SoundHound Q3 Earnings Beat as AI Momentum Drives 68% Sales Growth

Core Insights - SoundHound AI, Inc. (SOUN) achieved a record third quarter in 2025, exceeding Zacks Consensus Estimates for both revenue and earnings, driven by enterprise adoption and strategic acquisitions [1][9] Revenue and Earnings - SOUN reported third-quarter revenues of $42 million, reflecting a 68% year-over-year increase and surpassing the Zacks Consensus Estimate of $40 million, with growth across Enterprise AI, Automotive, Restaurants, and Financial Services [2][9] - The company recorded a non-GAAP net loss of 3 cents per share, which was better than the consensus estimate of a 4-cent loss and the previous year's loss of 4 cents per share. The GAAP net loss was $109.3 million, influenced by a $66 million non-cash mark-to-market charge related to contingent acquisition liabilities [3] Margins and Profitability - GAAP gross margin was 42.6%, down from 48.6% in the prior year, due to acquisition-related mix. Non-GAAP gross margin remained stable at 59.3%, supported by improved product mix and operating leverage. Adjusted EBITDA loss narrowed to $14.5 million from $15.9 million year-over-year, indicating effective cost controls [4] Business Highlights - The quarter saw significant advancements across strategic verticals, including new go-lives on the Amelia 7.3 platform in Enterprise AI, automotive program expansions in Europe and India, and increased Restaurant AI deployments. The launch of Vision AI and the acquisition of Interactions further strengthened SOUN's position in Agentic AI [5] Balance Sheet & Liquidity - At the end of the quarter, SOUN had $269 million in cash and equivalents with no long-term debt, providing a strong foundation for strategic investments and integrations [6] Guidance & Outlook - Management raised its 2025 revenue guidance to $165–$180 million from the previous $160-$178 million, citing increased demand in enterprise and automotive markets. The company aims for adjusted EBITDA profitability by the end of 2025, supported by scaling deployments and cloud optimizations [7]