SoundHound AI (NASDAQ:SOUN) Posts Quarterly Earnings Results, Beats Expectations By $0.11 EPS

Key Points

• SoundHound beat expectations: Q2 revenue rose 45% year over year to $61.9 million, well above the $42.6 million consensus, while adjusted EPS of a $0.02 loss beat estimates by $0.11.
• Growth outlook improved: Management raised 2026 revenue guidance to $230 million-$260 million, citing demand for its OASYS agentic AI platform across multiple industries. The LivePerson acquisition remains on track to close by year-end, pending shareholder approval.
• Profitability remains a risk: SoundHound posted a $42.8 million GAAP net loss and continues to face cash-burn, valuation and execution concerns despite improving margins and a $203 million cash balance with no debt.

SoundHound AI (NASDAQ:SOUN - Get Free Report) issued its earnings results on Wednesday. The company reported ($0.02) EPS for the quarter, beating analysts' consensus estimates of ($0.13) by $0.11, Briefing.com reports. SoundHound AI had a negative return on equity of 31.06% and a negative net margin of 67.45%.The business had revenue of $61.90 million during the quarter, compared to analyst estimates of $42.56 million. During the same period in the previous year, the company posted ($0.19) EPS. The firm's revenue was up 45.0% compared to the same quarter last year.

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

• Positive Sentiment: SoundHound reported a record quarter, with Q2 revenue of $61.9 million, up 45% year over year and 40% sequentially. Gross margin improved to 45% on a GAAP basis, while adjusted EBITDA loss narrowed 33% year over year.
• Positive Sentiment: The newly launched OASYS agentic AI platform is driving stronger demos, win rates, pilot conversions, and customer expansions, including an eight-figure commitment signed within 90 days. Management said OASYS can reduce implementation times from months to minutes through its “AI Builds AI” capabilities.
• Positive Sentiment: Management raised full-year 2026 revenue guidance to $230 million-$260 million, citing broad-based demand across healthcare, financial services, automotive, restaurants, and Asia. The company also highlighted a $203 million cash balance and no debt.
• Neutral Sentiment: The LivePerson acquisition has received key regulatory clearances and is still expected to close by year-end, but current guidance excludes its contribution and management did not provide specific 2026 revenue expectations for the deal. The company continues to target at least $350 million-$400 million of revenue in 2027 if the transaction closes.
• Negative Sentiment: Despite improving profitability metrics, SoundHound remains unprofitable, posting a $42.8 million GAAP net loss and a $9.6 million adjusted EBITDA loss in Q2. Management expects future margin expansion, but acquisitions and related costs continue to weigh on gross margin and expenses.

SoundHound AI Trading Up 13.3%

Shares of SOUN traded up $0.94 on Friday, reaching $8.02. The company's stock had a trading volume of 65,011,906 shares, compared to its average volume of 37,984,616. SoundHound AI has a twelve month low of $5.65 and a twelve month high of $22.17. The stock has a market capitalization of $3.47 billion, a PE ratio of -21.10 and a beta of 2.64. The firm has a fifty day moving average of $6.79 and a 200-day moving average of $7.61.

Analyst Ratings Changes

Several brokerages have issued reports on SOUN. Piper Sandler cut their price target on SoundHound AI from $8.00 to $7.00 and set a "neutral" rating on the stock in a report on Thursday. DA Davidson decreased their price objective on SoundHound AI from $12.00 to $10.00 and set a "buy" rating for the company in a report on Thursday. Weiss Ratings reaffirmed a "sell (e+)" rating on shares of SoundHound AI in a research report on Monday, June 15th. Finally, LADENBURG THALM/SH SH upgraded SoundHound AI to a "strong-buy" rating in a report on Wednesday, May 6th. One research analyst has rated the stock with a Strong Buy rating, five have given a Buy rating, three have assigned a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $14.07.

Key Stories Impacting SoundHound AI

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

• Positive Sentiment: Record revenue and earnings beat: Second-quarter revenue rose 45% year over year to $61.9 million, well above the approximately $42.6 million consensus estimate. The adjusted loss of $0.02 per share also beat expectations, while profitability metrics and margins improved. SoundHound Q2 Earnings Beat on OASYS Demand, Revenues Top, Stock Up
• Positive Sentiment: Higher full-year outlook: SoundHound raised its 2026 revenue floor, citing OASYS-driven enterprise adoption, faster deal conversions and broader customer demand. Management also emphasized continued margin improvement despite ongoing investment. SOUN Raises 2026 Revenue Outlook After OASYS Drives Record Q2 Sales
• Positive Sentiment: Potential strategic catalyst: Proxy adviser Glass Lewis recommended that LivePerson stockholders vote in favor of the proposed transaction with SoundHound at the August 20 special meeting, supporting the planned expansion of SoundHound’s conversational-AI capabilities. Glass Lewis Recommends LivePerson Stockholders Vote For SoundHound AI Transaction
• Positive Sentiment: Trading momentum: Heavy call-option activity and high short interest may be amplifying the post-earnings move as bullish traders participate and short sellers cover positions.
• Neutral Sentiment: Analyst support is mixed: DA Davidson maintained a Buy rating while lowering its price target from $12 to $10. Piper Sandler cut its target from $8 to $7 and retained a Neutral rating.
• Negative Sentiment: Valuation and financial risks: Analysts note that SOUN remains expensive relative to sales, with projected 2026 growth needing to justify the premium. The company continues to report losses and cash burn, while potential dilution and execution risks could limit further upside. SOUN Dips 16.9% in 3 Months

Insider Buying and Selling at SoundHound AI

In other SoundHound AI news, insider James Ming Hom sold 28,843 shares of the business's stock in a transaction that occurred on Monday, June 15th. The stock was sold at an average price of $7.46, for a total transaction of $215,168.78. Following the completion of the sale, the insider directly owned 743,521 shares of the company's stock, valued at approximately $5,546,666.66. The trade was a 3.73% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, COO Michael Zagorsek sold 64,994 shares of the firm's stock in a transaction that occurred on Monday, June 15th. The shares were sold at an average price of $7.46, for a total value of $484,855.24. Following the completion of the transaction, the chief operating officer owned 1,669,497 shares in the company, valued at $12,454,447.62. This represents a 3.75% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last three months, insiders have sold 268,022 shares of company stock worth $1,999,444. 8.84% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On SoundHound AI

A number of hedge funds have recently bought and sold shares of the company. Hsbc Holdings PLC purchased a new stake in shares of SoundHound AI in the fourth quarter valued at about $110,000. Alpine Woods Capital Investors LLC boosted its holdings in SoundHound AI by 143.0% during the fourth quarter. Alpine Woods Capital Investors LLC now owns 50,742 shares of the company's stock worth $506,000 after purchasing an additional 29,857 shares during the last quarter. Vident Advisory LLC boosted its holdings in SoundHound AI by 16.2% during the fourth quarter. Vident Advisory LLC now owns 27,840 shares of the company's stock worth $278,000 after purchasing an additional 3,875 shares during the last quarter. EP Wealth Advisors LLC bought a new stake in SoundHound AI in the 4th quarter worth about $146,000. Finally, XTX Topco Ltd grew its position in SoundHound AI by 47.4% in the 4th quarter. XTX Topco Ltd now owns 66,727 shares of the company's stock worth $665,000 after purchasing an additional 21,447 shares in the last quarter. 19.28% of the stock is owned by hedge funds and other institutional investors.

About SoundHound AI

SoundHound AI, Inc is a voice AI and conversational intelligence company specializing in speech recognition, natural language understanding and sound identification technologies. Founded in 2005 and headquartered in Santa Clara, California, the company initially gained recognition with its music discovery app before pivoting to enterprise-grade voice AI solutions. Over the years, SoundHound AI has built a comprehensive platform that enables developers and businesses to embed conversational intelligence into a wide range of products and services.

The company's core offering is the Houndify voice AI platform, which provides customizable speech-to-meaning technology, domain-specific natural language understanding and text-to-speech capabilities.

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