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SoundHound to Post Q3 Earnings: Buy, Sell or Hold the Stock?
Read MoreHide Full Article
Key Takeaways
SOUN's Polaris-powered Amelia 7 platform is driving customer wins and renewals.
Restaurant AI growth is recurring, with leading brands scaling SOUN's ordering tools.
SOUN's operating costs remain high as it invests in AI scaling and GTM capacity.
SoundHound AI (SOUN - Free Report) is scheduled to report its third-quarter 2025 results on Nov. 6, after the closing bell. The voice AI innovator is riding strong revenue momentum as conversational and agentic AI gain deeper traction in automotive, enterprise and restaurant markets.
In the last reported quarter, SoundHound delivered its best quarter, reporting revenues of $42.7 million, up 217% year over year and beating estimates by nearly 29.3%. Non-GAAP net loss per share came in at 3 cents, ahead of the Zacks Consensus Estimate by 50%. Growth was broad-based across its three strategic pillars—Enterprise AI, Restaurants and Automotive—with agentic AI and Voice Commerce acting as unifying catalysts. Query volume surged past 1 billion per month, while active restaurant locations exceeded 14,000. Management also raised 2025 revenue guidance to $160–$178 million, targeting adjusted EBITDA profitability by year-end.
This maker of artificial intelligence (AI) tools for computer interpretation of voice commands surpassed earnings estimates in three of the trailing four quarters and missed on the other occasion, with an average negative surprise of 109.5%. You can see the historical figures in the chart below.
Image Source: Zacks Investment Research
How Are Estimates Placed for SOUN Stock?
The Zacks Consensus Estimate for the third-quarter bottom line has widened to a loss of 4 cents per share from 3 cents over the past 60 days. The company reported a year-ago loss per share of 6 cents. The consensus mark for revenues is $40.1 million, suggesting a 59.8% year-over-year increase.
For 2025, SOUN is expected to register a 95.3% increase from a year ago in revenues. Its bottom line is expected to witness an improvement to a loss of 13 cents per share from $1.04 a year ago.
SOUN’s Earnings Estimate
Image Source: Zacks Investment Research
SOUN’s Revenue Estimate
Image Source: Zacks Investment Research
What the Zacks Model Unveils for SoundHound
Our proven model does not conclusively predict an earnings beat for SoundHound for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) for this to happen. This is not the case here, as you will see below.
Earnings ESP: SoundHound has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
SoundHound’s strengthened demand outlook for 2025, reflected in its increased full-year revenue guidance of $160–$178 million, suggests sustained momentum into the third quarter as the company scales across its three core AI growth pillars. Management highlighted that voice AI adoption continues to accelerate across restaurants, enterprise and automotive markets, with second-quarter results showing revenue upside from faster-than-anticipated deal conversions — a tailwind likely extending into the third quarter.
A key driver expected to influence the third-quarter revenue trends is the rapid build-out of the company’s restaurant automation footprint, where SoundHound surpassed 14,000 active restaurant locations in the second quarter and added 1,000 new activations and about 1 million new interactions during the quarter — demonstrating increasing market penetration and higher usage-based revenue contribution as customers scale AI ordering solutions across more units. The company also cited wins and expansions with multiple large national brands, positioning restaurants as a recurring quarterly growth engine.
In enterprise AI, SoundHound continues to convert customers to its new agentic AI platform, Amelia 7, which integrates the Polaris speech foundation model. In the prior quarter, management noted that enterprise deployments hit their highest monthly levels to date, improving the pace of revenue recognition from go-lives and reinforcing accelerated adoption trends in the third quarter. Executives added that stronger integration of acquisition assets has improved customer renewals, cross-selling and net revenue retention — building a deeper pipeline and supporting the company’s raised revenue guidance assumptions.
The automotive segment is also expected to provide meaningful third-quarter support, following a major new OEM win in China representing “millions of units” over the lifecycle of the engagement, along with higher automotive ASPs driven by increased integration of generative AI solutions in North American vehicles. As global automakers transition more models toward voice-enabled and AI-automated experiences, SoundHound management emphasized that its footprint is “deepening” across global brands and remains a material growth contributor entering the back half of 2025.
Lastly, Voice Commerce, though still in pre-revenue phases, is expected to have contributed to early pipeline expansion in the third quarter, as multiple pilots and proofs-of-concept with leading automotive OEMs and global merchants progress closer to commercialization. Management stated that this integrated ordering ecosystem is entering a near-term launch phase, representing an emerging monetization stream that the company anticipates will drive future revenue acceleration and support longer-term guidance confidence.
Collectively, these drivers — combined with ongoing channel-partner expansion through EXL, Par and Acrelec — demonstrate diversified top-line momentum and reinforce the rationale behind SoundHound’s upward guidance revision, even as management continues to caution that individual quarterly performance may exhibit deal-timing volatility as large enterprise programs ramp through the second half of 2025.
Considering the margins, management guided that cloud integration, elimination of legacy tech stacks, and improved product mix would continue to benefit margins in the coming quarters, implying further sequential improvement is likely in the third quarter. However, SoundHound reiterated that operating costs would remain elevated near-term as it invests aggressively in the commercialization of Amelia 7 and Polaris, expanding selling capacity and innovation throughput — reflected in the second-quarter expenses rising sharply from a year ago across R&D and Sales & Marketing. The company cautioned that third and fourth quarters’ margin progress may remain non-linear due to “step-function” AI advancements requiring upfront costs and the ramp of newly launched services ahead of revenue scale.
Importantly, management reaffirmed guidance that adjusted EBITDA profitability remains achievable by the end of 2025. Strong liquidity — $230 million cash and zero debt — supports continuity of this investment strategy without compromising the runway.
SOUN Stock Outperforms Industry
SOUN shares have gained 53.4% during the July-September period, outperforming the Zacks Computers - IT Services industry, the broader Zacks Computer & Technology sector and the S&P 500 index.
SOUN Stock’s July-Sept. Performance
Image Source: Zacks Investment Research
SOUN’s Competition: A Big Challenge
SoundHound faces intense competition across conversational and agentic AI. Yet, it continues to differentiate with its proprietary Polaris speech foundation model and vertically integrated voice stack spanning automotive, restaurant and enterprise markets. Alphabet (GOOGL - Free Report) remains a formidable rival, as its deep speech-AI ecosystem and Alphabet’s expansive developer reach challenge SoundHound in automaker and device integrations. Amazon (AMZN - Free Report) is another frequent competitor, with the Alexa ecosystem and Amazon’s cloud-AI influence driving pricing power and entrenched scale advantages.
Meanwhile, BigBear.ai (BBAI - Free Report) is pushing into overlapping agentic AI and defense-aligned automation opportunities, and its government focus and expanding partner network present rising competition in high-value AI workloads. Even with pressure from Alphabet, Amazon and BigBear.ai, SoundHound’s strong pipeline, channel momentum and early leadership in voice commerce reinforce a competitive position that is increasingly resonating with global customers.
A Look at SOUN Stock Valuation
SOUN shares are currently overvalued. In terms of its forward 12-month price-to-sales (P/S) ratio, SOUN is trading at 33.8, higher than the Zacks Computers - IT Services industry’s 16.97.
SOUN’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Why SOUN Stock Is a Hold for Now?
Despite near-term volatility and a premium valuation, SoundHound offers one of the most direct and scalable plays on the accelerating adoption of conversational and agentic AI. With third-quarter results approaching, the company enters the print with strong business momentum — highlighted by triple-digit revenue growth, expanding deployments across restaurants and automotive, a deepening enterprise pipeline and solid execution that enabled management to raise full-year revenue guidance and reiterate progress toward 2025 adjusted EBITDA profitability.
Its robust balance sheet, with more than $230 million in cash and zero debt, provides a key cushion supporting continued innovation and commercial scale-up.
Meanwhile, record query traffic, widening partnerships and differentiated capabilities like the Polaris speech model and Voice Commerce engine position SoundHound as a high-conviction growth story in the emerging AI automation cycle. Shares have already outperformed the broader tech landscape this past quarter, signaling strengthening investor confidence ahead of upcoming catalysts. As SoundHound targets sustained revenue acceleration and profitability inflection in 2025, holding SOUN before the third-quarter report seems to be prudent because that could allow investors to participate in further upside if execution and demand trends continue to surprise to the positive.
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SoundHound to Post Q3 Earnings: Buy, Sell or Hold the Stock?
Key Takeaways
SoundHound AI (SOUN - Free Report) is scheduled to report its third-quarter 2025 results on Nov. 6, after the closing bell. The voice AI innovator is riding strong revenue momentum as conversational and agentic AI gain deeper traction in automotive, enterprise and restaurant markets.
In the last reported quarter, SoundHound delivered its best quarter, reporting revenues of $42.7 million, up 217% year over year and beating estimates by nearly 29.3%. Non-GAAP net loss per share came in at 3 cents, ahead of the Zacks Consensus Estimate by 50%. Growth was broad-based across its three strategic pillars—Enterprise AI, Restaurants and Automotive—with agentic AI and Voice Commerce acting as unifying catalysts. Query volume surged past 1 billion per month, while active restaurant locations exceeded 14,000. Management also raised 2025 revenue guidance to $160–$178 million, targeting adjusted EBITDA profitability by year-end.
This maker of artificial intelligence (AI) tools for computer interpretation of voice commands surpassed earnings estimates in three of the trailing four quarters and missed on the other occasion, with an average negative surprise of 109.5%. You can see the historical figures in the chart below.
Image Source: Zacks Investment Research
How Are Estimates Placed for SOUN Stock?
The Zacks Consensus Estimate for the third-quarter bottom line has widened to a loss of 4 cents per share from 3 cents over the past 60 days. The company reported a year-ago loss per share of 6 cents. The consensus mark for revenues is $40.1 million, suggesting a 59.8% year-over-year increase.
For 2025, SOUN is expected to register a 95.3% increase from a year ago in revenues. Its bottom line is expected to witness an improvement to a loss of 13 cents per share from $1.04 a year ago.
SOUN’s Earnings Estimate
Image Source: Zacks Investment Research
SOUN’s Revenue Estimate
Image Source: Zacks Investment Research
What the Zacks Model Unveils for SoundHound
Our proven model does not conclusively predict an earnings beat for SoundHound for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) for this to happen. This is not the case here, as you will see below.
Earnings ESP: SoundHound has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Influencing SoundHound’s Q3 Performance
SoundHound’s strengthened demand outlook for 2025, reflected in its increased full-year revenue guidance of $160–$178 million, suggests sustained momentum into the third quarter as the company scales across its three core AI growth pillars. Management highlighted that voice AI adoption continues to accelerate across restaurants, enterprise and automotive markets, with second-quarter results showing revenue upside from faster-than-anticipated deal conversions — a tailwind likely extending into the third quarter.
A key driver expected to influence the third-quarter revenue trends is the rapid build-out of the company’s restaurant automation footprint, where SoundHound surpassed 14,000 active restaurant locations in the second quarter and added 1,000 new activations and about 1 million new interactions during the quarter — demonstrating increasing market penetration and higher usage-based revenue contribution as customers scale AI ordering solutions across more units. The company also cited wins and expansions with multiple large national brands, positioning restaurants as a recurring quarterly growth engine.
In enterprise AI, SoundHound continues to convert customers to its new agentic AI platform, Amelia 7, which integrates the Polaris speech foundation model. In the prior quarter, management noted that enterprise deployments hit their highest monthly levels to date, improving the pace of revenue recognition from go-lives and reinforcing accelerated adoption trends in the third quarter. Executives added that stronger integration of acquisition assets has improved customer renewals, cross-selling and net revenue retention — building a deeper pipeline and supporting the company’s raised revenue guidance assumptions.
The automotive segment is also expected to provide meaningful third-quarter support, following a major new OEM win in China representing “millions of units” over the lifecycle of the engagement, along with higher automotive ASPs driven by increased integration of generative AI solutions in North American vehicles. As global automakers transition more models toward voice-enabled and AI-automated experiences, SoundHound management emphasized that its footprint is “deepening” across global brands and remains a material growth contributor entering the back half of 2025.
Lastly, Voice Commerce, though still in pre-revenue phases, is expected to have contributed to early pipeline expansion in the third quarter, as multiple pilots and proofs-of-concept with leading automotive OEMs and global merchants progress closer to commercialization. Management stated that this integrated ordering ecosystem is entering a near-term launch phase, representing an emerging monetization stream that the company anticipates will drive future revenue acceleration and support longer-term guidance confidence.
Collectively, these drivers — combined with ongoing channel-partner expansion through EXL, Par and Acrelec — demonstrate diversified top-line momentum and reinforce the rationale behind SoundHound’s upward guidance revision, even as management continues to caution that individual quarterly performance may exhibit deal-timing volatility as large enterprise programs ramp through the second half of 2025.
Considering the margins, management guided that cloud integration, elimination of legacy tech stacks, and improved product mix would continue to benefit margins in the coming quarters, implying further sequential improvement is likely in the third quarter. However, SoundHound reiterated that operating costs would remain elevated near-term as it invests aggressively in the commercialization of Amelia 7 and Polaris, expanding selling capacity and innovation throughput — reflected in the second-quarter expenses rising sharply from a year ago across R&D and Sales & Marketing. The company cautioned that third and fourth quarters’ margin progress may remain non-linear due to “step-function” AI advancements requiring upfront costs and the ramp of newly launched services ahead of revenue scale.
Importantly, management reaffirmed guidance that adjusted EBITDA profitability remains achievable by the end of 2025. Strong liquidity — $230 million cash and zero debt — supports continuity of this investment strategy without compromising the runway.
SOUN Stock Outperforms Industry
SOUN shares have gained 53.4% during the July-September period, outperforming the Zacks Computers - IT Services industry, the broader Zacks Computer & Technology sector and the S&P 500 index.
SOUN Stock’s July-Sept. Performance
Image Source: Zacks Investment Research
SOUN’s Competition: A Big Challenge
SoundHound faces intense competition across conversational and agentic AI. Yet, it continues to differentiate with its proprietary Polaris speech foundation model and vertically integrated voice stack spanning automotive, restaurant and enterprise markets. Alphabet (GOOGL - Free Report) remains a formidable rival, as its deep speech-AI ecosystem and Alphabet’s expansive developer reach challenge SoundHound in automaker and device integrations. Amazon (AMZN - Free Report) is another frequent competitor, with the Alexa ecosystem and Amazon’s cloud-AI influence driving pricing power and entrenched scale advantages.
Meanwhile, BigBear.ai (BBAI - Free Report) is pushing into overlapping agentic AI and defense-aligned automation opportunities, and its government focus and expanding partner network present rising competition in high-value AI workloads. Even with pressure from Alphabet, Amazon and BigBear.ai, SoundHound’s strong pipeline, channel momentum and early leadership in voice commerce reinforce a competitive position that is increasingly resonating with global customers.
A Look at SOUN Stock Valuation
SOUN shares are currently overvalued. In terms of its forward 12-month price-to-sales (P/S) ratio, SOUN is trading at 33.8, higher than the Zacks Computers - IT Services industry’s 16.97.
SOUN’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Why SOUN Stock Is a Hold for Now?
Despite near-term volatility and a premium valuation, SoundHound offers one of the most direct and scalable plays on the accelerating adoption of conversational and agentic AI. With third-quarter results approaching, the company enters the print with strong business momentum — highlighted by triple-digit revenue growth, expanding deployments across restaurants and automotive, a deepening enterprise pipeline and solid execution that enabled management to raise full-year revenue guidance and reiterate progress toward 2025 adjusted EBITDA profitability.
Its robust balance sheet, with more than $230 million in cash and zero debt, provides a key cushion supporting continued innovation and commercial scale-up.
Meanwhile, record query traffic, widening partnerships and differentiated capabilities like the Polaris speech model and Voice Commerce engine position SoundHound as a high-conviction growth story in the emerging AI automation cycle. Shares have already outperformed the broader tech landscape this past quarter, signaling strengthening investor confidence ahead of upcoming catalysts. As SoundHound targets sustained revenue acceleration and profitability inflection in 2025, holding SOUN before the third-quarter report seems to be prudent because that could allow investors to participate in further upside if execution and demand trends continue to surprise to the positive.