SoundHound AI, Inc Class A (SOUN) AI Stock Analysis

• Market Cap: $2.77B
• Dividend Yield: N/A
• Average Volume (3M): 26.73M
• Price to Earnings (P/E): ―
• Beta (1Y): 3.32
• Revenue Growth: 120.52%
• EPS Growth: -124.81%
• Country: US
• Employees: 842
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.10
• Shares Outstanding: 390,278,780
• 10 Day Avg. Volume: 29,199,405
• 30 Day Avg. Volume: 26,728,887
• PEG Ratio: 2.99
• Price to Book (P/B): 8.72
• Price to Sales (P/S): 23.93
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.91
• Enterprise Value/Revenue: 14.95
• Enterprise Value/Gross Profit: 35.29
• Enterprise Value/Ebitda: 37.75
• 1Y Price Target: $14.50
• Price Target Upside: 121.37% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): -0.32
• Revenue Forecast (FY): $232.79M

• Rating: 53 Neutral
• Price Target: $7.50 ▲(14.50% Upside)
• Action: Reiterated Date: 03/19/26
• Date: Action: Reiterated 03/19/26

The score is primarily held back by weak cash flow and ongoing losses despite rapid revenue growth and a much improved balance sheet. Technicals remain bearish with the stock trading below major moving averages. Offsetting these risks, the latest earnings call provided strong 2026 revenue guidance and highlighted improving margins and narrowing EBITDA losses, supporting a moderately better outlook.

Positive Factors

Revenue growth & customer traction

Near‑doubling of revenue to $169M in 2025 and Q4 +59% YoY with record deal momentum (100+ Q4 customer deals) indicate durable commercial traction across automotive, restaurant and enterprise channels. This scale supports recurring licensing and usage economics, diversifies revenue, and improves multi‑year visibility as deployments scale.

Product leadership & differentiation

Agentic and Polaris combined with multi‑model arbitration (on‑device, cloud, on‑premise, human‑augmented) create a technical moat that speeds deployments and improves containment for customers. This integrated stack supports upsells, migration opportunities and stickiness, underpinning sustainable competitive advantage in voice AI.

Balance sheet strength & margin path

A $248M cash balance and no debt, plus materially improved leverage, give a meaningful runway to invest in growth and execute margin expansion. Low financial risk reduces refinancing pressure and supports multi‑quarter initiatives to reach targeted higher gross and EBIT margins without immediate funding constraints.

Negative Factors

Negative operating and free cash flow

Deep negative operating and free cash flow in 2025 reflect persistent cash burn despite revenue growth. Continued reliance on external financing or dilutive capital raises funding and execution risk, constraining the firm's ability to self‑fund expansion and increasing sensitivity to slower growth or adverse contract timing.

Ongoing operating losses; non-linear path to breakeven

Although losses narrowed, the company remains operationally unprofitable and guided a non‑linear progression to breakeven. Sustained profitability depends on realizing scale economics and large contract conversions; failure to do so would perpetuate negative margins and limit durable earnings quality.

Expense inflation, stock comp and leadership transition

The CFO departure during an intense scale‑up introduces execution risk in financial planning and capital strategy. Coupled with steep S&M/G&A increases and high stock‑based comp (noted in Q4), this raises dilution and P&L volatility risks, making consistent margin improvement and forecasting more challenging.

SoundHound AI, Inc Class A Business Overview & Revenue Model

Company Description

SoundHound AI, Inc. develops independent voice artificial intelligence (AI) platform that enables businesses across industries to deliver high-quality conversational experiences to their customers. Its products include Houndify platform that offers a suite of Houndify tools to help brands build conversational voice assistants, such as automatic speech recognition, natural language understanding, wake words, custom domains, text-to-speech, and embedded voice solutions The company is headquartered in Santa Clara, California.

How the Company Makes Money

SoundHound AI primarily makes money by commercializing its voice AI technology through a mix of software licensing and service-based arrangements with enterprise customers. Key revenue streams include: (1) Licensing and royalties/usage-based fees for deploying its voice AI (including embedded/on-device and cloud-based implementations) in third-party products and services—commonly structured around per-unit, per-vehicle, per-device, per-location, or usage-driven economics depending on the customer deployment model. (2) Subscription and SaaS-style revenue for access to its developer platform and related software components used to build, customize, and maintain voice assistants and conversational experiences, typically billed as recurring fees and/or scaled by usage. (3) Professional services and implementation revenue tied to integrating SoundHound’s technology into customer environments, including customization, deployment support, and ongoing maintenance/optimization; this revenue is often project-based and can accompany longer-term licensing or subscription arrangements. (4) Advertising/monetization and related revenue from consumer-facing voice experiences (where applicable), which may include monetizing interactions through ads or commerce-related arrangements; if specific current contribution or structure is not publicly detailed in the company’s disclosures, the precise mix should be treated as null. Significant factors influencing earnings include the pace and scale of enterprise adoption (notably in automotive and restaurant voice ordering), contract structure (recurring vs. one-time services), usage volumes, and strategic partnerships and customer relationships that embed SoundHound voice capabilities into widely distributed platforms and devices.

SoundHound AI, Inc Class A Financial Statement Overview

Summary

Strong revenue expansion and improving gross margins, plus a materially healthier balance sheet with minimal leverage, are positives. However, persistent net losses and very large negative operating/free cash flow remain the primary constraint and imply ongoing funding/execution risk until profitability and cash conversion improve.

Income Statement

Revenue growth is strong over time, with revenue rising from $13.0M (2020) to $168.9M (2025), including a sharp acceleration in 2025 (+13.8). Gross margin remains healthy at ~42% in 2025, but profitability is still a key weakness: the company continues to post net losses (2025 net margin ~-8.3%), and EBITDA remains negative. The notable improvement from very large losses in 2024 to a much smaller loss in 2025 is a positive inflection, but earnings quality and consistency are not yet proven.

Balance Sheet

Leverage has improved dramatically versus earlier years, with very low debt relative to equity in 2025 (debt-to-equity ~0.01) and sizable equity ($463.8M) supporting a larger asset base ($688.2M). This is a meaningful stabilization compared with 2023’s highly levered profile (debt-to-equity ~3.20) and negative equity in 2020–2022. The main weakness is that returns remain negative (2025 return on equity ~-3.0%), reflecting ongoing losses despite a stronger capital structure.

Cash Flow

Cash generation remains the biggest pressure point: operating cash flow and free cash flow are deeply negative in 2025 (operating cash flow -$98.2M; free cash flow -$99.1M), following similarly negative results in prior years. While the operating cash burn improved modestly versus 2024, free cash flow still declined year over year (free cash flow growth -9.94). The company’s cash flow profile indicates continued reliance on external funding until operating losses and working-capital demands improve materially.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	168.92M	84.69M	45.87M	31.13M	21.20M
Gross Profit	71.55M	41.38M	34.57M	21.53M	14.61M
EBITDA	25.53M	-329.09M	-62.63M	-99.70M	-61.65M
Net Income	-14.01M	-350.68M	-88.94M	-116.71M	-79.54M
Balance Sheet
Total Assets	688.17M	553.95M	151.12M	37.99M	49.20M
Cash, Cash Equivalents and Short-Term Investments	248.49M	198.24M	95.26M	9.24M	21.63M
Total Debt	4.21M	4.35M	90.16M	44.12M	73.32M
Total Liabilities	224.39M	371.30M	122.95M	74.55M	392.44M
Stockholders Equity	463.79M	182.65M	28.17M	-36.56M	-343.24M
Cash Flow
Free Cash Flow	0.00	-109.52M	-68.66M	-95.35M	-66.81M
Operating Cash Flow	-98.22M	-108.88M	-68.27M	-94.02M	-66.18M
Investing Cash Flow	-59.50M	-12.37M	-392.00K	-1.33M	-636.00K
Financing Cash Flow	208.07M	210.91M	168.24M	82.00M	44.65M

SoundHound AI, Inc Class A Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.55
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOUN, the sentiment is Negative. The current price of 6.55 is below the 20-day moving average (MA) of 7.94, below the 50-day MA of 8.76, and below the 200-day MA of 12.14, indicating a bearish trend. The MACD of -0.46 indicates Positive momentum. The RSI at 31.05 is Neutral, neither overbought nor oversold. The STOCH value of 11.93 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SOUN.

SoundHound AI, Inc Class A Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SOUN	53 Neutral	$2.77B	-288.59	-3.46%	―	120.52%	-124.81%
CRNC	52 Neutral	$307.92M	―	0.22%	―	-24.05%	96.90%
BBAI	49 Neutral	$1.70B	-83.08	-69.72%	―	-6.95%	-53.69%
VERI	48 Neutral	$248.79M	-2.44	-367.59%	―	-17.50%	-51.25%
AI	47 Neutral	$1.19B	-2.86	-55.55%	―	1.84%	-27.74%
LPSN	44 Neutral	$30.01M	-0.25	132.32%	―	-23.03%	-107.34%

SoundHound AI, Inc Class A Corporate Events

SoundHound AI Announces CFO Transition and Interim Appointment

On March 18, 2026, SoundHound AI announced that Chief Financial Officer Nitesh Sharan will resign effective April 3, 2026, to take a leadership role at a quantum computing company, with the firm emphasizing his departure was for personal reasons and not due to any disagreement over operations or financial practices. Co-founder and current Chief Product Officer James Hom, who previously served as the company’s first CFO from 2005, will step in as interim CFO while an executive search firm assists in finding a permanent successor, a move aimed at ensuring continuity in financial leadership as SoundHound pursues further growth.

During his tenure, Sharan helped build out the finance team and supported an eight-fold increase in revenue, which management says has left SoundHound with a solid balance sheet and strong financial foundation heading into another planned year of robust expansion. Hom’s return to the finance role, combined with Sharan’s commitment to advise during the transition and remain a long-term shareholder, signals an effort to reassure investors and stakeholders that the leadership change will not derail the company’s strategic execution or its positioning as a leading player in the voice AI market.

The most recent analyst rating on (SOUN) stock is a Hold with a $7.50 price target. To see the full list of analyst forecasts on SoundHound AI, Inc Class A stock, see the SOUN Stock Forecast page.