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SoundHound AI, Inc Class A (SOUN)
NASDAQ:SOUN
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SoundHound AI, Inc Class A
(NASDAQ:SOUN)
Rating:58Neutral
Price Target:
$10.00
▲(9.89%Upside)
Positive Factors
Financial Position
The company has managed its balance sheet with $198.2M of available cash and no debt.
Market Expansion
SoundHound is a direct play on the A.I revolution with its voice-A.I platform, allowing organizations to drive better experiences and efficiencies.
Revenue Growth
The company's restaurant business now exceeds 13,000 locations, representing significant annual recurring revenue.
Negative Factors
Financial Performance
Lower revenue, lower gross margin, and lower cash operating expense resulted in an adjusted EBITDA loss of $22.2M, versus an expected $19.0M loss.
Industry Competition
Competitors have more awareness, creating a challenge for SoundHound in driving profitability while needing to invest in sales and marketing.
Stock Performance
SOUN shares have come under pressure in recent days, down 29% year to date versus a 2.2% decline in the Russell 2000 Index.
SoundHound AI, Inc Class A (SOUN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.66B
Dividend YieldN/A
Average Volume (3M)33.03M
Price to Earnings (P/E)―
Beta (1Y)3.00
Revenue Growth101.39%
EPS Growth-42.58%
CountryUS
Employees842
SectorTechnology
Sector Strength84
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.31
Shares Outstanding369,198,940
10 Day Avg. Volume26,979,213
30 Day Avg. Volume33,032,537
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)-7.90
Price to Sales (P/S)0.00
P/FCF Ratio-2.92
Enterprise Value/Market Cap0.09
Enterprise Value/Revenue1.01
Enterprise Value/Gross Profit6.86
Enterprise Value/Ebitda-0.46
Forecast
1Y Price Target
$11.50Price Target Upside26.37% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
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
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.
Breaks down revenue by different service offerings, indicating which services drive growth and where the company might expand or face competition.
Data provided by:
Main Street Data
Main Street DataSoundHound AI, Inc Class A Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: -6.57%|
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. is exhibiting robust revenue growth, but faces challenges with negative profit margins and cash flows. The company has a solid equity base, but negative operating and free cash flows highlight a reliance on external financing. Improving profitability and cash generation remains crucial.Income Statement
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.60
Neutral
Balance Sheet
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.52
Neutral
Cash Flow
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.58
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 102.23M | 84.69M | 45.87M | 31.13M | 21.20M | 13.02M | Gross Profit |
| 45.68M | 41.38M | 34.57M | 21.53M | 14.61M | 7.15M | EBIT |
| -189.09M | -341.35M | -68.61M | -105.41M | -65.33M | -66.00M | EBITDA |
| -176.86M | -329.09M | -65.14M | -102.89M | -61.65M | -65.36M | Net Income Common Stockholders |
| -188.44M | -350.68M | -88.94M | -115.37M | -79.54M | -74.41M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 245.81M | 198.24M | 95.26M | 9.24M | 21.63M | 43.69M | Total Assets |
| 587.54M | 553.95M | 151.12M | 38.25M | 49.20M | 63.64M | Total Debt |
| 4.63M | 4.35M | 90.16M | 44.25M | 73.32M | 16.64M | Net Debt |
| -241.18M | -193.89M | -5.10M | 35.01M | 51.69M | -27.05M | Total Liabilities |
| 190.54M | 371.30M | 122.95M | 73.48M | 392.44M | 339.99M | Stockholders Equity |
| 396.99M | 182.65M | 28.17M | -35.23M | -343.24M | -276.35M |
| Cash Flow | Free Cash Flow | ||||
| -106.82M | -109.52M | -68.66M | -95.35M | -66.81M | -48.47M | Operating Cash Flow |
| -106.11M | -108.88M | -68.27M | -94.02M | -66.18M | -46.30M | Investing Cash Flow |
| -8.75M | -12.37M | -392.00K | -1.33M | -636.00K | 11.45M | Financing Cash Flow |
| 135.22M | 210.91M | 168.24M | 82.00M | 44.65M | 53.45M |
SoundHound AI, Inc Class A Technical Analysis
Neutral
9.10
Price Trends
9.42
Positive
10.36
Negative
9.85
Negative
Market Momentum
-0.07
Positive
48.86
Neutral
23.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOUN, the sentiment is Neutral. The current price of 9.1 is below the 20-day moving average (MA) of 9.95, below the 50-day MA of 9.42, and below the 200-day MA of 9.85, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 48.86 is Neutral, neither overbought nor oversold. The STOCH value of 23.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $4.51B | ― | -63.52% | ― | 30.08% | -196.62% | |
65 Neutral | $790.22M | 419.60 | 4.15% | ― | 30.64% | ― | |
62 Neutral | $11.97B | 10.29 | -7.47% | 2.99% | 7.32% | -8.06% | |
60 Neutral | $197.25M | ― | -27.44% | ― | 16.03% | 30.99% | |
58 Neutral | $3.66B | ― | -68.22% | ― | 101.39% | -42.58% | |
56 Neutral | $541.25M | ― | -46.57% | ― | -2.39% | -2961.26% | |
56 Neutral | $166.46M | ― | -22.66% | ― | -25.43% | -135.09% |
* Technology Sector Average
Performance Comparison
SOUN
SoundHound AI, Inc Class A
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5.43
126.57%
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23.46
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FRGE
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SMRT
SmartRent
0.89
-1.52
-63.07%
DSP
Viant Technology
13.03
3.61
38.32%
BMBL
Bumble
5.24
-5.38
-50.66%
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.