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Yahoo
13-08-2025
- Business
- Yahoo
SoundHound's Q2 NRR Hits 120% From 90%: What's Fueling the Rise?
SoundHound AI, Inc. SOUN posted standout second-quarter 2025 results, but one of the most telling metrics was its net revenue retention (NRR) — which surged from under 90% pre-acquisition to more than 120% in the quarter. This sharp improvement signals not just stronger customer retention, but significant upselling and cross-selling jump is tied directly to SoundHound's integration of recent acquisitions, particularly Amelia and Synq3. By replacing third-party ASR engines with its in-house Polaris speech recognition model, SoundHound has delivered measurable improvements in accuracy, latency, and cost efficiency. These technology gains have translated into better customer satisfaction, faster deployment cycles, and higher close rates on between business units is another driver. In the second quarter, SoundHound sold solutions from its most recent acquisition to a marquee customer of an earlier acquisition — securing both an expansion and a multi-year renewal. This multi-pillar approach, spanning enterprise AI, automotive, and restaurant automation, increases wallet share while locking customers deeper into its partnerships with AVANT Communications, Acrelec, and Par Technologies have amplified this momentum, opening doors to global restaurant chains, enterprise service providers, and large OEMs. These alliances not only drive new customer wins but also enable existing clients to adopt more SoundHound products across an expanded product suite — including the agentic AI platform Amelia 7 and emerging Voice Commerce ecosystem — SoundHound is positioned to maintain elevated NRR levels. Sustaining this growth, however, will hinge on execution in competitive markets dominated by big tech incumbents. (read more: SoundHound Q2 Earnings Beat as AI Demand Fuels 217% Sales Growth) Competitive Landscape of SoundHound In the conversational AI and voice technology space, SoundHound faces formidable competition from Nuance Communications, acquired by Microsoft MSFT and Cerence Inc. CRNC. Nuance, now part of Microsoft, has deep enterprise penetration, particularly in healthcare and customer engagement solutions, leveraging Microsoft's cloud scale and AI resources to lock in long-term contracts. This makes Nuance a consistent competitor in sectors where SoundHound is expanding, such as healthcare and enterprise meanwhile, dominates automotive voice technology, powering infotainment and in-car assistant solutions for many global OEMs. Cerence's established relationships with automakers and its focus on embedded, cloud, and hybrid models keep it directly in SoundHound's competitive path in automotive AI. Both Nuance and Cerence benefit from brand recognition, long-standing client ties, and robust R&D budgets. For SoundHound, differentiation will depend on sustaining its 120% net revenue retention through unique offerings like Voice Commerce and its proprietary Polaris engine. SOUN Stock's Price Performance & Valuation Trend Shares of SoundHound have rallied more than 48% since its second-quarter earnings release, performing better than the Zacks Computers - IT Services industry, as you can see below. SOUN Stock's Price Performance Image Source: Zacks Investment Research SOUN stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-sales (P/S) ratio of 33.19, as evidenced by the chart below. SOUN's P/S Ratio (Forward 12-Month) vs. Industry Image Source: Zacks Investment Research Earnings Estimate Trend of SOUN Stock The Zacks Consensus Estimate for 2025 loss per share has narrowed in the past seven consensus estimate for 2025 sales implies growth of 98.3%. The same for the company's 2025 bottom line is expected to improve from the year-ago loss of $1.04 per share. Image Source: Zacks Investment Research SOUN's Zacks Rank SOUN stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT) : Free Stock Analysis Report Cerence Inc. (CRNC) : Free Stock Analysis Report SoundHound AI, Inc. (SOUN) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
01-07-2025
- Business
- Yahoo
Will Restaurant AI Help SoundHound Scale Profitably?
SoundHound AI, Inc. SOUN is notably benefiting from restaurant operators shifting toward AI solutions from legacy answering systems. The demand for AI solutions is not only limited to food ordering services but is also expanding to services such as table reservations and prepaid discussing AI solutions for restaurants, SOUN's next-generation voice commerce solution brightens the screen. This voice-powered AI solution creates a seamless, hands-free order experience across cars, drive-thrus, phones, kiosks and more, giving it a competitive edge over its market peers. This creative edge is enabling it to expand voice commerce to OEMs (Original Equipment Manufacturers) outside of its existing network and beyond food ordering services. As of March 31, 2025, SoundHound AI had more than 15 large restaurant chains entwined in its network, with it grabbing opportunities from partners signing up for reservations and parking services as well. In the first quarter of 2025, SOUN scaled and reached thousands of locations by expanding its partnership with one of the United States' largest pizza chains for its phone answering and AI solutions. Catalyzing SOUN's growth further was the acquisition of Synq3, Inc. in January 2024. Synq3's solutions, like Smart Answering and Employee Assist, amalgamated with SoundHound AI's voice-powered AI solutions, introduce restaurant partners and customers to an innovative and advanced technology for improved ordering accuracy. As of March 31, 2025 majority of Synq3's locations have been upgraded to SOUN's Polaris model, a multilingual automatic speech recognition (ASR) and foundational voice-AI the company is undergoing several pilots and POCs with multiple automakers for its voice commerce solution, with being already integrated in many restaurant brands. The robust trends indicate incremental revenue visibility and market share expansion in the long term for SoundHound AI. SoundHound AI is enjoying a competitive edge over its peers with its next-generation voice commerce solution, but it is not much away from competition in this context. Other renowned market players, including Microsoft Corporation MSFT and Inc. AMZN, offer noticeable competition in the market to with its Azure OpenAI integrations and Nuance Communications unit, offers substantial restrictions in the market that SoundHound AI operates in. Nuance's deep roots in healthcare voice automation and conversational AI give Microsoft a strong enterprise footprint, with Azure offering tools for custom enterprise the other hand, Amazon's voice assistant Alexa Auto seems to be one of the market competitors for SOUN. Amazon's Alexa Auto leverages its consumer ecosystem to deliver in-car voice functionality. The strength lies in smart home integration and brand familiarity, but OEMs increasingly seek white-labeled, customizable alternatives, an area where SoundHound differentiates. SOUN's earnings estimates for 2025 have remained unchanged over the past 60 days at a loss per share of 16 cents. On the contrary, during the said time frame, the earnings estimates of loss per share for 2026 have contracted to five cents. Earnings Estimate Revision Image Source: Zacks Investment Research Even though the company's earnings estimates for 2025 and 2026 indicate a loss per share, the estimated values indicate 84.6% and 64.1% year-over-year growth, respectively. Shares of this California-based voice AI company have trended upward 23.9% in the past three months, outperforming the Zacks Computers - IT Services industry, the Zacks Computer and Technology sector and the S&P 500 index. Image Source: Zacks Investment Research SOUN stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 23.09X, as evidenced by the chart below. The overvaluation of the stock compared with its industry peers indicates its strong potential in the market, given the favorable trends backing it up. Image Source: Zacks Investment Research SOUN stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report SoundHound AI, Inc. (SOUN) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
01-07-2025
- Business
- Yahoo
Will Restaurant AI Help SoundHound Scale Profitably?
SoundHound AI, Inc. SOUN is notably benefiting from restaurant operators shifting toward AI solutions from legacy answering systems. The demand for AI solutions is not only limited to food ordering services but is also expanding to services such as table reservations and prepaid discussing AI solutions for restaurants, SOUN's next-generation voice commerce solution brightens the screen. This voice-powered AI solution creates a seamless, hands-free order experience across cars, drive-thrus, phones, kiosks and more, giving it a competitive edge over its market peers. This creative edge is enabling it to expand voice commerce to OEMs (Original Equipment Manufacturers) outside of its existing network and beyond food ordering services. As of March 31, 2025, SoundHound AI had more than 15 large restaurant chains entwined in its network, with it grabbing opportunities from partners signing up for reservations and parking services as well. In the first quarter of 2025, SOUN scaled and reached thousands of locations by expanding its partnership with one of the United States' largest pizza chains for its phone answering and AI solutions. Catalyzing SOUN's growth further was the acquisition of Synq3, Inc. in January 2024. Synq3's solutions, like Smart Answering and Employee Assist, amalgamated with SoundHound AI's voice-powered AI solutions, introduce restaurant partners and customers to an innovative and advanced technology for improved ordering accuracy. As of March 31, 2025 majority of Synq3's locations have been upgraded to SOUN's Polaris model, a multilingual automatic speech recognition (ASR) and foundational voice-AI the company is undergoing several pilots and POCs with multiple automakers for its voice commerce solution, with being already integrated in many restaurant brands. The robust trends indicate incremental revenue visibility and market share expansion in the long term for SoundHound AI. SoundHound AI is enjoying a competitive edge over its peers with its next-generation voice commerce solution, but it is not much away from competition in this context. Other renowned market players, including Microsoft Corporation MSFT and Inc. AMZN, offer noticeable competition in the market to with its Azure OpenAI integrations and Nuance Communications unit, offers substantial restrictions in the market that SoundHound AI operates in. Nuance's deep roots in healthcare voice automation and conversational AI give Microsoft a strong enterprise footprint, with Azure offering tools for custom enterprise the other hand, Amazon's voice assistant Alexa Auto seems to be one of the market competitors for SOUN. Amazon's Alexa Auto leverages its consumer ecosystem to deliver in-car voice functionality. The strength lies in smart home integration and brand familiarity, but OEMs increasingly seek white-labeled, customizable alternatives, an area where SoundHound differentiates. SOUN's earnings estimates for 2025 have remained unchanged over the past 60 days at a loss per share of 16 cents. On the contrary, during the said time frame, the earnings estimates of loss per share for 2026 have contracted to five cents. Earnings Estimate Revision Image Source: Zacks Investment Research Even though the company's earnings estimates for 2025 and 2026 indicate a loss per share, the estimated values indicate 84.6% and 64.1% year-over-year growth, respectively. Shares of this California-based voice AI company have trended upward 23.9% in the past three months, outperforming the Zacks Computers - IT Services industry, the Zacks Computer and Technology sector and the S&P 500 index. Image Source: Zacks Investment Research SOUN stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 23.09X, as evidenced by the chart below. The overvaluation of the stock compared with its industry peers indicates its strong potential in the market, given the favorable trends backing it up. Image Source: Zacks Investment Research SOUN stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report SoundHound AI, Inc. (SOUN) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17-04-2025
- Business
- Yahoo
Prediction: 2 Stocks That Will Be Worth More Than SoundHound AI 1 Year From Now
SoundHound AI (NASDAQ: SOUN), a developer of audio and speech recognition technologies, went public by merging with a special purpose acquisition company (SPAC) on April 28, 2022. Its stock started trading at $8.72 per share, and it rallied to an all-time high of $24.23 on Dec. 26, 2024, as its market capitalization reached nearly $9 billion. SoundHound initially impressed the bulls with its breakneck growth rates. Its revenue surged 47% in 2022, 47% in 2023, and 85% in 2024. That acceleration was driven by the growing usage of its Houndify platform to develop custom speech recognition tools, as well as its acquisitions of restaurant AI company Synq3, online food ordering platform Allset, and conversational AI company Amelia. Nvidia (NASDAQ: NVDA) also bought more shares of SoundHound in early 2024, pumping up investor optimism. But today, SoundHound's stock trades at about $8. Its stock pulled back as investors fretted over its ongoing losses, cooling organic growth, and growing dependence on acquisitions. Its high valuations also made it an easy target for the bears as the Donald Trump's unpredictable tariffs drove investors toward safe haven plays again. Nvidia liquidated its entire stake in SoundHound earlier this year, and SoundHound delayed its 10-K filing for 2024 in March due to the "complexity" of its acquisitions of Synq3 and Amelia. Those setbacks caused its stock to plummet, but it doesn't look like a bargain yet. With a market cap of $3.28 billion, it still trades at 20 times this year's sales estimaes. Analysts expect its revenue to surge 96% in 2025, but a lot of that growth will come from its recent acquisitions. In 2026, they expect just 29% growth -- and it's expected to stay unprofitable for the foreseeable future. Therefore, I believe SoundHound's stock could either stagnate or slide lower over the next 12 months. So instead of buying SoundHound as a contarian play at these levels, investors should pay attention to two less valuable AI plays that ich might eclipse its market cap in a year: Innodata (NASDAQ: INOD) and Five9 (NASDAQ: FIVN). Innodata was once a tiny, slow-growth analytics software company that didn't attract much attention. But in 2018, it rolled out a suite of task-specific microservices aimed at preparing data for AI applications. When big tech companies develop a new AI project, they often spend 80% of their time preparing that data and the remaining 20% feeding it into the training algorithm. It makes sense to outsource all that time-consuming process to Innodata's microservices. As of this writing, five of the "Magnificent Seven" companies had already hired Innodata to clean up their AI data. From 2019 to 2024, Innodata's revenue grew at a compound annual growth rate (CAGR) of 25%. In 2024, its revenue surged 95% and it turned profitable on a generally accepted accounting principles (GAAP) basis. That growth spurt was driven by its new Magnificent Seven contracts and the rapid expansion of the generative AI market. Five9 operates a cloud-based contact center, which helps companies manage and optimize customer interactions across voice, chat, email, web, social media, and mobile channels with AI-powered chatbots and human agents. Its customers can directly access those services or integrate them into their own apps with a few lines of code. It aims to disrupt traditional call centers with those streamlined services. From 2019 to 2024, Five9's revenue grew at a CAGR of 26%. It also significantly narrowed its GAAP net losses in 2023 and 2024. That growth was driven by the ongoing outsourcing and automation of customer service jobs to cut costs. With a market cap of $1.16 billion, Innodata trades at only 4.8 times this year's sales. Five9, which has a market cap of $1.75 billion, trades at 1.5 times this year's sales. From 2024 to 2026, analysts expect Innodata's revenue to grow at a CAGR of 31% as Five9's revenue increases at a CAGR of 10%. Innodata's business of cleaning up AI data might be better insulated from the macro headwinds than Five9, which could struggle to gain new customers during an economic downturn. But over the long term, Five9 should keep expanding as more companies automate their call centers and adopt its AI chatbots. Assuming Innodata matches analysts' estimates and trades at a more generous 12 times its forward sales by the beginning of 2026, its stock could more than triple to nearly $105 a share and boost its market cap to $3.51 billion. If Five9 meets Wall Street's expectations and commands a higher (but still reasonable) forward price-to-sales ratio of 5 by the start of 2026, its stock price could nearly quadruple to around $82 and propel its market cap to $6.34 billion. Investors should take those estimates with a grain of salt, but both of these AI stocks have a shot at overtaking SoundHound AI over the next 12 months. I think they will. Meanwhile, SoundHound AI's stock could stall out and slide lower if it doesn't fix its most pressing issues. Before you buy stock in SoundHound AI, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and SoundHound AI wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $502,231!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $678,552!* Now, it's worth noting Stock Advisor's total average return is 800% — a market-crushing outperformance compared to 156% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 14, 2025 Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Five9 and Nvidia. The Motley Fool has a disclosure policy. Prediction: 2 Stocks That Will Be Worth More Than SoundHound AI 1 Year From Now was originally published by The Motley Fool
