SoundHound AI (NASDAQ:SOUN) Releases Quarterly Earnings Results, Beats Expectations By $0.07 EPS

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

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

SoundHound AI stock traded down $0.06 during mid-day trading on Thursday, hitting $4.26. The company’s stock had a trading volume of 27,734,922 shares, compared to its average volume of 15,042,702. SoundHound AI has a 52-week low of $3.88 and a 52-week high of $15.68. The company has a market cap of $1.89 billion, a PE ratio of -11.21 and a beta of 2.89. The firm’s 50 day moving average is $5.56 and its 200 day moving average is $7.06.

Insiders Place Their Bets

In related news, CEO Keyvan Mohajer sold 137,290 shares of the firm’s 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 $869,045.70. Following the completion of the sale, the chief executive officer directly owned 3,684,947 shares in the company, valued at approximately $23,325,714.51. This trade represents a 3.59% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, COO Michael Zagorsek sold 71,113 shares of the company’s 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 $450,145.29. Following the completion of the transaction, the chief operating officer owned 2,600,231 shares in the company, valued at approximately $16,459,462.23. This represents a 2.66% 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. In the last 90 days, insiders sold 288,758 shares of company stock worth $1,828,598. Insiders own 8.84% of the company’s stock.

Analyst Upgrades and Downgrades

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

Key SoundHound AI News

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.