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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 Q4 2025 Earnings: A Record Year with Strong Momentum

SoundHound reported a strong Q4 2025, with revenue reaching $55.1 million, up 59% year-over-year, driven by growth across multiple verticals, including enterprise AI, restaurant, and automotive businesses. The company's non-GAAP gross margin was 61%, up year-over-year, reflecting efficiencies gained from modernizing infrastructure and optimizing cloud spend. The GAAP net income was $40.1 million, with a GAAP net earnings per share of $0.10, positively impacted by the change in fair value of contingent liabilities. Non-GAAP net loss was $7.3 million, with a non-GAAP net loss per share of $0.02, in line with estimates. The actual EPS came out at '-0.02' relative to estimates at '-0.02'.

Publication Date: Mar -08

📋 Highlights
  • Revenue Growth:: Q4 revenue hit $55.1M (+59% YoY), driven by enterprise AI expansion and automation in sectors like healthcare, finance, and automotive.
  • Customer Acquisition:: Secured over 100 deals in Q4, including a major Japanese automotive OEM, a U.S. telecom multiyear contract, and a global athletic apparel AI service deal.
  • Margin Improvements:: Non-GAAP gross margin reached 61%, up YoY, via infrastructure modernization and cloud cost optimization, despite $24.8M in R&D expenses (+22% YoY).
  • Agentic AI Impact:: Containment rates surged from 30% to 70–80% for customers, driving revenue via higher automation efficiency and premium pricing for upgraded Agentic solutions.
  • Financial Position:: $248M in cash with no debt, and 2026 revenue guidance of $225–260M, targeting 70%+ gross margins and 30%+ EBIT margins long-term as growth scales.

Revenue Growth and Diversification

The company's revenue growth was driven by various industries and regions, including a prominent automotive logo in Japan, a multiyear deal with a US telecom company, and a global deal with a leading athletic shoes and apparel company. As Keyvan Mohajer, CEO, stated, "We believe the power of AI is disrupting traditional software and services companies, creating further tailwinds for SoundHound." The company's diversified revenue streams and strong pipeline across several verticals are expected to drive future growth.

Valuation and Growth Expectations

With a P/S Ratio of 20.2, the market is pricing in a revenue growth rate of around 20.2% for next year, which is in line with analysts' estimates. The EV/EBITDA ratio of 47.36 suggests that the market is expecting significant improvements in profitability. The company's strong balance sheet, with cash and equivalents at $248 million and no debt, provides a solid foundation for future growth. As the company continues to drive scale through targeted investments, it is expected to achieve 70% plus gross margins and 30% plus EBIT margins in the long-term.

Future Growth Prospects

SoundHound's Agentic platform is expected to drive future growth, with the company seeing strong traction in the automotive vertical and a "flywheel effect" from its Pillar 3 vision. The company's focus on profitable contracts and adjusting or moving away from those that don't meet its minimum thresholds is expected to drive future profitability. With a strong foundational customer base to expand upon through full portfolio upsell and cross-sell, SoundHound is well-positioned for continued growth.

3. NewsRoom

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Cramer Rejects SoundHound: They Aren’t Making Money

Apr -13

Source: 247wallst.com

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3 Under-the-Radar AI Stock Picks That Could Be Incredible Buys

Apr -13

Source: fool.com

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5 Genius AI Stock Picks (Hint: Nvidia Is One of Them)

Apr -10

Source: fool.com

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SoundHound Brings Agentic AI to Telecom Operators: What it Means

Apr -10

Source: zacks.com

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What Is One of the Best Growth Stocks to Buy With $500 Today?

Apr -10

Source: fool.com

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The Nasdaq Has Made a Solid Recovery. Here Are 2 Incredibly Attractive Stocks to Buy Before It's Too Late.

Apr -10

Source: fool.com

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Best AI Stocks to Buy: BigBear.ai Stock vs. Soundhoundai Stock

Apr -09

Source: fool.com

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SoundHound AI and Associated Carrier Group Partner to Bring Agentic AI to Telecom Customer Service and Employee Experience

Apr -09

Source: globenewswire.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
Paycor HCM

A-Score: 5.5/10

Value: 2.9

Growth: 7.7

Quality: 5.2

Yield: 0.0

Momentum: 8.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
CoreCard

A-Score: 4.9/10

Value: 3.9

Growth: 5.7

Quality: 7.2

Yield: 0.0

Momentum: 8.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Getaround

A-Score: 4.2/10

Value: 10.0

Growth: 5.0

Quality: 5.4

Yield: 0.0

Momentum: 5.0

Volatility: 0.0

1-Year Total Return ->

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Stock-Card
Fastly

A-Score: 4.2/10

Value: 6.2

Growth: 5.8

Quality: 3.8

Yield: 0.0

Momentum: 7.5

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
SoundHound AI

A-Score: 3.9/10

Value: 6.0

Growth: 4.6

Quality: 3.9

Yield: 0.0

Momentum: 8.5

Volatility: 0.7

1-Year Total Return ->

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Stock-Card
NextPlat

A-Score: 3.7/10

Value: 9.6

Growth: 5.4

Quality: 3.8

Yield: 0.0

Momentum: 2.5

Volatility: 1.0

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

6.97$

Current Price

6.97$

Potential

-0.00%

Expected Cash-Flows