Summary
SoundHound AI reported first quarter fiscal 2025 revenue of $29.1 million, up 151% from the prior-year quarter. Service subscriptions drove the top line, according to management, on the Amelia acquisition and growth in the Americas. Lower product royalty revenue in Asia partly offset that gain. GAAP operating income was $128.1 million, a swing to profit from an operating loss in the prior-year quarter. GAAP net income was $129.9 million, also a swing to profit, and diluted GAAP EPS was $0.31, up from a loss in the prior-year quarter. Operating margin was 439.8%, up from the prior-year quarter. The GAAP profit reflected a non-cash fair value gain on contingent acquisition liabilities, an item that non-GAAP results exclude. On a non-GAAP basis, SoundHound reported a net loss of $(22.3) million, adjusted EBITDA of $(22.2) million, and diluted EPS loss of $(0.06). Non-GAAP gross margin was 50.8%.
Cash use and backlog metrics gave a mixed picture. Operating cash flow was negative $19.2 million, an improvement from the prior-year quarter. Capital expenditures were $0.16 million, up from the prior-year quarter. Deferred revenue was $26.9 million, up 640.5% from the prior-year quarter. Remaining performance obligations, or RPO, were $71.1 million, up 502.5% from the prior-year quarter. During the quarter, SoundHound sold 4,248,900 shares under its Second Equity Distribution Agreement at an average price of $15.94 and raised $67.7 million of gross proceeds. The agreement had $182.3 million of remaining capacity at March 31, 2025. The company reported no debt.
The quarter's operational news centered on product launches and expansion across verticals. SoundHound unveiled Amelia 7.0, an agentic AI platform with voice technology, and continued to build out voice commerce. Voice commerce has integrated dozens of restaurant brands and is running pilots and POCs with multiple automakers, including the innovation team at one of the world's largest automotive brands. The company expanded its partnership with one of the largest pizza chains in the U.S., added locations with brands such as Habit Burger, Casey's, Firehouse Subs, Five Guys, White Castle and McAlister's, and continued expansion across Burger King UK locations with partner Acrelec. In automotive, SoundHound partnered with Tencent Intelligent Mobility and participated in NVIDIA GTC 2025. In healthcare, SoundHound renewed or expanded with three customers, including a prominent medical billing company, a healthcare provider that brings test results to the patient at home, and a midwest provider that owns and operates a dozen hospitals. Three of the new healthcare deals won in Q4 2024 are now live. In retail, the company signed strategic pilots with multiple top U.S. fitness chains and leading home services franchises. In energy, it launched an AI agent for a large utilities company signed in Q4 2024 and partnered with PowerConnect.AI. IT and telecom customers renewed contracts, including a large British multinational telecommunications company. Travel and hospitality added a leading luxury resort developer in Latin America and expanded with one of the largest hotel chains in the world. Financial services saw renewals across four financial institutions and a new deal with one of the world's largest insurance companies in Europe. No customer accounted for more than 10% of revenue, which management framed as evidence of customer diversification.
For the full fiscal year 2025, SoundHound reaffirmed its revenue outlook of $157 million to $177 million. That guidance is for the full year, not the next quarter. Still, the quarter's GAAP profitability came from a non-operating, non-cash item, and the non-GAAP measures show continuing losses. The MD&A flags several risks: revenue growth depends on OEM integration, competition and enterprise demand, and enterprise sales cycles can be long. The company also faces cost pressure from cloud and data center investments, integration of the 2024 acquisitions, and potential gross margin fluctuations. Management expects sales and marketing, research and development, and general and administrative expenses to grow below revenue over the long term, but it expects those expenses to remain stable or increase in the short term. Seasonality is another factor, and SoundHound has historically seen about one third of revenue in the first half and two thirds in the second half. The company has incurred recurring losses since inception but believes it can fund operations for at least the next twelve months, partly through its at-the-market equity program.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $29.1M | $34.5M | -15.7% | $11.6M | +151.2% |
| Gross profit | $10.6M | $13.8M | -23.0% | $6.9M | +53.3% |
| Gross margin | 36.5% | 39.9% | -3.4 pp | 59.7% | -23.3 pp |
| Research & development | $24.8M | $20.4M | +21.4% | $14.9M | +66.4% |
| Sales & marketing | $12.0M | $9.6M | +25.5% | $5.5M | +116.7% |
| General & administrative | $18.4M | $16.4M | +12.0% | $10.3M | +79.3% |
| Total operating expenses | -$99.0M | $291.6M | -133.9% | $40.1M | -346.7% |
| Operating income (loss) | $128.1M | -$257.1M | +149.8% | -$28.5M | +549.0% |
| Operating margin | 439.8% | -744.2% | +1184.0 pp | -246.1% | +685.8 pp |
| Net income (loss) | $129.9M | -$258.6M | +150.2% | -$33.0M | +493.6% |
| Net margin | 446.1% | -748.6% | +1194.7 pp | -284.7% | +730.8 pp |
| Diluted EPS | $0.31 | -$0.76 | +$1.07 | -$0.12 | +$0.43 |
Risks
MD&A reports gross margin decreased to 36% for the three months ended March 31, 2025 from 60% in the prior-year quarter, primarily due to the Amelia acquisition, including $3.5 million of amortization of acquired intangible assets, while cost of revenues increased 296% and total revenues rose 151%.
Total revenues increased 151% for the three months ended March 31, 2025, driven by $21.0 million of additional service subscription revenue from the Amelia acquisition, but the Amelia purchase price allocation remains preliminary as of March 31, 2025 and is expected to be finalized within 12 months, creating integration and accounting risks.
Operating income and net income swung to profits for the three months ended March 31, 2025 largely from a $176.1 million non-operating, non-cash gain on the change in fair value of contingent acquisition liabilities, and MD&A says this mark-to-market remeasurement will continue quarterly through 2026 and can significantly impact net income and EPS.
New risk factor states that although SoundHound is not directly impacted by tariffs as a SaaS provider, the early April 2025 U.S. tariffs on foreign imports from about 90 nations may increase business partners' costs and reduce their margins, potentially pressuring demand for SoundHound's products or its pricing strategy and increasing market volatility and currency exchange rate fluctuations.
MD&A states that with a primary focus on enterprise customers, SoundHound must align with enterprise sales cycles that can be longer than consumer cycles, requiring continued sales and marketing investment and significant upfront investment in customer specific engineering projects.
MD&A warns that SoundHound anticipates seasonal demand fluctuations and historically saw about one third of revenue in the first half of the year and two thirds in the second half, with the overall seasonality impact not consistent year-to-year, which could negatively affect demand forecasting.
Total revenues rose 151% for the three months ended March 31, 2025, but product royalties decreased 44% and monetization revenue decreased 11%, with the royalty decline primarily in Asia, showing dependence on service subscriptions and the Amelia acquisition.
Operating cash flow was negative $19.2 million for the three months ended March 31, 2025, though up $2.8 million from negative $21.9 million in the prior-year quarter, and MD&A notes recurring losses since inception and continued reliance on an at-the-market equity program that raised $67.7 million of gross proceeds in the quarter.
SaaS KPIs
All quarters →Remaining Performance Obligations
Non-GAAP Gross Margin
Adjusted EBITDA
Summary, forecast, risks and KPIs are extracted from SOUNDHOUND AI, INC.'s SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.