SoundHound AI's SOUN path to EBITDA improvement increasingly depends on one factor — scale. The company delivered first-quarter 2026 revenues of $44.2 million, up 52% year over year, while reaffirming full-year revenue guidance of $225-$260 million. Although adjusted EBITDA remained negative at $26.7 million, management believes growing revenue, cost synergies and a more efficient AI platform can narrow losses over time.
A major catalyst is SoundHound's planned acquisition of LivePerson. The transaction is expected to significantly expand the company's enterprise footprint, adding hundreds of long-standing customers and strengthening its presence across banking, telecommunications, healthcare and retail. Management projects a 2027 revenue opportunity of at least $350-$400 million after the deal closes, while cross-selling voice AI and digital messaging solutions could eventually support a $500 million revenue opportunity from the combined customer base.
Operational efficiency is another key driver. SoundHound is consolidating infrastructure, optimizing cloud spending, replacing third-party technologies with proprietary models and extracting cost synergies from prior acquisitions. Management noted that several restructuring actions taken in the first quarter should begin delivering recurring cost benefits over the next two quarters. The newly launched OASYS platform, powered primarily by SoundHound's in-house AI models, is also expected to reduce inference costs as customer traffic scales, supporting future EBITDA expansion.
The company still faces near-term profitability challenges. Investments in proprietary foundation models and continued integration expenses will likely keep margins under pressure in 2026. However, with $216 million in cash, no debt and multiple cost-saving initiatives underway, SoundHound appears well-positioned to leverage higher revenues into improved EBITDA over the longer term, provided execution on acquisitions and platform integration remains strong.
How Do Nuance and NICE Compare With SoundHound?
Two companies worth watching alongside SoundHound are Microsoft's MSFT Nuance Communications and NICE Ltd. NICE.
Nuance Communications has built a dominant position in enterprise conversational AI, particularly in healthcare and customer engagement, benefiting from Microsoft's cloud ecosystem and broad enterprise reach. Nuance Communications focuses on large-scale deployments, but its deep integration within Microsoft makes rapid independent innovation less visible than SoundHound's dedicated AI platform.
Meanwhile, NICE continues to strengthen its AI-powered customer experience platform through automation and analytics, helping enterprises improve contact center efficiency and reduce operating costs. NICE is increasingly embedding generative AI into its CX solutions to enhance productivity and customer service. While Nuance Communications and NICE possess greater enterprise scale today, SoundHound aims to close the gap by expanding through acquisitions, cross-selling opportunities and its proprietary OASYS platform, which management believes can lower AI inference costs and support stronger EBITDA improvement as revenue scales.
SOUN’s Price Performance, Valuation & Estimates
SoundHound shares have lost 35.4% year to date (YTD), outperforming the industry, as shown below:
SOUN’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, SOUN trades at a forward price-to-sales (P/S) multiple of 11.03, below the industry’s average of 11.23.
SOUN’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Over the past 60 days, the Zacks Consensus Estimate for SoundHound’s 2026 loss per share has widened to 18 cents, as shown below. The expected loss also remains wider than the previous year’s loss of 13 cents.
EPS Trend of SOUN Stock
Image Source: Zacks Investment Research
SOUN currently has a Zacks Rank #4 (Sell).
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
