SoundHound AI Earnings Signal Faster Growth
SoundHound AI earnings showed accelerating revenue and raised 2026 guide; GAAP profit reflected non-cash gains, keeping traders focused on cash burn.
KEY TAKEAWAYS
- Q4 revenue $55M and FY 2025 $169M; management raised 2026 revenue guide to $225M-$260M.
- GAAP Q4 net income included $85M mark-to-market gains, while non-GAAP showed a $7M loss.
- Ended 2025 with $248M cash and no debt; $98M operating cash use and EBITDA losses highlight runway risk.
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SoundHound AI Inc. (NASDAQ: SOUN) reported accelerating revenue growth on Feb. 26, 2026, prompting a raised full-year 2026 revenue outlook after an earnings-per-share beat. The company’s reported GAAP profit reflected significant non-cash accounting gains.
Top-Line Growth and 2026 Guidance
The company said in a press release that fourth-quarter 2025 revenue reached $55.1 million, up 59% year-over-year. This growth contributed to full-year 2025 revenue of $168.9 million, a 99% increase that exceeded the prior guidance range of $165 million to $180 million. SoundHound issued 2026 revenue guidance of $225 million to $260 million.
The quarter included a record number of enterprise deals across automotive, retail, restaurants, and telecom sectors. CEO Keyvan Mohajer said, "Our results speak for themselves," linking the stronger outlook to this commercial momentum.
Profitability, Cash Flow, and Non-Cash Gains
On a GAAP basis, SoundHound reported fourth-quarter net income of $40.1 million, or $0.10 per share. On a non-GAAP basis, it posted a net loss of $7.3 million, or $0.02 per share, beating the consensus non-GAAP loss per share of $0.10. For the full year, the company recorded a GAAP net loss of $14.0 million, or $0.03 per share, and a non-GAAP net loss of $53.9 million, or $0.13 per share.
The GAAP results included mark-to-market gains on contingent acquisition liabilities of $85 million in the quarter and $163 million for the full year. These non-operating gains materially narrowed reported GAAP losses and produced the quarter’s GAAP profit.
Adjusted EBITDA showed a loss of $7.4 million in the fourth quarter and $58.4 million for the year. The company ended 2025 with $248 million in cash and no debt, using $98.2 million of operating cash during the year. This cash position provides a near-term cushion, though ongoing adjusted EBITDA losses and operating cash use highlight the need to convert sales growth into sustained operating profit.
Fourth-quarter GAAP gross margin was 47.9%, while non-GAAP gross margin improved 8.4 percentage points year-over-year to 60.5%. For the full year, GAAP gross margin declined 6.5 percentage points to 42.4%, and non-GAAP gross margin slipped 0.5 percentage points to 58.0%.
The quarter’s revenue acceleration, record enterprise deals, and raised revenue guidance indicate growing commercial traction as SoundHound enters 2026. However, sizable non-cash accounting gains, ongoing adjusted EBITDA losses, and significant operating cash use underscore the near-term challenges in achieving sustained operating profitability.
