tiprankstipranks
Trending News
More News >
SoundHound AI, Inc Class A (SOUN)
NASDAQ:SOUN
US Market
Advertisement

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

Compare
17,789 Followers

Top Page

SOUN

SoundHound AI, Inc Class A

(NASDAQ:SOUN)

Rating:61Neutral
Price Target:
$12.00
▲(0.33%Upside)
SoundHound AI is experiencing impressive revenue growth and strategic advancements, particularly in voice AI. However, significant profitability challenges and a high-risk valuation due to ongoing losses weigh on the score. Positive technical trends provide some support, but focus on improving margins and cash flow is crucial.
Positive Factors
Business Model Transition
The ongoing business model transition towards Subscription and Amelia/Core synergies could boost margins by over 10% in the next few years.
Market Expansion
The Amelia acquisition has launched SoundHound into the conversational A.I market, with a $30B serviceable addressable market by 2027.
Revenue Guidance
The company reaffirmed its previously issued revenue guidance for 2025, which should relieve some investor concern given an increasing level of macroeconomic uncertainty.
Negative Factors
Auto Industry Pressure
The macro-environment is likely putting pressure on auto sales, affecting production and sales projections for SoundHound's largest customers.
Customer Experience Challenges
There is limited traction for Amelia in the customer experience space, with the overall sector under incremental pressure and limited wins for standalone AI providers.
Execution Concerns
The setup for the second half of 2025 presents concerns that deals may get pushed into 2026, impacting near-term execution.

SoundHound AI, Inc Class A (SOUN) vs. SPDR S&P 500 ETF (SPY)

SoundHound AI, Inc Class A Business Overview & Revenue Model

Company DescriptionSoundHound 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 MoneySoundHound AI, Inc generates revenue through licensing its voice AI technology to enterprises across various industries, including automotive, consumer electronics, and telecommunications. The company offers customizable voice solutions that allow clients to enhance their user interfaces with voice-enabled functionalities. Additionally, SoundHound AI has established strategic partnerships with major corporations to expand its technology's reach and application. Revenue streams include licensing fees, subscription models for its software-as-a-service (SaaS) products, and potentially revenue sharing models with partners who integrate its voice technology into their products.

SoundHound AI, Inc Class A Key Performance Indicators (KPIs)

Any
Any
Revenue by Service Type
Revenue by Service Type
Breaks down revenue by different service offerings, indicating which services drive growth and where the company might expand or face competition.
Chart InsightsSoundHound's Service Subscriptions have surged dramatically, especially in late 2024, reflecting a strategic pivot towards SaaS-like revenue streams. This aligns with their earnings call, which highlighted a robust $1.2 billion backlog and strong growth in automotive and healthcare sectors. Despite a decline in Product Royalties and Monetization, the company's focus on expanding its voice commerce ecosystem and strategic partnerships suggests a promising outlook. However, challenges remain with declining gross margins and increased operating expenses, impacting profitability in the short term.
Data provided by:Main Street Data

SoundHound AI, Inc Class A Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: 22.79%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong revenue growth and successful strategic initiatives, particularly in voice AI and enterprise partnerships. However, challenges in the automotive sector and increased operating expenses have created some headwinds. Overall, the company is optimistic about future growth opportunities.
Q1-2025 Updates
Positive Updates
Record Revenue Growth
SoundHound reported over $29 million in revenue for Q1 2025, representing a 151% year-over-year increase, showcasing significant growth and strong financial performance.
Expansion of Polaris Model
The Polaris multimodal, multilingual foundation model has been integrated into the majority of SYNQ3's locations, leading to a 30% increase in locations and demonstrating successful product deployment and synergy realization.
Voice AI Advancements
SoundHound's voice AI technology has improved latency, sentence accuracy, and word error rate, outperforming competitors and enhancing the company's competitive edge in the market.
Strategic Acquisitions and Synergies
The acquisitions of SYNQ3, Allset, and Amelia have shown strong integration and growth, with Allset expanding the voice commerce ecosystem and Amelia launching a new agentic AI platform.
Growing Enterprise Partnerships
SoundHound has secured new deals and expansions with major companies across diverse sectors including automotive, healthcare, retail, and financial services, demonstrating broad market appeal and customer trust.
Negative Updates
Automotive Sector Challenges
SoundHound experienced pressure in auto units due to complex geopolitical dynamics, impacting revenue despite optimism about future opportunities in the sector.
Gross Margin Pressure
GAAP gross margin decreased to 37% year-over-year due to the impact of product mix and recent acquisitions, although non-GAAP gross margin was 51%.
Increased Operating Expenses
Operating expenses, including R&D and sales and marketing, increased significantly year-over-year, driven by acquisitions and investments in growth and innovation.
Company Guidance
During the SoundHound First Quarter 2025 Earnings Conference Call, the company reported a significant revenue increase of over 151% year-over-year, reaching $29.1 million. Key performance metrics highlighted include improved average latency per query, which is up to four times better, and sentence accuracy in noisy environments being around twice as good. The word error rate is reported to be 35% better, with nearly 30 languages in a mature state. The company has expanded its presence in the restaurant industry, with voice AI ordering solutions nearing 13,000 locations and handling approximately 10 million interactions per quarter. SoundHound's gross margin on a non-GAAP basis was 51%, and they reaffirmed their 2025 revenue guidance of $157 to $177 million. The company aims to achieve adjusted EBITDA profitability by the end of 2025, despite a current adjusted EBITDA loss of $22.2 million for Q1. The call also noted successful integrations and expansions with recent acquisitions like SYNQ3 and Amelia, contributing to the company's growth and strategic initiatives.

SoundHound AI, Inc Class A Financial Statement Overview

Summary
SoundHound AI, Inc. demonstrates strong revenue growth with a 20.67% increase, yet faces significant profitability challenges with negative margins. The balance sheet is stable, showing a strong equity position, but negative cash flow indicates reliance on external financing. Improving profitability and cash generation remains crucial.
Income Statement
60
Neutral
The company has shown consistent revenue growth, with a TTM revenue increase of 20.67% compared to the previous year. However, the company is struggling with negative profit margins, including a net profit margin of -184.33% and an EBIT margin of -184.93% for the TTM period. This reflects ongoing profitability challenges.
Balance Sheet
52
Neutral
The company's balance sheet shows a reasonable equity position with an equity ratio of 67.56%, providing some stability. However, the debt-to-equity ratio is low at 0.01, indicating limited leverage, which could be a double-edged sword in terms of growth potential. Return on equity is negative, reflecting poor profitability.
Cash Flow
58
Neutral
Operating cash flow is negative at -$106.12 million, indicating cash outflows from operations. Free cash flow is also negative, but financing activities have provided substantial inflows. The operating cash flow to net income ratio is 0.56, suggesting some efficiency in converting net income to cash, albeit negative.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue84.69M45.87M31.13M21.20M13.02M
Gross Profit41.38M34.57M21.53M14.61M7.15M
EBITDA-329.09M-65.14M-102.89M-61.65M-65.36M
Net Income-350.68M-88.94M-115.37M-79.54M-74.41M
Balance Sheet
Total Assets553.95M151.12M38.25M49.20M63.64M
Cash, Cash Equivalents and Short-Term Investments198.24M95.26M9.24M21.63M43.69M
Total Debt4.35M90.16M44.25M73.32M16.64M
Total Liabilities371.30M122.95M73.48M392.44M339.99M
Stockholders Equity182.65M28.17M-35.23M-343.24M-276.35M
Cash Flow
Free Cash Flow-109.52M-68.66M-95.35M-66.81M-48.47M
Operating Cash Flow-108.88M-68.27M-94.02M-66.18M-46.30M
Investing Cash Flow-12.37M-392.00K-1.33M-636.00K11.45M
Financing Cash Flow210.91M168.24M82.00M44.65M53.45M

SoundHound AI, Inc Class A Technical Analysis

Technical Analysis Sentiment
Positive
Last Price11.96
Price Trends
50DMA
10.66
Positive
100DMA
9.84
Positive
200DMA
10.68
Positive
Market Momentum
MACD
0.48
Positive
RSI
55.37
Neutral
STOCH
41.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOUN, the sentiment is Positive. The current price of 11.96 is above the 20-day moving average (MA) of 11.57, above the 50-day MA of 10.66, and above the 200-day MA of 10.68, indicating a bullish trend. The MACD of 0.48 indicates Positive momentum. The RSI at 55.37 is Neutral, neither overbought nor oversold. The STOCH value of 41.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SOUN.

SoundHound AI, Inc Class A Risk Analysis

SoundHound AI, Inc Class A disclosed 51 risk factors in its most recent earnings report. SoundHound AI, Inc Class A reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

SoundHound AI, Inc Class A Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
69
Neutral
$884.69M469.774.15%30.64%
68
Neutral
¥234.20B14.807.50%2.60%9.27%6.74%
62
Neutral
$3.76B-63.52%30.08%-196.62%
61
Neutral
$4.90B-68.22%101.39%-42.58%
58
Neutral
$221.91M-27.44%16.03%30.99%
56
Neutral
$205.11M-22.66%-25.43%-135.09%
49
Neutral
$867.65M-46.57%-2.39%-2961.26%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SOUN
SoundHound AI, Inc Class A
11.96
6.84
133.59%
GRND
Grindr
19.15
7.71
67.40%
FRGE
Forge Global Holdings
17.87
-5.83
-24.60%
SMRT
SmartRent
1.09
-1.39
-56.05%
DSP
Viant Technology
14.14
2.01
16.57%
BMBL
Bumble
8.57
-0.56
-6.13%

SoundHound AI, Inc Class A Corporate Events

Shareholder MeetingsRegulatory Filings and Compliance
SoundHound AI Approves Key Amendments at Annual Meeting
Neutral
May 30, 2025

On May 23, 2025, SoundHound AI, Inc. held its Annual Meeting of Stockholders where several key decisions were made. The stockholders re-elected directors, ratified the appointment of PricewaterhouseCoopers LLP as the independent auditor, and approved multiple amendments to the company’s Certificate of Incorporation, including an increase in authorized Class A shares and provisions for officer exculpation. These changes were formalized with the filing of a Certificate of Amendment on May 29, 2025.

The most recent analyst rating on (SOUN) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on SoundHound AI, Inc Class A stock, see the SOUN Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 23, 2025