SoundHound Q2 Earnings Beat on OASYS Demand, Revenues Top, Stock Up

SOUN’s Revenues and Earnings

In the second quarter, SoundHound reported record revenues of $61.9 million, up 45% year over year. The figure surpassed the Zacks Consensus Estimate of $52.49 million by 17.9%. Management attributed the top-line growth to major enterprise AI deals linked to OASYS, reflecting rising adoption of the company’s voice and agentic AI offerings across industries.

The company posted an adjusted loss of 2 cents per share compared with the Zacks Consensus Estimate of a loss of 3 cents, representing a favorable surprise of 33.3%. The adjusted loss also narrowed from 3 cents per share in the prior-year quarter.

SOUN’s Margins Improve on Cost Discipline

On a year-over-year basis, SOUN’s profitability improved. GAAP gross profit rose 68% to $27.9 million from $16.7 million, while GAAP gross margin expanded to 45.1% from 39%, reflecting stronger growth in gross profit than revenues.

Non-GAAP gross profit increased 45% to $36.2 million. Non-GAAP gross margin remained unchanged at 58.4%, indicating stable underlying profitability after excluding amortization, stock-based compensation and acquisition-related expenses.

Adjusted EBITDA also improved year over year, with the loss narrowing to $9.6 million from $14.3 million. Non-GAAP net loss decreased 24% to $9 million, while GAAP operating loss narrowed to $43.3 million from $78.1 million.

SOUN’s Enterprise Pipeline Keeps Broadening

Management highlighted rising demand across health care, financial services, telecommunications, automotive, restaurants and consumer-facing applications. In health care, SoundHound signed a seven-figure agreement with a nationally ranked system employing 30,000 people across hospitals, health parks and medical offices.

The company also secured new and expanded business with health care technology, pharmacy care and electronic health record customers. Financial services renewals included a Japanese online brokerage serving more than 6 million accounts, a global asset manager, a major U.S. bank and a Canadian financial services organization.

Automotive activity included a seven-figure deal with an infotainment software company in China. Stellantis increased overall unit adoption and added live generative AI capabilities, while Hyundai expanded its adoption of the technology. Restaurant wins and expansions included Ruby Tuesday, Five Guys, IHOP and Jersey Mike’s.

SoundHound’s OASYS Drives Enterprise Adoption

OASYS remained central to SoundHound’s enterprise growth strategy. Management said major agreements attributed to the platform supported the quarter’s record revenues and demonstrated strong customer interest in deploying voice and agentic AI across business workflows.

The company describes OASYS as a self-learning, orchestrated platform that allows organizations to build and deploy conversational agents across phones, chat, kiosks, smart devices, drive-thrus, televisions and vehicles. Its broader deployment model is intended to support transactions, tasks and customer-service workflows across digital and physical channels.

SoundHound also expanded its distribution reach through a multi-year partnership in Latin America representing an initial eight-figure agreement. The arrangement covers a network spanning more than 20 countries. A partnership with a global IT services provider is expected to extend access to enterprise digital-transformation customers.

SoundHound’s Balance Sheet Remains Debt-Free

As of June 30, 2026, SOUN ended the quarter with $203 million in cash and cash equivalents and no debt. The debt-free position preserves financial flexibility as the company continues investing in platform development and prepares for the pending LivePerson transaction.

Operating cash flow weakened year over year during the first half. Net cash used in operating activities was $60 million compared with $43.7 million in the prior-year period. Net cash used in investing activities totaled $32.7 million, while financing activities provided $46.7 million.

The quarter’s GAAP results included an approximately $4 million gain tied to the revaluation of contingent acquisition liabilities. This noncash item was excluded from the company’s non-GAAP performance measures.

SOUN Raises Its 2026 Revenue Outlook

For 2026, SOUN raised its revenue outlook to $230 million to $260 million from the previous range of $225 million to $260 million. The revision followed the company’s strong second-quarter performance and reflected continued demand for OASYS and its broader voice and agentic AI portfolio.

The outlook does not yet contemplate the pending acquisition of LivePerson. SoundHound expects the transaction to close before the end of 2026 and plans to update its guidance after the deal is completed.

SOUN Stock’s Zacks Rank & Key Picks

SoundHound currently carries a Zacks Rank #3 (Hold). 

Some better-ranked stocks in the broader Zacks Computer and Technology sector are NVIDIA Corporation NVDA, Broadcom Inc. AVGO and Dell Technologies Inc. DELL

NVIDIA carries a Zacks Rank #2 (Buy) at present. It has a trailing four-quarter earnings surprise of 5.5% on average. Shares of NVDA have plunged 17.6% year to date ("YTD"). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 EPS indicates 90.6% growth on 106.9% revenue rise from the year-ago levels.

Broadcom currently holds a Zacks Rank of 2. It has a trailing four-quarter earnings surprise of 2.2%, on average. Shares of AVGO have gained 20.9% YTD.

The Zacks Consensus Estimate for Broadcom’s fiscal 2026 EPS implies a 72.1% rise on 66% revenue growth, from the year-ago levels.

Dell currently carries a Zacks Rank of 2. It has a trailing four-quarter earnings surprise of 18.7%, on average. Shares of DELL have gained 267.6% YTD.

The Zacks Consensus Estimate for Dell’s fiscal 2027 sales and EPS indicates 82.5% and 67.6% growth, respectively, from the year-ago levels.

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