SoundHound AI NASDAQ: SOUN reported record second-quarter revenue of $61.9 million, up 45% from a year earlier and 40% sequentially, as the company cited demand for its conversational and agentic AI offerings across healthcare, financial services, automotive, restaurants and other industries.
Chief Executive Officer and Co-Founder Keyvan Mohajer said the quarter was the company’s largest to date, with improvements in gross margin, adjusted EBITDA and earnings per share both year over year and sequentially. He attributed a significant portion of the performance to OASYS, the self-learning agentic AI platform SoundHound launched publicly in May.
“Our results were beyond our own expectations,” Mohajer said, adding that OASYS has helped the company win demonstrations, requests for proposals, pilots and production deployments. He said SoundHound recently signed an eight-figure commitment less than 90 days after an initial demonstration.
Financial Results and Raised Outlook
Chief Financial Officer and Co-Founder James Hom said growth was broad-based, led by enterprise AI and supported by healthcare, financial services, technology and automotive. SoundHound’s enterprise AI business remained its largest revenue contributor, while its automotive operations in Asia posted substantial growth for a fifth consecutive quarter, according to Hom.
- Revenue totaled $61.9 million, up 45% year over year.
- GAAP gross margin was 45%, up six percentage points from the prior-year quarter.
- Non-GAAP gross margin was 58%, flat year over year and up eight percentage points sequentially.
- GAAP operating loss was $43.3 million, an improvement of 45% from a year earlier.
- Adjusted EBITDA loss was $9.6 million, improving 33% year over year.
- GAAP net loss was $42.8 million, or $0.10 per share.
- Non-GAAP net loss was $9 million, or $0.02 per share.
- Cash and equivalents totaled $203 million at quarter-end, with no debt.
Hom said the company has been working to improve efficiency through infrastructure modernization, cloud-spending optimization, legacy-system consolidation, adoption of in-house technology and acquisition synergies. Acquisitions have temporarily weighed on gross margin, he said, but the company expects margins to exceed 70% in the future, similar to levels when it became public.
SoundHound raised its full-year revenue outlook to a range of $230 million to $260 million, reflecting its first-half performance and continuing demand. The outlook does not include the planned acquisition of LivePerson because the timing of the transaction’s closing remains uncertain.
OASYS Adoption Across Verticals
Mohajer said OASYS is designed to enable companies to build and deploy AI agents across channels rather than tying customer interactions to a specific platform or modality. The platform’s “AI Builds AI” feature can create and refine agentic workflows using documents, application programming interfaces and prior interaction data, he said.
During the question-and-answer session, Mohajer said implementations that previously required months of work and large professional-services teams can now be completed in minutes in some cases. The system can also identify missing information or capabilities after deployment and propose enhancements for human approval, he said.
The company cited healthcare as an area of particular traction. Mohajer said one top-20 healthcare provider quadrupled its spending during the quarter, while SoundHound added Champion Payer Solutions and either renewed or expanded relationships with five additional healthcare organizations. Hom said the company signed seven healthcare deals during the quarter, including one seven-figure agreement.
In financial services, SoundHound said it renewed or expanded contracts with two of the world’s seven largest banking institutions and one large global insurer. The company also cited new and expanded business with organizations including Rakuten Securities, a global asset-management firm and a Canadian-headquartered financial-services company.
In restaurants, the company said its Smart Answering offering for small and midsize businesses more than doubled year over year. It signed three major U.S. restaurant chains during the quarter and reported 100% renewal rates among key restaurant accounts. Mohajer said restaurant deployments are also creating cross-selling opportunities for IT help desk and guest-relations services through OASYS.
Automotive, Voice Commerce and In-House Models
SoundHound continued to expand in Asia, particularly in China’s automotive market. The company signed a seven-figure agreement with a large infotainment software company for agentic AI solutions and an IoT agreement with an automotive maintenance and diagnostics company. It also signed a six-figure unit expansion with Indian two-wheeler company Ultraviolette and reached an agreement with another OEM to deploy real-time generative AI features in vehicles in India.
Elsewhere, SoundHound said Stellantis expanded unit adoption in Europe and added live generative AI capabilities, while Hyundai is adding generative AI enhancements in the U.S., Latin America and India.
The company also outlined upcoming voice-commerce initiatives. In the third quarter, it plans to begin piloting direct in-vehicle transactions with an unnamed automotive brand through a recently signed contract. Later this year, it expects to launch with a global electronics manufacturer that will use its technology to enable retail and restaurant purchases through television screens in U.S. homes.
Mohajer said SoundHound is investing in its proprietary Polaris speech foundation model, specialized large language models and speech-synthesis technology. Smaller customers are now operating entirely on SoundHound’s own technology stack, he said, and the company is preparing to deploy the stack with one of its largest healthcare customers after seeing improvements in accuracy and latency.
LivePerson Transaction Advances
SoundHound said it has received key regulatory clearances for its planned acquisition of LivePerson and continues to expect the deal to close before year-end. Mohajer said the transaction would broaden the company’s conversational AI footprint to include 25 Fortune 100 brands and expand its enterprise customer base.
Management said its prior outlook of at least $350 million to $400 million in revenue next year remains unchanged, assuming the LivePerson transaction closes in the second half of 2026. The company did not provide a separate estimate for LivePerson’s contribution this year.
Mohajer said LivePerson’s digital customer-service offerings would complement SoundHound’s voice capabilities. He described opportunities to upgrade LivePerson customers to OASYS and to offer voice services to customers that have historically used LivePerson primarily for web chat and digital interactions.
“All the new customers we expect will utilize OASYS,” Mohajer said, while noting that existing customers will transition from legacy platforms at a pace with which they are comfortable.
About SoundHound AI (NASDAQ:SOUN)
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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