Executive Summary

Record revenue of $42.7M, up 217% year-over-year; sequential acceleration from Q1’s $29.1M. Management raised FY25 revenue outlook to $160–$178M, citing strong enterprise, restaurant, and automotive momentum .
GAAP gross margin improved sequentially to 39.0% (non-GAAP 58.4%); GAAP net loss of $(74.7)M was largely driven by a $(31)M non-cash loss tied to contingent acquisition liabilities; non-GAAP net loss $(11.9)M; adjusted EBITDA $(14.3)M .
Strategic catalysts: major China OEM win (global reach), 15 large enterprise customers migrating to Amelia 7 agentic platform, expanding voice commerce pilots with OEMs and national/global merchants; Vision AI launched to integrate real-time visual understanding into conversational AI .
Liquidity solid: $230M cash and no debt; CFO reiterated aim for adjusted EBITDA profitability exiting 2025 and pointed to Q4 being larger than Q3 as deals ramp into year-end .

What Went Well and What Went Wrong

What Went Well

Revenue inflection: $42.7M (+217% YoY), broad-based strength across enterprise AI, restaurants, and automotive; “strongest ever quarter” per CEO .
Strategic wins and cross-sell: China OEM integration, 15 enterprise migrations to Amelia 7; cross-selling Amelia into marquee restaurant customers; expanding pilots for voice commerce with large automakers and merchants .
Operational scale: active restaurant locations exceeded 14,000 with ~1M new interactions in Q2; ~3B queries processed in the quarter, >100% YoY increase; channel partnerships (EXL, PAR, Acrelec, AVANT) accelerating go-to-market .

Management quotes:

“We have demonstrated a repeatable success formula. Our financial results speak for themselves” — CEO Keyvan Mohajer .
“We are moving with speed to capture the explosion we’re seeing in voice and conversational AI” — CFO Nitesh Sharan .

What Went Wrong

GAAP margin compression YoY from acquisitions/product mix: GAAP gross margin 39.0% vs 63.0% in Q2 2024; non-GAAP gross margin 58.4% vs 66.5% YoY (though both improved sequentially) .
GAAP results volatility: $(31)M non-cash loss from fair value of contingent acquisition liabilities impacted GAAP operating loss and EPS; stock-based compensation stepped up to $23.8M (incl. a $3.8M one-time item) .
Profitability still negative: adjusted EBITDA $(14.3)M; non-GAAP net loss $(11.9)M, reflecting continued investment in R&D (Q2 R&D $25.8M) and sales & marketing to capture growth .

Financial Results

Metric	Q2 2024	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$13.462	$34.543	$29.129	$42.683
GAAP Gross Margin %	63.0%	39.9%	36.5%	39.0%
Non-GAAP Gross Margin %	66.5%	52.1%	50.8%	58.4%
GAAP Net Income (Loss) ($USD Millions)	$(37.322)	$(258.599)	$129.932	$(74.724)
Adjusted EBITDA ($USD Millions)	$(13.848)	$(16.793)	$(22.172)	$(14.300)
GAAP EPS ($USD)	$(0.11)	$(0.69)	$0.31	$(0.19)
Non-GAAP EPS ($USD)	$(0.04)	$(0.05)	$(0.06)	$(0.03)

Selected balance sheet and cash KPIs:

Metric	Q4 2024	Q1 2025	Q2 2025
Cash and Equivalents ($USD Millions)	$198.240	$245.809	$230.340
Deferred Revenue ($USD Millions)	$23.876	$26.888	$23.715
Total Debt ($USD Millions)	$0	$0	$0

Operational KPIs (current quarter):

KPI	Q2 2025
Active restaurant locations using Voice AI	14,000+
Quarterly queries processed	~3.0B
Enterprise customers migrating to Amelia 7	15
Customer revenue concentration (>10%)	None in 1H 2025

Note on GAAP volatility: GAAP operating loss reflects $(31)M non-cash loss from fair value change in contingent acquisition liabilities; excluded from non-GAAP metrics .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$157–$177M (Q4/Q1 outlook)	$160–$178M	Raised
Quarterly Revenue Cadence	2H 2025	Not disclosed	Q4 > Q3 expected	New detail
Adjusted EBITDA	Exit 2025	Not disclosed	Expect adjusted EBITDA profitability exiting 2025	New target

Earnings Call Themes & Trends

Topic	Q4 2024 (Q-2)	Q1 2025 (Q-1)	Q2 2025 (Current)	Trend
Agentic AI (Amelia)	Framing agentic era; strong portfolio, CES demos	Launched Amelia 7.0, agentic AI with voice; cross-industry pilots	15 large enterprise migrations; Amelia 7 benefits from Polaris; 7.1 update announced	Accelerating adoption
Voice Commerce	Unveiled in-vehicle platform at CES; ecosystem vision	Integrated dozens of restaurant brands; pilots with multiple automakers	Advanced pilots with large automotive brands in EU/US; merchants engaged; flywheel effect aiding Pillar 1/2 wins	Moving toward monetization
Automotive	Expanding with Stellantis brands, Lucid, Togg	Joined Tencent Intelligent Mobility; NVIDIA edge demos	China OEM win with global scope; Chat AI rolled out to three major brands in North America	Broader footprint, higher ASPs
Restaurants	Working with >30% top 20 QSRs; expanding brands	Expanded phone ordering and omnichannel; Burger King UK via Acrelec	Breakthrough quarter: new wins (IHOP, Red Lobster, Peter Piper), renewals/expansions; 14k+ locations	Rapid scale-up
Channel Partners	Broad partner ecosystem highlighted	Channel partner wins across sectors	EXL, PAR, Acrelec, AVANT; doubling interactions with a long-standing partner	Strengthening distribution
R&D/Polaris	Tech leadership emphasized	Continued enhancement of Polaris; edge GenAI demos	Polaris beating peers (accuracy/latency); migrating acquired stacks; Vision AI launched	Differentiation widening
Macro/Tariffs	Not highlighted	Not highlighted	Watching tariff impacts on auto shipments (secondary effect on royalties)	Monitor risk
Regulatory/Legal	Not highlighted	Multiple third-party law firm notices filed during Q2 timeframe	Continued third-party legal notices; not discussed on call	External noise, limited operational impact per filings

Management Commentary

CEO: “In SoundHound’s strongest ever quarter… growth across every business unit… significant new wins as well as cross-sell deals” .
CEO on Polaris: “Beats closer peers, including Big Tech, in accuracy by over 35% and in latency by four times… at a lower cost” .
CFO: “Increasing our outlook for 2025 revenue to $160 to $178M… aim to achieve adjusted EBITDA profitability as we exit 2025” .
CEO on Voice Commerce: “Going live is imminent… pilots with large automotive brands… merchants leaning in” .
CFO on acquisitions: “Net revenue retention jumped from <90% pre-acquisition to >120% this quarter… fully displaced third-party ASR engines… delivering millions in cost savings” .

Q&A Highlights

Sequential growth drivers: Broad-based momentum with enterprise leading, restaurants scaling, automotive adding new OEMs; cross-pillar synergies and channel partners amplifying adoption .
China OEM differentiation: Competing on accuracy, features, language coverage; attractive for OEMs shipping globally; providing Chinese ASR variants as needed .
Pricing/process optimization: Internal AI adoption driving engineering productivity; outbound sales exploring AI use within regulatory constraints; significant wallet share runway as AI budget allocation rises .
2H revenue cadence: Expect ramp with Q4 > Q3 given deal timing, seasonality, and budget cycles, especially in Europe .
Voice commerce revenue timing: Indirect impact now (flywheel for Pillar 1/2 wins); material direct revenue expected upon scale launch “very soon” .
QSR coverage and drive-thru scaling: Operating with 7 of top 20 QSRs; multi-channel differentiation (phone, drive-thru, SMS); drive-thru scaling via partners and lower-footprint retrofits; sub-minute ordering times achieved at major brands .

Estimates Context

S&P Global consensus estimates for Q2 2025 were unavailable via our data pull; as a result, we cannot formally score revenue/EPS versus Wall Street consensus for this quarter. We note company raised FY25 revenue guidance to $160–$178M and indicated Q4 > Q3 cadence, implying positive estimate-revision risk near-term if execution continues .
We attempted to retrieve quarterly revenue/EPS/EBITDA consensus for current and next periods; data was unavailable at time of query (S&P Global). Values retrieved from S&P Global were unavailable.

Key Takeaways for Investors

Revenue acceleration and raised FY outlook are key stock catalysts; broad-based demand across enterprise, restaurants, and automotive reduces single-vertical risk .
Non-GAAP margins improved sequentially and should benefit further from acquisition synergies (cloud spend, stack migration to Polaris), though GAAP volatility from contingent liabilities can mask underlying progress .
Strategic wins (China OEM, three North American brand rollouts) and the imminent voice commerce launch create optionality for higher ARPU/royalty and transaction-based monetization in 2026 and beyond .
Operational scale is tangible (14k+ restaurant locations; ~3B quarterly queries), supporting network effects and cross-sell/upsell dynamics across pillars .
Watch cost discipline and SBC/contingent liability impacts; CFO targets adjusted EBITDA profitability exiting 2025, suggesting potential inflection into year-end if execution and mix hold .
Near-term trading: Positive setup on raised guide and enterprise momentum; mind lumpy deal timing and macro tariff effects on auto shipments (secondary royalty impact) .
Medium-term thesis: Proprietary stack (Polaris, Vision AI) plus agentic platform (Amelia) and voice commerce flywheel position SOUN to capture secular conversational AI spend across multiple verticals .

Appendix: Other Relevant Press Releases

Three major global automotive brands rolled out Chat AI in North America, showcasing in-vehicle GenAI capabilities .
Vision AI launched to bring real-time visual understanding into the platform; Amelia 7.1 update improves speed, accuracy, and enterprise control .
Strategic partnership with Acrelec to power next-generation AI drive-thrus worldwide; deepens restaurant channel deployment potential .

SOUNDHOUND AI, INC. (SOUN)·Q2 2025 Earnings Summary