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In the last reported quarter, SoundHound delivered impressive results, with earnings and revenues surpassing the Zacks Consensus Estimate by 33.3% and 17.9%, respectively. The company reported record revenues of $61.9 million, up 45% year over year, driven by accelerating enterprise adoption of agentic AI, strong demand for its OASYS platform and expanding customer relationships. Adjusted loss narrowed to 2 cents per share from 3 cents in the year-ago quarter. Adjusted EBITDA also improved year over year, with the loss narrowing to $9.6 million from $14.3 million.
Non-GAAP gross profit increased 45% to $36.1 million. Non-GAAP gross margin remained unchanged at 58.4%, indicating stable underlying profitability after excluding amortization, stock-based compensation and acquisition-related expenses. Performance benefited from growing AI deployments across healthcare, financial services, automotive and restaurants, alongside disciplined cost management and improving operational efficiencies.
This maker of artificial intelligence (AI - Free Report) tools for computer interpretation of voice commands surpassed earnings estimates in two of the trailing four quarters, missed in one and met on the other occasion. 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 6 cents per share from 5 cents over the past 30 days. The estimate figure indicates a decline from the year-ago loss of 3 cents per share. The consensus mark for revenues is pegged at $63 million, suggesting a 49.9% year-over-year increase.
For 2026, SOUN is expected to register a 42.7% increase from a year ago in revenues to $241.1 million. Its bottom line is expected to witness a wider loss of 18 cents per share compared with 13 cents reported in 2025.
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 predicts 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 exactly the case here, as you will see below.
Earnings ESP: SoundHound has an Earnings ESP of +33.33%. 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.
Revenues to Benefit From OASYS Adoption and LivePerson: SoundHound's third-quarter revenues are expected to have benefited from accelerating demand for enterprise AI solutions, increasing customer deployments and strong adoption of its self-learning OASYS platform. The platform's ability to automate complex customer interactions, streamline workflows and enable cross-channel AI experiences is expected to attract new enterprise customers and encourage existing clients to expand their deployments.
The company's acquisition of LivePerson, completed on Sept. 4, 2026, is expected to have provided additional revenue contributions during the quarter. By combining SoundHound's voice AI capabilities with LivePerson's digital messaging infrastructure, the company has expanded its reach across enterprise customer engagement channels, including voice, web, mobile and social messaging.
Management raised its full-year 2026 revenue guidance to $230-$260 million in August, before the LivePerson acquisition closed. It indicated plans to revise the outlook following the transaction. However, the company did not provide specific third-quarter revenue guidance in the supplied materials.
Broad-Based Industry Demand to Support Business Expansion: SoundHound's third-quarter performance is expected to have benefited from expanding opportunities across several industries. Within healthcare and financial services, increasing adoption of AI-powered customer service automation, growing enterprise relationships and demand for secure conversational AI solutions are likely to have driven revenue growth.
The automotive business is expected to have benefited from expanding deployments with Stellantis and Hyundai, increasing adoption of generative AI-powered voice assistants and growing opportunities in Asian markets, particularly China and India. Management also planned to initiate direct in-vehicle Voice Commerce pilots during the quarter, creating opportunities for future transaction-based monetization.
Within restaurants and retail, expanding adoption of Smart Answering, Smart Ordering and drive-thru automation is expected to have supported growth. Increasing deployments with Five Guys, IHOP and Jersey Mike's, alongside opportunities to cross-sell additional AI services, are likely to have strengthened customer engagement and revenue generation.
Meanwhile, the LivePerson acquisition expands the combined company's customer footprint to include 25 Fortune 100 brands. This broader enterprise presence is expected to have created additional cross-selling opportunities, although the timing of new deployments will determine their near-term contribution.
Margins to Reflect Cost Discipline and Integration Spending: SoundHound's third-quarter margins are expected to have benefited from increasing operating leverage, disciplined expense management and continued optimization of its proprietary AI technology.
Greater reliance on in-house AI models, including Polaris and specialized language models, could lower third-party technology costs, improve deployment efficiency and support gross margin expansion over time. Additionally, acquisition-related synergies and the consolidation of technology platforms could improve operational efficiency.
However, continued investments in OASYS development, AI research, enterprise sales capabilities and LivePerson integration are likely to have kept operating expenses elevated. Personnel costs, acquisition-related amortization and integration expenses might also have pressured GAAP profitability.
The appointment of John Collins as chief financial officer, with a focus on cost optimization, margin expansion and operational synergies, reinforces management's emphasis on improving financial efficiency.
SOUN Stock Lags Industry & Sector
SOUN shares have lost 59% year to date (YTD), lagging the Zacks Computers - IT Services industry and 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
SoundHound competes with C3.ai, Inc. (AI - Free Report) in enterprise AI applications and intelligent automation, Cerence Inc. (CRNC - Free Report) in automotive voice assistants and conversational AI and Five9, Inc. (FIVN - Free Report) in AI-powered customer engagement, contact center solutions and automated customer service.
So far this year, Five9 has significantly outperformed its peers, gaining 78.4%, reflecting optimism surrounding AI-driven cloud contact center solutions and enterprise automation. In contrast, C3.ai has plunged 14.3% amid concerns over growth and execution, while Cerence has declined 24.8%, reflecting challenges in the automotive AI market. SoundHound differentiates itself through its proprietary voice and agentic AI technologies, growing enterprise adoption of OASYS and expanding automotive presence. The completed LivePerson acquisition further strengthens its omnichannel capabilities and creates cross-selling opportunities across enterprise customer engagement markets.
A Look at SOUN Stock’s Valuation
SOUN shares are currently trading at a discount to the Zacks Computers – IT Services industry. Based on the forward 12-month price-to-sales (P/S) ratio, SoundHound trades at 4.95X, below the industry average, as shown below. Among its closest peers, C3.ai trades at 7.86X, while Five9 and Cerence are valued at 1.99X and 1.24X, respectively. Although SoundHound commands a premium to Five9 and Cerence, it trades at a discount to C3.ai. Its valuation reflects expectations for sustained growth in voice and agentic AI, expanding enterprise adoption of OASYS and revenue opportunities from the LivePerson acquisition, while remaining below the broader industry average.
SOUN’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Why SOUN Stock Is a Hold for Now?
SoundHound’s expanding enterprise AI adoption, growing OASYS deployments, automotive opportunities and LivePerson acquisition strengthen its long-term growth prospects. However, widening loss estimates, elevated integration expenses, persistent profitability concerns and significant YTD share-price underperformance warrant caution. Although robust revenue growth and expanding customer relationships remain encouraging, investors should await clearer evidence of margin improvement, successful acquisition integration and sustainable profitability before increasing exposure. Hence, retaining SOUN stock appears prudent.
View the Zacks #1 Rank List
Image: Bigstock
SoundHound Q3 Earnings Ahead: Buy Now or Wait for Clarity?
Key Takeaways
SoundHound AI, Inc. (SOUN - Free Report) is scheduled to report its third-quarter 2026 results on Nov. 5, 2026, after market close.
In the last reported quarter, SoundHound delivered impressive results, with earnings and revenues surpassing the Zacks Consensus Estimate by 33.3% and 17.9%, respectively. The company reported record revenues of $61.9 million, up 45% year over year, driven by accelerating enterprise adoption of agentic AI, strong demand for its OASYS platform and expanding customer relationships. Adjusted loss narrowed to 2 cents per share from 3 cents in the year-ago quarter. Adjusted EBITDA also improved year over year, with the loss narrowing to $9.6 million from $14.3 million.
Non-GAAP gross profit increased 45% to $36.1 million. Non-GAAP gross margin remained unchanged at 58.4%, indicating stable underlying profitability after excluding amortization, stock-based compensation and acquisition-related expenses. Performance benefited from growing AI deployments across healthcare, financial services, automotive and restaurants, alongside disciplined cost management and improving operational efficiencies.
This maker of artificial intelligence (AI - Free Report) tools for computer interpretation of voice commands surpassed earnings estimates in two of the trailing four quarters, missed in one and met on the other occasion. 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 6 cents per share from 5 cents over the past 30 days. The estimate figure indicates a decline from the year-ago loss of 3 cents per share. The consensus mark for revenues is pegged at $63 million, suggesting a 49.9% year-over-year increase.
For 2026, SOUN is expected to register a 42.7% increase from a year ago in revenues to $241.1 million. Its bottom line is expected to witness a wider loss of 18 cents per share compared with 13 cents reported in 2025.
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 predicts 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 exactly the case here, as you will see below.
Earnings ESP: SoundHound has an Earnings ESP of +33.33%. 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
Revenues to Benefit From OASYS Adoption and LivePerson: SoundHound's third-quarter revenues are expected to have benefited from accelerating demand for enterprise AI solutions, increasing customer deployments and strong adoption of its self-learning OASYS platform. The platform's ability to automate complex customer interactions, streamline workflows and enable cross-channel AI experiences is expected to attract new enterprise customers and encourage existing clients to expand their deployments.
The company's acquisition of LivePerson, completed on Sept. 4, 2026, is expected to have provided additional revenue contributions during the quarter. By combining SoundHound's voice AI capabilities with LivePerson's digital messaging infrastructure, the company has expanded its reach across enterprise customer engagement channels, including voice, web, mobile and social messaging.
Management raised its full-year 2026 revenue guidance to $230-$260 million in August, before the LivePerson acquisition closed. It indicated plans to revise the outlook following the transaction. However, the company did not provide specific third-quarter revenue guidance in the supplied materials.
Broad-Based Industry Demand to Support Business Expansion: SoundHound's third-quarter performance is expected to have benefited from expanding opportunities across several industries. Within healthcare and financial services, increasing adoption of AI-powered customer service automation, growing enterprise relationships and demand for secure conversational AI solutions are likely to have driven revenue growth.
The automotive business is expected to have benefited from expanding deployments with Stellantis and Hyundai, increasing adoption of generative AI-powered voice assistants and growing opportunities in Asian markets, particularly China and India. Management also planned to initiate direct in-vehicle Voice Commerce pilots during the quarter, creating opportunities for future transaction-based monetization.
Within restaurants and retail, expanding adoption of Smart Answering, Smart Ordering and drive-thru automation is expected to have supported growth. Increasing deployments with Five Guys, IHOP and Jersey Mike's, alongside opportunities to cross-sell additional AI services, are likely to have strengthened customer engagement and revenue generation.
Meanwhile, the LivePerson acquisition expands the combined company's customer footprint to include 25 Fortune 100 brands. This broader enterprise presence is expected to have created additional cross-selling opportunities, although the timing of new deployments will determine their near-term contribution.
Margins to Reflect Cost Discipline and Integration Spending: SoundHound's third-quarter margins are expected to have benefited from increasing operating leverage, disciplined expense management and continued optimization of its proprietary AI technology.
Greater reliance on in-house AI models, including Polaris and specialized language models, could lower third-party technology costs, improve deployment efficiency and support gross margin expansion over time. Additionally, acquisition-related synergies and the consolidation of technology platforms could improve operational efficiency.
However, continued investments in OASYS development, AI research, enterprise sales capabilities and LivePerson integration are likely to have kept operating expenses elevated. Personnel costs, acquisition-related amortization and integration expenses might also have pressured GAAP profitability.
The appointment of John Collins as chief financial officer, with a focus on cost optimization, margin expansion and operational synergies, reinforces management's emphasis on improving financial efficiency.
SOUN Stock Lags Industry & Sector
SOUN shares have lost 59% year to date (YTD), lagging the Zacks Computers - IT Services industry and 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
SoundHound competes with C3.ai, Inc. (AI - Free Report) in enterprise AI applications and intelligent automation, Cerence Inc. (CRNC - Free Report) in automotive voice assistants and conversational AI and Five9, Inc. (FIVN - Free Report) in AI-powered customer engagement, contact center solutions and automated customer service.
So far this year, Five9 has significantly outperformed its peers, gaining 78.4%, reflecting optimism surrounding AI-driven cloud contact center solutions and enterprise automation. In contrast, C3.ai has plunged 14.3% amid concerns over growth and execution, while Cerence has declined 24.8%, reflecting challenges in the automotive AI market. SoundHound differentiates itself through its proprietary voice and agentic AI technologies, growing enterprise adoption of OASYS and expanding automotive presence. The completed LivePerson acquisition further strengthens its omnichannel capabilities and creates cross-selling opportunities across enterprise customer engagement markets.
A Look at SOUN Stock’s Valuation
SOUN shares are currently trading at a discount to the Zacks Computers – IT Services industry. Based on the forward 12-month price-to-sales (P/S) ratio, SoundHound trades at 4.95X, below the industry average, as shown below. Among its closest peers, C3.ai trades at 7.86X, while Five9 and Cerence are valued at 1.99X and 1.24X, respectively. Although SoundHound commands a premium to Five9 and Cerence, it trades at a discount to C3.ai. Its valuation reflects expectations for sustained growth in voice and agentic AI, expanding enterprise adoption of OASYS and revenue opportunities from the LivePerson acquisition, while remaining below the broader industry average.
SOUN’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Why SOUN Stock Is a Hold for Now?
SoundHound’s expanding enterprise AI adoption, growing OASYS deployments, automotive opportunities and LivePerson acquisition strengthen its long-term growth prospects. However, widening loss estimates, elevated integration expenses, persistent profitability concerns and significant YTD share-price underperformance warrant caution. Although robust revenue growth and expanding customer relationships remain encouraging, investors should await clearer evidence of margin improvement, successful acquisition integration and sustainable profitability before increasing exposure. Hence, retaining SOUN stock appears prudent.