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1. Company Snapshot

1.a. Company Description

SoundHound AI, Inc.develops independent voice artificial intelligence (AI) platform that enables businesses across industries to deliver high-quality conversational experiences to their customers.Its products include Houndify platform that offers a suite of Houndify tools to help brands build conversational voice assistants, such as automatic speech recognition, natural language understanding, wake words, custom domains, text-to-speech, and embedded voice solutions The company is headquartered in Santa Clara, California.

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1.b. Last Insights on SOUN

Negative drivers behind SoundHound AI's recent performance include a class action lawsuit alleging the company of making materially false information, ongoing global trade war concerns, and a significant decline in investor sentiment. The company's shares have plummeted 25% in March, with a 11.8% loss on Friday. Additionally, multiple law firms have initiated investigations into SoundHound AI's possible violations of federal securities laws, citing concerns over the company's internal controls over financial reporting and its ability to effectively account for corporate acquisitions.

1.c. Company Highlights

2. SoundHound's Q3 2025 Earnings: A Strong Performance

SoundHound reported a revenue of $42 million for Q3 2025, representing a 68% year-over-year growth. The company's GAAP and non-GAAP gross margins improved from the prior quarter. Research and development expenses were $22.8 million, up 17% year-over-year. The actual EPS came out at -$0.03, beating estimates of -$0.04. The company's strong financial performance was driven by its product and technological differentiation in a rapidly expanding market.

Publication Date: Nov -25

📋 Highlights
  • Q3 Revenue Growth:: Revenue reached $42 million, up 68% year-over-year, with all three business pillars growing double digits.
  • Annual Revenue Record:: Full-year revenue is projected at $114 million, a 127% increase, with upwardly revised guidance.
  • Strategic Acquisitions:: Interactions acquisition added $22.8 million in R&D expenses (up 17% YoY) and workflow optimization capabilities for enterprise verticals.
  • Customer Wins:: Secured deals with major clients in automotive (sports car brand), IoT/robotics (China), and Indian 2-wheeler/commercial fleets, alongside 7/10 top financial institutions.
  • Amelia 7 Adoption:: Targeting 75% customer migration to the new platform by mid-2026, with Voice Commerce pilots set for 2026 and expected $10s of millions from robotics deals over 2-3 years.

Revenue Growth Drivers

The company's revenue growth was driven by strength in direct sales and channel partners, as well as expanded geographic reach and product coverage. All three pillars of the business grew double digits, with the company continuing to deliver strong growth. As Keyvan Mohajer mentioned, "SoundHound has successfully delivered the Pillar 2 scaling it had anticipated and communicated last year, and is now well-positioned to address the massive market opportunity in front of it."

Valuation Metrics

SoundHound's current valuation metrics indicate a high growth expectation. The company's Price-to-Sales Ratio stands at 33.84, and the EV/EBITDA ratio is -18.03. The ROE and ROIC are -93.43% and -50.78%, respectively, indicating significant losses. The Net Debt/EBITDA ratio is 1.0, suggesting a manageable debt level.

Acquisition Strategy and Innovation

The company's acquisition strategy, including the acquisition of Interactions, is expected to contribute to its growth. SoundHound's innovation, including the introduction of Amelia 7 and Polaris, is driving its competitive advantage. The company is aggressively investing to fortify and expand its moats while deepening customer relationships.

Future Outlook

The company expects continued hyper growth in 2026, commensurate with the levels it has been compounding over the past several years, with near breakeven profitability levels. Analysts estimate next year's revenue growth at 38.3%. SoundHound's strong growth, innovation, and expansion into new markets position it well to capitalize on AI disruption in the call center and customer service industry.

3. NewsRoom

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SoundHound Stock Lost 23% in a Month: Bargain Opportunity or Red Flag?

Dec -04

Source: zacks.com

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SoundHound AI to Participate in Barclays Annual Global Technology Conference

Dec -04

Source: globenewswire.com

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10 AI Stocks Worth Buying Right Now

Dec -04

Source: fool.com

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Down 40%, Should You Buy SoundHound AI Right Now?

Dec -03

Source: fool.com

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Could SoundHound AI Be a Millionaire-Maker Stock?

Dec -03

Source: fool.com

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How Realistic Is SOUN's Path to a Breakeven Operating Profile in 2026?

Dec -02

Source: zacks.com

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Wedbush Analyst Unveils Bold AI Picks -- Tech Stocks Could Jump 20% in 2026

Dec -02

Source: gurufocus.com

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The Market Isn't Pricing in This AI Megatrend, but These 2 Stocks Could Benefit First

Dec -01

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (26.60%)

6. Segments

Licensing

Expected Growth: 26.15%

SoundHound AI, Inc.'s 26.15% growth in licensing is driven by increasing demand for AI-powered audio recognition technology, expansion into new industries such as healthcare and education, and strategic partnerships with leading companies. Additionally, the company's proprietary sound recognition algorithms and large music database contribute to its growing market share.

Hosted Services

Expected Growth: 27.4%

SoundHound AI's Hosted Services growth is driven by increasing adoption of AI-powered voice assistants, rising demand for conversational AI solutions, and expansion into new industries such as automotive and healthcare. Additionally, strategic partnerships and investments in R&D have enhanced the company's technology, further fueling growth.

Professional Services

Expected Growth: 27.4%

SoundHound AI's Professional Services segment growth of 27.4% is driven by increasing demand for AI-powered solutions, expansion into new industries, and strategic partnerships. The company's expertise in voice AI and natural language processing is attracting clients seeking to enhance customer experiences and improve operational efficiency. Additionally, the growing need for digital transformation and automation is fueling demand for SoundHound AI's services.

Monetization

Expected Growth: 14.37%

SoundHound AI's 14.37% growth is driven by increasing adoption of its music recognition technology, expansion into new markets, and strategic partnerships. Growing demand for voice-enabled AI solutions, rising popularity of smart speakers, and increasing revenue from licensing and royalties also contribute to its growth.

7. Detailed Products

SoundHound Voice AI

A conversational AI platform that enables businesses to create custom voice assistants and integrate them into their products and services.

Houndify

A developer platform that enables developers to build conversational interfaces into their applications and devices.

SoundHound Music Recognition

A music recognition technology that identifies songs, artists, and albums in real-time.

SoundHound for Business

A suite of solutions for businesses to leverage SoundHound's AI technology for customer service, sales, and marketing.

SoundHound for Developers

A set of APIs and SDKs that enable developers to integrate SoundHound's AI technology into their applications and devices.

8. SoundHound AI, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

SoundHound AI, Inc. has a low threat of substitutes due to its unique AI-powered music recognition technology, making it difficult for competitors to replicate.

Bargaining Power Of Customers

SoundHound AI, Inc. has a medium bargaining power of customers, as customers have some flexibility to switch to alternative music recognition services, but the company's strong brand recognition and user base mitigate this risk.

Bargaining Power Of Suppliers

SoundHound AI, Inc. has a low bargaining power of suppliers, as the company has a diverse range of suppliers and can easily switch to alternative suppliers if needed.

Threat Of New Entrants

SoundHound AI, Inc. has a high threat of new entrants, as the music recognition technology market is attractive and has low barriers to entry, making it easy for new competitors to enter the market.

Intensity Of Rivalry

SoundHound AI, Inc. operates in a moderately competitive market, with several established players, but the company's strong brand recognition and innovative technology help to mitigate the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 75.55%
Debt Cost 18.63%
Equity Weight 24.45%
Equity Cost 20.24%
WACC 19.02%
Leverage 309.08%

11. Quality Control: SoundHound AI, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
CoreCard

A-Score: 5.1/10

Value: 3.7

Growth: 5.7

Quality: 7.4

Yield: 0.0

Momentum: 10.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Paycor HCM

A-Score: 5.0/10

Value: 2.8

Growth: 7.7

Quality: 5.2

Yield: 0.0

Momentum: 9.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Fastly

A-Score: 4.2/10

Value: 6.5

Growth: 5.9

Quality: 3.7

Yield: 0.0

Momentum: 7.0

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
SoundHound AI

A-Score: 4.0/10

Value: 6.0

Growth: 4.3

Quality: 3.9

Yield: 0.0

Momentum: 9.5

Volatility: 0.3

1-Year Total Return ->

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Stock-Card
NextPlat

A-Score: 3.7/10

Value: 9.2

Growth: 5.6

Quality: 4.2

Yield: 0.0

Momentum: 2.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Getaround

A-Score: 3.4/10

Value: 10.0

Growth: 5.0

Quality: 5.4

Yield: 0.0

Momentum: 0.0

Volatility: 0.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

12.74$

Current Price

12.74$

Potential

-0.00%

Expected Cash-Flows