$SoundHound AI Inc(SOUN)$ is set to report its Q2 2025 financial results on Thursday, August 7, 2025, after the market closes. Following a year of significant volatility and a decline of over 40% year-to-date, investors are looking for signs of sustained growth and a path to profitability.
The company, a pure-play in voice artificial intelligence, is expected to see a substantial increase in revenue, but remains unprofitable.
Revenue: Analysts have a consensus revenue expectation of approximately $33.03 million for SoundHound AI's fiscal Q2 2025 earnings. This would represent a robust 145% increase compared to the same period last year. The market is looking for the company to demonstrate continued, strong top-line growth driven by the demand for its voice AI technology.
Earnings Per Share (EPS): The consensus for Earnings Per Share (EPS) is a loss of $0.06 per share. While this indicates the company is still in a growth phase and not yet profitable, it is an improvement over the loss of $0.11 per share from the previous year. Investors will be watching to see if the company can continue narrowing its losses and move closer to its goal of achieving adjusted EBITDA profitability by the end of 2025.
Summary of SoundHound AI (SOUN) Fiscal Q1 2025 Earnings
SoundHound AI reported a strong Q1 2025 with revenue of $29.1 million, a 151% increase year-over-year. This growth was driven by its expanding product offerings and market penetration, including recent acquisitions. The company also reported a narrower-than-expected adjusted net loss of $0.06 per share.
However, the stock experienced a decline after the report because the company's revenue of $29.1 million missed Wall Street's higher expectations. Additionally, GAAP gross margin decreased due to amortization of acquired intangible assets from the Amelia acquisition, highlighting the challenges of integrating new businesses.
Lesson Learned from Guidance
The key lesson from SoundHound's Q1 2025 guidance is that for a high-growth stock, top-line revenue beats are paramount. Despite reporting a significant year-over-year revenue increase and beating on the bottom line (EPS), the stock fell because the revenue figure missed analyst consensus.
This signals that in the eyes of the market, the narrative of explosive, high-growth potential is more important than short-term profitability metrics. The company reaffirmed its full-year 2025 revenue guidance of $157 million to $177 million and its goal of achieving positive adjusted EBITDA by the end of the year.
This suggests that management is confident in its ability to convert its substantial revenue backlog into realized income, but the market is demanding that these expectations are met—and ideally, exceeded—each quarter.
Key Metrics for Investors to Watch
The market has high expectations for SoundHound's revenue growth, but with the stock's recent underperformance, the focus will be on the details behind the numbers. Here are the key metrics to watch:
Revenue and Revenue Growth Rate: This is the most critical metric. Analysts expect revenue of approximately $33.03 million, a remarkable 145.4% year-over-year increase. A significant beat here would signal strong demand for its AI technology and could be a major catalyst for the stock. However, a miss, even a small one, could be a negative surprise given the high expectations.
Gross Margin: SoundHound's gross margin has been a point of concern due to recent acquisitions of low-margin businesses. Investors will be looking for signs of improvement, with management previously indicating a gradual increase throughout 2025. An expansion in gross margin would demonstrate the company's ability to monetize its core, high-margin AI platform and is a key indicator of long-term profitability.
Path to Profitability: While the company is not yet profitable, its guidance for the full year aims for adjusted EBITDA profitability by the end of 2025. Investors will scrutinize the Q2 report and management's commentary for progress towards this goal, with a particular focus on operating expenses and a narrowing of its net loss. The consensus for Q2 is a loss of $0.06 per share, an improvement from the prior year's loss.
Bookings and Backlog: SoundHound has a substantial revenue backlog, which stood at around $1.2 billion at the end of 2024. The conversion of this backlog into recognized revenue is crucial for sustained growth. Any update on the backlog and new customer bookings will be a major indicator of future performance and market penetration.
Full-Year Guidance: The company's reaffirmation or adjustment of its full-year 2025 revenue guidance of $157 million to $177 million will be a key signal of management's confidence. Any hints about 2026 growth, which is not yet priced in, could also be a significant catalyst.
SoundHound AI (SOUN) Price Target
Based on 8 analysts from Tiger Brokers offering 12 month price targets for SoundHound AI, Inc Class A in the last 3 months. The average price target is $11.81 with a high forecast of $18.00 and a low forecast of $8.00. The average price target represents a 5.75% change from the last price of $11.17.
Short-Term Trading Opportunities Post-Earnings
Trading SoundHound stock around earnings is high-risk due to its high volatility and speculative nature. The stock is down significantly this year, but with a massive revenue backlog, it holds a compelling long-term growth story.
Volatility is a Given: The options market implies a post-earnings price move of around +/- 11%. This is a notable decrease from historical volatility but still suggests a significant swing is expected. Traders should be prepared for a sharp move in either direction.
The "Beat-and-Raise" Scenario: Given the high expectations, a substantial beat on revenue coupled with an upbeat outlook and a clear path to improved gross margins and profitability would likely be a powerful catalyst for a short-term rally.
The "Disappointment" Scenario: A miss on revenue or a lack of improvement in gross margins and profitability could lead to a sharp sell-off. The market's high valuation of the stock is based on its growth potential, and any signs of a slowdown or execution issues would be punished.
The Long-Term View: For longer-term investors, the earnings call will provide valuable insight into the company's progress in key verticals like restaurants and automotive, as well as the success of its recent acquisitions. This information will be more valuable than the immediate price reaction.
Technical Analysis - Exponential Moving Average (EMA)
We are seeing SOUN making a daily uptrend which might be due to the AI demand effect from some of the bigger AI names, like $Palantir Technologies Inc.(PLTR)$. So as a pure-play voice AI, SOUN have its competitive advantage but investors expectation might be high and they are expecting SOUN to turn in a profitable quarter.
Though we are seeing a positive momentum and the bulls are in control, which is trying to make a daily uptrend continuation and expansion, we could see some volatility trading if any of the outlook guidance given might not be accepted well.
Given the stock's significant decline this year, a positive earnings report and guidance could provide a much-needed momentum shift. However, its high valuation relative to its current revenue base makes it particularly sensitive to any missteps.
Summary
SoundHound AI (SOUN) is scheduled to report its Q2 2025 earnings on August 7. Investors should closely monitor revenue growth, which analysts expect to be around $33 million, a significant year-over-year increase.
Key metrics to watch include progress on gross margin expansion and the company's path to profitability, with a focus on its guidance for the rest of the year. Any updates on its substantial $1.2 billion revenue backlog and new bookings will also be crucial.
The stock is expected to be highly volatile post-earnings, with a strong beat and positive outlook potentially leading to a rally, while any disappointment could trigger a sell-off.
Appreciate if you could share your thoughts in the comment section whether you think SOUN could turn in as strong positive earnings beat and maybe a near profitable quarter.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
Comments