SoundHound to Post Q3 Earnings: Buy, Sell or Hold the Stock?

Core Insights - SoundHound AI (SOUN) is set to report its third-quarter 2025 results on November 6, showcasing strong revenue momentum driven by conversational and agentic AI in various markets [1][13]. Financial Performance - In the last reported quarter, SoundHound achieved revenues of $42.7 million, marking a 217% year-over-year increase and surpassing estimates by 29.3% [2]. - The company reported a non-GAAP net loss per share of 3 cents, exceeding the Zacks Consensus Estimate by 50% [2]. - For 2025, SoundHound raised its revenue guidance to $160–$178 million, anticipating adjusted EBITDA profitability by year-end [2][21]. Market Dynamics - SoundHound's query volume exceeded 1 billion per month, with active restaurant locations surpassing 14,000, indicating strong market penetration [2][14]. - The company is experiencing broad-based growth across its three strategic pillars: Enterprise AI, Restaurants, and Automotive, with agentic AI and Voice Commerce serving as key growth drivers [2][19]. Competitive Landscape - SoundHound faces significant competition from major players like Alphabet and Amazon, but differentiates itself with its proprietary Polaris speech foundation model [23][26]. - Despite the competitive pressures, SoundHound's strong pipeline and early leadership in voice commerce enhance its market position [26]. Valuation and Stock Performance - SOUN shares have increased by 53.4% during the July-September period, outperforming the broader tech sector [22]. - The stock is currently considered overvalued, trading at a forward 12-month price-to-sales (P/S) ratio of 33.8, compared to the industry average of 16.97 [27]. Future Outlook - Management expects continued revenue growth driven by the expansion of restaurant automation and enterprise AI deployments [14][15]. - The company maintains a robust balance sheet with $230 million in cash and no debt, supporting ongoing investments in innovation and commercialization [21][30].