SoundHound AI Reports 68% Revenue Growth to $42M Despite Increased Net Loss in Latest Quarter

SoundHound AI, Inc. reported significant financial developments in its latest quarterly filing for the period ending September 30, 2025. The company generated revenues of $42.0 million, a 68% increase from $25.1 million in the same period last year. For the nine months ended September 30, 2025, revenues reached $113.9 million, up 127% from $50.2 million in the prior year. Despite this growth, the company reported a net loss of $109.3 million for the third quarter, compared to a loss of $21.8 million in the same quarter of 2024. The nine-month net loss was $54.1 million, a 41% improvement from a loss of $92.1 million in the previous year.

The increase in revenue was primarily driven by the contributions from recent acquisitions, including SYNQ3 and Amelia, which enhanced the company's service subscription offerings. Service subscriptions accounted for $33.9 million in the third quarter, a 78% increase year-over-year. However, the cost of revenues also rose significantly, increasing by 87% to $24.1 million in the third quarter, which contributed to a decrease in gross margin from 49% to 43%. The total operating expenses surged to $157.9 million, a 168% increase compared to the previous year, largely due to the amortization of intangible assets from acquisitions and increased personnel costs.

In terms of strategic developments, SoundHound completed the acquisition of Interactions Corporation on September 3, 2025, for a preliminary purchase consideration of $76.1 million. This acquisition is expected to strengthen SoundHound's position in the AI customer service market and expand its customer portfolio. The company also reported a significant increase in its employee headcount, reflecting its growth strategy and the integration of acquired companies. As of September 30, 2025, SoundHound had 387.6 million shares of Class A Common Stock and 32.5 million shares of Class B Common Stock outstanding.

Looking ahead, SoundHound anticipates continued revenue growth driven by its expanding customer base and the integration of its recent acquisitions. The company has a strong cash position, with $268.9 million in unrestricted cash and cash equivalents as of September 30, 2025, which it expects will support its operations for at least the next twelve months. However, management cautioned that the company has historically incurred losses and may continue to do so as it invests in technology and market expansion. The outlook remains cautiously optimistic, with expectations for improved gross margins as the company scales its operations and integrates its acquisitions effectively.