{"id":234209,"date":"2025-05-10T07:15:34","date_gmt":"2025-05-10T07:15:34","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/finance\/soundhound-ai-stock-sinks-8-as-revenue-misses-wall-streets-estimate-is-soun-stock-a-buy\/"},"modified":"2025-05-10T07:15:34","modified_gmt":"2025-05-10T07:15:34","slug":"soundhound-ai-stock-sinks-8-as-revenue-misses-wall-streets-estimate-is-soun-stock-a-buy","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=234209","title":{"rendered":"SoundHound AI Stock Sinks 8% as Revenue Misses Wall Street’s Estimate. Is SOUN Stock a Buy?"},"content":{"rendered":"


\n<\/p>\n

In the first quarter, the AI-powered voice solutions provider continued to post strong revenue growth, but its sizable losses also continued.<\/p>\n

\n

SoundHound AI <\/strong>(SOUN<\/a> -8.16%<\/span>)<\/span> stock declined 7.8% on Friday following the conversational artificial intelligence (AI) technology provider’s release of its first-quarter 2025 report on the prior afternoon. The drop is largely attributable to the quarter’s revenue falling short of Wall Street’s expectations. The bottom-line result was in line with the analyst consensus estimate.<\/p>\n

\"Interior<\/p>\n

Image source: SoundHound AI.<\/p>\n<\/div>\n

SoundHound AI’s key numbers<\/h2>\n
\n\n\n\n\n\n\n\n\n\n
Metric<\/th>\nQ1 2024<\/th>\nQ1 2025<\/th>\nChange<\/th>\n<\/tr>\n
Revenue<\/td>\n$11.6 million<\/td>\n$29.1 million<\/td>\n151%<\/td>\n<\/tr>\n
GAAP operating income<\/td>\n($28.5 million)<\/td>\n$128.1 million<\/td>\nFlipped from negative to positive<\/td>\n<\/tr>\n
GAAP net income<\/td>\n($33 million)<\/td>\n$129.9 million<\/td>\nFlipped from negative to positive<\/td>\n<\/tr>\n
Adjusted net income<\/td>\n($20.2 million)<\/td>\n($22.3 million)<\/td>\nLoss widened by 10%<\/td>\n<\/tr>\n
GAAP earnings per share (EPS)<\/td>\n($0.12)<\/td>\n$0.31<\/td>\nFlipped from negative to positive<\/td>\n<\/tr>\n
Adjusted EPS<\/td>\n($0.07)<\/td>\n($0.06)<\/td>\nLoss narrowed by 14%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

Investors should focus on the adjusted numbers, which exclude one-time items. Q1 2025 GAAP numbers include an accounting-only (noncash) gain related to acquisitions. Data source: SoundHound AI. GAAP<\/a> = generally accepted accounting principles.<\/p>\n

Acquisitions over the last year have helped revenue growth year over year, though we do not know to what degree. In other words, we don’t know the organic revenue growth rate. On the positive side, these acquisitions have enabled the company to better diversify its customer base on both individual and industry bases. No single customer accounted for more than 10% of revenue in the quarter.<\/p>\n

Investors should focus on the adjusted numbers, which exclude one-time items.\u00a0Wall Street was looking for an adjusted loss of $0.06 per share on revenue of $30.4 million, so SoundHound met the bottom-line expectation but missed the top-line one.<\/p>\n

SoundHound used $19.2 million in cash to run its operation, slightly better than its operating cash flow of negative $21.9 million in the year-ago period. Free cash flow was negative $19.3 million, compared with negative $25.7 million in the year-ago period. The company ended the quarter with cash and cash equivalents of $246 million and no long-term debt.\u00a0At the current cash burn rate, SoundHound’s cash will last about 12.7 quarters, or just over three years.<\/p>\n

What the CEO had to say<\/h2>\n

CEO Keyvan Mohajer’s statement in the earnings release:<\/p>\n

\n

SoundHound continues to extend its reach and create new possibilities for real world AI applications. The release of our complete AI agent platform delivers full, voice-enabled Agentic AI for customers across all industries. At the same time, our bold growth initiatives are paying dividends, and we’re realizing significant cross-sell and upsell opportunities following our acquisitions.<\/p>\n<\/blockquote>\n

SoundHound AI’s 2025 guidance<\/h2>\n

On the earnings call, CFO Nitesh Sharan reaffirmed the company’s prior guidance as follows:<\/p>\n