SoundHound AI Set to Report Q1 2025 Earnings: Here’s What to Expect
SoundHound AI (NASDAQ: SOUN) is scheduled to release its Q1 2025 financial results on May 8, with analysts forecasting a net loss of $0.09 per share on expected revenue of $30.38 million.
- This would mark an improvement from the $0.12 loss per share posted in the same quarter last year, signaling incremental progress in narrowing losses.
- However, investors remain cautious due to the company’s history of earnings misses, having fallen short in six of the past nine quarters.
Revenue Trends Show Mixed Signals
While SoundHound continues to grow in some areas, its top-line composition reflects shifting dynamics.
- According to Main Street Data, service subscription revenues rose 58% sequentially, reaching $30.1 million for Q4 2024.
- However, product royalty revenues declined 27%, totaling $4.37 million, pointing to challenges in licensing and distribution channels.
These divergent trends suggest that while recurring revenue is gaining traction, non-subscription streams may be under pressure, limiting overall growth momentum.
Stock Performance Pressured by Headwinds
SOUN stock is down over 54% year-to-date, reflecting a mix of valuation concerns, delayed filings, and increased competition in the AI voice technology sector.
- A notable catalyst for the downturn came earlier in 2025 when Nvidia (NASDAQ: NVDA) disclosed it had fully exited its investment in SoundHound.
- This move likely amplified investor worries, as Nvidia was previously seen as a strategic backer in the AI ecosystem.
Analyst Ratings Cut, But Long-Term Outlook Holds
Ahead of earnings, analysts have adjusted their price targets downward, citing macroeconomic uncertainty and sector-wide pressure on tech stocks.
- DA Davidson analyst Gil Luria cut his price target from $13 to $10, while maintaining a Buy rating, acknowledging possible short-term weakness due to economic slowdown.
- Cantor Fitzgerald’s Thomas Blakey lowered his target from $10 to $8.50, holding a Neutral stance, and citing broader weakness in the software sector, as tracked by the IGV ETF, which is down 10% YTD.
The IGV ETF includes industry leaders like Microsoft, Salesforce, and Adobe, and its performance offers a benchmark for software market sentiment.
Options Market Predicts Volatility Post-Earnings
According to TipRanks’ Options tool, traders are pricing in a 12.8% move in either direction for SOUN stock following the earnings report.
- This estimate is derived from the at-the-money straddle of options expiring immediately after the earnings date.
- The projection suggests that investors anticipate significant volatility, likely tied to the company’s history of earnings surprises and market sensitivity to guidance updates.
With sentiment mixed and expectations tempered, all eyes are on whether SoundHound can reverse recent trends and show clearer signs of financial stability and commercial traction.
