SoundHound AI (SOUN) is set to report its second-quarter earnings on August 5. The company enters earnings with high expectations, even as the stock remains down about 35% year-to-date. A strong report could help revive investor sentiment, but a revenue beat alone may not be enough. Investors will be looking for solid guidance and further progress toward profitability.
Summer Sale - Claim 70% Off TipRanks
- Unlock powerful investing tools with TipRanks Premium to make smarter, more confident investment decisions
- Subscribe to TipRanks Smart Investor Newsletter, and discover new investing opportunities with data-backed stock picks
Guidance Could Decide the Stock’s Next Move
While the quarterly results are important, forward guidance may have a bigger impact on SOUN stock. Earlier this year, management projected full-year 2026 revenue between $225 million and $260 million. This marks an annual growth of 33% to 54%.
Bullish Trigger: Raising the lower end of the full-year revenue guidance would signal stronger-than-expected demand for SoundHound’s AI platform.
Bearish Trigger: If the company leaves its outlook unchanged or lowers its guidance because of slower customer adoption or delayed deals, the stock could come under pressure.
Notably, SoundHound AI relies heavily on a multi-year cumulative backlog of committed contracts across industries. As a result, investors will closely watch the company’s contract backlog and recurring revenue growth. Rising backlog and subscription revenue would show that customers are moving beyond trials. However, slower growth could raise concerns about customer adoption.
Revenue Growth and Profitability Remain Key Focus Areas
Wall Street expects SoundHound to report revenue of about $52.5 million, up 20% from the same quarter last year.
Strong revenue growth would show that demand for SoundHound’s conversational AI platform remains healthy. However, investors will want to see whether that growth is translating into improving profitability. Analysts expect the company to post a loss of $0.13 per share, improving from a $0.19 loss a year ago.
Is SOUN a Good Stock to Buy?
According to TipRanks, SOUN stock has received a Strong Buy consensus rating, with four Buys assigned in the last three months. The average SoundHound stock price target is $12.75, suggesting a potential upside of 95.85% from the current level.
