SOUNDHOUND AI, INC. (SOUN) · Material Event (8-K) SEC Filing

EX-99.1 2 soun-20260806ex991earnings.htm EX-99.1 DocumentSoundHound AI Reports Record Q2 and All Time High Revenue of $61.9 million, Up 45%, Raises Full Year OutlookDelivers strong growth with OASYS driving significant enterprise AI adoption improves all key profitability metricsSANTA CLARA, Calif.--SoundHound AI, Inc. (Nasdaq SOUN), a global leader in voice and agentic AI, today reported its financial results for the second quarter 2026. Our exceptional Q2 results demonstrate the momentum SoundHound is building, achieving a strong revenue performance, disciplined cost management, and industry-leading platform validation, said Keyvan Mohajer, CEO and Co-Founder of SoundHound AI. With our Q2 revenue now 10 times what it was when we debuted as a public company in Q2 2022, and enterprise demand for high-ROI voice and agentic AI accelerating globally, our OASYS platform and in-house model innovations position us to lead in the new era of enterprise automation. Financial Highlights Second quarter reported revenue was $61.9 million, an increase of 45.0% year-over-year. Second quarter GAAP gross margin was 45.1% non-GAAP gross margin was 58.4%. Second quarter GAAP net loss was $(42.8) million non-GAAP net loss was $(9.0) million. Second quarter adjusted EBITDA was a loss of $(9.6) million. Second quarter GAAP earnings per share was a loss of $(0.10) non-GAAP earnings per share was a loss of $(0.02). Our strong topline growth this quarter was driven by signing major enterprise AI deals attributed to OASYS. We also significantly improved our bottom line year-over-year, said James Hom, Interim CFO and Co-founder of SoundHound AI. We are excited by the strong interest we are already seeing with OASYS which is a testament to the category-defining technology we continue to deliver to the market. Our investment in innovation, combined with our cost discipline, is key as we drive our business toward achieving profitable growth. Business Highlights Healthcare and Pharmaceuticals Signed a 7-figure deal with a nationally ranked healthcare system with 30,000 employees throughout its hospitals, health parks, and medical offices Won Champion Payer Solutions, a California based company that provides all aspects of managed care management services to client physician groups Won new business with an existing U.S. healthcare customer that provides technology, pharmacy care, and direct healthcare services globally Won new business with existing customer that provides practice management and electronic health record solutions, customized for the eye care industry Renewed with A leading in-home nursing services, pediatric therapy, enteral nutrition, and ABA therapy healthcare company A rehab facility offering nursing care for short-term rehab, respite care, and long-term care services A global biopharmaceutical leader and one of the world s largest generic drug manufacturersBanking, Financial Services, and Insurance Renewed with Rakuten Securities, one of Japan s largest online brokerages, serving over 6 million accounts. A global asset-management firm providing investment-management and research services to investors worldwide One of the largest American multinational banks offering financial services and investment banking A major international financial services organization headquartered in Canada offering life and health insurance, wealth solutions, and asset management An insurance company that offers individuals, professionals and businesses casualty insurance productsTelecommunications Renewed with a British multinational telecommunications company operating in 15 countriesAuto, Devices, and Voice Commerce Signed a 7-figure deal with a major automotive infotainment software company in China Won a new deal with a global developer of automotive diagnostic scan tools, ADAS calibration systems, and shop maintenance equipment Stellantis increased overall unit adoption and expanded to add SoundHound s live generative AI capabilities Hyundai expanded unit adoption of live generative AI capabilities Multinational electronics manufacturer agreed to deploy SoundHound s technology to enable agentic transactions directly from their TVs Signed a new world-renowned automotive brand to rollout direct in-car Voice Commerce transactions Restaurants, Retail, and Consumer Goods Signed new deals with A large QSR specializing in seafood to adopt SoundHound s drive-thru ordering solution Ruby Tuesday signed on to use both Smart Answering and Smart Ordering solutions A major QSR known for American-style Mexican food A sushi restaurant known for its music and concert-themed menus Continued expansion with key brands Five Guys, IHOP, Jersey Mike s, and a prominent pizza brand that now has SoundHound technology live in more than 75% of their total locations. Signed renewals with Habit Burger, Red Lobster, and Torchy s Tacos. Lazy Dog also renewed and expanded to use both Smart Answering and Smart OrderingChannel Expansion Signed a new multi-year partnership with a company in Latin America, representing an initial 8-figure deal to deliver SoundHound technology to their vast network spanning over 20 countries Entered into a partner agreement with a massive global IT services and consulting provider specializing in comprehensive enterprise digital transformationsSecond Quarter 2026 Financial Measures1 Three Months Ended(thousands, unless otherwise noted) June 30, 2026 June 30, 2025 Change Revenues $ 61,897 $ 42,683 45 % GAAP gross profit $ 27,930 $ 16,662 68 % GAAP gross margin 45.1% 39.0% 6.1 pp Non-GAAP gross profit $ 36,177 $ 24,921 45 % Non-GAAP gross margin 58.4% 58.4% pp GAAP operating loss2 $ (43,298) $ (78,051) 45 % Non-GAAP adjusted EBITDA $ (9,607) $ (14,300) 33 % GAAP net loss2 $ (42,817) $ (74,724) 43 % Non-GAAP net loss $ (8,987) $ (11,863) 24 % GAAP net loss per share2 $ (0.10) $ (0.19) $ 0.09 Non-GAAP net loss per share $ (0.02) $ (0.03) $ 0.01 1)Please see tables below for a reconciliation from GAAP to non-GAAP. 2)GAAP-only operating loss includes an impact from the calculated fair value of contingent acquisition liabilities where future earn-out shares are marked-to-market on a quarterly basis, and with the fluctuation in stock price compared to the previous quarter there was a gain associated with this item was $4 million in the second quarter of 2026. Non-GAAP measures exclude this non-operating non-cash impact.Liquidity and Cash FlowsThe company s total cash and cash equivalents was $203 million at June 30, 2026, with no debt. Condensed Cash Flow Statement Quarter Ended(thousands) June 30, 2026 June 30, 2025 Cash flows Net cash used in operating activities $ (59,969) $ (43,682) Net cash used in investing activities (32,727) (354) Net cash provided by financing activities 46,699 76,606 Effects of exchange rate changes on cash 283 (210) Net change in cash and cash equivalents $ (45,714) $ 32,360 Business OutlookBased on the company s strong performance in the second quarter the company is raising its full year 2026 revenue outlook to now be a range of $230 - $260 million. Contemplating the close of LivePerson, SoundHound plans to update its guidance accordingly at that point in time, which is expected before the end of 2026.Additional InformationFor more information please see the company s SEC filings which can be obtained on the company s website at investors.soundhound.com. The financial statements for the fiscal quarter will be posted on the website, and will also be filed as an exhibit when the company files its 8-K including this press release. The financial data presented in this press release should be considered preliminary until the company files its 10-Q.Conference Call and WebcastSoundHound AI will host a live audio conference call and webcast today at 2 00 p.m. Pacific Time 5 00 p.m. Eastern Time. A live webcast and replay will also be accessible at investors.soundhound.com. About SoundHound AI SoundHound AI is a voice and agentic AI company that enables businesses to deliver natural, end-to-end conversational experiences across digital and physical channels, including phones, kiosks, chat, smart devices, drive-thrus, TVs, in-vehicle, and more. Its agentic platform, OASYS, is a self-learning, orchestrated AI system where organizations can build and deploy conversational AI agents to handle transactions, tasks, and workflows on behalf of customers and employees. Built on proprietary technology backed by 400+ patents and years of AI research, SoundHound serves leading brands across industries including automotive, financial services, healthcare, retail, telecommunications, and more. It powers millions of products and processes billions of interactions annually for enterprise customers worldwide. For more information, visit www.soundhound.com Forward Looking StatementsThis press release contains forward-looking statements, which are not historical facts, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by the use of words such as may, could, expect, intend, plan, seek, anticipate, believe, estimate, predict, potential, continue, likely, will, would and variations of these terms and similar expressions, or the negative of these terms or similar expressions. These forward-looking statements include, but are not limited to, statements concerning our expected financial performance, our ability to implement our business strategy and anticipated business and operations, the anticipated closing of our pending acquisition of LivePerson, and guidance for financial results for 2026. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. As a result, readers are cautioned not to place undue reliance on these forward-looking statements. Our actual results may differ materially from those expressed or implied by these forward-looking statements as a result of risks and uncertainties impacting SoundHound s business including, our ability to successfully launch and commercialize new products and services and derive significant revenue, our market opportunity and our ability to acquire new customers and retain existing customers, our ability to close the acquisition of LivePerson in our expected timeframe or at all, unexpected costs, charges or expenses resulting from our recent acquisitions and our pending acquisition of LivePerson, the ability of our recent acquisitions and, upon closing, our acquisition of LivePerson, to be accretive on the company's financial results, and those other factors described in our risk factors set forth in our filings with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We do not intend to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.Non-GAAP Measures of Financial PerformanceTo supplement the company s financial statements, which are presented on the basis of U.S. generally accepted accounting principles (GAAP), the following non-GAAP measures of financial performance are included in this release non-GAAP gross profit, non-GAAP gross margin, adjusted EBITDA, non-GAAP net loss and non-GAAP earnings per share. The company believes that providing this non-GAAP information in addition to the GAAP financial information allows investors to view the financial results in the way the company views its operating results. The company also believes that providing this information allows investors to not only better understand the company's financial performance, but also, better evaluate the information used by management to evaluate and measure such performance. As such, the company believes that disclosing non-GAAP financial measures to the readers of its financial statements provides the reader with useful supplemental information that allows for greater transparency in the review of the company s financial and operational performance. The company defines its non-GAAP measures by excluding certain items The company arrives at non-GAAP gross profit and non-GAAP gross margin by excluding (i) amortization of intangibles (including acquired intangible assets), (ii) stock-based compensation and related payroll taxes, and (iii) acquisition-related costsThe company arrives at adjusted EBITDA by excluding (i) total other income (expense), net, (ii) income taxes, (iii) depreciation and amortization expense (including acquired intangible assets), (iv) amortization of capitalized commissions, (v) stock-based compensation and related payroll taxes, (vi) change in fair value of contingent acquisition liabilities, and (vii) acquisition-related costs.The company arrives at non-GAAP net loss and non-GAAP net loss per share by excluding (i) depreciation and amortization expense (including acquired intangible assets), (ii) amortization of capitalized commissions, (iii) stock-based compensation and related payroll taxes, (iv) change in fair value of contingent acquisition liabilities, (v) change in fair value of derivative, (vi) acquisition-related costs.Reconciliations of GAAP to these adjusted non-GAAP financial measures are included in the tables below. When analyzing the company's operating results, investors should not consider non-GAAP measures as substitutes for the comparable financial measures prepared in accordance with GAAP.To the extent that the company presents any forward-looking non-GAAP financial measures, the company does not present a quantitative reconciliation of such measures to the most directly comparable GAAP financial measure (or otherwise present such forward-looking GAAP measures) because it is impractical to do so.Second Quarter Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit and GAAP Gross Margin to Non-GAAP Gross Margin Three Months Ended(thousands, unless otherwise noted) June 30, 2026 June 30, 2025 GAAP gross profit1 $ 27,930 $ 16,662 Adjustments Depreciation and amortization 5,725 4,084 Stock-based compensation and related payroll taxes 2,487 4,175 Acquisition-related expenses 35 Non-GAAP gross profit $ 36,177 $ 24,921 GAAP gross margin 45.1% 39.0% Non-GAAP gross margin 58.4% 58.4% 1)GAAP gross profit is calculated by subtracting the cost of revenues from revenues.2)Q2 2026 includes employer payroll taxes that result from stock-based compensation in the amount of $0.1 million.Second Quarter Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA Three Months Ended(thousands) June 30, 2026 June 30, 2025 GAAP net loss $ (42,817) $ (74,724) Adjustments Total other income, net1 (2,663) (4,583) Income taxes 2,182 1,256 Depreciation and amortization 11,105 7,774 Amortization of capitalized commissions 461 Stock-based compensation and related payroll taxes2 21,495 23,810 Change in fair value of contingent acquisition liabilities (3,697) 31,359 Acquisition-related expenses3 4,327 808 Non-GAAP adjusted EBITDA $ (9,607) $ (14,300) 1)Includes other income, net of $2.7 million and $4.8 million for the three months ended June 30, 2026 and 2025, respectively.2)Q2 2026 includes employer payroll taxes that result from stock-based compensation in the amount of $0.9 million.3)Acquisition-related expenses in Q2'26 also include acquisition-related severance expenses and transition expenses resulting from the transition agreements under specific acquisition. Second Quarter Reconciliation of GAAP Net Loss to Non-GAAP Net Loss and Non-GAAP Net Loss Per Share Three Months Ended(thousands, unless otherwise noted) June 30, 2026 June 30, 2025 GAAP net loss attributable to SoundHound common shareholders $ (42,817) $ (74,724) Adjustments Depreciation and amortization 11,105 7,774 Amortization of capitalized commissions 461 Stock-based compensation and related payroll taxes1 21,495 23,810 Change in fair value of contingent acquisition liabilities (3,697) 31,359 Change in fair value of derivative 139 (890) Acquisition-related expenses2 4,327 808 Non-GAAP net loss $ (8,987) $ (11,863) Basic GAAP net loss per share3 $ (0.10) $ (0.19) Adjustments 0.08 0.16 Non-GAAP net loss per share4 $ (0.02) $ (0.03) Diluted GAAP net loss per share3 $ (0.10) $ (0.19) Adjustments 0.08 0.16 Non-GAAP net loss per share4 $ (0.02) $ (0.03) 1)Q2 2026 includes employer payroll taxes that result from stock-based compensation in the amount of $0.9 million.2)Acquisition-related expenses in Q2'26 also include acquisition-related severance expenses and transition expenses resulting from the transition agreements under specific acquisition. 3)GAAP EPS Weighted average common shares outstanding (basic) for the three months ended June 30, 2026 and 2025, were 430,521,776 and 400,124,499, respectively. Weighted average common shares outstanding (diluted) for the three months ended June 30, 2026 and 2025, were 438,648,450 and 402,043,468, respectively. Diluted EPS excludes earnings impact from realized portion of contingently issuable shares related to prior acquisitions.4)Non-GAAP EPS Weighted average common shares outstanding (basic) for the three months ended June 30, 2026 and 2025, were 430,521,776 and 400,124,499, respectively. Weighted average common shares outstanding (diluted) for the three months ended June 30, 2026 and 2025, were 430,521,776 and 402,043,468, respectively. Diluted EPS excludes earnings impact from realized portion of contingently issuable shares related to prior acquisitions.Investors Scott Smith408-724-1498IR SoundHound.comMedia Fiona McEvoy415-610-6590PR SoundHound.com

EX-99.2 3 soun-20260806ex992financia.htm EX-99.2 DocumentSOUNDHOUND AI, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except share and per share data)(Unaudited) June 30,2026 December 31,2025 (Unaudited) ASSETS Current assets Cash and cash equivalents $ 202,776 $ 248,490 Restricted cash equivalents Accounts receivable, net of allowances of $3,378 and $2,254 as of June 30, 2026 and December 31, 2025, respectively 27,072 32,336 Contract assets and unbilled receivable, net 34,834 38,189 Other current assets 12,363 10,114 Total current assets 277,045 329,129 Restricted cash equivalents, non-current 676 676 Right-of-use assets 5,240 3,791 Property and equipment, net 2,498 2,928 Goodwill 122,277 122,277 Intangible assets, net 190,207 181,395 Deferred tax asset 28 29 Contract assets and unbilled receivable, non-current, net 48,073 29,906 Other non-current assets 21,843 18,042 Total assets $ 667,887 $ 688,173 LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities Accounts payable $ 7,572 $ 10,562 Accrued liabilities 31,441 26,325 Operating lease liabilities 2,456 1,812 Finance lease liabilities 226 332 Income tax liability 3,828 2,662 Deferred revenue 23,738 24,042 Contingent acquisition liabilities 4,400 Other current liabilities 1,614 1,604 Total current liabilities 70,875 71,739 Operating lease liabilities, net of current portion 2,756 2,069 Deferred revenue, net of current portion 5,161 8,195 Contingent acquisition liabilities, net of current portion 83,637 129,227 Deferred tax liabilities 1,403 1,363 Income tax liability, net of current portion 2,177 2,254 Other non-current liabilities 11,448 9,540 Total liabilities 177,457 224,387 Commitments and contingencies Stockholders equity Series A Preferred Stock, $0.0001 par value 1,000,000 shares authorized 0 and 0 shares issued and outstanding, aggregate liquidation preference of $0 and $0 as of June 30, 2026 and December 31, 2025, respectively Class A Common Stock, $0.0001 par value 755,000,000 shares authorized as of June 30, 2026 and December 31, 2025 403,287,100 and 390,070,691 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 38 37 Class B Common Stock, $0.0001 par value 44,000,000 shares authorized 32,535,408 shares issued and outstanding as of June 30, 2026 and December 31, 2025 3 3 Additional paid-in capital 1,515,141 1,420,672 Accumulated deficit (1,024,911) (957,066) Accumulated other comprehensive income 159 140 Total stockholders equity 490,430 463,786 Total liabilities and stockholders equity $ 667,887 $ 688,173 1SOUNDHOUND AI, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)(In thousands, except share and per share data)(Unaudited) Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Revenues $ 61,897 $ 42,683 $ 106,092 $ 71,812 Operating expenses Cost of revenues 33,967 26,021 64,420 44,532 Sales and marketing 16,635 15,837 35,850 27,844 Research and development 27,130 25,805 53,330 50,561 General and administrative 25,989 18,230 51,665 36,637 Change in fair value of contingent acquisition liabilities (3,697) 31,359 (43,089) (144,741) Amortization of intangible assets 5,171 3,482 9,885 6,933 Total operating expenses 105,195 120,734 172,061 21,766 Income (loss) from operations (43,298) (78,051) (65,969) 50,046 Other income, net Interest expense (61) (169) (132) (404) Other income, net 2,724 4,752 1,236 7,641 Total other income, net 2,663 4,583 1,104 7,237 Income (loss) before provision for income taxes (40,635) (73,468) (64,865) 57,283 Provision for income taxes 2,182 1,256 2,980 2,075 Net income (loss) $ (42,817) $ (74,724) $ (67,845) $ 55,208 Earnings attributable to participating Class A Common Shares (297) Net income (loss) attributable to SoundHound common shareholders $ (42,817) $ (74,724) $ (67,845) $ 54,911 Other comprehensive income Unrealized gains on investments (1) (33) 19 (27) Comprehensive income (loss) $ (42,818) $ (74,757) $ (67,826) $ 54,884 Net income (loss) per share Basic $ (0.10) $ (0.19) $ (0.16) $ 0.14 Diluted $ (0.10) $ (0.19) $ (0.21) $ 0.13 Weighted-average common shares outstanding Basic 430,521,776 400,124,499 426,022,299 397,026,119 Diluted 438,648,450 402,043,468 434,240,315 414,145,877 2SOUNDHOUND AI, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited) Six Months EndedJune 30, 2026 2025 Cash flows used in operating activities Net income (loss) $ (67,845) $ 55,208 Adjustments to reconcile net income (loss) to net cash used in operating activities Depreciation and amortization 21,071 15,529 Stock-based compensation 39,168 41,250 Loss on disposal of property and equipment 42 Non-cash lease amortization 1,658 1,388 Amortization of capitalized commissions 999 Bad debt expenses 3,478 Foreign currency gain loss from remeasurement 529 (871) Change in fair value of contingent acquisition liabilities (43,089) (144,741) Change in fair value of derivative 2,630 (2,179) Deferred income taxes 41 Other, net 179 1,997 Changes in operating assets and liabilities Accounts receivable, net 3,835 2,383 Other current assets (3,297) (2,696) Contract assets (16,942) (6,314) Other non-current assets 94 (1,846) Accounts payable (2,984) 4,567 Accrued liabilities 5,341 (6,210) Contingent acquisition liabilities (1,335) Other current liabilities (529) (2,481) Operating lease liabilities (1,632) (1,359) Deferred revenue (3,338) (891) Other non-current liabilities 1,999 3,542 Net cash used in operating activities (59,969) (43,682) Cash flows used in investing activities Purchases of property and equipment (822) (354) Capitalized software development costs (5,404) Payment related to asset acquisition (26,501) Net cash used in investing activities (32,727) (354) Cash flows provided by (used in) financing activities Proceeds from sales of Class A common stock under the Second Equity Distribution Agreement 48,481 75,565 Proceeds from exercise of stock options and employee stock purchase plan 3,923 2,766 Proceeds from warrants exercised 13 Payment of financing costs associated with the Second Equity Distribution Agreement (970) (1,511) Payment to settle contingent acquisition liabilities (3,538) (198) Payment to settle deferred holdback liabilities (1,000) Payments on finance leases (197) (29) Net cash provided by financing activities 46,699 76,606 Effects of exchange rate changes on cash 283 (210) Net change in cash, cash equivalents, and restricted cash equivalents (45,714) 32,360 Cash, cash equivalents, and restricted cash equivalents, beginning of period 249,166 198,916 Cash, cash equivalents, and restricted cash equivalents, end of period $ 203,452 $ 231,276 3SOUNDHOUND AI, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - continued(In thousands)(Unaudited) Reconciliation to amounts on the condensed consolidated balance sheets Cash and cash equivalents $ 202,776 $ 230,340 Non-current portion of restricted cash equivalents 676 936 Total cash, cash equivalents, and restricted cash equivalents shown in the condensed consolidated statements of cash flows $ 203,452 $ 231,276 Supplemental disclosures of cash flow information Cash paid for interest $ 28 $ 2 Cash paid for income taxes, net $ 1,310 $ 1,905 Noncash investing and financing activities Right-of-use assets obtained in exchange for lease liabilities $ 2,886 $ Issuance of Class A Common Stock to settle contingent acquisition liabilities $ 2,028 $ 3,922 Fair value of deferred cash consideration under other acquisition $ 1,519 $ Deferred offering costs reclassified to additional paid-in capital $ 49 $ 79 Stock-based compensation included in capitalized software development costs $ 1,889 $ 4