Key Takeaways
- Shares of SoundHound AI climbed 5.4% following fourth-quarter CY2025 results that surpassed Wall Street projections for both top and bottom lines.
- Quarterly revenue reached $55.06 million, marking a 59.4% increase from the previous year and exceeding forecasts by 2.3%.
- The company reported a GAAP loss per share of $0.03, significantly better than the anticipated loss of $0.10—a 69.1% outperformance.
- SoundHound unveiled a voice-activated Sales Assist agent and established a new engineering facility in Bengaluru.
- Wall Street maintains a Moderate Buy rating with a mean price target of $16.07, despite elevated short interest levels and recent insider dispositions.
SoundHound AI delivered impressive fourth-quarter CY2025 financial results on February 26, 2026, propelling shares 5.4% higher in Thursday’s session.
Shares peaked at $9.10 during the session and closed at $8.98, representing a solid gain from the previous day’s close of $8.52. Volume reached 41.6 million shares, approximately 55% higher than typical daily activity.
The company generated $55.06 million in quarterly revenue, representing a robust 59.4% year-over-year expansion. This figure surpassed analyst projections of $53.84 million by 2.3%.
Regarding profitability, SOUN recorded a GAAP loss of $0.03 per share. This significantly outperformed the Street’s expectation of a $0.10 loss, representing a 69.1% positive variance.
Adjusted EBITDA reached $72.28 million, translating to a 131% margin and marking 530% growth compared to the year-ago period. Operating margin showed dramatic improvement at 77.3%, a stark contrast to the -744% figure from the comparable quarter last year.
The company reported negative free cash flow of $24.43 million, showing sequential improvement from the previous quarter’s negative $32.83 million.
Over the past four years, SoundHound AI has achieved a 68% compound annual revenue growth rate. The company’s two-year annualized growth rate of 91.9% indicates accelerating momentum in recent periods.
Product Launches and Geographic Expansion
Prior to releasing earnings, SoundHound introduced its Sales Assist agent at Mobile World Congress—a voice-activated solution designed for retail applications. This launch represents strategic diversification beyond the company’s core automotive and call center markets.
Additionally, the firm inaugurated an engineering and innovation center in Bengaluru, designed to enhance research and development capabilities while supporting faster deployment of its agentic AI technology.
Shares currently trade below the 200-day moving average of $13.01, though they remain close to the 50-day moving average of $9.67. The company’s market capitalization stands at $3.77 billion, with a beta coefficient of 2.64.
Wall Street Perspective and Trading Activity
Analyst sentiment remains at Moderate Buy, with a consensus price target of $16.07. Ladenburg Thalmann elevated SOUN to Strong Buy in December. Piper Sandler reduced its target from $15.00 to $11.00 in January while maintaining a Neutral stance. DA Davidson established a $14.00 price target earlier this year.
Institutional investors have been increasing their positions. Vanguard expanded its holdings by 16.4% during Q3. Morgan Stanley raised its stake by 48.1% in Q4. UBS increased its position by 77.6% in the same quarter.
Regarding insider transactions, COO Michael Zagorsek divested 73,406 shares at $11.28 in December, reducing his position by 3.94%. CEO Keyvan Mohajer sold 144,326 shares at the same price point. Collectively, company insiders disposed of 460,922 shares valued at approximately $5.2 million over the past three months.
Short interest remains at elevated levels, creating potential volatility if future results or forward guidance fall short of expectations.
Following the earnings announcement, shares stabilized around $9.02.
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