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In the last reported quarter, SoundHound delivered strong growth in fourth-quarter 2025, with revenues rising 59% year over year to $55.1 million and beating the Zacks Consensus Estimate by 2%, driven by broad-based demand across enterprise AI, restaurants and automotive markets. Margins improved, with GAAP gross margin increasing to 47.9% from 39.9% a year ago, and non-GAAP rose to 60.5% from 52.1% a year ago, reflecting better scale and efficiency. Adjusted EBITDA loss narrowed, signaling improving operating leverage. The company reported GAAP net income of $40.1 million, mainly due to non-cash gains, while underlying profitability remained negative. Strong deal activity and customer additions highlighted continued momentum. The company’s loss per share of 2 cents came in line with the Zacks Consensus Estimate and narrowed from 5 cents a year ago.
This maker of artificial intelligence (AI - Free Report) tools for computer interpretation of voice commands surpassed earnings estimates in three of the trailing four quarters and met on the other occasion, with an average surprise of 22.3%. 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 first-quarter bottom line has remained unchanged at a loss of 5 cents per share over the past 60 days. The company reported a year-ago loss per share of 6 cents. The consensus mark for revenues is pegged at $42.7 million, suggesting a 46.6% year-over-year increase.
For 2026, SOUN is expected to register a 37.8% increase from a year ago in revenues to $232.7 million. Its bottom line is expected to witness an improvement to a loss of 9 cents per share from 13 cents reported in 2025.
SOUN’s Earnings 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.
Rising Enterprise AI Deals and Cross-Industry Adoption: SoundHound’s first-quarter 2026 revenues are expected to have benefited from strong enterprise AI demand and expanding adoption across verticals. The company entered 2026 with a robust pipeline and broad-based customer traction across industries such as automotive, restaurants, financial services and healthcare, supported by rising demand for conversational and agentic AI solutions.
A key growth driver is the rapid expansion of its agentic AI platform, which enables enterprises to automate complex workflows and customer interactions. Partnerships like the one with Experis are likely to have supported enterprise deployments by accelerating adoption across large organizations, particularly in healthcare and IT service environments.
The automotive segment is also expected to have remained a meaningful contributor, aided by new OEM wins and collaborations such as the integration with TomTom for in-vehicle AI navigation, which enhances the company’s presence in next-generation mobility solutions.
Additionally, innovations showcased at CES 2026, including agentic voice commerce across vehicles, TVs and smart devices, point to expanding monetization opportunities. These capabilities—ranging from food ordering to travel booking—are likely to have contributed to early-stage revenue traction and pipeline expansion in the quarter.
Growth in the restaurant vertical, supported by expansions with brands like Five Guys and rising adoption of voice-enabled ordering solutions, is also expected to have aided top-line performance through higher interaction volumes and deployment scale.
Investment-Led Cost Pressures and Path to Profitability: Despite strong revenue momentum, profitability in the first quarter is likely to remain under pressure due to continued investments in innovation, go-to-market expansion and platform scaling. The company has been increasing spending on R&D to enhance its agentic AI capabilities and maintain technological leadership, which could weigh on operating margins in the near term.
Higher sales and marketing investments to drive enterprise adoption, along with integration costs from acquisitions and partnerships, are also expected to have impacted margins. At the same time, the company continues to focus on scaling its platform and improving operational efficiency, including optimizing infrastructure and transitioning toward higher-margin contracts.
Management has indicated that 2026 will mark a transition toward a breakeven phase, with gradual improvement in EBITDA supported by operating leverage and cost synergies. However, this transition is expected to be non-linear, as the company balances aggressive growth investments with profitability goals.
Overall, while SoundHound’s first-quarter 2026 results are likely to reflect strong demand and expanding deployment of its AI solutions, margin expansion may remain constrained in the near term due to continued strategic investments.
SOUN Stock Outperforms Industry, Lags Sector
SOUN shares have lost 4.1% year to date (YTD), outperforming the Zacks Computers - IT Services industry but lagging the broader Zacks Computer & Technology sector and the S&P 500 Index, as shown below.
SOUN Stock’s Performance (YTD)
Image Source: Zacks Investment Research
Competitive Landscape: Voice AI vs. Large-Scale Enterprise Platforms
SoundHound operates in a highly competitive AI environment, facing pressure from both focused enterprise AI vendors and large platform providers. As it heads into the first quarter of 2026 earnings season, its key rivals include C3.ai (AI - Free Report) , Palantir Technologies (PLTR - Free Report) and Microsoft (MSFT - Free Report) .
C3.ai remains a close competitor in enterprise AI deployments, particularly across industrial and government use cases. While it targets large-scale implementations, it continues to compete with SoundHound for enterprise AI budgets. However, demand momentum has been relatively slower for C3.ai, whereas SoundHound is benefiting from stronger growth tied to its voice AI niche.
Palantir competes through its strength in data analytics and decision intelligence, especially within government and regulated industries. Although Palantir’s core focus differs, its expanding AI capabilities are increasingly overlapping with SoundHound’s enterprise offerings, particularly in complex, data-intensive environments.
At the top end, Microsoft represents the most significant competitive force. Its ability to integrate AI across Azure and enterprise software at scale, supported by a vast ecosystem and distribution reach, positions it strongly in accelerating the adoption of conversational AI solutions.
Overall, while SoundHound benefits from its focused expertise in voice and agentic AI, ongoing competition from C3.ai, Palantir and Microsoft remains an important factor influencing its growth trajectory.
A Look at SOUN Stock's Valuation
SOUN shares are currently slightly overvalued. In terms of its forward 12-month price-to-sales (P/S) ratio, SOUN is trading at 16.29, higher than the Zacks Computers - IT Services industry, as shown below.
SOUN’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Why SOUN Stock Is a Hold for Now?
SoundHound presents a balanced risk-reward profile ahead of its first-quarter 2026 results, supporting a hold stance. The company continues to deliver strong revenue growth, driven by expanding enterprise adoption, rising traction in automotive and restaurants and early momentum in agentic AI solutions. Improving gross margins and narrowing EBITDA losses signal gradual operating leverage.
However, near-term profitability remains constrained by elevated investments in R&D and go-to-market expansion, while the lack of a positive Earnings ESP limits visibility into an earnings beat. With the stock trading at a premium valuation and facing strong competition from C3.ai, Palantir and Microsoft, investors may prefer to wait for clearer margin improvement and execution consistency before turning more constructive.
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SoundHound to Post Q1 Earnings: Buy, Sell or Hold the Stock?
Key Takeaways
SoundHound AI, Inc. (SOUN - Free Report) is scheduled to report its first-quarter 2026 results on May 7, 2026, after market close.
In the last reported quarter, SoundHound delivered strong growth in fourth-quarter 2025, with revenues rising 59% year over year to $55.1 million and beating the Zacks Consensus Estimate by 2%, driven by broad-based demand across enterprise AI, restaurants and automotive markets. Margins improved, with GAAP gross margin increasing to 47.9% from 39.9% a year ago, and non-GAAP rose to 60.5% from 52.1% a year ago, reflecting better scale and efficiency. Adjusted EBITDA loss narrowed, signaling improving operating leverage. The company reported GAAP net income of $40.1 million, mainly due to non-cash gains, while underlying profitability remained negative. Strong deal activity and customer additions highlighted continued momentum. The company’s loss per share of 2 cents came in line with the Zacks Consensus Estimate and narrowed from 5 cents a year ago.
This maker of artificial intelligence (AI - Free Report) tools for computer interpretation of voice commands surpassed earnings estimates in three of the trailing four quarters and met on the other occasion, with an average surprise of 22.3%. 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 first-quarter bottom line has remained unchanged at a loss of 5 cents per share over the past 60 days. The company reported a year-ago loss per share of 6 cents. The consensus mark for revenues is pegged at $42.7 million, suggesting a 46.6% year-over-year increase.
For 2026, SOUN is expected to register a 37.8% increase from a year ago in revenues to $232.7 million. Its bottom line is expected to witness an improvement to a loss of 9 cents per share from 13 cents reported in 2025.
SOUN’s Earnings 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 Q1 Performance
Rising Enterprise AI Deals and Cross-Industry Adoption: SoundHound’s first-quarter 2026 revenues are expected to have benefited from strong enterprise AI demand and expanding adoption across verticals. The company entered 2026 with a robust pipeline and broad-based customer traction across industries such as automotive, restaurants, financial services and healthcare, supported by rising demand for conversational and agentic AI solutions.
A key growth driver is the rapid expansion of its agentic AI platform, which enables enterprises to automate complex workflows and customer interactions. Partnerships like the one with Experis are likely to have supported enterprise deployments by accelerating adoption across large organizations, particularly in healthcare and IT service environments.
The automotive segment is also expected to have remained a meaningful contributor, aided by new OEM wins and collaborations such as the integration with TomTom for in-vehicle AI navigation, which enhances the company’s presence in next-generation mobility solutions.
Additionally, innovations showcased at CES 2026, including agentic voice commerce across vehicles, TVs and smart devices, point to expanding monetization opportunities. These capabilities—ranging from food ordering to travel booking—are likely to have contributed to early-stage revenue traction and pipeline expansion in the quarter.
Growth in the restaurant vertical, supported by expansions with brands like Five Guys and rising adoption of voice-enabled ordering solutions, is also expected to have aided top-line performance through higher interaction volumes and deployment scale.
Investment-Led Cost Pressures and Path to Profitability: Despite strong revenue momentum, profitability in the first quarter is likely to remain under pressure due to continued investments in innovation, go-to-market expansion and platform scaling. The company has been increasing spending on R&D to enhance its agentic AI capabilities and maintain technological leadership, which could weigh on operating margins in the near term.
Higher sales and marketing investments to drive enterprise adoption, along with integration costs from acquisitions and partnerships, are also expected to have impacted margins. At the same time, the company continues to focus on scaling its platform and improving operational efficiency, including optimizing infrastructure and transitioning toward higher-margin contracts.
Management has indicated that 2026 will mark a transition toward a breakeven phase, with gradual improvement in EBITDA supported by operating leverage and cost synergies. However, this transition is expected to be non-linear, as the company balances aggressive growth investments with profitability goals.
Overall, while SoundHound’s first-quarter 2026 results are likely to reflect strong demand and expanding deployment of its AI solutions, margin expansion may remain constrained in the near term due to continued strategic investments.
SOUN Stock Outperforms Industry, Lags Sector
SOUN shares have lost 4.1% year to date (YTD), outperforming the Zacks Computers - IT Services industry but lagging the broader Zacks Computer & Technology sector and the S&P 500 Index, as shown below.
SOUN Stock’s Performance (YTD)
Image Source: Zacks Investment Research
Competitive Landscape: Voice AI vs. Large-Scale Enterprise Platforms
SoundHound operates in a highly competitive AI environment, facing pressure from both focused enterprise AI vendors and large platform providers. As it heads into the first quarter of 2026 earnings season, its key rivals include C3.ai (AI - Free Report) , Palantir Technologies (PLTR - Free Report) and Microsoft (MSFT - Free Report) .
C3.ai remains a close competitor in enterprise AI deployments, particularly across industrial and government use cases. While it targets large-scale implementations, it continues to compete with SoundHound for enterprise AI budgets. However, demand momentum has been relatively slower for C3.ai, whereas SoundHound is benefiting from stronger growth tied to its voice AI niche.
Palantir competes through its strength in data analytics and decision intelligence, especially within government and regulated industries. Although Palantir’s core focus differs, its expanding AI capabilities are increasingly overlapping with SoundHound’s enterprise offerings, particularly in complex, data-intensive environments.
At the top end, Microsoft represents the most significant competitive force. Its ability to integrate AI across Azure and enterprise software at scale, supported by a vast ecosystem and distribution reach, positions it strongly in accelerating the adoption of conversational AI solutions.
Overall, while SoundHound benefits from its focused expertise in voice and agentic AI, ongoing competition from C3.ai, Palantir and Microsoft remains an important factor influencing its growth trajectory.
A Look at SOUN Stock's Valuation
SOUN shares are currently slightly overvalued. In terms of its forward 12-month price-to-sales (P/S) ratio, SOUN is trading at 16.29, higher than the Zacks Computers - IT Services industry, as shown below.
SOUN’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Why SOUN Stock Is a Hold for Now?
SoundHound presents a balanced risk-reward profile ahead of its first-quarter 2026 results, supporting a hold stance. The company continues to deliver strong revenue growth, driven by expanding enterprise adoption, rising traction in automotive and restaurants and early momentum in agentic AI solutions. Improving gross margins and narrowing EBITDA losses signal gradual operating leverage.
However, near-term profitability remains constrained by elevated investments in R&D and go-to-market expansion, while the lack of a positive Earnings ESP limits visibility into an earnings beat. With the stock trading at a premium valuation and facing strong competition from C3.ai, Palantir and Microsoft, investors may prefer to wait for clearer margin improvement and execution consistency before turning more constructive.