SoundHound AI’s Stock (SOUN) Down as Revenue Fails To Beat the Street

SoundHound AI's stock (NASDAQ: SOUN) is down 3.3% through the early part of pre-market trading, as Q1 2025 earnings failed to hit the mark. Whilst EPS came in on the consensus of -$0.06, revenues of $29.13 million on the period fell short of analysts' projected revenues of $30.2 million, and represent a decline on the $34.54 million reported in the previous period.

The previous report showed a 101.5% revenue surge in Q4 2024, driven by adoption in automotive voice commerce and quick-service restaurants, but that has not followed through in the current quarter.

Taking a look at SoundHound's stock over the past 12 months, and it is the proverbial tale of two halves. The rapid rate of appreciation from May 2024 to the end of the year was almost breakneck, with a gain of more than 300%. The start of 2025 however has been blighted with downside volatility, as a YTD loss of 51.69% will attest. Zooming out to the 12 month return, and there remains plenty for longer term holders to be thankful for, with a gain of 105% on the period a significant outperformance on broader markets.

Revenue slowing, and persistent concerns surrounding valuation (P/S above 43), cash burn (-$35.5million in Q4 24), and dilution risks to fund operations have weighed on the stock in recent times, yet the long from the CEO remains bullish.

Comments from CEO and Co-Founder of SoundHound AI Keyvan Mohajer made clear the view that “bold growth initiatives are paying dividends, and we're realizing significant cross-sell and upsell opportunities following our acquisitions.” FY25 revenue guidance was also reaffirmed at the $157million -$177million range, largely in line with the consensus estimate of $165.98million at the mid-point.

On April 22, SoundHound announced a partnership with Tencent Intelligent Mobility to integrate its Chat AI Automotive platform into Tencent’s cloud-based automotive solutions. The collaboration focuses on enhancing in-vehicle voice assistants with multilingual support, and context aware responses for navigation, entertainment, and local recommendations.

SoundHound also achieved market leadership in the 2025 ISG Buyers Guide for AIOps, outperforming BMC, IBM, and Splunk in AIOps Capability; whilst expanding its collaboration with NVIDIA to optimize voice AI performance.

Analysts continue to back the firm, with a $13.93 price target offering significant perceived upside from current price action. The high mark of $26 reflects the bull view, with the low of $8 the bear case.

There is plenty to do in order to return the stock sentiment to previous highs, yet revenue growth of 151% year-over-year cannot be overlooked.