharan: Again, we're still pretty early in the integration process, but we're excited about the fleet of partners that they have and, really, mostly about the synergies that we think we could build. We've contemplated it in our leadership, and we think together we can accelerate even faster than we could have alone. Share count, I think it's probably a big 270-ish. I don't have the number right in front of me on the class A side, but I think that's where we are.

We're excited about the fleet of the.

Share count I think.

It's probably think $2 70 ish I don't have the number right in front of me on.

On the class eight side is probably where we are we have.

Michael James Latimore: We have, I think I mentioned the preparer mark, some capital raising that we've done this year to get the balance sheet over $200 million of cash, so that is about where we are. All right, great. Thanks a lot. Thank you. One moment for our next question. Our next question comes from Brett Knoblauch, with Kendra Gerald. Do your lines now open? Hi, guys.

I think I mentioned in the prepared remarks, some capital raising that we've done this year to get the balance sheet over $200 million of.

Of cash though.

So that is about where we are.

Alright, great. Thanks, a lot.

Thanks, Mike.

Okay.

Thank you.

For next question.

Our next.

Comes from Brett Knoblauch with Cantor Fitzgerald. Your line is now open.

Hi, guys. Thanks for taking my question.

Brett Anthony Knoblauch: Thanks for taking my question. It was nice that you kind of gave us some info on. I got the year over year growth in auto. I was wondering if you could maybe give us some type of indication for how many units or devices your technology is currently embedded in, and if that's something you could foresee giving us on a more frequent basis going forward. We are in the millions. It's we are considered disclosing the exact number. One challenge is that some of our customers don't give us unique device IDs. So it makes it more difficult to accurately measure.

Okay.

It was nice that you kind of gave us some and so on.

The year over year growth in auto units I was wondering if you could maybe give us some type of indication for how many units or devices or technology.

Technology is currently embedded in.

And if that's something you could foresee given us on a more frequent basis going forward.

Yes, we are.

In the millions.

If you consider disclosing the exact number one challenge is that some of our customers don't give us unique device.

So then it makes it more difficult to accurately.

Measure.

Keyvan Mohajer: So, it might all look like one device, but it might be a million devices. There are ways to interpolate that, but definitely, we are talking about millions of cards and TVs and IoT devices. The other measure we do give, and we put it in the press release, but, you know, it's the queries, which is another, you know, sort of an indicator of usage and activity, and that has, you know, been growing. It has been growing. We've been given that number for a couple years now, and crossing the three and a half billion sort of run rate is an indication of the breadth and also just the usage curve increases that we're excited about.

So.

It looks like one device, but it might be a million devices.

There are ways to interpolate that but.

Definitely you are the millions of cars on TV and Iot devices. The other measure we do give and when you put it in the press release, but.

It's the queries, which is another sort of an indicator indicator of.

Usage and activity and that has been growing it's been growing we've been given that number for a couple of years now and crossing $3 5 billion sort of run rate.

Indication of the breadth and also just the usage curve increases.

That we're excited about.

Got it.

Keyvan Mohajer: And then maybe the restaurant business, I guess. Any update on how many units you guys are currently deployed in and, you know, what you're targeting for the end of this year, I think, or White Castle, you're expecting to be in, you know, over 100 by the end of the year. But maybe more broadly speaking, given you kind of expect pillar two to be north of, you know, 20% of the business this year. Yeah, I'll break apart.

And then on maybe the restaurant business I guess any update to how many units you guys are currently deployed in and what you're targeting for it for end of this year I think sat or White castle.

Are you expecting to be in over 100 by the end of the year, but maybe more broadly speaking.

Given you kind of expect pillar two to be north of.

20% of the business this year.

Yes.

Oh break apart.

Keyvan Mohajer: You know, we are, We do now have, you know, thousands and thousands, right? They brought a big arsenal of restaurants of the likes of customer names I gave a little earlier. And then we're always growing and have these massive deals that are currently we're working on that, you know, it's tens of thousands of potential opportunities. So, I think the best way, and I will say the pricing can range, you know, if you're kind of ordering on the phone, it could be in the hundreds of dollars per location. If you're in drive-thru more often, it could be north of thousands. So, kind of, really, in our more advanced state, it could be. I'll be on that, so, of tech, so, you know, units and location are going to kind of be driven by the integration pace. We believe we are unpacking and addressing a market that has hundreds of thousands of locations, so what we have today is a small fraction. I'd say in the U.S. alone, there are a million food establishments, and globally, multiples of that, so we are going to grow from, you know, the 10,000 range by the end of the year quite meaningfully, and then, hopefully, we'll be soon talking about hundreds of thousands Thank you; it is much appreciated. Thanks for having me. Thanks. Showing no further questions at this time, whose conference is being recorded. Thank you for participating.

We are.

We do think three now have but.

And thousands right they brought a big Arsenal of restaurants, the likes of customer names I gave a little earlier.

And then we're always growing and have these massive deals that are currently.

We're working on that.

It's tens of thousands of potential opportunities.

I think the best way to and I will say the pricing can range, if youre kind of in the phone ordering it could be in the hundreds of dollars per location. If youre in drive thru Mark would be north of thousands so kind of really on our more advanced state could be.

Keyvan Mohajer: I'll be on that, so, of tech, so, you know, units and location are going to kind of be driven by the integration pace. We believe we are unpacking and addressing a market that has hundreds of thousands of locations, so what we have today is a small fraction. I'd say in the U.S. alone, there are a million food establishments, and globally, multiples of that, so we are going to grow from, you know, the 10,000 range by the end of the year quite meaningfully, and then, hopefully, we'll be soon talking about hundreds of thousands Thank you; it is much appreciated. Thanks for having me. Thanks. Showing no further questions at this time, whose conference is being recorded. Thank you for participating.

Beyond that so tech so.

Units and location are going to kind of be driven by the integration pace.

We believe we are unpacking and addressing a market that has hundreds of thousands of locations. So what we have today is a small fraction in I'd say in the U S alone, it's 1 million food establishment, so and globally multiples of that so we are going to grow from the 10000 range.

By the end of the year quite meaningfully and then hopefully will be soon talking about hundreds of thousands that we're in and the revenue numbers will follow.

That you're frustrated with it.

Thanks, Brett.

Okay.

Yes.

Thank you.

Showing no further questions at this time.

This concludes today's conference call. Thank you for participating you may now disconnect.

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