SoundHound CFO remains focused on growth and profitability as inflationary pressures loom
CFOs across all sectors have been watching inflation closely over the past few months as leading economic indicators continue to point to the growing possibility of a recession. The latest tepid CPI data released by the Labor Department is unlikely to persuade the Federal Reserve to halt further rate hikes, for example forcing financial leaders to balance their companies’ financial needs with inflationary pressures. growing.
However, CFOs need to be aware of how their particular business will hold up in different economic environments, said Nitesh Sharan, CFO of conversational AI provider SoundHound, in a recent interview.
The response to inflationary pressures is not unique, he said. The decision to slow down operations or continue to foster growth will depend on your current business position and goals.
“As far as we are concerned, we should keep the [focus on] growth and scale,” Sharan said, referring to SoundHound. “We haven’t broken even yet and we need to find a viable path [to profitability]which we expect in 2024.”
SoundHound, a conversational and voice-based artificial intelligence technology provider that started out as a song identification app similar to services like Shazam, went public through a merger with the Special Purpose Acquisition Company (SPAC) Archimedes Tech on April 27.
The deal, which the two companies announced in November 2021, valued the voice assistant creator at $2.1 billion, according to a Reuters report following the initial announcement. Shares fell 7% after the merger, before rebounding 56% on May 2 the week after SPAC closed, according to a May 2022 report from Seeking Alpha.
To determine the path for future growth, it’s critical that CFOs keep a close eye on where to put their resources, especially during more fragile economic times, Sharan said.
To balance business needs with inflationary pressures, financial leaders need to pay close attention to their spending, according to Sharan. In order to deal with economic distress, CFOs must always pay attention to detail, differentiating between “must-haves” from “nice-to-haves” and anything below that level when it comes to spending.
“You should set up your liquidity profile so that you rarely have to compromise on the must-haves,” he said.
Create a path to growth
Sharan first joined the SoundHound C-Suite as CFO in September 2021. After beginning his career as a senior consultant at Accenture, he held senior and CFO roles for cloud company Hewlett Packard Enterprise as well as for the retail company Nike. CFO, global operations and technology for the retailer before joining SoundHound, according to his LinkedIn profile.
Sharan is the first CFO of the voice-enabled artificial intelligence company. He has since been joined in the SoundHound C suite by executives such as Zubin Irani – a former CEO of ALTEN subsidiary Cprime Inc – whom the company appointed as its chief revenue officer in January 2022.
The company announced its first financial results as a public company on August 11, with Sharan and SoundHound co-founder and CEO Keyvan Mohajer hosting the company’s inaugural conference call. SoundHound saw $283 million in cumulative bookings, a 207% year-over-year increase, making it the AI provider’s third straight quarter of triple-digit growth on its earnings .
As the two executives spoke about the effects of economic rumbles on the earnings call, Sharan said that while “progress isn’t always linear,” the company’s current momentum was “unquestionable.”
He also reaffirmed the company’s guidance for full-year 2022, forecasting revenue of between $27 million and $33 million. SoundHound generated $6.2 million in revenue, a 43% jump from the first quarter of 2022, according to its results.
Sharan continues to drive growth as the year progresses, he said.
“As CFO, my goal is for us to evolve and grow,” Sharan said. “All good things come from growth. We have a lot of market opportunities, so [achieving growth requires] partnership within the management team, [listening to] what customers say.
For his part, Sharan is excited about the future, independent impact of the conversational AI industry, having previously spoken with CFO Dive about the global-changing potential of these technologies.
CFOs across all sectors also need to take steps to understand how technology is spreading in their own sectors, Sharan said – technology is an “enabler for everything”, he said, highlighting the developments in areas such as the automotive industry and food. service where emerging technologies such as SoundHound’s own AI-based products and solutions play a key role in shaping the future shape of industries.
SoundHound has taken several steps to foster its growth after its public debut, including cementing partnerships with notable players in the automotive and foodservice industries.
The AI provider partnered with electronics to develop an advanced AI voice system for conversational voice control in automobiles last July. It also partnered with payment processing company Square in May 2022 to create an AI voice ordering service.