SoundHound AI, Inc. (SOUN) Stock: Slip 3.01% Despite Record Q3 Revenue of $62.4 Million

TLDR

• SoundHound stock slides to $3.94 despite record third-quarter sales growth.
• SoundHound posts $62.4 million in Q3 revenue, up 48.5% from a year earlier.
• Quarterly net loss narrows to $46.4 million, but adjusted EBITDA loss grows.
• SoundHound signs an LG deal covering approximately 20 million US smart TVs.
• Company targets positive adjusted EBITDA in 2027 and $120M in cost savings.

SoundHound AI, Inc. faced renewed selling pressure despite reporting record third-quarter revenue and outlining its profitability targets. Shares initially traded at $4.19, down 3.01%, before a later price update showed $3.94, representing a 7.51% decline. Revenue increased 48.5% to $62.4 million, supported by expanding enterprise demand and new AI partnerships.

SoundHound AI, Inc., SOUN

The company released its third-quarter 2026 financial results on November 5, highlighting growth across several business segments. SoundHound also completed its LivePerson acquisition and introduced plans to improve operating efficiency through cost reductions. Teaker gross margins and higher adjusted operating losses highlighted the financial challenges accompanying its expansion.

SoundHound provides voice and conversational AI technology for automotive, healthcare, retail, telecommunications, and hospitality businesses. Its OASYS platform allows enterprises to automate customer interactions, handle transactions, and manage routine operations. The company continues integrating acquired technologies to expand its products and strengthen recurring revenue opportunities.

SoundHound AI Reports Record Q3 Revenue as Net Loss Narrows

SoundHound reported quarterly revenue of $62.4 million, compared with $42 million during the corresponding period last year. The increase reflected continued demand for conversational AI services across enterprise and consumer-facing markets. The company expanded existing relationships and secured additional contracts across several industries.

GAAP net loss narrowed to $46.4 million from $109.3 million in the previous year. The company reported a loss of $0.10 per share, compared with $0.27 previously. Adjusted EBITDA losses widened to $20.7 million from $14.5 million, reflecting continued operating expenses.

SoundHound’s GAAP gross margin declined to 34.1% from 42.6%, representing an 8.5-percentage-point contraction. Non-GAAP gross margin also fell to 50.3% from 59.3% during the same period. These changes accompanied the company’s growing operations and ongoing integration of acquired businesses.

SoundHound Expands AI Partnerships Following LivePerson Acquisition

SoundHound completed its LivePerson acquisition on September 4 and retired nearly all outstanding debt associated with the acquired business. The company subsequently contacted 90 major enterprise accounts representing more than $100 million in annual recurring revenue. Management reported contract renewals and additional business from customers across healthcare, telecommunications, and utility services.

The company also secured a seven-figure minimum-guarantee agreement with a leading Chinese automotive supplier. SoundHound partnered with LG to introduce voice commerce capabilities across approximately 20 million smart televisions in the United States. These agreements expand the company’s reach into connected devices, automotive systems, and digital shopping services.

SoundHound introduced OASYS Edge to support conversational AI directly on vehicles, televisions, and other connected devices. The company also expanded restaurant ordering services and secured additional enterprise customer care contracts. Resorts World Las Vegas expanded its digital concierge services to include an automated booking system.

SoundHound Targets Adjusted EBITDA Profitability in 2027

SoundHound expects annual revenue between $250 million and $260 million for 2026, reflecting continued business expansion. Management projects revenue between $350 million and $400 million during 2027. The company expects sustained positive adjusted EBITDA during the second half of 2027.

SoundHound identified approximately $120 million in annualized cost savings through operational changes and business integration. Management expects actions representing more than $80 million in savings to take effect before January 2027. The company plans to achieve the full annualized savings target during 2027.

At September 30, SoundHound held $207.6 million in cash and reported approximately $3.8 million in short-term debt. Operating activities consumed $96 million during the first nine months, compared with $76.3 million a year earlier. The company’s future results will depend on revenue growth, cost reductions, and progress toward its adjusted profitability target.

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