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SoundHound targets positive adjusted EBITDA in H2 2027, reaffirming its $350M-$400M revenue outlook.
SOUN plans at least $120M in annualized cost cuts, with $80M scheduled to take effect before January 2027.
LivePerson added nearly $14M in Q3 revenues, while proprietary AI models cut costs by more than tenfold.
SoundHound AI, Inc. (SOUN - Free Report) outlined a path toward sustainable profitability during its third-quarter 2026 earnings call, emphasizing cost reductions, recurring revenue and the integration of LivePerson.
Management reaffirmed its 2027 revenue outlook while introducing a profitability target for the second half of next year. Executives also detailed changes to licensing arrangements, proprietary AI deployment and operating expenses intended to improve earnings quality.
Third-quarter adjusted loss of 5 cents per share was narrower than the Zacks Consensus Estimate of a loss of 6 cents. Third-quarter revenues increased 48% year over year to $62.43 million, missing the Zacks Consensus Estimate of $63 million by 0.90%.
SoundHound AI, Inc. Price, Consensus and EPS Surprise
Chief Financial Officer John Collins reaffirmed the company's 2027 revenue guidance of $350 million to $400 million. Management expects sustainable positive adjusted EBITDA within the second half of 2027, even at the lower end of that range.
Collins outlined at least $120 million in annualized cost reductions, including more than $80 million already actioned and scheduled to become effective before January 2027. Another $40 million will take effect progressively during 2027.
The reductions include approximately $48 million in merger synergies, $42 million in cloud optimization, $15 million in AI-driven operational efficiencies and $15 million in resource reallocation.
SoundHound Prioritizes Recurring Revenue Quality
Co-Founder, CEO and President Keyvan Mohajer emphasized restructuring customer agreements to favor recurring revenue over upfront licensing.
Point-in-time revenue contributions declined to approximately 10% in the third quarter from more than 33% in the preceding quarter. Mohajer said the OASYS platform enables multiyear hosted contracts rather than upfront licenses.
Collins explained that these changes, alongside exits from negative-margin contracts, reduce anticipated 2026 revenue by approximately $35 million. Nevertheless, management narrowed its full-year revenue guidance to $250 million to $260 million from $230 million to $260 million.
SOUN Advances LivePerson Integration
Mohajer said SoundHound remains on schedule to complete LivePerson's platform and organizational integration by early 2027.
Management has engaged LivePerson's top 90 enterprise accounts, representing more than $100 million in annual recurring revenue. The acquisition expands SoundHound's presence across enterprise messaging, customer engagement and voice AI.
Collins said LivePerson contributed nearly $14 million in third-quarter revenue following the September 4 acquisition closing. Management also emphasized consolidating overlapping operations and retiring substantially all inherited debt.
SoundHound Expands Proprietary AI Deployment
Mohajer highlighted the deployment of SoundHound's proprietary models across hundreds of customers, reducing model costs by more than an order of magnitude.
Responding to an Oppenheimer analyst, Mohajer explained that specialized models deliver lower latency and costs than third-party alternatives for customer-service applications. Management intends to migrate most interactions toward its proprietary technology.
The company also introduced OASYS Edge, extending agentic AI capabilities to vehicles and connected devices with local processing and offline functionality.
SOUN Highlights Enterprise and Commercial Expansion
Mohajer described new customer agreements across health care, automotive, restaurants and enterprise services. Nearly 20 enterprise implementations of OASYS are underway.
SoundHound expanded its hospitality footprint through Resorts World Las Vegas and secured automotive agreements in China and India. Restaurant deployments also supported additional customer locations and improved retention.
The company announced a partnership with LG targeting approximately 20 million U.S. smart TVs for voice commerce capabilities. Management views connected devices as an additional distribution channel for its AI platform.
SoundHound Addresses Revenue Visibility and Margins
Responding to Oppenheimer, Collins said adjusted EBITDA will become a regular guidance metric in 2027. Additional operating indicators are under consideration for the fourth-quarter call.
A Ladenburg Thalmann analyst pressed management for an operating expense baseline. Collins indicated that additional financial details would appear in an upcoming filing.
SOUN Maintains Focus on Financial Discipline
Management's overarching message centered on combining enterprise AI expansion with improved operating efficiency and more predictable revenue recognition.
Collins and Mohajer emphasized cost execution, LivePerson integration and proprietary model adoption as central priorities supporting the company's profitability ambitions.
SoundHound's Zacks Rank and Style Scores Signal Caution
SOUN currently carries a Zacks Rank #3 (Hold), indicating a neutral near-term assessment. Its Momentum Score of C reflects middle-range momentum characteristics, while its Growth Score of D indicates weaker growth-style attractiveness. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Value Score of F and VGM Score of F indicate unfavorable valuation and combined style characteristics. These scores offer limited support for near-term outperformance under the Zacks framework, which favors higher-ranked stocks with A or B Style Scores. The Zacks Rank may change as analysts revise earnings estimates following the latest results.
View the Zacks #1 Rank List
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SOUN Q3 Earnings Call Highlights 2027 Profitability Target
Key Takeaways
SoundHound AI, Inc. (SOUN - Free Report) outlined a path toward sustainable profitability during its third-quarter 2026 earnings call, emphasizing cost reductions, recurring revenue and the integration of LivePerson.
Management reaffirmed its 2027 revenue outlook while introducing a profitability target for the second half of next year. Executives also detailed changes to licensing arrangements, proprietary AI deployment and operating expenses intended to improve earnings quality.
Third-quarter adjusted loss of 5 cents per share was narrower than the Zacks Consensus Estimate of a loss of 6 cents. Third-quarter revenues increased 48% year over year to $62.43 million, missing the Zacks Consensus Estimate of $63 million by 0.90%.
SoundHound AI, Inc. Price, Consensus and EPS Surprise
SoundHound AI, Inc. price-consensus-eps-surprise-chart | SoundHound AI, Inc. Quote
SOUN Targets Sustainable Profitability in 2027
Chief Financial Officer John Collins reaffirmed the company's 2027 revenue guidance of $350 million to $400 million. Management expects sustainable positive adjusted EBITDA within the second half of 2027, even at the lower end of that range.
Collins outlined at least $120 million in annualized cost reductions, including more than $80 million already actioned and scheduled to become effective before January 2027. Another $40 million will take effect progressively during 2027.
The reductions include approximately $48 million in merger synergies, $42 million in cloud optimization, $15 million in AI-driven operational efficiencies and $15 million in resource reallocation.
SoundHound Prioritizes Recurring Revenue Quality
Co-Founder, CEO and President Keyvan Mohajer emphasized restructuring customer agreements to favor recurring revenue over upfront licensing.
Point-in-time revenue contributions declined to approximately 10% in the third quarter from more than 33% in the preceding quarter. Mohajer said the OASYS platform enables multiyear hosted contracts rather than upfront licenses.
Collins explained that these changes, alongside exits from negative-margin contracts, reduce anticipated 2026 revenue by approximately $35 million. Nevertheless, management narrowed its full-year revenue guidance to $250 million to $260 million from $230 million to $260 million.
SOUN Advances LivePerson Integration
Mohajer said SoundHound remains on schedule to complete LivePerson's platform and organizational integration by early 2027.
Management has engaged LivePerson's top 90 enterprise accounts, representing more than $100 million in annual recurring revenue. The acquisition expands SoundHound's presence across enterprise messaging, customer engagement and voice AI.
Collins said LivePerson contributed nearly $14 million in third-quarter revenue following the September 4 acquisition closing. Management also emphasized consolidating overlapping operations and retiring substantially all inherited debt.
SoundHound Expands Proprietary AI Deployment
Mohajer highlighted the deployment of SoundHound's proprietary models across hundreds of customers, reducing model costs by more than an order of magnitude.
Responding to an Oppenheimer analyst, Mohajer explained that specialized models deliver lower latency and costs than third-party alternatives for customer-service applications. Management intends to migrate most interactions toward its proprietary technology.
The company also introduced OASYS Edge, extending agentic AI capabilities to vehicles and connected devices with local processing and offline functionality.
SOUN Highlights Enterprise and Commercial Expansion
Mohajer described new customer agreements across health care, automotive, restaurants and enterprise services. Nearly 20 enterprise implementations of OASYS are underway.
SoundHound expanded its hospitality footprint through Resorts World Las Vegas and secured automotive agreements in China and India. Restaurant deployments also supported additional customer locations and improved retention.
The company announced a partnership with LG targeting approximately 20 million U.S. smart TVs for voice commerce capabilities. Management views connected devices as an additional distribution channel for its AI platform.
SoundHound Addresses Revenue Visibility and Margins
Responding to Oppenheimer, Collins said adjusted EBITDA will become a regular guidance metric in 2027. Additional operating indicators are under consideration for the fourth-quarter call.
A Ladenburg Thalmann analyst pressed management for an operating expense baseline. Collins indicated that additional financial details would appear in an upcoming filing.
SOUN Maintains Focus on Financial Discipline
Management's overarching message centered on combining enterprise AI expansion with improved operating efficiency and more predictable revenue recognition.
Collins and Mohajer emphasized cost execution, LivePerson integration and proprietary model adoption as central priorities supporting the company's profitability ambitions.
SoundHound's Zacks Rank and Style Scores Signal Caution
SOUN currently carries a Zacks Rank #3 (Hold), indicating a neutral near-term assessment. Its Momentum Score of C reflects middle-range momentum characteristics, while its Growth Score of D indicates weaker growth-style attractiveness. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Value Score of F and VGM Score of F indicate unfavorable valuation and combined style characteristics. These scores offer limited support for near-term outperformance under the Zacks framework, which favors higher-ranked stocks with A or B Style Scores. The Zacks Rank may change as analysts revise earnings estimates following the latest results.