SoundHound AI (NASDAQ: SOUN) is staging a strong rebound after delivering robust fourth-quarter earnings and raising its 2025 revenue outlook.
The stock surged 17.5%, reversing some of the losses from a recent sell-off triggered by Nvidia’s (NASDAQ: NVDA) exit from its investment in the company.
As of press time, SOUN stock is trading at $10.82, extending its rally with pre-market gains of 3.8%. However, despite the recovery, the stock remains under pressure, down 45% year-to-date (YTD).
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SoundHound’s Q4 earnings beat and 2025 growth outlook
SoundHound reported fourth-quarter revenue of $34.5 million, marking an impressive 101% year-over-year growth and a narrower-than-anticipated loss of $0.05 per share.
Meanwhile, its full-year 2024 revenue reached $84.7 million, an 85% increase. The company also raised its full-year 2025 revenue guidance to a range of $157 million to $177 million, up from previous estimates of $155 million to $175 million, an indicator of strong growth expectations as demand for its AI-powered voice solutions expands across industries.
A key driver of this expansion is SoundHound’s acquisition of Amelia, which has significantly broadened its total addressable market and enhanced its AI-powered customer service solutions.
The acquisition has strengthened SoundHound’s presence in financial services, healthcare, and energy, creating new cross-selling opportunities and further diversifying its revenue streams.
Despite reporting an adjusted EBITDA loss of $16.8 million in Q4, CFO Nitesh Sharan noted that SoundHound remains on track to achieve positive adjusted EBITDA by the end of 2025, focusing on improving gross margins and shifting toward more predictable recurring revenue streams.
The company also expects a more balanced revenue distribution in 2025, with 40% of its annual revenue coming in the first half of the year, compared to 30% in prior years.
“We also remain committed to our path to profitability. We will get there through continued scale and through surgical high ROI investments. We will also continue to drive the acquisition cost synergies and build on the positive early integration progress we have seen. Accordingly, we continue to expect to achieve adjusted EBITDA profitability by the end of 2025” — Nitesh Sharan
Analyst update SOUN stock price target
Several analysts reaffirmed their bullish stance on SoundHound following its earnings report.
DA Davidson raised its price target from $9.50 to $13, maintaining a ‘Buy’ rating, citing strong revenue growth and sustained demand for its AI solutions.
The firm highlighted SoundHound’s expansion into key industries, including financials, healthcare, and energy, as well as the impact of its Amelia acquisition, which has significantly broadened its total addressable market and diversified its business.
H.C. Wainwright analyst Scott Buck also reiterated a ‘Buy’ rating with a $26 price target, citing SoundHound’s strong Q4 performance and promising growth projections.
He emphasized the company’s solid financial position, with a strong cash reserve and no debt, which provides flexibility for future growth initiatives and potential acquisitions. The company’s effective balance sheet management, improving gross margins, and expectation of positive adjusted EBITDA by the end of 2025 further support the bullish outlook.
That being said, while SoundHound’s strong earnings report has boosted investor sentiment, valuation concerns remain. The stock currently trades at 25 times its projected sales for the year, leaving it vulnerable to further volatility.
Nonetheless, with record Q4 revenue, strong industry demand, and an improved financial outlook, SoundHound remains a compelling AI stock to watch, with the potential for further upside in the year ahead.
Featured image via Shutterstock
