Ok folks, I'm gonna do my best at a write up, as I've been asked to in DMs by the few people who've followed me into the breach here. First off, I want to address two things, 1. Yes I purchased LivePerson shares originally believing in that company and now hold SOUN shares as the combined company and 2. I'm down on my investment on paper, though less so than one may think due to DCA and other things.
Also, for the sake of my own sanity, however ironic considering my own investment choice in an AI company, I'm not going to use AI for this write up (just the TLDR). I'm just a guy typing on a broken iphone 15 with too much conviction in one company.
TLDR (AI)
SOUN didn’t just buy LivePerson. It bought the enterprise distribution network for AI agents. Debt-free, hundreds of millions in revenue, 25 Fortune 100 customers, and a massive cross-sell opportunity. The gold rush is here—and SoundHound just bought the mine.
I believe in, and have put my money towards the thesis of, the combined company of Soundhound AI (SOUN) and LivePerson. SOUN recently completed a merger of LivePerson taking the entire company under its management wing for a steal of $250 million in enterprise value. First and foremost, LivePerson was a legacy enterprise customer service company that was straddled with debt trying to impliment AI across its conversational platforms. It was mostly successful but questions of debt payments threatened the solvency of the company ultimately hampering signings. In the end, the decades old company was left selling itself to the new AI competitor SOUN for a fraction of its original cost about 2 weeks ago. Plummetting from almost a $20 billion market cap to a mere $40 million.
In this acquisition, SOUN acquired not only the experience and prestige of a legacy company, but more importantly, enterprise customers and revenue. And not small numbers at that. I'm talking hundreds of customers and 25 of the fortune 100 companies. Thats 1 in every 4 fortune 100 companies. 25%, or in other words a quarter. 2 in every 8. 50 in every 200 fortune 100 companies! I mean to say, they got bank. Soundhound went from selling conversational AI and their new OASYS platform (both of which constantly seeing upsells and rapid adoption) for smaller application uses to literally installing themselves into the heart of America's largest companies. This means upsell potential through the roof, and in short time, reputation opportunity to spread further and further. Selling more and more. How about that revenue aspect though?
Soundhound, an already fastly growing company with $250 million plus in yearly revenue just nearly doubled their revenue through LivePerson who was already producing a (kinda) profitable $200 million plus. LivePerson couldn't make their numbers work because of debt, and a lot of it. But SOUN wiped the slate clean. The combined company has no debt to speak of and hundreds of millions of dollars in cash on hand runway. Enough to make the combined companies' synergies work.
2027 Revenue forecasts put the new company at over $400 million at a minimum, with some $500 million in raw current customer opportunity. And all that's on a currently $2.5 billion market cap. Further potential easily possible as LivePerson customers expand into the OASYS network, and SOUNDHOUND finds more upsells, more customers, more MONEY.
SOUN had a share price over $20 last year on industry specific booms in optimism over fractions of the revenue it is currently and will in the future generate. Growth is explosive with 45% YoY in the last quarterly filings before even LivePerson joining on hand and outlooks being raised every quarter. I truly believe at current prices SOUN is a steal, if all AI is really good at is taking human computer jobs then, the frontier of customer service, an industry worth hundreds of billions, is ripe for the picking. And there's no one around willing to do the dirty work like Soundhound and LivePerson.
At the end of the day, the whole AI boom is eerily reminiscent of booms we've seen before. But for as many dot com failures as we had, we still got Amazon. And maybe selling shovels is smart, but when everyone is focused on selling shovels there's no one left mining for gold. Soundhound sits at the crux of a technological revolution, poised to take full advantage of its now dominate lead thanks to LivePerson.
As always everything here is just my opinion and does not in any way constitute financial advice. I just like the stock.