SOUNWCAUTIOUS

SOUNW Gross Margin Analysis

31.1%

Higher than 9% of Technology sector peers

Updated 44h ago·SEC filings & market data

Key Takeaway

SoundHound AI's gross margin of 31.1% means that for every dollar of revenue, the company keeps 31.1 cents after paying the direct costs of producing its products or services — the rest covers those costs.

Sector Performance

9th percentile

SOUNW

31.1%

Sector Median

65.2%

Sector Avg

60.2%

Prior Period

20.1%(Jun 2026)

↑ Improving

📊

Deep Analysis

This is far below the sector median of 65.2%, ranking the company at the 9th percentile among technology peers, indicating it is less efficient at generating profit from revenue than most competitors. The year-over-year change is not available, but the quarter-over-quarter improvement of +54.7% — from 20.1% in the prior quarter to 31.1% now — shows a sharp recent increase. The combination of a low absolute margin with a strong upward trend presents both risk, because the company still trails peers by a wide margin, and opportunity, if the improvement continues toward sector norms. This metric directly supports the overall CAUTIOUS verdict, as the gross margin remains well below the sector median despite the recent jump, reinforcing the need for careful monitoring.

Frequently Asked Questions

What does the Gross Margin tell investors about SOUNW?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

How does SOUNW's Gross Margin compare to its sector?

SOUNW's Gross Margin of 31.1% compares to a Technology sector median of 65.2%, placing it in the 9th percentile.

Who are SOUNW's closest peers by Gross Margin?

The closest Technology peers by Gross Margin include: ORCL (65.2%), MDB (72.2%), NVDA (74.9%), LIF (77.3%), SMTC (52.0%).

📚

Learn More About Gross Margin

Gross Margin vs Net Margin: Why the Gap Between Them Tells You Everything

Gross margin vs net margin: learn what the spread between them reveals about operating leverage, cost structure, and early warning signs in any stock.

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.