Key Takeaways
- SoundHound AI reports third-quarter results after the close on Thursday, two days after announcing a deal to bring restaurant ordering to about 20 million LG smart TVs in the US.
- Second-quarter revenue grew 45%, but the operating loss excluding earnout swings barely changed, so this report has to show the losses and cash burn shrinking in dollars.
- ServiceNow’s and Roku’s latest quarters show customers paying for AI agents and TV screens, while Stellantis’s shipments fell 1%.
- Management’s updated outlook, its first with LivePerson inside, should say whether it still expects at least $350 million of revenue in 2027.
SoundHound AI (SOUN) reports its third quarter after the close on Thursday, Nov. 5. Two days earlier, it announced a partnership with LG Electronics to bring restaurant ordering to about 20 million LG smart TVs in the US.
Three companies tied to SoundHound’s quarter have already reported. ServiceNow (NOW) sells AI agents into the same customer-service budgets. Roku (ROKU) already makes real money from TV screens. Stellantis (STLA) builds SoundHound’s voice assistant into its cars in Europe.
For SoundHound, the bar is higher than a revenue beat. Revenue has grown fast for years, but the losses haven’t shrunk along with it. Thursday’s report has to show they’re starting to.
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LG’s TVs are a long game
Restaurants come first on LG’s TVs, with retail and other merchants to follow. CEO and co-founder Keyvan Mohajer called the TV “the largest screen in the most social setting of every home, which makes it a highly untapped opportunity for commerce.”
Untapped is right. SoundHound first showed this TV commerce channel at CES 2025, and the announcement gave no financial terms. Its food ordering revenue sits inside service subscriptions. That line brought in $47.0 million of the second quarter’s $61.9 million in revenue, so the filings don’t yet show what commerce earns on its own.
Roku shows what a TV screen can earn. On Nov. 2 it reported third-quarter advertising revenue of $727 million, up 23% and its ninth straight quarter of double-digit growth. That money comes from advertisers paying for viewers’ attention, though. It will take several quarters to show whether restaurants will pay to take orders on LG’s TVs, and Thursday’s report is too early for that.
Revenue has been the easy part
SoundHound’s revenue nearly doubled in 2025, to $168.9 million, and second-quarter revenue rose 45%. Analysts expect it to keep climbing through 2028:
LivePerson, which SoundHound bought on Sept. 4, makes up much of the jump to $390 million in 2027. Management has said it expects 2027 revenue of at least $350 million to $400 million, with at least $100 million of it coming from LivePerson’s customers.
The car business had some sales volume behind it, too. Carmakers and device makers paid $34.9 million in product royalties in 2025, about a fifth of revenue. Stellantis has put SoundHound’s ChatGPT-powered assistant in Peugeot, Citroën and other European brands. Its third-quarter shipments fell 1% from a year earlier, but its shipments in Europe rose 10%. That’s a decent backdrop for royalties, though royalties are too small a share of revenue to make the quarter on their own.
The loss hasn’t shrunk yet
SoundHound’s operating margin improved from a year earlier in each of the last four quarters:
All of that improvement came from revenue growth, though. TIKR’s figures leave out the swings in SoundHound’s earnout liabilities. On those figures, the second-quarter operating loss was $47.0 million, against $46.7 million a year earlier, on 45% more revenue. The GAAP operating loss looks better, narrowing to $43.3 million from $78.1 million, but most of that gap came from a $31.4 million earnout charge a year earlier. Management points to adjusted EBITDA, which came in at a $9.6 million loss against $14.3 million a year earlier. That measure, however, adds back $20.6 million of stock pay.
Demand for AI agents doesn’t look like SoundHound’s problem. On Oct. 28, ServiceNow raised its year-end target for AI annual contract value to $1.7 billion, up from $1 billion at the start of the year. It also lifted its full-year free cash flow margin target to 36%. Enterprises are paying for agents at scale, and ServiceNow is turning that into cash. SoundHound has to show it can shrink its losses while selling into the same budgets.
The cash burn is the bigger worry
SoundHound’s free cash flow was negative in each of the last 12 quarters, and the latest quarter was the worst of them:
Part of that is one-off. About $26 million went to a business SoundHound bought in May for its customer contracts. Even before spending on equipment or deals, operating cash outflow widened to $33.7 million in the second quarter, from $24.5 million a year earlier.
SoundHound had $202.8 million of cash on June 30 and almost no debt. It has covered the losses by selling stock. Diluted shares rose from 157.3 million in 2022 to 405.4 million in 2025, and another 36.9 million went to LivePerson’s noteholders in September. In the second quarter, it sold 6.2 million shares for $48.5 million, using up an earlier share-sale program. It then set up a new $300 million program in May and hadn’t sold any stock under it as of June 30.
Smaller losses, in dollars
Four things on Thursday will show whether that’s starting:
- An operating loss smaller in dollars than a year earlier, even with LivePerson’s costs inside
- Operating cash outflow below the second quarter’s $33.7 million
- Little or no stock sold under the $300 million program
- An updated outlook that holds the 2027 floor of $350 million
The stock could easily trade on that outlook alone. But management sets the outlook with words, while the other three come straight from the financial statements.
Paying up for the growth makes more sense once the loss shrinks in dollars. Until it does, each new deal like LG’s comes with more burn and, most likely, more shares.
Of course, LivePerson will be in the numbers for less than four weeks. The first full quarter with it, reported early next year, will be the better test.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
