SoundHound AI Earnings On Deck – Stock (SOUN) Has A History Of Volatility

SoundHound AI's stock (NASDAQ: SOUN) has given holders their fair share of volatility in the last year or two, with a 10x through 2024 giving way to a 46% pullback through the first part of this year. The market can be forgiven for holding its breath ahead of the company's Q2 2025 earnings report, due later today after market close. But can SoundHound convert its impressive revenue growth into a sustainable path toward profitability?

Analysts project SoundHound AI to report revenue of $32.88 million, a 144% increase from $13.46 million a year ago, reflecting strong topline growth. However, the company is expected to post a slightly deeper loss, with an estimated EPS of –$0.05 compared to –$0.04 in the same quarter last year.

The acquisition of Amelia, a conversational AI leader, in August 2024, for $80 million, is expected to be a significant revenue driver. SoundHound anticipates Amelia to contribute over $45 million to its 2025 revenue and become accretive to earnings in the latter half of the year. The successful integration of Amelia into SoundHound's existing ecosystem is crucial for realizing these benefits and justifying the acquisition cost.

However, let's play devil's advocate for a moment. What if the market is overemphasizing the importance of immediate profitability? SoundHound operates in a rapidly evolving AI landscape. Perhaps the company should be aggressively investing in R&D and market share acquisition, even if it means delaying profitability.

This view suggests that focusing solely on the bottom line might be short-sighted, potentially hindering SoundHound's ability to capitalize on future opportunities.

Ultimately, SoundHound's fate hinges on its ability to execute its growth strategy, manage its expenses, and demonstrate a clear path to profitability. The Q2 2025 earnings report will provide critical insights into the company's progress and determine whether the recent consolidation will lead to a breakout or a breakdown.

The AI space is hot, but SoundHound needs to prove it can not only generate buzz, but also generate profits in the periods ahead. Expect guidance, and narrative to play a key role in how this one shapes up. Leading in, options markets are pricing a ~18% move off the back of the print, volatility is expected.