SoundHound AI — Q3 2026 Earnings Summary

Financial Performance:

• Third quarter revenue reached $62.4 million, representing a 48.5% year-over-year increase compared to $42.0 million in Q3 2025.
• GAAP gross margin was 34.1%, down from 42.6% in the prior year period; non-GAAP gross margin was 50.3%, down from 59.3% year-over-year.
• GAAP net loss was $(46.4) million, a significant improvement from $(109.3) million in Q3 2025; non-GAAP net loss was $(21.2) million, an increase from $(13.0) million in Q3 2025.
• Adjusted EBITDA was a loss of $(20.7) million, widening from a loss of $(14.5) million in Q3 2025.
• GAAP net loss per share was $(0.10) (basic and diluted), compared to $(0.27) in Q3 2025; non-GAAP net loss per share was $(0.05) (basic and diluted), compared to $(0.03) in Q3 2025.
• Cash and cash equivalents totaled $207.6 million as of September 30, 2026.
• Short-term debt stood at $3.8 million as of September 30, 2026, assumed from the LivePerson acquisition.
• Net cash used in operating activities for the nine months ended September 30, 2026, was $(96.0) million, compared to $(76.3) million in the same period of 2025.

Guidance and Future Outlook:

• The company expects 2026 revenue to be in the range of $250 million to $260 million.
• The company expects 2027 revenue to be in the range of $350 million to $400 million.
• SoundHound guides to achieving sustained adjusted EBITDA profitability within the second half of 2027, even at the lower end of the revenue guidance.
• The company identified $120 million in annualized cost synergies, with over $80 million in actions scheduled to take effect before January 1, 2027, and the full run-rate expected in 2027.
• Management plans to shift from upfront license deals to hosted structures to improve revenue stability and predictability.
• The company is strategically exiting negative gross margin contracts inherited from prior acquisitions to positively impact gross margin and EBITDA.

Business Segments and Product Lines:

• LivePerson Integration: Closed the acquisition of LivePerson on September 4, 2026; coordinated outreach to top 90 enterprise accounts representing over $100 million in ARR with positive feedback regarding financial stability and new AI capabilities.
• Enterprise and Customer Care: Secured contracts with a leading academic health system, health testing provider Randox, a major US electric utility, and a British multinational telecommunications company.
• Auto, Devices, and Voice Commerce: Signed a 7-figure minimum-guarantee agreement with a tier-one Chinese automotive supplier; secured a deal with Greaves Electric for an embedded voice assistant; launched OASYS Edge for on-device LLM-powered voice AI; signed a deal with LG to debut a commerce channel across 20 million smart TVs in the US; established direct voice commerce partnerships with a large coffeehouse brand and a fast-casual restaurant chain.
• Consumer Brands, Hospitality, and Physical Operations: Renewed an enterprise HR deployment with a multinational food and beverage company; expanded Resorts World Las Vegas from a digital concierge to an autonomous booking agent; added ordering capabilities to nearly 100 additional locations for a household-name pizza chain; acquired a new end customer through a partnership with Alta Resources.
• OASYS Platform: The OASYS platform is positioned as the operating system for the agentic era, incorporating technology from six combined pioneering businesses.

Market and Competitive Landscape:

• The company states its OASYS platform leads its category.
• SoundHound serves leading brands across automotive, financial services, healthcare, retail, telecommunications, and other industries.
• The company powers millions of products and processes billions of interactions annually.

Risks and Challenges:

• GAAP operating loss includes a $23.4 million gain associated with the change in fair value of contingent acquisition liabilities (mark-to-market of earn-out shares).
• Forward-looking statements involve risks including the ability to successfully launch and commercialize new products, acquire new customers, retain existing customers, and achieve expected cost synergies.
• Risks include unexpected costs from recent acquisitions and the potential for actual results to differ materially from forward-looking estimates.

Management Commentary and Tone:

• CEO Keyvan Mohajer described the quarter as a "milestone moment," citing record revenue, the LivePerson acquisition, and the guidance for EBITDA profitability.
• CFO John Collins highlighted swift integration of LivePerson, the realization of cost and revenue synergies, and the shift to hosted structures to improve the quality of earnings.
• Management expressed confidence that business transformations provide the operating leverage necessary to reach sustainable, profitable growth by the second half of 2027.

Other Key Points:

• The acquisition of LivePerson resulted in the retirement of all but a negligible portion of debt, with remaining debt to be repaid at maturity in the fourth quarter.
• The company will host a live audio conference call and webcast at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time.
• Financial data presented is preliminary until the company files its 10-Q.
• SoundHound holds over 800 patents and utilizes proprietary technology backed by years of AI research.