Voice AI recognition company SoundHound (NASDAQ: SOUN) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 217% year on year to $42.68 million. Its GAAP loss of $0.19 per share was significantly below analysts’ consensus estimates.
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SoundHound AI (SOUN) Q2 CY2025 Highlights:
- Revenue: $42.68 million vs analyst estimates of $32.54 million (217% year-on-year growth, 31.2% beat)
- EPS (GAAP): -$0.19 vs analyst estimates of -$0.09 (significant miss)
- Adjusted Operating Income: -$78.05 million vs analyst estimates of -$37.86 million (-183% margin, significant miss)
- Operating Margin: -183%, down from -163% in the same quarter last year
- Free Cash Flow was -$24.69 million compared to -$19.35 million in the previous quarter
- Market Capitalization: $4.31 billion
Company Overview
Founded in 2005, SoundHound AI (NASDAQ: SOUN) develops independent voice artificial intelligence solutions that enable businesses across various industries to offer customized conversational experiences to consumers.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last three years, SoundHound AI grew its sales at an incredible 88.5% compounded annual growth rate. Its growth beat the average software company and shows its offerings resonate with customers.
This quarter, SoundHound AI reported magnificent year-on-year revenue growth of 217%, and its $42.68 million of revenue beat Wall Street’s estimates by 31.2%.
Looking ahead, sell-side analysts expect revenue to grow 32.5% over the next 12 months, a deceleration versus the last three years. Still, this projection is commendable and suggests the market is forecasting success for its products and services.
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Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
SoundHound AI is extremely efficient at acquiring new customers, and its CAC payback period checked in at 0.5 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a highly differentiated product offering and a strong brand reputation. These dynamics give SoundHound AI more resources to pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments.
Key Takeaways from SoundHound AI’s Q2 Results
We were impressed by how significantly SoundHound AI blew past analysts’ EBITDA expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this quarter featured some important positives. The stock traded up 23.4% to $13.27 immediately after reporting.
SoundHound AI had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
