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SoundHound Q2 Earnings Beat as AI Demand Fuels 217% Sales Growth
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Key Takeaways
SoundHound's Q2 revenue jumped 217% to $42.7M, beating Wall Street estimates on sales and earnings.
Growth came from enterprise, automotive, and restaurant AI, plus agentic AI and Voice Commerce gains.
Management raised 2025 revenue guidance to $160M-$178M, expecting EBITDA profitability by year-end.
SoundHound AI, Inc. (SOUN - Free Report) posted record second-quarter 2025 results, outperforming Wall Street expectations on both the top and bottom lines. In its strongest quarter on record, SoundHound AI’s prior strategic investments — particularly its 2024 acquisitions — translated into tangible, high-impact results.
The voice artificial intelligence specialist benefited from accelerating adoption across enterprise, automotive, and restaurant verticals, as well as strong early traction for its agentic AI and Voice Commerce initiatives. Robust revenue growth, expanding deployments, and improved cost synergies underscored management’s confidence, prompting an upward revision to full-year guidance.
SOUN shares jumped more than 22% in the after-hours trading session following the release.
SOUN’s Revenues and Earnings
SoundHound reported revenues of $42.7 million, up 217% year over year and well above the Zacks Consensus Estimate of $33 million. Strength was broad-based, with Enterprise AI, automotive, and restaurant businesses all contributing to the upside. The company posted a non-GAAP net loss of 3 cents per share, narrower than the Zacks Consensus Estimate of a 6-cent loss and the prior-year loss.
Margins and Profitability of SoundHound
GAAP gross margin came in at 39%, down from 63% a year ago due to acquisition-related mix, while non-GAAP gross margin was 58.4%, up sequentially on cost synergies and improved product mix but down 810 basis points (bps) year over year. Adjusted EBITDA loss stood at $14.3 million, with an adjusted EBITDA margin of negative 33%. Adjusted operating loss was $11.9 million, translating to an adjusted operating margin of negative 28%.
SoundHound AI, Inc. Price, Consensus and EPS Surprise
Enterprise AI recorded its highest number of monthly go-lives, driven by the Amelia 7 agentic AI platform. Restaurant AI deployments expanded to more than 14,000 locations, with more than 1,000 added in the quarter. Automotive growth was fueled by a major OEM win in China and higher ASPs from Generative AI integration. Voice Commerce pilots with global automakers and QSRs advanced toward commercialization, creating cross-sell opportunities across verticals.
SOUN’s Balance Sheet & Liquidity
The company ended the second quarter with $230 million in cash and equivalents, no long-term debt, and solid liquidity to fund strategic initiatives. No share repurchases were reported during the quarter.
SoundHound’s Guidance & Outlook
Management raised its 2025 revenue outlook to $160 million–$178 million, citing strong close rates and expanding AI adoption. Sequential growth is expected in the second half, with the fourth quarter anticipated to outpace the third quarter on seasonal enterprise and automotive momentum. SoundHound projects adjusted EBITDA profitability by year-end 2025, supported by ongoing cost synergies, cloud optimizations, and scaling Voice Commerce opportunities.
SOUN Stock’s Zacks Rank & Key Picks
SoundHound currently carries a Zacks Rank #3 (Hold).
Leidos currently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 23.7%, on average. The stock has gained 12.6% in the past three months.
The Zacks Consensus Estimate for Leidos’ 2025 sales and EPS implies an increase of 2.9% and 6.5%, respectively, from a year ago.
The Zacks Consensus Estimate for EXLS’ this year’s sales indicates an increase of 12.4%, and the same for earnings implies a growth of 15.2% year over year.
CDW currently holds a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 3.3%, on average. The stock has lost 9.5% in the past three months.
The consensus estimate for CDW’s 2025 sales and EPS implies an increase of 2.2% and 2.21%, respectively, from a year ago.
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SoundHound Q2 Earnings Beat as AI Demand Fuels 217% Sales Growth
Key Takeaways
SoundHound AI, Inc. (SOUN - Free Report) posted record second-quarter 2025 results, outperforming Wall Street expectations on both the top and bottom lines. In its strongest quarter on record, SoundHound AI’s prior strategic investments — particularly its 2024 acquisitions — translated into tangible, high-impact results.
The voice artificial intelligence specialist benefited from accelerating adoption across enterprise, automotive, and restaurant verticals, as well as strong early traction for its agentic AI and Voice Commerce initiatives. Robust revenue growth, expanding deployments, and improved cost synergies underscored management’s confidence, prompting an upward revision to full-year guidance.
SOUN shares jumped more than 22% in the after-hours trading session following the release.
SOUN’s Revenues and Earnings
SoundHound reported revenues of $42.7 million, up 217% year over year and well above the Zacks Consensus Estimate of $33 million. Strength was broad-based, with Enterprise AI, automotive, and restaurant businesses all contributing to the upside. The company posted a non-GAAP net loss of 3 cents per share, narrower than the Zacks Consensus Estimate of a 6-cent loss and the prior-year loss.
Margins and Profitability of SoundHound
GAAP gross margin came in at 39%, down from 63% a year ago due to acquisition-related mix, while non-GAAP gross margin was 58.4%, up sequentially on cost synergies and improved product mix but down 810 basis points (bps) year over year. Adjusted EBITDA loss stood at $14.3 million, with an adjusted EBITDA margin of negative 33%. Adjusted operating loss was $11.9 million, translating to an adjusted operating margin of negative 28%.
SoundHound AI, Inc. Price, Consensus and EPS Surprise
SoundHound AI, Inc. price-consensus-eps-surprise-chart | SoundHound AI, Inc. Quote
Business Highlights
Enterprise AI recorded its highest number of monthly go-lives, driven by the Amelia 7 agentic AI platform. Restaurant AI deployments expanded to more than 14,000 locations, with more than 1,000 added in the quarter. Automotive growth was fueled by a major OEM win in China and higher ASPs from Generative AI integration. Voice Commerce pilots with global automakers and QSRs advanced toward commercialization, creating cross-sell opportunities across verticals.
SOUN’s Balance Sheet & Liquidity
The company ended the second quarter with $230 million in cash and equivalents, no long-term debt, and solid liquidity to fund strategic initiatives. No share repurchases were reported during the quarter.
SoundHound’s Guidance & Outlook
Management raised its 2025 revenue outlook to $160 million–$178 million, citing strong close rates and expanding AI adoption. Sequential growth is expected in the second half, with the fourth quarter anticipated to outpace the third quarter on seasonal enterprise and automotive momentum. SoundHound projects adjusted EBITDA profitability by year-end 2025, supported by ongoing cost synergies, cloud optimizations, and scaling Voice Commerce opportunities.
SOUN Stock’s Zacks Rank & Key Picks
SoundHound currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Computers - IT Services industry are Leidos Holdings, Inc. (LDOS - Free Report) , EXL Service (EXLS - Free Report) and CDW Corporation (CDW - Free Report) .
Leidos currently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 23.7%, on average. The stock has gained 12.6% in the past three months.
The Zacks Consensus Estimate for Leidos’ 2025 sales and EPS implies an increase of 2.9% and 6.5%, respectively, from a year ago.
EXL Service presently has a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 7.6%, on average. The stock has lost 7.6% in the past three months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for EXLS’ this year’s sales indicates an increase of 12.4%, and the same for earnings implies a growth of 15.2% year over year.
CDW currently holds a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 3.3%, on average. The stock has lost 9.5% in the past three months.
The consensus estimate for CDW’s 2025 sales and EPS implies an increase of 2.2% and 2.21%, respectively, from a year ago.