SoundHound’s second quarter saw revenue climb sharply, driven by significant expansion across its automotive, enterprise, and restaurant AI businesses. Management attributed the strong results to its successful acquisition integration, which enabled cross-selling and improved product performance. CEO Keyvan Mohajer emphasized that migrating acquired companies onto SoundHound’s proprietary Polaris AI model reduced costs while boosting customer experience. Mohajer also pointed to an increase in user queries and strong channel partner contributions as key factors, stating, “We achieved significant growth in our automotive business, significant growth in AI customer service for enterprise, and significant growth in AI and automation for restaurants.”
Is now the time to buy SOUN? Find out in our full research report (it’s free).
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Revenue: $42.68 million vs analyst estimates of $32.54 million (217% year-on-year growth, 31.2% beat)
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Adjusted EPS: -$0.03 vs analyst estimates of -$0.05 ($0.02 beat)
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Adjusted Operating Income: -$78.05 million vs analyst estimates of -$37.86 million (-183% margin, significant miss)
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Operating Margin: -183%, down from -163% in the same quarter last year
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Billings: $38.13 million at quarter end, up 206% year on year
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Market Capitalization: $6.73 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
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Gil Barnum Luria (D.A. Davidson): Asked about the relative contribution of each business vertical to sequential growth. CEO Keyvan Mohajer highlighted broad momentum, with enterprise leading but all segments showing strength due to cross-vertical product integration.
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Scott Christian Buck (H.C. Wainwright and Company): Inquired about opportunities to optimize the sales process and pricing. Mohajer explained that internal AI adoption has improved engineering productivity, while sales process enhancements are ongoing but subject to regulatory considerations.
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Leo Federico Carpio (Joseph Gunnar): Questioned why guidance did not fully reflect the Q2 beat and whether acquisitions are included in the outlook. CFO Nitesh Sharan cited lumpiness in major deals and stated guidance is based on organic growth only.
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Thomas Blakey (Cantor): Sought clarity on the revenue opportunity from a major automotive OEM win in China and the impact of tariffs. Mohajer described multiple revenue streams from automotive deals, while noting indirect tariff effects on royalty-based revenue.
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Unidentified Analyst (Piper Sandler): Asked about the pace of customer wins in the quick-service restaurant vertical and competitive differentiation. Mohajer pointed to SoundHound’s unique Voice Commerce proposition and multi-channel capabilities as key differentiators.
Story Continues
Going forward, our analysts are monitoring (1) the commercial launch and scaling of Voice Commerce across automotive and restaurant platforms, (2) the migration rate of enterprise customers to Polaris and agentic AI solutions, and (3) the pace of new customer additions and upsell activity in healthcare and financial services. Execution on operational efficiencies and further channel partnership expansion will also be important measures of sustained growth.
SoundHound AI currently trades at $16.45, up from $10.75 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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