SoundHound AI on Track to Surpass $500 Million in Revenue Before Reaching Sustained Profitability

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 the sale of their company to SoundHound on Sept. 2, a deal adding roughly $200 million of declining annual revenue.

• The company’s adjusted EBITDA loss narrowed to $9.6 million last quarter, a trajectory suggesting sustained profitability remains years away.

SoundHound AI (NASDAQ:SOUN) is rapidly expanding its scale. LivePerson (NASDAQ:LPSN) shareholders approved the acquisition by the voice artificial intelligence specialist on Sept. 2, and the predominantly stock transaction closed on Sept. 6.

SoundHound’s second-quarter revenue climbed 45% year over year to a record $61.9 million, prompting management to raise the low end of its full-year outlook to a range of $230 million to $260 million for 2026.

Image source: The Motley Fool.

Record Revenue and a Raised Outlook

SoundHound’s growth trajectory has been steep, if brief. Revenue nearly doubled in 2025 to $168.9 million. The first quarter of 2026 delivered $44.2 million, a 52% year-over-year increase, while the second quarter grew 45% and jumped 40% sequentially. Although the growth rate is moderating as the base expands, the absolute dollar gains continue to set records.

Current guidance of $230 million to $260 million implies 36% to 54% growth for the year. Notably, this range excludes LivePerson; management intends to update its outlook following the deal’s closure, likely before year-end.

Starting from the $245 million midpoint, compounding acts quickly. A repeat of 45% growth would push 2027 revenue near $355 million and 2028 revenue to approximately $515 million. Even at a cooled 30% pace, the $500 million threshold would be crossed in 2029.

LivePerson Accelerates the Timeline to 2028

The acquisition, valued at roughly $250 million in enterprise value, brings a business nearly the size of SoundHound itself. LivePerson projects $195 million to $207 million in revenue for the current year.

However, that revenue base is contracting. Guidance indicates a 15% to 20% decline in 2026, and revenue retention among enterprise and mid-market customers fell to 78% last year.

SoundHound’s combined-company forecast reflects this erosion. Management projects at least $350 million to $400 million in revenue for 2027—still below the combined pro forma figure for the current year.

From the top of that range, the merged entity requires only about 25% growth in 2028 to surpass $500 million, a fraction of the organic rate SoundHound is currently delivering. Management has stated the combined business could reach up to $500 million from existing customers alone. The prediction here is that revenue crosses the threshold in 2028, with 2029 as the slower scenario.

When Will Profits Materialize?

On the current trend, sustained profitability remains distant.

SoundHound’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 excludes items such as stock-based compensation.)

The loss trajectory is not linear, however. The first quarter’s adjusted loss widened year over year to $26.7 million from $22.2 million.

A larger issue is the gap between adjusted EBITDA and GAAP net losses. SoundHound’s second-quarter net loss was $42.8 million—approximately 69% of revenue—improving from $74.7 million a year prior. Stock-based compensation, depreciation, and amortization alone account for more than $30 million per quarter, while quarterly mark-to-market swings on acquisition-related liabilities add further volatility.

Those swings can occasionally reverse; SoundHound reported $40.1 million of net income in the fourth quarter of 2025 due to an $85 million non-cash mark-to-market gain. However, such one-time accounting benefits do not represent sustainable operational profit.

LivePerson will not accelerate the timeline. It posted a $72.6 million loss last quarter, including a $51.8 million goodwill impairment, and the merger introduces fresh acquisition accounting complexities.

Ultimately, this is not a close race. At the current pace, revenue exceeds $500 million in 2028, while sustained operational profitability appears unlikely before 2029 at the earliest—and that assumes the second quarter’s operating leverage persists through a significant integration.

For investors, the sequence matters. Shares trade around $6.75 as of writing, down roughly 70% from a 52-week high of $22.17, yet still command about 12 times revenue based on the midpoint of this year’s guidance. That valuation already assumes continued growth, a reasonable expectation.

However, buyers should anticipate years of red ink while the top line expands. It would be prudent to wait for evidence that the loss trajectory can continue narrowing through the integration before committing capital.

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