SoundHound Stock Plummets 35% Despite 59% Q4 Revenue Growth
SoundHound AI reported Q4 revenue of $55.1M, a 59% increase year-over-year, with non-GAAP gross margin at 60.5% and adjusted EBITDA loss narrowing to $7.4M. Despite signing over 100 enterprise deals and guiding 2026 revenue to $225M–$260M, shares have tumbled 35.1% in three months.
1. Q4 Performance Highlights
In Q4 2025 SoundHound generated $55.1M in revenue, a 59% year-over-year increase, achieved a non-GAAP gross margin of 60.5% and narrowed its adjusted EBITDA loss to $7.4M while signing over 100 enterprise agreements across automotive, retail, telecommunications and financial services.
2. Stock Performance and Valuation
The stock has fallen 35.1% over the past three months to around $8.27 from its 52-week high of $22.17, trading at 14.4× forward price-to-sales compared with an industry average of 13.6× and below its three-year median of 18.1×.
3. Growth Outlook and Profitability Risks
Management projects 2026 revenue of $225M–$260M, representing about 37.8% growth, but the company posted a 2025 non-GAAP net loss of $53.9M, consumed $98M in operating cash, and faces potential dilution from ongoing stock-based compensation, extending the timeline to breakeven.