Summary
SoundHound AI opened fiscal 2026 with revenue of $44.2 million, up 51.7% from the prior-year quarter. The company said revenue in its core automotive and IoT AI vertical rose 88% excluding all acquisitions, which points to demand beyond the deals it has closed. GAAP operating income swung to an operating loss of $22.7 million, down from positive operating income a year earlier. GAAP net income swung to a net loss of $25.0 million. Diluted EPS swung to a loss of $0.11. Operating margin was -51.3%, down from a positive margin in the prior-year quarter.
Non-GAAP results also showed pressure. Non-GAAP gross margin was 49.7%, compared with 50.8% a year earlier. Non-GAAP net loss was $26.6 million, and adjusted EBITDA was a loss of $26.7 million. Non-GAAP loss per share was $0.06. The press release notes that first quarter expenses included non-recurring vendor true-up costs that hit both GAAP and non-GAAP gross margin. A non-cash gain from remeasuring contingent acquisition liabilities helped GAAP results, but the gain is tied to the company's stock price and earnout assumptions, so it does not reflect operating performance.
Cash generation remains negative. Operating cash flow was -$26.3 million, down 36.9% from the prior-year quarter. Capital expenditures were $0.5 million, up from the prior-year quarter; those are cash outflows. Deferred revenue, current portion only, was $28.5 million, up 6.0%. Remaining performance obligations were $64.7 million, down 9.0%. The MD&A explains that RPO and deferred revenue can move with billing frequency and contract timing, so they do not track revenue growth directly. Management says the company has no debt and expects to fund operations for at least the next twelve months.
Operational momentum centers on OASYS, the agentic AI platform launched in the quarter. SoundHound signed a 7-figure commitment with a prominent Japanese manufacturer to deploy its voice assistant across vehicles globally. It also signed an agreement to integrate voice AI across Walmart's ONN TV brand. In restaurants, a major QSR saw AI-enabled locations generate more revenue than locations without the technology. New wins spanned fitness apparel, banking, insurance, utilities, healthcare and IT services. The planned acquisition of LivePerson would combine voice and agentic AI with digital messaging. The companies expect a $500 million revenue opportunity and a customer footprint that includes 25 of the Fortune 100.
Guidance remains for the full year 2026. SoundHound reaffirmed its full year 2026 revenue outlook of $225 million to $260 million. For 2027, the company expects revenue of at least $350 million to $400 million, including at least $100 million of growable contribution from LivePerson's long-tenured customers. The LivePerson deal is expected to close in the second half of 2026, subject to regulatory approvals and closing conditions. Risks include integration of SYNQ3, Amelia and Interactions, unexpected costs from those deals, the ability to close LivePerson, longer enterprise sales cycles, and seasonality. The company has historically seen roughly 40% of revenue in the first half and 60% in the second half. It also plans to invest in its control environment to remediate existing material weaknesses, and it has net operating loss carryforwards that can expire or face annual limitations.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $44.2M | $55.1M | -19.7% | $29.1M | +51.7% |
| Gross profit | $13.7M | $26.4M | -47.8% | $10.6M | +29.4% |
| Gross margin | 31.1% | 47.9% | -16.8 pp | 36.5% | -5.4 pp |
| Research & development | $26.2M | $24.8M | +5.5% | $24.8M | +5.8% |
| Sales & marketing | $19.2M | $17.4M | +10.3% | $12.0M | +60.0% |
| General & administrative | $25.7M | $21.2M | +21.1% | $18.4M | +39.5% |
| Total operating expenses | $66.9M | $12.5M | +435.5% | -$99.0M | +167.6% |
| Operating income (loss) | -$22.7M | $42.6M | -153.3% | $128.1M | -117.7% |
| Operating margin | -51.3% | 77.3% | -128.6 pp | 439.8% | -491.1 pp |
| Net income (loss) | -$25.0M | $40.1M | -162.5% | $129.9M | -119.3% |
| Net margin | -56.6% | 72.8% | -129.4 pp | 446.1% | -502.7 pp |
| Diluted EPS | -$0.11 | $0.10 | -$0.21 | $0.31 | -$0.42 |
Risks
Operating income swung to a loss of $22.67 million in FY2026 Q1 from $128.10 million in FY2025 Q1, and net income swung to a loss of $25.03 million from $129.93 million. Operating margin fell to -51.3%, down 491.1 percentage points, highlighting severe operating leverage risk.
Operating cash flow used $26.26 million in FY2026 Q1, down 36.9% from $19.18 million used in FY2025 Q1. MD&A notes recurring losses since inception and reliance on future ATM proceeds and available cash to fund operations.
MD&A details significant costs and purchase accounting for SYNQ3, Amelia and Interactions acquisitions, including incomplete Interactions purchase accounting and contingent earnouts. The 2024 SYNQ3 revenue target was not met and the 2026 Interactions revenue target was assessed as not probable of being met, creating integration and liability risks.
MD&A states enterprise sales cycles can be longer than consumer cycles and require significant upfront customer-specific engineering investment. Remaining performance obligations decreased 9.0% to $64.70 million in FY2026 Q1 from $71.10 million in FY2025 Q1.
MD&A anticipates quarterly revenue fluctuations based on seasonality and notes that in the past approximately 40% of revenue was in the first half and 60% in the second half, with inconsistent year-to-year impacts across verticals.
MD&A highlights gross margin pressure from data center investments, cloud workloads and labor costs, and states gross margin may continue to fluctuate due to product mix and acquisitions. The company expects to gradually improve gross margins in the mid-term as it integrates Amelia, Interactions and SYNQ3.
MD&A states the company expects general and administrative expenses to increase in the short term as it invests in its control environment to remediate existing material weaknesses, raising compliance and reporting risk.
MD&A describes competitive pressure from big tech Voice AI offerings that can disintermediate customer brands and from legacy vendors with dated technology. The company must defend its independent Voice AI position against these alternatives.
MD&A states monetization revenue is currently derived only from the SoundHound music identification app and has not yet generated revenue from leads and transactions on voice-enabled products, making future revenue diversification uncertain.
SaaS KPIs
All quarters →Non-GAAP Gross Margin
Adjusted EBITDA
Remaining Performance Obligations (RPO)
Summary, forecast, risks and KPIs are extracted from SOUNDHOUND AI, INC.'s SEC filings for Q1 FY2026 (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.