SoundHound AI Acquires Interactions, Boosting Agentic AI Leadership

By Philip Seaworth • Wednesday, September 10 10:26 • Permanent Link

SoundHound AI (NASDAQ: SOUN) has announced the acquisition of Interactions, a pioneer in AI for customer service and workflow orchestration. This strategic move is expected to strengthen and extend SoundHound's leadership in agentic AI and accelerate its market penetration in customer service across enterprise businesses. The acquisition introduces major new powerhouse brands to SoundHound's customer portfolio, including global consumer icons, large technology device brands, insurers, automakers, and other Fortune 100 companies across industries.

One of the early pioneers in AI for customer service, Interactions provides businesses with AI-powered voice assistants to enhance customer engagement while improving productivity. The potential synergies with SoundHound's existing solutions, including complementary capabilities, are expected to grow the company's enterprise business. This includes generating significant new revenue through product, geographic, and channel expansion, as well as cross-sell and upsell opportunities.

Key facts from the acquisition include the introduction of a diverse new client base across various verticals, the addition of multiple new global brands, the strengthening of SoundHound's existing intellectual property (bringing the combined total to nearly 400 patents), and the creation of opportunities for revenue generation, including cross-selling and up-selling.

Since going public in 2022, SoundHound has been able to augment its growth and portfolio diversity through targeted and strategic acquisitions. By successfully combining these various organizations, the company has extended and reinforced its leadership in agentic AI, where they were one of the first to bring a fully agentic platform to market.

The acquisition consideration consists of approximately $60 million in cash payable at close, with the potential for additional payments earned contingent on the achievement of certain revenue milestones. The transaction is expected to be immediately accretive to SoundHound's operating profitability. At closing, the combined company holds over $270 million of cash on hand with no outstanding debt.

SoundHound's CEO and co-founder, Keyvan Mohajer, expressed the company's commitment to establishing itself as a true leader for the new AI era, while Interactions' CEO, Mike Iacobucci, noted the union of the two companies will give the businesses they serve unrivaled choice, flexibility, and scale as the market shifts towards more agentic interactions.

This acquisition follows SoundHound's strongest ever quarter, which saw revenue grow by three times year-over-year. The company also reported strong data points across all pillars underpinning these reported financials, including the major milestone of processing nearly 3 billion conversational AI queries per quarter. The market has reacted to these announcements by moving the company's shares -2.88% to a price of $14.85. For more information, read the company's full 8-K submission here.

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