{"id":4373,"date":"2026-09-06T09:29:13","date_gmt":"2026-09-06T09:29:13","guid":{"rendered":"https:\/\/smartinvestingschronicle.com\/index.php\/2026\/09\/06\/prediction-soundhound-passes-500-million-in-revenue-before-it-turns-a-profit\/"},"modified":"2026-09-06T09:29:13","modified_gmt":"2026-09-06T09:29:13","slug":"prediction-soundhound-passes-500-million-in-revenue-before-it-turns-a-profit","status":"publish","type":"post","link":"https:\/\/smartinvestingschronicle.com\/index.php\/2026\/09\/06\/prediction-soundhound-passes-500-million-in-revenue-before-it-turns-a-profit\/","title":{"rendered":"Prediction: SoundHound Passes $500 Million in Revenue Before It Turns a Profit"},"content":{"rendered":"<div>\n<h2>Key Points<\/h2>\n<ul>\n<li>\n<p>SoundHound grew second-quarter revenue 45% year over year to a record $61.9 million and now expects $230 million to $260 million for 2026.<\/p>\n<\/li>\n<li>\n<p>LivePerson shareholders approved their company&#8217;s sale to SoundHound on Sept. 2, a deal that adds about $200 million of shrinking annual revenue.<\/p>\n<\/li>\n<li>\n<p>The company&#8217;s adjusted EBITDA loss narrowed to $9.6 million last quarter, a pace that likely leaves sustained profits years away.<\/p>\n<\/li>\n<li>10 stocks we like better than SoundHound AI \u203a<span id=\"pit-929a3142-3704-4b17-9537-9510fbac0d40\" style=\"display:none\"\/><\/li>\n<\/ul>\n<p><strong>SoundHound AI<\/strong> <span class=\"ticker\" data-id=\"430224\">(NASDAQ:SOUN)<\/span> is becoming a much bigger company. <strong>LivePerson<\/strong> <span class=\"ticker\" data-id=\"206579\">(NASDAQ:LPSN)<\/span> shareholders approved the sale of their company to the voice artificial intelligence (AI) specialist on Sept. 2, and the mostly stock deal closed on Friday, Sept. 4.<\/p>\n<p>SoundHound&#8217;s own second-quarter revenue grew 45% year over year to a record $61.9 million, and management raised the low end of its full-year outlook, which now calls for $230 million to $260 million of revenue in 2026.<\/p>\n<p><strong>Missed Nvidia in 2009? This Rare Signal Is Flashing Again.<\/strong> <span>In 2009, a &#8220;Double Down&#8221; signal flashed for a little-known chipmaker called Nvidia.<\/span> For the first time in years, that same &#8220;Total Conviction&#8221; signal is flashing for a company 1\/100th the size of Nvidia. <span style=\"text-decoration: underline;\"><strong>Continue \u00bb<\/strong><\/span><\/p>\n<p><span id=\"pit-f99aa454-9e84-4d8e-b288-b2f8e6aace39\" style=\"display:none\"\/><\/p>\n<p>Stack a large acquired business on top of that growth, and the top line could reach half a billion dollars surprisingly soon. The losses are moving much more slowly. Here&#8217;s my prediction: SoundHound passes $500 million in annual revenue before it earns a sustained profit.<\/p>\n<p><\/p>\n<p style=\"margin-top: 0.5rem; font-size: 0.875rem; color: #666;\">Image source: The Motley Fool.<\/p>\n<h2 id=\"record-revenue-a-raised-outlook\">Record revenue, a raised outlook<\/h2>\n<p>SoundHound&#8217;s growth record is short but steep. Revenue nearly doubled in 2025, reaching $168.9 million. The first quarter of 2026 came in at $44.2 million, up 52% year over year, and the second quarter&#8217;s growth was 45%, with revenue up 40% from the first quarter alone. The growth rate is decelerating as the numbers get bigger. But the dollars keep setting records.<\/p>\n<p>This year&#8217;s guidance of $230 million to $260 million implies 36% to 54% growth. Notably, the range excludes LivePerson. Management plans to update its guidance after the deal closes, likely before the end of the year.<\/p>\n<p>From the $245 million midpoint, the compounding works fast. Another year of 45% growth would put 2027 revenue near $355 million, and a repeat in 2028 would land the company at about $515 million. Even if growth cooled to 30%, revenue would cross $500 million in 2029.<\/p>\n<h2 id=\"liveperson-pulls-the-timeline-into-2028\">LivePerson pulls the timeline into 2028<\/h2>\n<p>The acquisition, a mostly stock deal with an enterprise value of about $250 million, brings a business nearly as large as SoundHound itself. LivePerson expects $195 million to $207 million of revenue this year.<\/p>\n<p>That revenue is shrinking, though. Guidance calls for a 15% to 20% decline in 2026, and revenue retention among LivePerson&#8217;s enterprise and mid-market customers fell to 78% last year.<\/p>\n<p>SoundHound&#8217;s own combined-company forecast reflects the erosion. Management projects at least $350 million to $400 million of revenue in 2027 (still below what the two would generate this year combined).<\/p>\n<p>Still, from the top of that range, the combined company needs only about 25% growth in 2028 to pass $500 million &#8212; a fraction of the rate SoundHound is delivering on its own. Management has said the combined business is expected to reach up to $500 million on its existing customers alone. I think revenue crosses in 2028, with 2029 as the slow case.<\/p>\n<h2 id=\"when-do-the-profits-show-up\">When do the profits show up?<\/h2>\n<p>Much later, on the current trend.<\/p>\n<p>SoundHound&#8217;s non-GAAP (adjusted) EBITDA loss narrowed to $9.6 million in the second quarter from $14.3 million a year earlier, a 33% improvement. (Adjusted EBITDA is earnings before interest, taxes, depreciation, and amortization, excluding items like stock-based compensation.)<\/p>\n<p>The loss line is narrowing, but not in a straight line. The first quarter&#8217;s adjusted loss widened year over year, to $26.7 million from $22.2 million.<\/p>\n<p>The bigger problem is the gap between that measure and the company&#8217;s full losses. SoundHound&#8217;s second-quarter net loss was $42.8 million (about 69% of revenue), an improvement from $74.7 million a year earlier. Stock-based compensation plus depreciation and amortization alone separate the two figures by more than $30 million a quarter, and quarterly mark-to-market swings on acquisition-related liabilities add noise on top.<\/p>\n<p>Of course, those swings can point the other way, too. SoundHound reported $40.1 million of net income in the fourth quarter of 2025, thanks to an $85 million non-cash mark-to-market gain. But that isn&#8217;t the kind of profit this prediction is about.<\/p>\n<p>And LivePerson won&#8217;t speed things up. It lost $72.6 million last quarter, including a $51.8 million goodwill impairment, and the merger adds fresh acquisition accounting on top.<\/p>\n<p>Ultimately, this isn&#8217;t a close race. On the current pace, revenue passes $500 million in 2028. A sustained profit (money earned on operations, not a one-quarter accounting gain) looks unlikely before 2029 at the earliest. And even that requires the second quarter&#8217;s operating leverage to hold through a big integration.<\/p>\n<p>For the stock, that order matters. Shares trade at about $6.75 as of this writing, down about 70% from their 52-week high of $22.17, yet still about 12 times revenue, based on the midpoint of this year&#8217;s guidance. That price already assumes the growth keeps coming, and I think it will.<\/p>\n<p>But anyone buying the growth stock should expect red ink for years while the top line does the work. I&#8217;d avoid buying shares here until the loss line proves it can keep narrowing through the integration.<\/p>\n<h2>Should you buy stock in SoundHound AI right now?<\/h2>\n<p>Before you buy stock in SoundHound AI, consider this:<\/p>\n<p>The Motley Fool Stock Advisor analyst team just identified what they believe are the <strong>10 best stocks<\/strong> for investors to buy now\u2026 and SoundHound AI wasn\u2019t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.<\/p>\n<p>Consider when <strong>Netflix<\/strong> made this list on December 17, 2004&#8230; if you invested $1,000 at the time of our recommendation, <strong>you\u2019d have $421,997<\/strong>!* Or when <strong>Nvidia<\/strong> made this list on April 15, 2005&#8230; if you invested $1,000 at the time of our recommendation, <strong>you\u2019d have $1,413,876<\/strong>!*<\/p>\n<p>Now, it\u2019s worth noting Stock Advisor\u2019s total average return is 978<span>% \u2014 a market-crushing outperformance compared to 213% for the S&amp;P 500. <strong><span style=\"font-weight: 400;\">Don&#8217;t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.<\/span><\/strong><\/span><\/p>\n<p><strong>See the 10 stocks \u00bb<\/strong><\/p>\n<p class=\"disclaimer\" style=\"font-size: 0.65rem; color: #767676; margin-top: 5px; text-align: left;\">*Stock Advisor returns as of September 6, 2026. <\/p>\n<p><span id=\"pit-71cce0ea-d55d-4628-b7fa-5b690bdcf67f\" style=\"display:none\"\/><\/p>\n<p>Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends SoundHound AI. The Motley Fool has a disclosure policy.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Key Points SoundHound grew second-quarter revenue 45% year over year to a record $61.9 million and now expects $230 million to $260 million for 2026. LivePerson shareholders approved their company&#8217;s sale to SoundHound on Sept. 2, a deal that adds about $200 million of shrinking annual revenue. The company&#8217;s adjusted EBITDA loss narrowed to $9.6 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4265,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-4373","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock"],"_links":{"self":[{"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/posts\/4373","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/comments?post=4373"}],"version-history":[{"count":0,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/posts\/4373\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/media\/4265"}],"wp:attachment":[{"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/media?parent=4373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/categories?post=4373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/tags?post=4373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}