SoundHound AI (NASDAQ:SOUN) Announces Quarterly Earnings Results

SoundHound AI (NASDAQ:SOUN) posted its quarterly earnings results on Thursday. The company reported ($0.05) earnings per share for the quarter, topping analysts’ consensus estimates of ($0.12) by $0.07, FiscalAI reports. SoundHound AI had a negative return on equity of 30.22% and a negative net margin of 67.45%. The company had revenue of $62.43 million during the quarter, compared to the consensus estimate of $61.71 million. During the same period last year, the business earned ($0.03) EPS. The business’s quarterly revenue was up 48.5% on a year-over-year basis.

Here are the key takeaways from SoundHound AI’s conference call:

• SoundHound reported record Q3 revenue of $62.4 million, up 48% year over year, with nearly one month of LivePerson revenue included.
• The company is shifting large license deals to hosted, multi-year contracts: point-in-time revenue fell to about 10% of Q3 revenue from over 33% in Q2. This improves recurring-revenue visibility but reduces near-term licensing revenue; 2026 guidance was raised and narrowed to $250 million to $260 million.
• Management reaffirmed 2027 revenue guidance of $350 million to $400 million and expects sustainable positive adjusted EBITDA in the second half of 2027. It cited at least $120 million in annualized cost reductions, with more than $80 million already actioned.
• Non-GAAP gross margin fell 9 percentage points year over year to 50.3%, which management attributed to increased cloud usage and the ramp of agentic AI capabilities. It expects margin improvement from cloud savings, exiting negative-margin contracts, and using its own AI models.
• SoundHound ended the quarter with more than $200 million in cash and was effectively debt-free after retiring nearly all LivePerson debt. Management said its proprietary models have cut model costs by more than an order of magnitude in migrated deployments.

SoundHound AI Price Performance

Shares of SOUN stock traded down $0.06 during trading on Thursday, reaching $4.26. The company had a trading volume of 27,734,922 shares, compared to its average volume of 15,042,702. The firm’s 50 day simple moving average is $5.56 and its two-hundred day simple moving average is $7.06. SoundHound AI has a one year low of $3.88 and a one year high of $15.68. The company has a market capitalization of $1.89 billion, a PE ratio of -11.21 and a beta of 2.89.

Insider Buying and Selling

In other SoundHound AI news, COO Michael Zagorsek sold 71,113 shares of the stock in a transaction that occurred on Tuesday, September 15th. The stock was sold at an average price of $6.33, for a total transaction of $450,145.29. Following the transaction, the chief operating officer owned 2,600,231 shares in the company, valued at $16,459,462.23. This trade represents a 2.66% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, SVP Majid Emami sold 38,730 shares of SoundHound AI stock in a transaction that occurred on Tuesday, September 15th. The shares were sold at an average price of $6.33, for a total transaction of $245,160.90. Following the completion of the transaction, the senior vice president directly owned 834,253 shares in the company, valued at approximately $5,280,821.49. This represents a 4.44% decrease in their position. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 288,758 shares of company stock worth $1,828,598 over the last ninety days. Company insiders own 8.84% of the company’s stock.

Analyst Ratings Changes

Several equities research analysts recently commented on SOUN shares. Wall Street Zen raised SoundHound AI from a “strong sell” rating to a “sell” rating in a research note on Saturday, October 24th. DA Davidson cut their price objective on shares of SoundHound AI from $12.00 to $10.00 and set a “buy” rating on the stock in a research report on Thursday, August 6th. Weiss Ratings upgraded shares of SoundHound AI from a “sell (e+)” rating to a “sell (d-)” rating in a research note on Thursday, October 15th. Piper Sandler reduced their target price on shares of SoundHound AI from $7.00 to $6.00 and set a “neutral” rating for the company in a research note on Tuesday, September 22nd. Finally, Yorkville Ives began coverage on shares of SoundHound AI in a research note on Monday, October 5th. They set an “in-line” rating and a $6.50 price target on the stock. One research analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating, three have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, SoundHound AI has an average rating of “Moderate Buy” and a consensus target price of $11.50.

Key Stories Impacting SoundHound AI

Here are the key news stories impacting SoundHound AI this week:

• Positive Sentiment: Revenue reached a record $62.43 million, up 48.5% year over year. SoundHound also said it expects sustained adjusted EBITDA profitability in the second half of 2027 and announced that it closed its LivePerson acquisition. SoundHound AI Q3 results and outlook
• Positive Sentiment: A recently expanded Ultraviolette partnership will bring SoundHound’s voice AI co-pilot to the EV maker’s global electric-motorcycle lineup, adding a commercial deployment opportunity. SoundHound and Ultraviolette expand partnership
• Neutral Sentiment: Quarterly comparisons are mixed: SoundHound’s $0.05-per-share loss was narrower than some analyst estimates, while reports differ on revenue expectations, with one describing a slight miss despite the strong year-over-year growth. Q3 earnings estimates
• Negative Sentiment: The company remains unprofitable, and the 2027 adjusted EBITDA target underscores that meaningful profitability is not expected imminently. Reports also highlighted a GAAP loss and revenue below some market estimates, which may be frustrating investors focused on near-term execution. Q3 sales expectations and loss

SoundHound AI Company Profile

SoundHound AI, Inc develops voice artificial intelligence and conversational intelligence technologies. Its platform is designed to enable people to interact with devices, applications and services using natural language, with capabilities including speech recognition, language understanding and conversational response generation.

The company’s offerings include the Houndify platform, which businesses can use to create branded voice assistants and conversational interfaces. SoundHound AI also provides voice-enabled solutions for industries such as automotive, restaurants and customer service, allowing users to access information, control functions, place orders and engage with businesses through voice interactions.