SoundHound AI Stock Analysis: Buy Now or Steer Clear?

SoundHound AI's revenue increased 217% YoY in Q2 to $42.7 million, prompting a revenue outlook of $160-$178 million for 2025, up from $84.7 million in 2024. The company's diversified business, thanks to strategic acquisitions, and robust balance sheet are positives, but it is not yet profitable and has a widening operating loss. Management aims to achieve adjusted EBITDA profitability by 2025.

SoundHound AI, Inc. (SOUN) reported a significant 217% year-over-year (YoY) increase in its Q2 revenue to $42.7 million, prompting the company to raise its full-year revenue outlook for 2025 to $160-$178 million, up from $84.7 million in 2024. This substantial growth is driven by a diversified business strategy that includes strategic acquisitions and a robust balance sheet [2].

The company's revenue growth was bolstered by broad-based expansion across enterprise, restaurant, and automotive segments. SoundHound processed nearly 3 billion queries during the quarter, more than doubling the prior year's volume, indicating accelerating demand for conversational AI [3]. The company's Voice Commerce strategy, which aims to enable drivers to order food, pay for parking, or make reservations directly from their vehicles, is gaining traction and is expected to drive further growth [3].

However, despite the impressive revenue growth, SoundHound remains unprofitable. The company reported a widening operating loss of $78.1 million in Q2 2025, up from a $22 million loss in the prior year. This increase is primarily attributed to greater expenses related to its acquisitions. Management has set a goal to achieve adjusted EBITDA profitability by the end of 2025 [2].

SoundHound's balance sheet remains strong, with total assets of $579.5 million, including $230.3 million in cash and equivalents, and total liabilities of $219.7 million as of Q2 2025 [2]. The company's diversified revenue streams, which now include industries such as restaurants, healthcare, and financial services, help insulate its business from economic downturns in any one sector [2].

Despite the challenges, investors remain cautiously optimistic about SoundHound's prospects. The company's share price has surged by 361.17% over the past three years, outperforming both the US market and the US software industry's returns of 17.5% and 27.3% respectively. However, the company's shares are currently trading at approximately an 8% discount to the consensus price target of $14.5, reflecting a cautious optimism from investors [1].

References:
[1] https://finance.yahoo.com/news/soundhound-ai-soun-q2-sales-173602178.html
[2] https://finance.yahoo.com/news/soundhound-ai-stock-buy-now-141500545.html
[3] https://www.nasdaq.com/articles/soundhounds-voice-commerce-gains-traction-flywheel-emerging