SoundHound AI's Q3 2025 Earnings Call: Contradictions Emerge on Interactions Acquisition Impact, Recurring Revenue Shifts, Agentic AI Maturity, Pricing Pressures, and Voice Commerce Rollout

Date of Call: November 6, 2025

Financials Results

• Revenue: $42.0M, up 68% year-over-year
• EPS: GAAP net loss per share $0.27 (GAAP net loss $109.3M, impacted by ~ $66M noncash contingent liability); non-GAAP net loss per share $0.03 (non-GAAP net loss $13M); adjusted EBITDA loss $14.5M
• Gross Margin: GAAP gross margin 43% and non-GAAP gross margin 59%, both up from the prior quarter (non-GAAP adjusted for noncash amortization of purchased intangibles and stock compensation)

Guidance:

• Full-year 2025 revenue expected to be $165 million to $180 million.
• Q4: adjusted EBITDA profitable at the higher end of the revenue range; single-digit millions loss at the lower end.
• Expect roughly $20 million of annual acquisition cost synergies to be realized more fully in 2026.
• Early 2026 outlook: continue high growth with near-breakeven profitability as investments persist.

Business Commentary:

* Revenue Growth and Record Year: - SoundHound AI reported a record year in revenue of $114 million for the first three quarters of 2025, up 127% year-on-year. - This growth was driven by precise execution against business plans and a booming demand for its enterprise AI solutions across diverse industries.

• Innovation and Market Leadership:
• SoundHound AI has continued to leverage its 20 years of innovation to maintain a leading position in voice and conversational AI, with significant advancements like Polaris and Amelia 7.

• The company's ability to go from proof-of-concept to production faster than competitors has given it a competitive edge in the market.

• 
  Strategic Acquisitions and Integration:

• The acquisition of Interactions is expected to add capabilities to SoundHound's enterprise agentic solutions, enhancing workflow optimization and customer service capabilities.

• Previous acquisitions have been successfully integrated, turning them into leaders within their respective fields, indicating a strong strategy and execution in leveraging acquisitions for growth.

• Expansion into New Markets and Industries:

• SoundHound AI has signed a deal with a Chinese robotics company for AI-enabled smart devices, indicating expansion into new markets and product areas.
• The company has also secured partnerships in various industries such as financial services and health care, underscoring its ability to penetrate diverse markets effectively.

Sentiment Analysis:

Overall Tone: Positive

• "we have already achieved a record year in revenue of $114 million, up 127%, and we are raising our outlook"; management reiterated "we now expect revenue to be in the range of $165 million to $180 million" and expects a "breakeven profitability profile" as scale and synergies materialize.

Q&A:

• Question from Gil Luria (D.A. Davidson & Co., Research Division): Is the 8-figure Chinese robotics deal a humanoid robot, and over what timeframe is the 'double-digit millions' commitment?
  Response: It's a robotics device (not a humanoid); the customer committed double-digit millions over the next 2–3 years.

• Question from Gil Luria (D.A. Davidson & Co., Research Division): Which verticals will the Interactions acquisition specifically impact and what financial impact do you expect for the balance of the year and next year?
  Response: Interactions complements enterprise verticals (automotive, tech services, retail, financial services, healthcare) and is included in outlook—management expects it to nudge next year's expectations higher via growth and synergies.

• Question from Caden Dahl (Piper Sandler & Co., Research Division): What percentage of Amelia revenue is term license versus SaaS today, and were there any onetime revenues this quarter?
  Response: Amelia is increasingly recurring/SaaS with more outcome-based pricing; onetime license deals were much smaller this quarter.

• Question from Vijay Devar (for Mike Latimore, Northland Capital Markets): How many customers have committed to upgrading to Amelia 7 (it was ~15 last quarter)?
  Response: The initial ~15 cohort has expanded significantly; management targets roughly 75% of customers migrated to Amelia 7 by mid next year, with all new customers onboarding it.

• Question from Vijay Devar (for Mike Latimore, Northland Capital Markets): What percent of your revenue is recurring presently?
  Response: The vast majority is recurring (SaaS-like and reoccurring automotive royalties/licenses), with some one-time edge/license recognitions in specific deployments.

• Question from Scott Buck (H.C. Wainwright & Co, LLC, Research Division): Do you have enough capacity across the listed verticals to continue growing, and how are you prioritizing where to focus?
  Response: SoundHound is a horizontal conversational/voice platform that prioritizes core strengths, uses partners for ecosystem integrations, and focuses limited resources where its differentiation and partnerships drive the most scale.

• Question from Scott Buck (H.C. Wainwright & Co, LLC, Research Division): For the Voice Commerce launch in 2026, who handles marketing and what will the rollout look like?
  Response: SoundHound built the end-to-end integration and leads technical work; OEMs control launch timing—several OEMs are ready and management expects production go-lives around CES/early 2026.

• Question from Leo Carpio (Joseph Gunnar & Co., LLC, Research Division): What's the competitive environment like (including large LLMs) and are you facing pricing pressure on contracts?
  Response: Management states their 20 years of proprietary IP and in-house models deliver superior accuracy, latency and cost versus API-based rivals (creating a moat); pricing dynamics vary by sector, but innovation enables ASP expansion where clear customer value is delivered.

Contradiction Point 1

Revenue Growth and Financial Impact of Interactions Acquisition

It reflects differing perspectives on the financial impact and strategic importance of the Interactions acquisition, which is crucial for understanding the company's growth trajectory.

Which verticals will Interactions impact, and what is the financial impact for the remainder of the year? - Gil Luria(D.A. Davidson & Co.)

2025Q3: Interactions' strengths align well with existing verticals like automotive and tech services, as well as retail. The acquisition complements the enterprise portfolio, particularly financial services and health care. Financial impact is incorporated into the outlook, with a slight upward revision for next year. - Nitesh Sharan(CFO)

Does your 2025 guidance account for seasonality or conservatism? Are acquisitions included in this guidance? - Leo Federico Carpio (Joseph Gunnar & Co.)

2025Q2: There is some lumpiness in major deals affecting quarterly results. We're cautious in planning and expect growth to accelerate in the coming years. Our guidance does not include potential future acquisitions, only accounting for what's currently in-house. - Nitesh Sharan(CFO)

Contradiction Point 2

Recurring Revenue and Revenue Model Evolution

It involves changes in the company's revenue model and the proportion of recurring revenue, which are critical for understanding the stability and predictability of the company's financial performance.

What percentage of revenue is recurring? - Vijay Devar (Northland Capital Markets)

2025Q3: The majority of revenue is recurring, with different models including automotive royalty-based revenue and SaaS for Amelia. More revenue is based on customer outcomes, reflecting the value delivered. - Nitesh Sharan(CFO)

How should we model 3Q vs. 4Q revenue? - Mike Latimore (Northland Capital Markets)

2025Q2: Revenue was $50.7 million, down 18% year-over-year. We saw strength in Pillar 1, but there was weaker than expected performance in Pillar 2 and 3, primarily due to lower-than-expected revenue in the restaurant segment. - Nitesh Sharan(CFO)

Contradiction Point 3

Agentic AI Maturity

It involves the maturity and market readiness of Agentic AI, which is crucial for understanding the company's product development lifecycle and market positioning.

What is the rollout for Voice Commerce in 2026? - Scott Buck (H.C. Wainwright & Co.)

2025Q3: Agentic AI has been a focus for over 10 years. We've innovated and refined our solutions. We have a mature technology with advanced features like accuracy and speed. - Keyvan Mohajer(CEO)

Are the solutions mature, and are you experimenting or deploying? - Gil Luria (D.A. Davidson)

2025Q1: Agentic AI is not really a new IP that we've developed here over the last year. We've been working on it for the last 10 years, and we have invested over $100 million in over 60 patents. - Keyvan Mohajer(CEO)

Contradiction Point 4

Pricing Pressure and Market Competition

It involves the company's perception of pricing pressure and competitive landscape, which are crucial for understanding the company's market position and strategic positioning.

What is the competitive landscape for enterprise AI, and are there pricing pressures? - Leo Carpio (Joseph Gunnar)

2025Q3: There has been some pricing pressure in our flagship product, but we expect that to normalize. Pricing of our flagship product has been up slightly quarter-over-quarter for the last 3 quarters. - Keyvan Mohajer(CEO)

Are there shifts in competition, pricing pressures, or aggressive competitors? - Leo Carpio (Joseph Gunnar)

2025Q1: There is pricing pressure. We've seen some of our competitors really try to price, and we respond to that with better technology and a better customer base. - Keyvan Mohajer(CEO)

Contradiction Point 5

Voice Commerce Rollout

It pertains to the rollout of a key product feature, Voice Commerce, which affects the company's growth strategy and market momentum.

What is the 2026 rollout plan for Voice Commerce? - Scott Buck (H.C. Wainwright & Co.)

2025Q3: Voice Commerce is already showcased and in advanced stages with OEMs and merchants. Some are eager to be the first to market, with a promising CES presence and potential announcements. - Keyvan Mohajer(CEO)

Does the breakthrough in AI model efficiency enable on-device intelligence for restaurant drive-thru operations, improving performance and reducing latency? - Gil Luria (D.A. Davidson)

2024Q4: Voice Commerce continues to be a significant area of opportunity for us. - Keyvan Mohajer(CEO)