Renowned investor Jim Cramer has voiced strong skepticism toward SoundHound Inc. (SOUN), calling the stock a 'no' due to its continued failure to generate profits. The company’s financial performance remains a central concern in his assessment.
- SoundHound reported a net loss of $42.6 million in FY 2024
- Revenue reached $78.4 million, up 14% year-over-year
- Operating expenses totaled $61.2 million, or 77% of revenue
- SOUN shares declined 7.2% in after-hours trading post-Cramer's remarks
- Company has posted negative earnings for four consecutive years
- Market cap stands at $1.3 billion despite ongoing unprofitability
Jim Cramer, host of CNBC’s 'Mad Money,' has dismissed SoundHound Inc. (SOUN) as an investment opportunity, stating unequivocally that the company 'doesn’t make any money.' This assessment comes amid ongoing scrutiny of the AI voice technology firm’s financial trajectory. Cramer emphasized that despite its technological ambitions, SoundHound has yet to achieve consistent profitability, a key benchmark for sustainable growth in the current market environment. Financial statements reveal that SoundHound reported a net loss of $42.6 million in the fiscal year ending September 2024, marking its fourth consecutive year of negative earnings. Revenue for the same period reached $78.4 million, a 14% increase from the prior year, but this growth has not translated into positive cash flow or margin improvement. The company’s operating expenses, particularly in research and development, remain elevated at $61.2 million—over 77% of total revenue—highlighting its heavy reliance on capital infusions to maintain operations. Cramer’s comments carry weight in retail investor circles, where his views often influence trading activity. Following his remarks, SOUN shares dropped 7.2% in after-hours trading, reflecting heightened investor concern over the company’s path to profitability. Analysts note that SoundHound’s current market capitalization stands at approximately $1.3 billion, which appears disconnected from its current earnings power. The sentiment underscores a broader market shift toward prioritizing profitability over pure growth narratives, especially in the AI and software sectors. With several peer companies—such as Nuance Communications and Vivox—recently restructuring or scaling back operations, the pressure on SoundHound to demonstrate a clear monetization strategy is intensifying.