• SoundHound AI, Inc. (NASDAQ:SOUN) reported a Return on Invested Capital (ROIC) of -68.13%, highlighting significant inefficiencies in capital utilization.
• BigBear.ai Holdings, Inc. (BBAI) shows slightly better metrics with a ROIC to WACC ratio of -2.11, though it still falls short of covering its cost of capital.
• BuzzFeed, Inc. (BZFD) showcases the least negative ROIC to WACC ratio, nearing break-even in generating returns against its capital costs.

SoundHound AI, Inc. specializes in voice-enabled AI and conversational technologies. Competing with several tech companies, it faces challenges in capital efficiency.

Evaluating SoundHound’s financials, the ROIC stands at -68.13%, which is significantly lower than its WACC of 17.82%. This points to serious inefficiencies in how the company utilizes its capital.

BigBear.ai follows with a ROIC of -32.02% and a WACC of 15.17%, presenting a slightly less severe ROIC to WACC ratio of -2.11. BuzzFeed appears relatively better positioned with a ROIC of -8.65% against its WACC of 15.30%, resulting in a ratio of -0.57. While negative, it indicates potential improvement in efficiency.

All firms in this group share the common challenge of negative ROICs, signaling difficulties in producing enough returns to cover capital costs. However, BuzzFeed’s performance reveals some hope in capital efficiency.