Key Takeaways
- SoundHound posted record Q2 revenue of $61.9 million, up 45%, and raised its 2026 outlook to $230 million to $260 million before closing LivePerson.
- Shares closed under $5 on October 21, down 56.5% this year and just above their 52-week low.
- First-half operating cash burn rose to $60 million, and 36.9 million LivePerson-related shares are registered for resale.
- The November 5 Q3 report should show LivePerson’s early contribution and whether cash burn is starting to narrow.
SoundHound AI (SOUN) keeps posting the kind of growth most small-cap AI names only promise. The market keeps shrugging anyway.
Shares closed under $5 on October 21, down 56.5% this year and pennies above their 52-week low. They traded as high as $19 in the past 12 months.
That slide followed a quarter that beat on almost every line. So what is the market pricing that the income statement hasn’t shown yet?
My guess: burn, dilution, and an acquisition that changes what kind of company this is.
A record quarter, then a bigger company
Q2 revenue rose 45% to $61.9 million, well ahead of the $52.4 million consensus. Management tied the growth to large enterprise deals running on OASYS, its agentic AI platform.
- GAAP gross margin rose 610 basis points to 45.1%, and non-GAAP gross margin hit 58.4%.
- Adjusted EBITDA loss narrowed 33% to $9.6 million.
- GAAP net loss came in at $42.8 million.
Management then lifted 2026 revenue guidance to $230 million to $260 million, raising the low end by $5 million. That range excluded LivePerson, which closed in September alongside the arrival of new CFO John Collins.
Revenue has compounded quickly since the 2022 listing…
Q2 sales were 10 times the level of SoundHound’s first public quarter. CEO Keyvan Mohajer said in the Q2 release that OASYS positions the company to “lead in the new era of enterprise automation.”
OASYS has to carry LivePerson
LivePerson adds messaging infrastructure and 25 Fortune 100 brands. Management sees more than $500 million of future revenue potential from cross-selling and deeper adoption across voice, web, mobile, SMS and social channels.
The new demos show the range. At Money20/20, SoundHound ran OASYS banking agents through lost-card replacement, bill pay, mortgage applications and disputed charges, with human handoff when needed.
Autos remain the older engine. Kia (000270.KS) just launched a Sorento voice assistant in India built on SoundHound’s real-time generative AI, and OASYS Edge pushes agents directly onto vehicles and devices.
Gross margin shows whether this mix is maturing.
Software-heavy deals lifted GAAP gross margin into the mid-40s. LivePerson’s mix could push that figure either way, and management hasn’t said which.
TIKR tracks 8 analysts on SoundHound AI. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on SoundHound AI, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See SoundHound AI’s Analyst Ratings
The burn behind the beat
Cash is the harder part. First-half operating cash outflow widened to $60 million from $43.7 million a year earlier. SoundHound held $203 million of cash and no debt at June 30, before the deal closed.
Dilution adds weight. A September filing registered up to 36.9 million shares for resale by holders who received stock in the LivePerson acquisition.
The valuation shows how little faith remains. SoundHound trades at 5.0x forward EV/sales, while Navitas Semiconductor (NVTS), another small-cap AI story with far less revenue, trades at 29.9x.
Has the market given up on the multiple?
SoundHound now sits at a steep discount to its AI peers. The $13 average analyst target is nearly triple the share price.
My take: The growth is real, and the margin trend is encouraging. Still, a raised guide that predates a transformational merger tells me little about 2027. At 5.0x sales, SoundHound needs to prove LivePerson revenue holds and losses shrink as the base grows before the multiple can recover.
SoundHound reports Q3 on November 5. Watch for a combined outlook, LivePerson retention data and whether quarterly cash burn finally tightens.
So what is SoundHound AI stock actually worth?
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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 stocks mentioned. Thank you for reading, and happy investing!
