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    SOUN
    Earnings call· Jun 2026(Q2 FY26)

    SOUNDHOUND AI Q2 FY26 earnings call SOUN

    Aug 5, 2026 Source

    Executive summary

    SoundHound AI Q2 FY26 — Record Revenue and Strong Profitability Improvement Driven by OASYS Platform

    SoundHound AI delivered a record-breaking second quarter, significantly exceeding expectations, driven by the successful launch and rapid adoption of its OASYS agentic AI platform. The company demonstrated strong execution across all business segments, securing major deals and expanding its footprint in key verticals like healthcare and automotive. With the LivePerson acquisition on track, SoundHound is poised for further scale and leadership in the rapidly growing agentic AI market, while maintaining a disciplined approach to profitability.

    Highlights

    5

    • Record quarterly revenue of $62 million, up 45% year-over-year and 40% sequentially.

    • Adjusted EBITDA improved by 33% year-over-year, reflecting disciplined cost management.

    • Non-GAAP gross margin improved 8 percentage points sequentially to 58%.

    • Signed an 8-figure commitment in less than 90 days from initial demo to contract signature.

    • Full-year 2026 revenue guidance increased to a range of $230 million to $260 million.

    Guidance & targets

    3
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $230M-$260M
    high materiality
    High
    Full-year 2027 Revenue (including LivePerson)
    $350M-$400M
    high materiality
    High
    Non-GAAP Gross Margin
    exceeding 70%
    medium materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Healthcare
    One top 20 provider quadrupled their spend. Added Champion Payer Solutions and renewed/expanded with five additional health care organizations.
    Deals: 77-figure deals: 1
    		————
    Automotive (Asia)
    Signed a 7-figure deal with a large infotainment software company in China. IoT win with an automotive maintenance and diagnostic company. 6-figure unit expansion with Indian 2-wheeler company Ultraviolette. Agreement with another large OEM to roll out real-time generative AI feature to vehicles in India.
    Major deals: 5 consecutive quartersLargest deal of the quarter: 1
    		—Substantially growing——
    Automotive (Global)
    Expanded with major OEM customers including Stellantis in Europe (added live generative AI capabilities) and Hyundai (adding generative AI enhancements in U.S., Latin America, and India).
    Unit adoption (Stellantis Europe): Higher
    		————
    Restaurants and Retail (Smart Answering)
    Smart Answering solution for SMBs more than doubled year-over-year. Signed 3 major U.S. restaurant chains. Drive-through locations deploying SoundHound AI solutions generating greater revenue.
    Restaurant renewal rates (key accounts): 100%Client location count growth: Major brands (Jersey Mike's, Five Guys, IHOP, prominent pizza brand)
    		—Doubled——

    Operational metrics

    18
    Revenue
    $61.9MUp 45% YoY
    Q2 FY26

    Largest all-time quarter, 10x higher than Q2 four years ago.

    GAAP Gross Margin
    45%Up 6 percentage points YoY
    Q2 FY26

    Improved from prior year.

    Non-GAAP Gross Margin
    58%Flat YoY, Up 8 percentage points sequentially
    Q2 FY26

    Adjusts for noncash amortization of purchased intangibles and employee stock compensation. Driven by modernizing infrastructure, optimizing cloud spend, consolidating legacy systems, and shifting to in-house solutions.

    R&D expenses
    $27.1MUp 5% YoY
    Q2 FY26

    Primarily due to acquisitions and related headcount and development costs.

    Sales and marketing expenses
    $16.6MUp 5% YoY
    Q2 FY26

    Primarily driven by acquisitions, with bulk of investments in go-to-market efforts and customer success.

    G&A expenses
    $26MUp 43% YoY
    Q2 FY26

    Primarily driven by legal, advisory, and other costs related to acquisitions, including increased headcount.

    GAAP Operating Loss
    $43.3MImproved 45% YoY
    Q2 FY26

    Improved compared to the same quarter in the previous year.

    Adjusted EBITDA
    -$9.6MImproved 33% YoY
    Q2 FY26

    Reflects disciplined approach to spending.

    GAAP Net Loss
    $42.8M
    Q2 FY26

    Reported GAAP net loss for the quarter.

    GAAP Net Loss per Share
    $0.10
    Q2 FY26

    Reported GAAP net loss per share.

    Non-GAAP Net Loss
    $9M
    Q2 FY26

    Adjusts for noncash depreciation and amortization, M&A transaction costs, and stock-based compensation.

    Non-GAAP Net Loss per Share
    $0.02
    Q2 FY26

    Adjusts for noncash depreciation and amortization, M&A transaction costs, and stock-based compensation.

    Cash and equivalents balance
    $203M
    Q2 FY26

    Balance sheet remains strong with no debt.

    Employee stock compensation
    $21M
    Q2 FY26

    Included in GAAP results.

    Depreciation and amortization
    $11M
    Q2 FY26

    Includes amortization of intangibles, included in GAAP results.

    Qualitas (Latin America insurance) calls handled
    100,000Up 150% over 4 years
    Q2 FY26

    Automated AI agents interacting with customers over issues like card assistance requests and broken glass claims.

    Restaurant locations live with AI
    >75%
    Q2 FY26

    For a prominent pizza brand with thousands of locations.

    Agentic AI software spending CAGR
    60%
    2025-2030

    Gartner projected agentic AI software spending to hit nearly $1 trillion by 2030.

    Industry KPIs

    6
    MetricValueDetails
    Revenue growth$61.9MUSD
    Customer account count—
    Large deal new logo metrics8-figureUSD
    Gross retention renewal rate100%%
    Operating FCF margin rule of 40-$9.6MUSD
    Ai product adoption monetization100,000calls/month

    Orderbook & backlog

    3
    Commitment for platform usage8-figureQ2 FY26

    Signed in less than 90 days from initial demo to contract signature. With a channel customer for their customers across 20 countries.

    Deal with infotainment software company7-figureQ2 FY26

    To provide agent AI solutions in China.

    Unit expansion with Ultraviolette6-figureQ2 FY26

    With Indian 2-wheeler company.

    Product announcements

    4
    ProductTypeDetails
    OASYSlaunch
    Polarisupdate
    In-vehicle transactions (Voice Commerce)launch
    TV screen transactions (Voice Commerce)launch

    Deals & partnerships

    3
    LivePersonAcquisition of conversational AI company to accelerate leadership and extend footprint.

    Expected to accelerate leadership position and extend footprint with 25 of the Fortune 100 brands. Follows a repeatable M&A formula used with SYNQ3, Allset, Amelia, and Interactions. OASYS is built to unify technology from acquired companies onto one platform.

    Large global IT services and consulting providerPartner agreement to deliver SoundHound technology.

    Specializing in comprehensive enterprise digital transformations.

    Latin America-based companyMultiyear partnership to deliver SoundHound technology to their vast network of customers.Multiyear

    Customers spanning over 20 countries.

    What to watch in Q3 FY26

    5

    LivePerson acquisition closing

    Before end of 2026
    CurrentAll key regulatory clearances secured
    TargetDeal closed

    Why it matters

    The acquisition is expected to significantly expand SoundHound's market leadership and contribute substantially to FY27 revenue guidance.

    Looking ahead, we are poised to increase our scale again with the acquisition of LivePerson, which is expected to close by the end of this year.

    Q&A highlights

    6

    How are OASYS and proprietary models impacting current acquired bases (Amelia, Interactions) and what is the potential for LivePerson's installed base, especially regarding new technologies and 2Q trends?

    OASYS unifies innovations from acquired companies, offering high-quality, low-latency, and accurate conversational AI. Its 'AI builds AI' feature reduces time-to-value from months to minutes. SoundHound's proprietary Polaris foundation model outperforms competitors in speed, accuracy, and cost, and the company is investing in specialized LLMs. Smaller customers are already on SoundHound's stack, with larger ones transitioning. LivePerson customers will benefit from OASYS upgrades and the addition of voice capabilities, which was a historically requested feature.

    “OASYS has a lot of strength and promises. One is just absolute high-quality conversational AI and agentic AI for businesses, low latency, high accuracy, naturalness, flexibility, and kind of a better-than-human experience that our customers have been waiting for, for a long time, and it's finally here.”

    asked by Thomas Blakey · answered by Keyvan Mohajer

    2 min read5 chapters

    Detailed Narrative

    01

    OASYS Platform Driving Growth and Efficiency

    The newly launched OASYS self-learning agentic AI platform was a primary driver of Q2's outstanding results, contributing to record revenue and improved profitability. OASYS is enabling rapid customer acquisition and conversion, with one 8-figure commitment signed in under 90 days. Its 'AI builds AI' feature significantly reduces deployment times from months to minutes, enhancing time-to-value for customers and reducing professional services costs. This platform unifies technology from acquired companies, leveraging SoundHound's core innovations.

    02

    Strong Performance Across Key Verticals and Geographies

    SoundHound saw robust demand across healthcare, financial services, and automotive sectors. In healthcare, one top-20 provider quadrupled spend, and five other organizations expanded or renewed contracts. The company also strengthened its presence in banking, renewing or expanding with two top-seven global institutions. Asia, particularly China, proved to be a high-impact market, with a 7-figure deal in automotive and a 6-figure unit expansion in India, demonstrating the platform's global appeal and competitive edge.

    03

    Advancements in Voice Commerce and Restaurant AI

    The Voice Commerce segment is rapidly expanding, with the first commercial projects set to launch in Q3. This includes a pilot for direct in-vehicle transactions with a world-renowned automotive brand and a later-year launch with a global electronic manufacturer for TV-based retail and restaurant purchases. The Smart Answering solution for SMB restaurants more than doubled year-over-year, achieving 100% renewal rates for key accounts and growing client location counts with major brands, fueled by demonstrated revenue generation for locations using SoundHound AI.

    04

    Strategic M&A and Integration Success

    The acquisition of LivePerson is progressing, having secured all key regulatory clearances, with an expected close by year-end. This acquisition is seen as a high-potential turnaround opportunity, leveraging SoundHound's proven M&A formula (SYNQ3, Allset, Amelia, Interactions) to integrate LivePerson's digital CCaaS capabilities with OASYS. The combined entity aims to offer end-to-end omnichannel conversational AI, addressing LivePerson customers' historical need for voice solutions and enhancing financial stability.

    05

    Proprietary Model Development and Cost Efficiency

    SoundHound continues to invest in its proprietary Polaris speech foundation model and specialized LLMs, aiming for better quality and lower costs for customers, alongside increased control and differentiation. Smaller SMB customers are already running entirely on SoundHound's own stack, independent of frontier models, with a large healthcare customer also transitioning due to significant improvements in accuracy and latency. This strategy is expected to reduce costs and improve profit margins.

    AI-generated summary of the company’s earnings call. Not investment advice.