SoundHound AI's Q4 2025 Earnings Call: Amelia Migration Delays and M&A Guidance Flip Clash with Prior Statements

Date of Call: Feb 26, 2026

Financials Results

• Revenue: $55.1M in Q4, up 59% YOY; $169M for full year, up 99% YOY
• EPS: GAAP: $0.10 per share, positively impacted by $85M nonoperating/noncash expense. Non-GAAP: loss of $0.02 per share
• Gross Margin: GAAP: 48%; Non-GAAP: 61%, up YOY

Guidance:

• Revenue for 2026 expected to be $225M to $260M, representing strong growth.
• Expect continued year-over-year improvement in EBITDA and operating leverage.
• Long-term target: operate at scale with >70% gross margins and >30% EBIT margins.
• Customer base is expected to remain diverse with no single customer >10% of revenue.

Business Commentary:

Record Revenue Growth:

• SoundHound reported record revenue of $169 million for the full year 2025, up 99% versus the prior year.
• The growth was driven by strong demand across multiple verticals, particularly in automotive, enterprise AI, and voice commerce.

Automotive Industry Expansion:

• The company signed over 100 customer deals in Q4, including notable automotive OEMs in Japan, Korea, Italy, and China.
• This expansion was fueled by SoundHound's comprehensive solutions and the adoption of AI capabilities in automotive, creating a flywheel effect with voice commerce.

Enterprise AI Adoption:

• SoundHound's enterprise AI business saw strong growth, with significant deals in healthcare, financial services, and insurance.
• The adoption was driven by the need for customer service automation and the ability of SoundHound's AI platform to deliver measurable economic benefits.

Voice Commerce Momentum:

• The company's voice commerce solutions saw increased momentum, with expansions in restaurant and retail sectors.
• This growth was supported by strong penetrations in key markets and partnerships with leading smart TV and pizza restaurant chains.

Profitability and Efficiency Improvements:

• Q4 GAAP gross margin was 48% and non-GAAP gross margin was 61%, showing sequential improvements.
• Efforts to modernize infrastructure, optimize cloud spend, and focus on profitable contracts contributed to these improvements.

Sentiment Analysis:

Overall Tone: Positive

• CEO stated '2025 was a record year' and 'Q4 was our strongest quarter.' CFO highlighted 'strong momentum' and 'record performance.' Management expressed confidence in growth, market position, and profitability transition, noting they are 'in the very early innings of massive transformational shift.'

Q&A:

• Question from Scott Buck (H.C. Wainwright & Company): How are you handling deployment and customer service capacity? Are you constrained?
  Response: No constraints; advances in AI allow faster deployment with fewer resources, and demand is increasing while resource requirements are decreasing.

• Question from Scott Buck (H.C. Wainwright & Company): Any changes in pricing or upselling during renewals?
  Response: Renewals often involve upselling to the Agentic solution, which may include price increases and larger volume commitments, and higher containment rates generate incremental revenue.

• Question from Brian Schwartz (Oppenheimer): How do you see the durability of the enterprise AI business as larger LLM providers advance?
  Response: Sees tailwinds: AI disruption forces companies to automate (benefiting SoundHound), and advances make SoundHound's delivery faster/cheaper, similar to how broadband improved internet services.

• Question from Brian Schwartz (Oppenheimer): How are you planning the efficiency progression and investment profile for 2026?
  Response: Focus on fueling hypergrowth while being mindful of profit; expect year-over-year EBITDA improvements and operational efficiencies across R&D, sales/marketing, and G&A, moving toward a breakeven zone.

• Question from Unknown Analyst (D.A. Davidson): Why was there prominent success in the automotive vertical this quarter?
  Response: Success due to best-in-class solutions, strong partner relationships, and the monetizable voice commerce flywheel connecting Pillar 1 (cars/TVs) with Pillar 2 (merchant service).

• Question from Unknown Analyst (D.A. Davidson): What are top investment priorities and M&A strategy update?
  Response: Top investments: Agentic platform for better containment/migration and voice commerce. M&A remains disciplined, focused on partnerships that expand customer relationships and landing points in relevant industries.

• Question from Vijay Devar (Northland Capital Markets): How many Amelia customers are live on Agentic AI version 7.3 and likely to go live this year?
  Response: On a pathway to migrate over 75% of customers by mid-year 2026, with incremental progress each quarter and early traction from new platform.

• Question from Vijay Devar (Northland Capital Markets): Does migrating to Agentic AI version 7.3 bring incremental revenue?
  Response: Yes, due to higher containment rates (e.g., 30% to 90%) and sometimes explicit price increases for the upgrade, leading to more interactions captured and higher payments.

• Question from James Fish (Piper Sandler): How is Amelia winning new customers vs. contact center pure plays and AI solutions?
  Response: Wins due to deep industry experience, proprietary models that outperform big tech, and an economic model tied to customer outcomes (e.g., bookings, orders), versus legacy seat-based pricing models and new 'LEGO' players without integrated tech.

• Question from James Fish (Piper Sandler): Is further M&A included in the annual guide? How are you handling stock-based comp and dilution?
  Response: Guidance does not include future M&A; outlook is based on existing business. On stock comp: proud of equitizing all employees, mindful of dilution and cost structure, and will remain competitive while scaling.

Contradiction Point 1

Customer Migration Timeline for Amelia 7

The target migration date shifts from mid-2026 to an unspecified future date.

Vijay Devar (Northland Capital Markets, on for Mike Latimore) - Vijay Devar (Northland Capital Markets, on for Mike Latimore)

20260227-2025 Q4: The migration pathway aims to get over 75% of customers migrated by mid-2026, with progress accelerating each quarter. - Nitesh Sharan(CFO)

How many Amelia customers are currently live on Agentic AI version 7.3, how many are expected to go live this year, and does migrating to version 7.3 generate incremental revenue? - Unknown Analyst (Northland Capital Markets, on for Mike Latimore)

20251107-2025 Q3: The target is for about 75% of customers to migrate to Amelia 7 by mid-2026, with all new customers starting on that platform. - Nitesh Sharan(CFO)

Contradiction Point 2

M&A Guidance Inclusion

The stance on including potential M&A in financial guidance changes from being open to a material deal to explicitly excluding any future M&A from guidance.

James Fish (Piper Sandler) - James Fish (Piper Sandler)

20260227-2025 Q4: The 2026 guidance does not contemplate future M&A. The company takes inbound M&A opportunities seriously but will only update guidance if a deal is material and closes. - Nitesh Sharan(CFO)

How is Amelia effectively winning new customers versus contact center pure-plays, CRM offerings, and other standalone AI solutions, and is further M&A included in the 2026 guidance, with how you're handling stock-based compensation and dilution? - Gil Luria (D.A. Davidson)

20251107-2025 Q3: The acquisition... aligns with a pattern of integrating companies with strong customer relationships and legacy technology that SoundHound can innovate upon. - Nitesh Sharan(CFO) / implied openness to future strategic acquisitions that contribute to growth outlook.

Contradiction Point 3

Voice Commerce Revenue Timeline

Inconsistent timeline for when Voice Commerce will generate meaningful revenue.

Vijay Devar (Northland Capital Markets, on for Mike Latimore) - Vijay Devar (Northland Capital Markets, on for Mike Latimore)

20260227-2025 Q4: The migration pathway aims to get over 75% of customers migrated by mid-2026, with progress accelerating each quarter. - Nitesh Sharan(CFO)

How many Amelia customers are currently live on Agentic AI version 7.3, how many are expected to go live this year, and does migrating to version 7.3 generate incremental revenue? - Thomas Blakey (Cantor Fitzgerald)

2025Q2: Will not report meaningful revenue until it goes live at scale. This is expected to happen 'very soon.' - Keyvan Mohajer(CEO)

Contradiction Point 4

Characterization of Growth and Market Saturation

Contradiction on whether market penetration is low or if there is significant remaining wallet share.

Brian Schwartz (Oppenheimer) - Brian Schwartz (Oppenheimer)

20260227-2025 Q4: The company is in the early innings of a massive transformation, focusing on hyper-growth. - Keyvan Mohajer(CEO)

How do you ensure the durability of the enterprise AI business against large LLM providers bypassing software companies, and what are your plans for business efficiency and investment in 2026? - Scott Christian Buck (H.C. Wainwright & Co.)

2025Q2: Believes penetration is still very low across all verticals. Sees a significant runway... - Nitesh Sharan(CFO)

Contradiction Point 5

Company Capacity and Resource Constraints

Contradiction on whether AI advancements alleviate or increase resource needs.

Scott Buck (H.C. Wainwright & Company) - Scott Buck (H.C. Wainwright & Company)

20260227-2025 Q4: Advances in AI allow for faster deployment and development with fewer resources. Demand is increasing, but the resource requirement to deliver is actually decreasing. - Keyvan Mohajer(CEO)

Are you feeling constrained from a customer service and deployment capacity standpoint due to new deals and deployments, and can you discuss any pricing or upselling changes seen during customer renewals? - Vijay Devar (Northland Capital Markets, for Mike Latimore)

2025Q1: Investment has been made in customer success to understand and enhance performance. - Nitesh Sharan(CFO)