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SoundHound shifts more AI work in-house to target better margins
In its latest quarter, the company reported $61.9 million in revenue, up 45% year-over-year, but still posted a GAAP net loss of $0.10 per share.
SoundHound AI is moving more of its artificial intelligence technology in-house, aiming to lower costs and improve profit margins, according to Yahoo Finance. The company is betting that tighter control of its AI stack will help it convert recent growth into more consistent profitability.
The article points to strong momentum on the top line, with SoundHound reporting second-quarter revenue of $61.9 million, up 45% year-over-year and 40% sequentially. Despite that growth, it remains unprofitable, posting a GAAP net loss of $0.10 per share and an adjusted net loss per share of $0.02 in the quarter.
SoundHound spent $27.1 million on research and development and $26.0 million on general and administrative costs, which the report says were led by acquisition-related expenses. It also notes that GAAP gross margin was 45%, well below managements target level.
Management expects SoundHound gross margins to eventually surpass 70%, near the level it had when it went public. The plan hinges on its new OASYS platform, described as an agentic AI platform intended to operate across different channels to scale use cases without building new technology each time.