Summary
SoundHound AI reported record second-quarter fiscal 2026 revenue of $61.9 million, up 45.0% from the prior-year quarter. Year-to-date revenue reached $106.1 million, up 47.7%. The company credited enterprise demand for its OASYS agentic AI platform, which launched in May 2026, for the growth. Management said OASYS drove major enterprise AI deals. Those included a seven-figure deal with a nationally ranked healthcare system with 30,000 employees, a new multi-year partnership in Latin America that starts as an eight-figure deal and covers more than 20 countries, and expanded unit adoption with Stellantis and Hyundai. Restaurant brands Five Guys, IHOP, Jersey Mike's, and a prominent pizza brand now have SoundHound technology live in more than 75% of that pizza brand's total locations.
Profitability improved on a quarterly basis. GAAP operating loss narrowed to $43.3 million. GAAP net loss narrowed to $42.8 million. GAAP diluted loss per share narrowed to $0.10. Operating margin was -70.0%, up 112.9 percentage points from the prior-year quarter. Non-GAAP net loss was $9.0 million, adjusted EBITDA was a loss of $9.6 million, and non-GAAP loss per share was $0.02. Non-GAAP gross margin was 58.4%. Those non-GAAP figures strip out stock-based compensation, acquisition-related expenses, amortization, and changes in the fair value of contingent acquisition liabilities. The year-to-date GAAP picture is weaker because the prior-year period included large fair value gains on those contingent liabilities. For the first six months of fiscal 2026, GAAP operating loss was $66.0 million, GAAP net loss was $67.8 million, and GAAP diluted loss per share was $0.21. Operating margin for the year-to-date period was -62.2%, down 131.9 percentage points.
Cash generation remains a pressure point. Operating cash flow was negative $33.7 million in the second quarter, down 37.6% year over year. For the first six months, operating cash flow was negative $60.0 million, down 37.3% year over year. Capital expenditures were $0.35 million in the quarter, up 84.4%, and $0.82 million year to date, up 132.2%. Deferred revenue was $23.7 million, essentially flat with a 0.1% increase. Remaining performance obligations were $60.0 million, down 13.3%. The company said RPO can fluctuate with the timing of performance obligations and is not directly correlated with revenue growth in a given period. SoundHound ended the quarter with no debt, according to the press release. It also raised $48.5 million of gross proceeds from sales of 6,232,900 Class A shares under its second equity distribution agreement, at an average price of $7.78 per share, and had no remaining capacity under that program. A third equity distribution agreement entered in May 2026 provides up to $300.0 million of capacity.
Guidance is for the full fiscal year 2026. SoundHound raised its full year 2026 revenue outlook to a range of $230 million to $260 million. Management said it will update guidance after the close of the LivePerson acquisition, which is expected before the end of 2026. The LivePerson deal carries approximately $42.8 million of consideration and a related notes restructuring of approximately $261.2 million, and it is expected to close in the third quarter of 2026, subject to regulatory approvals. Risks include the 13.3% decline in RPO, flat deferred revenue, and negative operating cash flow that worsened year over year. The company has also said it expects seasonality, with roughly 40% of revenue in the first half and 60% in the second half. It continues to integrate SYNQ3, Amelia, and Interactions, and it expects general and administrative expenses to rise in the short term as it remediates existing material weaknesses and pays acquisition costs. The pending LivePerson deal adds integration and closing risk.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $61.9M | $44.2M | +40.1% | $42.7M | +45.0% |
| Gross profit | $27.9M | $13.7M | +103.2% | $16.7M | +67.6% |
| Gross margin | 45.1% | 31.1% | +14.0 pp | 39.0% | +6.1 pp |
| Research & development | $27.1M | $26.2M | +3.5% | $25.8M | +5.1% |
| Sales & marketing | $16.6M | $19.2M | -13.4% | $15.8M | +5.0% |
| General & administrative | $26.0M | $25.7M | +1.2% | $18.2M | +42.6% |
| Total operating expenses | $105.2M | $66.9M | +57.3% | $120.7M | -12.9% |
| Operating income (loss) | -$43.3M | -$22.7M | -91.0% | -$78.1M | +44.5% |
| Operating margin | -70.0% | -51.3% | -18.7 pp | -182.9% | +112.9 pp |
| Net income (loss) | -$42.8M | -$25.0M | -71.1% | -$74.7M | +42.7% |
| Net margin | -69.2% | -56.6% | -12.5 pp | -175.1% | +105.9 pp |
| Diluted EPS | -$0.10 | -$0.11 | +$0.01 | -$0.19 | +$0.09 |
Risks
The company is integrating SYNQ3, Amelia, and Interactions while pursuing the pending LivePerson acquisition, which carries approximately $42.8 million of consideration and a concurrent Notes Restructuring Agreement for approximately $261.2 million. The LivePerson deal is expected to close in the third quarter of 2026 subject to customary closing conditions, including regulatory approvals.
The company has incurred recurring losses and used $60.0 million in cash for operating activities in the six months ended June 30, 2026, compared with $43.7 million used in the prior-year period. It relies on cash balances and ATM programs, including a new $300.0 million Third Equity Distribution Agreement, to meet longer-term cash requirements.
The MD&A highlights competition from big tech voice AI offerings that can disintermediate a customer's brand and user experience, and positions the OASYS platform as a competitive response. The company believes it must win on technology and brand control to maintain its independent voice AI position.
The company's primary focus on enterprise customers requires alignment with enterprise sales cycles, which can be longer than consumer cycles, and involves significant upfront investment in customer-specific engineering projects.
The company historically generated approximately 40% of revenue in the first half and 60% in the second half, and it expects fluctuations in customer and user demand based on seasonality that may not be consistent year-to-year.
The MD&A states that gross margin may continue to fluctuate in the near term due to revenue contributions from varying product mixes and acquisitions, including amortization from Interactions and the MIPA asset acquisition.
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 and incurs costs for potential acquisitions.
Changes in fair value of contingent acquisition liabilities for SYNQ3, Amelia, and Interactions can cause large swings in operating results, including a $43.1 million gain in the six months ended June 30, 2026, tied to stock price and revenue target assessments.
The company sold 6,232,900 shares under the Second Equity Distribution Agreement during the six months ended June 30, 2026, raising $48.5 million, and has a new $300.0 million Third Equity Distribution Agreement available, which could further dilute existing stockholders.
SaaS KPIs
All quarters →Remaining Performance Obligations
Non-GAAP Gross Margin
Summary, forecast, risks and KPIs are extracted from SOUNDHOUND AI, INC.'s SEC filings for Q2 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.