First-quarter revenue rose 151% year-on-year, missing Wall Street's 162% forecast.
According to analyst consensus estimates, the adjusted loss per share is $0.06.
Management reiterated its previously released full-year 2025 revenue guide to $157 million to $177 million and is expected to receive a positively adjusted EBITDA by the end of the year.
10 Better Stocks than Soundhound AI›
Sound Dog AI (Nasdaq: Soun) Stocks fell 7.8% on Friday in a morning's 2025 report released by the Dialogue Artificial Intelligence (AI) technology provider. The decline was largely attributed to the quarter's underpaid revenues for Wall Street. The bottom line results are consistent with the analyst's consensus estimate.
| Metric system | Q1 2024 | Q1 2025 | Change |
|---|---|---|---|
| income | $11.6 million | $29.1 million | 151% |
| GAAP operating income | (USD 28.5 million) | $128.1 million | From negative to positive |
| GAAP Net Income | ($33 million) | $129.9 million | From negative to positive |
| Adjusted net income | (USD 20.2 million) | (USD 22.3 million) | Losses increased by 10% |
| GAAP Earnings Per Share (EPS) | ($0.12) | $0.31 | From negative to positive |
| Adjusted EPS | ($0.07) | ($0.06) | Losses shrank by 14% |
Investors should focus on adjusted numbers that do not include one-time items. Q1 2025 GAAP number includes accounting only (non-cash) gains associated with the acquisition. Source of data: Soundhound AI. GAAP = universally accepted accounting principles.
Acquisitions over the past year have contributed to annual revenue growth, although we don’t know what extent. In other words, we don’t know the organic revenue growth rate. On the positive side, these acquisitions allow the company to better diversify its customer base on a personal and industry basis. During the quarter, none of the customers accounted for more than 10% of revenue.
Investors should focus on adjusted numbers that do not include one-time items. Wall Street is looking for adjusted losses of $0.06 per share with $30.4 million in revenue, so SoundHound hits its lowest expectations but misses the line.
Soundhound operates with $19.2 million in cash, slightly higher than its annual negative operating cash flow of $21.9 million. Free cash flow was $19.3 million, compared with $25.7 million in the same period last year. The company ended with $246 million in cash and cash equivalents, with no long-term debt. According to the current cash burn rate, Soundhound's cash will last about 12.7 quarters, or more than three years.
CEO Keyvan Mohajer's statement in earnings release:
Soundhound continues to expand its reach and create new possibilities for real-world AI applications. The launch of our complete AI proxy platform provides customers in all industries with a complete, voice-enabled proxy AI. Meanwhile, our bold growth plans are paying for dividends and we are aware of cross-selling and selling opportunities after the acquisition.
During the revenue call, CFO Nitesh Sharan reiterated the company's previous guidance, as follows:
For the full year of 2025, revenue is expected to range from $157 million to $177 million. This will be equivalent to an annual growth of 85% to 90%. Last year’s acquisition, especially the $80 million Amelia acquisition, will provide a lot of help in annual growth rates.
By the end of 2025, the company is expected to receive positively adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).
Soundhound AI (the company) is worth a look, because the simple reason why the voice artificial intelligence (AI) market is expected to be huge. That said, I think that over the past year or so, Soundhound AI (stocks) has been hyped up on financial media and social media. However, it is not the company’s fault that its stock price is ahead due to all the hype.
Of course, the company has potential - a lot. However, I have doubts about its ability to be a long-term winner in the AI-powered voice technology field. (Unlike unhealthy skepticism, healthy skepticism is considered the basis of critical thinking and involves keeping an open mind.) Indeed, I keep an open mind, especially since it is a relatively early situation in the field of conversational AI.
Before I follow my concerns, it is worth noting that Soundhound's cash will last about 12.7 quarters, or more than three years, at the current cash burn rate.
What is my main problem?
The first one has to do with the company's growth through massive acquisitions. Growth strategies that rely heavily on acquisitions involve integrating often diverse corporate cultures, which are challenging.
And - that's the main reason I don't like these growth strategies - they may mask the company's lack of strong organic (internal) revenue growth and its own core products and technologies. Unless investors regularly reveal their organic growth rate, it is impossible to accurately measure the company's performance (growth does not include the contribution of large acquisitions made in the past year).
The second major issue involves profitability – or, more accurately, lack of profitability. Of course, it is not uncommon for new public tech companies to prioritize revenue growth over achieving profitability. But the lack of profitability advancement is only a problem. My other question is how the situation goes with respect to profitability guidance.
The company initially made positive adjustments to EBITDA (earnings before interest, taxes, depreciation and amortization) in the fourth quarter of 2023. Five quarters later, its adjusted EBITDA was $22.2 million. When this milestone fails to meet its target, it is intended to receive guidance from the positive EBITDA throughout 2025.
Currently, guidance includes achieving positive adjustments to EBITDA by the end of the year (which could mean in the fourth quarter). One question that comes to mind is whether the current profitability outlook is likely to be simply due to the $80 million Amelia acquisition in August 2024.
Finally, competition in conversational AI applications is already tough, as players in the automotive end market include large tech companies with a lot of cash. Competition is expected to heat up further. Does SoundHound have enough competitive advantages to increase revenue on a large scale and Generating reliable profits remains to be seen.
Along with large technicians, investors should watch Cellens (NASDAQ: CRNC) In the sound AI space. In October 2019, the company broke away from the nuanced newsletter (has been acquired since then Microsoft). Cerence has an execution problem, but there is a high-profile CEO (formerly Intel CEO Brian Krzanich) The company's performance was installed last fall and could improve.
Again, I remain open to AIN's voice, and so should investors.
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Beth McKenna has no position in any of the stocks mentioned. Motley fool has a place and recommends Intel and Microsoft. Motley Fool recommends Cerence and recommends the following options: $395 Phone on Microsoft, Short January 2026, Microsoft $405 Phone on Microsoft, Short May 2025 $30 Intel Phone on Microsoft. Motley Fool has a disclosure policy.
Soundhound AI stock fell 8% as revenue misses Wall Street estimates. Is Soun Stock a purchase? Originally published by Motley Fool