Summary
SoundHound AI reported record second quarter revenue of $42.68 million for FY2025 Q2, up 217.1% from the prior-year quarter. The top line benefited from service subscriptions and product royalties, with growth across automotive, enterprise, and restaurant businesses. For the first six months of FY2025, revenue was $71.81 million, up 186.6%. GAAP profitability moved in the opposite direction. The quarter's operating loss widened to $78.05 million, and net loss widened to $74.72 million. Diluted EPS was a loss of $0.19. The company attributed the large GAAP loss to non-cash fair value adjustments on contingent acquisition liabilities, which are tied to its stock price and earnout targets.
Year-to-date GAAP results swung to a profit because of the same fair value items. Operating income was $50.05 million for the six months ended June 30, 2025, compared with a loss in the prior-year period. Net income was $55.21 million. Diluted EPS was $0.13. Operating margin was 69.7% year to date. In the quarter, operating margin was negative 182.9%, down 19.6 percentage points from negative 163.3% a year earlier. That contrast highlights how much the GAAP numbers depend on non-cash, non-operating remeasurements. The six-month profit reflects a large gain from fair value remeasurements in the first half, while the second quarter recorded a loss on the same item.
Cash generation remained negative. Operating cash flow was negative $24.50 million in the quarter, down 32.5% from the prior-year quarter. Year to date, operating cash flow was negative $43.68 million, down 8.0%. Capital expenditures were $0.19 million in the quarter, down 18.6%. Year to date, capital expenditures were $0.35 million, up 5.7%. Deferred revenue was $23.72 million at June 30, 2025, up 709.1% from the prior-year quarter. Remaining performance obligations were $69.20 million, up 552.8%. The company said it has no debt.
Operational highlights were broad. SoundHound unveiled Amelia 7, and 15 large enterprise customers are migrating to the platform. Voice commerce pilots are underway with large automotive brands in Europe and the USA. Restaurant wins included Red Lobster, Peter Piper Pizza, Applebee's, and IHOP. Renewals and expansions came from MOD Pizza, Chipotle, Firehouse Subs, Habit Burger, McAllister's Deli, Beef O Brady's, and Casey's. Automotive included a new win in China for a major OEM and continued expansion with KIA in India. Healthcare added Primary Health Solutions and Allina Health. Retail signed two multi-hundred unit personal care companies and a home services company with over 500 locations. Financial services renewed or upsold 4 of the top 10 global financial institutions. Channel partnerships expanded with EXL, Par Technologies, Acrelec, and AVANT.
Guidance context: SoundHound raised its full year 2025 revenue outlook to a range of $160 million to $178 million. That guidance is for the full fiscal year, not the next quarter. The company said it expects to fund operations for at least the next twelve months. Risks include integrating the 2024 acquisitions, longer enterprise sales cycles, customer adoption, and potential acquisition-related costs. The company also cited its ability to successfully launch and commercialize new products, retain customers, and manage unexpected costs from its 2024 acquisitions. Seasonality is another factor. Historically, about one third of revenue came in the first half and two thirds in the second half. Non-GAAP measures show a smaller loss. Non-GAAP net loss was $11.9 million, and adjusted EBITDA was a loss of $14.3 million. Non-GAAP gross margin was 58.4%, down from 66.5% a year earlier. Non-GAAP EPS was a loss of $0.03. Even after excluding stock-based compensation, acquisition costs, and fair value changes, the company is not yet profitable on a non-GAAP basis.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $42.7M | $29.1M | +46.5% | $13.5M | +217.1% |
| Gross profit | $16.7M | $10.6M | +56.9% | $8.5M | +96.4% |
| Gross margin | 39.0% | 36.5% | +2.6 pp | 63.0% | -24.0 pp |
| Research & development | $25.8M | $24.8M | +4.2% | $15.7M | +64.0% |
| Sales & marketing | $15.8M | $12.0M | +31.9% | $5.7M | +180.1% |
| General & administrative | $18.2M | $18.4M | -1.0% | $9.5M | +91.2% |
| Total operating expenses | $120.7M | -$99.0M | +222.0% | $35.4M | +240.6% |
| Operating income (loss) | -$78.1M | $128.1M | -160.9% | -$22.0M | -255.0% |
| Operating margin | -182.9% | 439.8% | -622.6 pp | -163.3% | -19.6 pp |
| Net income (loss) | -$74.7M | $129.9M | -157.5% | -$37.3M | -100.2% |
| Net margin | -175.1% | 446.1% | -621.1 pp | -277.2% | +102.2 pp |
| Diluted EPS | -$0.19 | $0.31 | -$0.50 | -$0.11 | -$0.08 |
Risks
The Amelia Acquisition drove a 217% increase in revenue for the quarter ended June 30, 2025, but cost of revenues rose 423% and gross margin decreased to 39% from 63% for that quarter, primarily due to acquired intangible amortization. The Amelia purchase price allocation was not finalized as of June 30, 2025, and finalization could result in further measurement adjustments.
The change in fair value of contingent acquisition liabilities was a loss of $31.4 million for the quarter ended June 30, 2025 and a gain of $144.7 million for the six months ended June 30, 2025, driven by stock price movements and assessed probability of revenue targets. This non-operating, non-cash volatility can materially affect reported net income and may cause dilution if Amelia or SYNQ3 earnouts are met.
The company has incurred recurring losses since inception and net cash used in operating activities was $43.7 million during the six months ended June 30, 2025 compared to $40.4 million during the six months ended June 30, 2024. It expects to fund operations for at least the next twelve months using cash, operating cash flows, and its at-the-market equity program, creating reliance on equity issuance and potential dilution.
Revenue growth depends on enterprise customer adoption, OEM integrations, and competition. Management states that its primary focus on enterprise customers requires aligning with sales cycles that can be longer than consumer cycles, and that it must invest in sales and marketing for its messaging, capabilities, and offerings to be understood and valued.
Big tech Voice AI offerings are primarily extensions of core services and can take over the customer experience, potentially disintermediating brands and limiting their ability to innovate, differentiate, and customize. SoundHound's growth depends on customers choosing an independent Voice AI platform and maintaining control of their brand and user data.
The One Big Beautiful Bill Act enacted on July 4, 2025 changes U.S. tax rules, including immediate expensing of domestic R&D and certain capital expenditures and changes to foreign profit taxation. SoundHound does not expect a significant change in tax expense for the third and fourth quarters of 2025 due to its taxable loss position and full U.S. valuation allowance, but it continues to evaluate the impact.
Remaining performance obligations were $69.2 million as of June 30, 2025, and management says deferred revenue and RPO can fluctuate with contract timing and billing frequency and may not correlate with revenue growth in a given period. This limits quarter-to-quarter revenue predictability.
Management anticipates fluctuations in customer and user demand based on seasonality, noting that historically approximately one third of revenue fell in the first half and two thirds in the second half, with overall seasonality potentially inconsistent year-to-year across verticals.
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 Q2 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.