Soundhound AI (Soun), a leading provider of artificial intelligence (AI) voice solutions, reported its fourth quarter financial results, catalyzing a jump of 17.5% of its stock price. The reported adjusted loss of $0.05 per share with $304.5 million in revenue and announcements of a 2025 guidance increase exceeded expectations. Soundhound’s recent revenue report shows an impressive increase of 100% year-on-year revenue growth, with new revenue guidance for 2025 projecting double sales from 2024. CEO Keyvan Mohajer addresses investor concerns over Nvidia’s recent sale from Soundhound, suggesting that the share price has fallen by more than 45%.
Significant revenue growth
Soundhound is a provider of Voice AI Solutions, specializing in conversation intelligence. Its unique technology enables companies from a wide range of industries, including automobiles, televisions, and IoT to deliver fast, accurate conversational experiences in multiple languages. It handles billions of interactions each year with prominent businesses around the world.
Soundhound reported strong financial results for the fourth quarter and one year. In the fourth quarter, revenues rose significantly year-on-year to $34.5 million. GAAP’s total margin was 39.9%, with adjusted EBITDA losing $16.8 million in the quarter.
Full-year revenues rose 85% year-on-year to appear at $84.7 million. The total margin for GAAP was 48.9% higher for a year, but the annual adjusted EBITDA was a loss of $61.9 million. It is noteworthy that the rise in Soundhound’s year-end stock price will increase the fair value of contingent liabilities, which will have a significant impact on both GAAP net loss and EPS value for the fourth quarter and full year.
Despite some economic set-offs, Soundhound is optimistic about the future, increasing its revenue vision for 2025 from $157 million to $177 million.
Analyst responses are mixed
Analysts following the company have taken a complex response to recent revenue reports. Da Davidson’s Gil Luria is one of those bullish people in response. He maintains his purchase rating while increasing the price target for Soundhound’s stock by $13 (from $9.50).
Luria has focused on the company’s strong financial performance towards the end of 2024, with revenue growth exceeding expectations. The company’s solutions are in high demand and will expand its business to prominent sectors such as finance, healthcare and energy. Additionally, Amelia’s acquisition has significantly increased the entire addressable market for Soundhound, bringing diversity to the portfolio, according to analyst notes.
Soundhound AI is rated as a medium purchase overall, based on recent recommendations from five analysts. The average price target for SOUN stocks is $15.80, representing a potential upside of 46.03% from its current level.
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