SoundHound AI, Inc.SOUNW
NASDAQ • Technology
$2.71
P/E
—
PEG
—
FCF Yield
0.0%
Rev Growth YoY
+51.7% YoY
Gross Margin
20.1%
Health Score
4/10
D/E Ratio
0.01
Confidence
LOW
Business Snapshot
SoundHound AI is a voice artificial intelligence company that provides conversational intelligence technology, including speech recognition and natural language processing, primarily to businesses in the automotive, restaurant, and customer service industries. It operates in the competitive speech-AI software market as a growth-stage challenger, facing incumbents such as Google and Amazon but differentiating with its customisable on-device and cloud hybrid platform. The company generated trailing twelve-month revenue of $183.99 million, placing it at the lower end of small-cap software firms, though it remains unprofitable with a net loss of $–168.97 million over the same period. A defining characteristic is its rapid top-line growth (51.7% YoY) paired with persistent cash burn and negative free cash flow, indicating a heavy reliance on external financing or equity dilution to fund operations.
Financial Health
Gross margin collapsed from 47.9% in the prior year to just 20.1% in the last twelve months, while net margin stands at –91.8%, reflecting deep operating losses and deteriorating unit economics. The balance sheet shows contrasting signs: debt-to-equity is a negligible 0.01x, and the current ratio of 4.59x signals ample short-term liquidity...
Risk Assessment
- EARNINGS QUALITY — The company beat analyst earnings estimates in 0 of the last 4 quarters, a track record that signals poor guidance credibility and unexpected operational deterioration.
- REVENUE DECELERATION — While revenue surged 51.7% year-over-year, the most recent quarter saw a 19.7% sequential decline, indicating a sharp slowdown that may continue.
- 52-WEEK POSITION — At $2.71, the stock is trading 65.5% below its 52-week high of $7.86 and only $0.04 above its low of $2.67, reflecting sustained bearish momentum and proximity to a floor.
- FCF / CASH BURN — Free cash flow is $0 and FCF yield is 0.0%; combined with a net loss of –$168.97 million, the company is effectively burning cash and has no internal buffer to fund operations....
Gross margin collapsed from 47.9% in the prior year to just 20.1% in the last twelve months, while net margin stands at –91.8%, reflecting deep operating losses and deteriorating unit economics. The balance sheet shows contrasting signs: debt-to-equity is a negligible 0.01x, and the current ratio of 4.59x signals ample short-term liquidity. However, free cash flow is precisely $0 (a FCF yield of 0.0%), meaning the company is neither generating nor consuming cash on a trailing basis — but given negative net income, this likely reflects aggressive capital management rather than genuine cash generation. Overall, the company possesses a conservative debt structure but lacks the profitability and cash conversion needed to self-fund growth, leaving it dependent on external capital and vulnerable to dilution.
- EARNINGS QUALITY — The company beat analyst earnings estimates in 0 of the last 4 quarters, a track record that signals poor guidance credibility and unexpected operational deterioration. - REVENUE DECELERATION — While revenue surged 51.7% year-over-year, the most recent quarter saw a 19.7% sequential decline, indicating a sharp slowdown that may continue. - 52-WEEK POSITION — At $2.71, the stock is trading 65.5% below its 52-week high of $7.86 and only $0.04 above its low of $2.67, reflecting sustained bearish momentum and proximity to a floor. - FCF / CASH BURN — Free cash flow is $0 and FCF yield is 0.0%; combined with a net loss of –$168.97 million, the company is effectively burning cash and has no internal buffer to fund operations.
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