Voice AI technology company SoundHound AI (NASDAQ: SOUN) announced better-than-expected revenue in Q4 CY2025, with sales up 59.4% year on year to $55.06 million. Its GAAP loss of $0.03 per share was 69.1% above analysts’ consensus estimates.
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SoundHound AI (SOUN) Q4 CY2025 Highlights:
- Revenue: $55.06 million vs analyst estimates of $53.84 million (59.4% year-on-year growth, 2.3% beat)
- EPS (GAAP): -$0.03 vs analyst estimates of -$0.10 (69.1% beat)
- Adjusted EBITDA: $72.28 million (131% margin, 530% year-on-year growth)
- Operating Margin: 77.3%, up from -744% in the same quarter last year
- Free Cash Flow was -$24.43 million compared to -$32.83 million in the previous quarter
- Market Capitalization: $3.58 billion
Company Overview
Born from the idea that machines should understand human speech as naturally as people do, SoundHound AI (NASDAQ: SOUN) develops voice recognition and conversational intelligence technology that enables businesses to integrate voice assistants into their products and services.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, SoundHound AI’s sales grew at an incredible 68% compounded annual growth rate over the last four years. Its growth beat the average software company and shows its offerings resonate with customers.
Long-term growth is the most important, but within software, a stretched historical view may miss new innovations or demand cycles. SoundHound AI’s annualized revenue growth of 91.9% over the last two years is above its four-year trend, suggesting its demand was strong and recently accelerated. 
This quarter, SoundHound AI reported magnificent year-on-year revenue growth of 59.4%, and its $55.06 million of revenue beat Wall Street’s estimates by 2.3%.
Looking ahead, sell-side analysts expect revenue to grow 34.8% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is healthy and suggests the market is baking in success for its products and services.
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Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
SoundHound AI’s recent customer acquisition efforts haven’t yielded returns as its CAC payback period was negative this quarter, meaning its incremental sales and marketing investments outpaced its revenue. The company’s inefficiency indicates it operates in a competitive market and must continue investing to grow.
Key Takeaways from SoundHound AI’s Q4 Results
We were impressed by how significantly SoundHound AI blew past analysts’ EBITDA expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock remained flat at $9.02 immediately following the results.
Is SoundHound AI an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
