SoundHound AI's LivePerson Acquisition Fuels Growth Prospects
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 36 minutes ago
0mins
Should l Buy SOUN?
Source: Fool
- Significant Revenue Growth: SoundHound AI reported a 52% year-over-year revenue increase in Q1, reaching $44.2 million, with automotive and IoT revenues surging by 88%, indicating strong performance in the rapidly evolving AI market despite profitability challenges.
- Acquisition of LivePerson: SoundHound plans to acquire LivePerson with cash, which has faced challenges in its customer service transformation; this acquisition will provide SoundHound access to a large customer base and aims to turn around LivePerson's business within the next year, enhancing competitive positioning.
- Future Revenue Guidance: The company maintains its 2023 revenue guidance between $225 million and $260 million, expecting combined revenues to reach between $350 million and $400 million by 2027, with LivePerson contributing at least $100 million, although this estimate may be conservative.
- Cash Flow and Profitability: Despite revenue growth, SoundHound faces profitability issues, reporting an adjusted EPS loss of $0.06 and an operating cash outflow of $26.3 million in Q1, highlighting the need for careful cash flow management during its expansion efforts.
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Analyst Views on SOUN
Wall Street analysts forecast SOUN stock price to rise
7 Analyst Rating
5 Buy
2 Hold
0 Sell
Moderate Buy
Current: 8.450
Low
11.00
Averages
16.60
High
26.00
Current: 8.450
Low
11.00
Averages
16.60
High
26.00
About SOUN
SoundHound AI, Inc. is engaged in conversational intelligence, offering voice and conversational artificial intelligence (AI) solutions that let businesses offer experiences to their customers. Through its proprietary technology, its voice AI delivers speed and accuracy in numerous languages to product creators and service providers across retail, financial services, healthcare, automotive, smart devices, and restaurants via AI-driven products, such as Smart Answering, Smart Ordering, Dynamic Drive Thru, and Amelia AI Agents. Along with SoundHound Chat AI, a voice assistant with integrated Generative AI, it powers various products and services, and processes billions of interactions each year for businesses. Its developer platform, Houndify, is an open-access platform that allows developers to leverage its Voice AI technology and a library of over 100 content domains, including commonly used domains for points of interest, weather, flight status, sports and more.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
SoundHound AI Reports Revenue Growth Amid Rising Losses
- Significant Revenue Growth: SoundHound reported a revenue of $44.2 billion for the quarter ending March 31, marking a 52% increase year-over-year, indicating strong market demand in the voice AI sector; however, the accompanying rise in losses has raised investor concerns.
- Declining Gross Margin: Despite revenue growth, SoundHound's gross margin fell from 36.5% to 31.1%, with a net loss exceeding $25 million compared to a profit of nearly $130 million last year, highlighting a deterioration in profitability.
- Increased Cash Burn: In Q1, SoundHound's cash burn escalated to $26.3 million, up from $19.2 million a year earlier, suggesting that ongoing cash outflows may force the company to rely on frequent stock offerings to fund its growth initiatives.
- Market Confidence Wanes: Although the growth in the past quarter is impressive, the lack of significant improvement in cash flow and earnings has left many investors skeptical about SoundHound's sustainability, contributing to a stock price decline of over 60% from its peak.
See More
SoundHound AI's LivePerson Acquisition Fuels Growth Prospects
- Significant Revenue Growth: SoundHound AI reported a 52% year-over-year revenue increase in Q1, reaching $44.2 million, with automotive and IoT revenues surging by 88%, indicating strong performance in the rapidly evolving AI market despite profitability challenges.
- Acquisition of LivePerson: SoundHound plans to acquire LivePerson with cash, which has faced challenges in its customer service transformation; this acquisition will provide SoundHound access to a large customer base and aims to turn around LivePerson's business within the next year, enhancing competitive positioning.
- Future Revenue Guidance: The company maintains its 2023 revenue guidance between $225 million and $260 million, expecting combined revenues to reach between $350 million and $400 million by 2027, with LivePerson contributing at least $100 million, although this estimate may be conservative.
- Cash Flow and Profitability: Despite revenue growth, SoundHound faces profitability issues, reporting an adjusted EPS loss of $0.06 and an operating cash outflow of $26.3 million in Q1, highlighting the need for careful cash flow management during its expansion efforts.
See More
SoundHound AI Q1 2026 Earnings Report Analysis
- Significant Revenue Growth: SoundHound AI reported Q1 revenue of $44.2 million, a 52% year-over-year increase, showcasing the company's potential in a $140 billion total addressable market despite not raising full-year guidance.
- Negative Market Reaction: Although revenue met expectations, the market's concerns over the lack of guidance increase and ongoing losses led to a 7.89% drop in stock price post-earnings, reflecting investor caution regarding short-term prospects.
- Client Collaboration Expansion: SoundHound's agreement with Walmart to integrate its voice AI technology into retail television brands further solidifies its market position in smart devices and customer service sectors.
- Optimistic Future Outlook: The company projects full-year revenue for 2026 between $225 million and $260 million, with 2027 revenue expected to reach at least $350 million to $400 million, indicating strong growth potential, although investors must navigate significant stock volatility.
See More
SoundHound AI Reports Strong Q1 2026 Revenue but Shares Decline
- Significant Revenue Growth: SoundHound AI reported a revenue of $44.2 million in Q1 2026, marking a 52% year-over-year increase; however, despite meeting expectations, concerns over ongoing losses led to a sharp decline in share price.
- Market Expectations Missed: The company did not raise its full-year revenue guidance, maintaining a forecast of $225 million to $260 million for 2026 and a minimum of $350 million to $400 million for 2027, failing to meet market expectations for higher guidance.
- Customer Satisfaction Improvement: SoundHound's technology has shown strong performance among clients, with an average revenue increase of 11% and a 14% boost in customer satisfaction post-implementation, indicating the effectiveness and potential of its products in the market.
- Long-Term Growth Potential: Despite short-term stock volatility, SoundHound's total addressable market is estimated at $140 billion, suggesting the company is still in the early stages and could achieve larger revenue growth through partnerships with major clients.
See More
SoundHound AI Reports Q1 2026 Earnings Amid Market Concerns
- Strong Revenue Growth: SoundHound AI reported Q1 2026 revenue of $44.2 million, a 52% increase year-over-year, yet the lack of raised guidance raised concerns about future profitability, leading to a negative market reaction.
- Negative Market Reaction: The stock price dropped sharply post-report due to growing losses and unchanged guidance, reflecting investor worries about short-term prospects, even though the company's long-term market potential remains significant.
- Broad Market Opportunities: With a projected total addressable market (TAM) of $140 billion, SoundHound is positioned in various sectors including smart devices, customer service, and retail, highlighting its strategic importance for future growth.
- Increased Customer Satisfaction: Clients using SoundHound's technology experience an average revenue increase of 11% and a 14% boost in customer satisfaction, indicating the effectiveness and demand for its solutions across multiple industries.
See More
Investment Opportunities Amid AI Stock Pullback
- Market Pullback Impact: The decline of many popular AI stocks in 2023, driven by the Iran war, inflation, and unclear monetary policies, has diminished investor interest in high-growth and speculative investments, creating attractive buying opportunities for long-term investors.
- Snowflake's Growth Potential: Snowflake's cloud data warehouses assist over 13,000 global customers in centralizing data and processing 6.3 billion queries daily; despite a drop in product revenue growth to 27% in fiscal 2026, it is expected to grow at a 25% CAGR from 2026 to 2029, indicating strong potential in AI applications.
- SoundHound's Market Expansion: SoundHound AI's revenue has increased more than fivefold from 2022 to 2025, and although its stock has declined 14% this year, its acquisitions are expanding its presence in restaurant digitization and conversational AI markets, with a projected 16% CAGR from 2025 to 2028, showcasing long-term growth potential.
- Acquisition-Driven Growth: SoundHound's growth has been primarily driven by acquisitions rather than organic expansion of its core platform, which may compress margins in the short term, but these acquisitions could yield substantial returns in the long run as the AI market expands.
See More
SoundHound AI Reports Revenue Growth Amid Rising Losses
- Significant Revenue Growth: SoundHound reported a revenue of $44.2 billion for the quarter ending March 31, marking a 52% increase year-over-year, indicating strong market demand in the voice AI sector; however, the accompanying rise in losses has raised investor concerns.
- Declining Gross Margin: Despite revenue growth, SoundHound's gross margin fell from 36.5% to 31.1%, with a net loss exceeding $25 million compared to a profit of nearly $130 million last year, highlighting a deterioration in profitability.
- Increased Cash Burn: In Q1, SoundHound's cash burn escalated to $26.3 million, up from $19.2 million a year earlier, suggesting that ongoing cash outflows may force the company to rely on frequent stock offerings to fund its growth initiatives.
- Market Confidence Wanes: Although the growth in the past quarter is impressive, the lack of significant improvement in cash flow and earnings has left many investors skeptical about SoundHound's sustainability, contributing to a stock price decline of over 60% from its peak.
See More
SoundHound AI's LivePerson Acquisition Fuels Growth Prospects
- Significant Revenue Growth: SoundHound AI reported a 52% year-over-year revenue increase in Q1, reaching $44.2 million, with automotive and IoT revenues surging by 88%, indicating strong performance in the rapidly evolving AI market despite profitability challenges.
- Acquisition of LivePerson: SoundHound plans to acquire LivePerson with cash, which has faced challenges in its customer service transformation; this acquisition will provide SoundHound access to a large customer base and aims to turn around LivePerson's business within the next year, enhancing competitive positioning.
- Future Revenue Guidance: The company maintains its 2023 revenue guidance between $225 million and $260 million, expecting combined revenues to reach between $350 million and $400 million by 2027, with LivePerson contributing at least $100 million, although this estimate may be conservative.
- Cash Flow and Profitability: Despite revenue growth, SoundHound faces profitability issues, reporting an adjusted EPS loss of $0.06 and an operating cash outflow of $26.3 million in Q1, highlighting the need for careful cash flow management during its expansion efforts.
See More
SoundHound AI Q1 2026 Earnings Report Analysis
- Significant Revenue Growth: SoundHound AI reported Q1 revenue of $44.2 million, a 52% year-over-year increase, showcasing the company's potential in a $140 billion total addressable market despite not raising full-year guidance.
- Negative Market Reaction: Although revenue met expectations, the market's concerns over the lack of guidance increase and ongoing losses led to a 7.89% drop in stock price post-earnings, reflecting investor caution regarding short-term prospects.
- Client Collaboration Expansion: SoundHound's agreement with Walmart to integrate its voice AI technology into retail television brands further solidifies its market position in smart devices and customer service sectors.
- Optimistic Future Outlook: The company projects full-year revenue for 2026 between $225 million and $260 million, with 2027 revenue expected to reach at least $350 million to $400 million, indicating strong growth potential, although investors must navigate significant stock volatility.
See More
SoundHound AI Reports Strong Q1 2026 Revenue but Shares Decline
- Significant Revenue Growth: SoundHound AI reported a revenue of $44.2 million in Q1 2026, marking a 52% year-over-year increase; however, despite meeting expectations, concerns over ongoing losses led to a sharp decline in share price.
- Market Expectations Missed: The company did not raise its full-year revenue guidance, maintaining a forecast of $225 million to $260 million for 2026 and a minimum of $350 million to $400 million for 2027, failing to meet market expectations for higher guidance.
- Customer Satisfaction Improvement: SoundHound's technology has shown strong performance among clients, with an average revenue increase of 11% and a 14% boost in customer satisfaction post-implementation, indicating the effectiveness and potential of its products in the market.
- Long-Term Growth Potential: Despite short-term stock volatility, SoundHound's total addressable market is estimated at $140 billion, suggesting the company is still in the early stages and could achieve larger revenue growth through partnerships with major clients.
See More
SoundHound AI Reports Q1 2026 Earnings Amid Market Concerns
- Strong Revenue Growth: SoundHound AI reported Q1 2026 revenue of $44.2 million, a 52% increase year-over-year, yet the lack of raised guidance raised concerns about future profitability, leading to a negative market reaction.
- Negative Market Reaction: The stock price dropped sharply post-report due to growing losses and unchanged guidance, reflecting investor worries about short-term prospects, even though the company's long-term market potential remains significant.
- Broad Market Opportunities: With a projected total addressable market (TAM) of $140 billion, SoundHound is positioned in various sectors including smart devices, customer service, and retail, highlighting its strategic importance for future growth.
- Increased Customer Satisfaction: Clients using SoundHound's technology experience an average revenue increase of 11% and a 14% boost in customer satisfaction, indicating the effectiveness and demand for its solutions across multiple industries.
See More
Investment Opportunities Amid AI Stock Pullback
- Market Pullback Impact: The decline of many popular AI stocks in 2023, driven by the Iran war, inflation, and unclear monetary policies, has diminished investor interest in high-growth and speculative investments, creating attractive buying opportunities for long-term investors.
- Snowflake's Growth Potential: Snowflake's cloud data warehouses assist over 13,000 global customers in centralizing data and processing 6.3 billion queries daily; despite a drop in product revenue growth to 27% in fiscal 2026, it is expected to grow at a 25% CAGR from 2026 to 2029, indicating strong potential in AI applications.
- SoundHound's Market Expansion: SoundHound AI's revenue has increased more than fivefold from 2022 to 2025, and although its stock has declined 14% this year, its acquisitions are expanding its presence in restaurant digitization and conversational AI markets, with a projected 16% CAGR from 2025 to 2028, showcasing long-term growth potential.
- Acquisition-Driven Growth: SoundHound's growth has been primarily driven by acquisitions rather than organic expansion of its core platform, which may compress margins in the short term, but these acquisitions could yield substantial returns in the long run as the AI market expands.
See More
