SOUN Posts In-Line Earnings, Strong Revenue Growth in Q4, Stock Up

SoundHound AI, Inc. SOUN reported fourth-quarter 2025 results, wherein earnings came in line with the Zacks Consensus Estimate, but revenues surpassed the same.

SoundHound AI is gaining momentum as businesses move away from traditional software and adopt AI-first solutions. This shift is creating favorable conditions for the company, reflected in stronger profitability metrics and a record number of customer deals in the latest quarter. Growing demand for enterprise-grade AI continues to support SoundHound’s expansion.

Following the results, the company’s shares increased 3.3% in after-hour trading session yesterday.

SOUN’s Revenues and Earnings

SoundHound posted fourth-quarter revenues of $55.1 million, up 59% year over year, outpacing the Zacks Consensus Estimate of $54 million. Growth was broad-based across Enterprise AI, Automotive, Restaurants and Financial Services.

The company reported a non-GAAP net loss of 2 cents per share, in line with the consensus estimate. In the prior-year quarter, the company reported an adjusted loss per share of 5 cents. GAAP net profit stood at $40.1 million, against a net loss of $258.6 million in the prior-year quarter.

Margins and Profitability of SoundHound

GAAP gross margin was 47.9% compared with 39.9% in the prior year, reflecting acquisition-related mix. Non-GAAP gross margin was 60.5% compared with 52.1% in the year-ago quarter. Margin growth is being driven by improved operating efficiency across the business. The company is modernizing its infrastructure, optimizing cloud spending and consolidating legacy systems to reduce costs. Shifting from third-party tools to internally built platforms is also enhancing scalability and cost control. In addition, pruning low-margin acquired contracts has improved the quality of revenues, supporting steady sequential gains in gross margins.

Adjusted EBITDA loss narrowed to $7.4 million from $16.8 million a year ago, underscoring effective cost controls amid scaling operations.

Business Highlights

SoundHound’s fourth-quarter highlights reflected broad-based momentum, led by automotive wins with new global OEMs, deeper partnerships with existing manufacturers and multi-year renewals from major U.S. automakers. The company also advanced voice commerce with initial large-scale rollouts, new vehicle brands and smart TV partners, and expanded use cases such as travel and ticket bookings.

Adoption continued to grow in restaurants through expanded drive-thru deployments and contract renewals, while retail, healthcare, financial services, insurance, telecom, hospitality and the public sector added new enterprise customers. Channel partnerships with telecoms and global services firms further strengthened SoundHound’s ability to scale its AI solutions across enterprises and SMBs worldwide.

SOUN’s Balance Sheet & Liquidity

SoundHound ended the quarter with $248 million in cash and equivalents and no long-term debt, providing ample capacity for strategic investments and integrations.

SoundHound’s Guidance & Outlook

Based on management’s comments on the earnings call, SoundHound’s guidance indicates confidence in sustained, high-growth execution while steadily moving toward profitability. For 2026, the company expects revenues of $225 million to $260 million, supported by a strong deal pipeline, expanding enterprise adoption and continued upsell of its Agentic AI platform across existing customers.

Management noted that revenues are likely to ramp through the year due to deal timing and seasonality, but this effect should ease as recurring revenue becomes a larger mix. SoundHound plans to keep investing in innovation, go-to-market expansion and channel partnerships, while maintaining cost discipline and improving operating leverage.

SOUN Stock’s Zacks Rank & Other Key Picks

SoundHound currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Genpact Limited G carries a Zacks Rank #2 (Buy) at present. It has a trailing four-quarter earnings surprise of 5.2% on average. Shares of G have declined 25% in the past year.

The Zacks Consensus Estimate for G’s 2026 sales and EPS indicates 7% and 9% growth, respectively, from the year-ago levels.

Accenture plc ACN currently carries a Zacks Rank of 2. It has a trailing four-quarter negative earnings surprise of 3.1%, on average. The stock has declined 41.9% in the past year.

The Zacks Consensus Estimate for ACN’s 2026 sales and EPS implies a rise of 6.1% and 7.3%, respectively, from the year-ago levels.

Vertiv Holdings Co VRT currently carries a Zacks Rank of 2. It has a trailing four-quarter earnings surprise of 11.8%, on average. 

The Zacks Consensus Estimate for VRT’s 2026 sales and EPS indicates 34% and 46.9% growth, respectively, from the year-ago levels.

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This article originally published on Zacks Investment Research (zacks.com).

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