SoundHound AI, Inc. SOUN delivered a record second quarter as enterprise demand for OASYS helped lift revenues and management raised the floor of its 2026 outlook. The result strengthens the case that the platform is becoming a more meaningful growth driver.
Investors now have a tougher test to watch. Faster deal conversion and improving margins need to persist while SoundHound absorbs acquisition risk and works toward better cash generation.
SoundHound's Record Q2 Shows OASYS Momentum
Second-quarter revenues rose 45% year over year to a record $61.9 million, topping the Zacks Consensus Estimate of $52.49 million by 17.9%. The adjusted loss narrowed to 2 cents per share from 3 cents a year earlier and beat the consensus estimate of 3 cents.
Management attributed the top-line growth to major enterprise AI deals linked to OASYS. The self-learning, orchestrated platform lets customers build and deploy conversational agents across phones, chat, kiosks, smart devices, drive-thrus, televisions and vehicles.
SOUN's Guidance Raise Extends the Growth Story
SoundHound raised its 2026 revenue outlook to $230-$260 million from $225-$260 million, lifting the lower end by $5 million. The revision followed its first-half performance and continued demand for OASYS and the company's broader voice and agentic AI portfolio.
The Zacks Consensus Estimate for 2026 sales is $233 million, up 37.9% from 2025. That figure sits near the lower end of management's new range, while the unchanged $260 million ceiling leaves the raised floor as the principal guidance change.
OASYS Helps SoundHound Shorten Deal Timelines
Management said work that previously took months can now be built in minutes using OASYS. One eight-figure commitment moved from demonstration to contract in less than 90 days. OASYS also helped SoundHound convert pilots and customer evaluations more quickly.
Cerence Inc. CRNC, a listed Zacks industry peer, develops conversational AI for automotive use cases. Five9, Inc. FIVN, another listed peer, offers agentic and voice AI for contact centers. Those businesses frame the competitive pressure SoundHound faces across automotive and enterprise customer-service deployments.
SOUN's Margin Improvement Adds Quality to the Beat
GAAP gross margin expanded 610 basis points year over year to 45.1% from 39%, while GAAP gross profit rose 68% to $27.9 million. Adjusted EBITDA loss narrowed 33% to $9.6 million from $14.3 million.
Non-GAAP gross margin was unchanged at 58.4%, indicating stable underlying gross profitability after the company's adjustments. Losses remain material, however. GAAP net loss totaled $42.8 million and first-half operating cash outflow widened to $60 million from $43.7 million a year earlier.
SoundHound's Outlook Excludes LivePerson Upside
The new 2026 outlook does not contemplate SoundHound's pending acquisition of LivePerson, Inc. LPSN. SoundHound expects the transaction to close before the end of 2026 and plans to update guidance after completion.
That structure leaves any post-close contribution outside the current range, but the transaction also adds execution risk. SoundHound must integrate technologies, engineering teams and enterprise platforms while continuing to convert OASYS demand into scaled deployments.
SoundHound's Scores Temper the Post-Earnings Setup
The second-quarter report strengthens the operating case for OASYS, but the next phase depends on whether faster deployments can support durable margin improvement and better cash generation while acquisition risks remain in focus.
SOUN currently carries a Zacks Rank #3 (Hold), a VGM Score of F, Value Score of F, Growth Score of D and Momentum Score of F. The Zacks Rank reflects earnings-estimate revisions over a one- to three-month horizon, while the Style Scores assess value, growth and momentum characteristics. The weaker grades temper the setup despite the stronger quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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SoundHound AI, Inc. (SOUN): Free Stock Analysis Report
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Cerence Inc. (CRNC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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