SoundHound AI (SOUN) shares plunged 16% Wednesday, a day after the provider of artificial intelligence (AI) voice technology software reported a big drop in gross margin. 

The Nvidia (NVDA)-backed company’s third-quarter GAAP gross margin sank 24.3 percentage points to 48.6%, and non-GAAP gross margin tumbled 14.0 percentage points to 59.7%. 

That offset an otherwise powerful financial report, with its loss per share of $0.06 beating the $0.10 loss per share expected by analysts surveyed by Visible Alpha. Revenue soared 89% year-over-year to a record $25.1 million, also above forecasts.

CEO Says Voice Is 'Killer App' for Generative AI

Co-founder and CEO Keyvan Mohajer said voice is the "killer app" for applied generative AI. He added that because of the company's "best-in-class technology, mastery of complex vertical integrations, and proprietary AI software, SoundHound is ideally positioned to capitalize on this huge and growing opportunity."

The company now sees full-year revenue to be in a range of $82 million to $85 million compared with its earlier outlook of more than $80 million. It predicts fiscal 2025 revenue between $155 million and $175 million versus its previous estimate of more than $150 million.

Even with today's declines, shares of SoundHound AI have tripled so far in 2024.