Voice AI recognition company SoundHound (NASDAQ:SOUN) missed Wall Street’s revenue expectations in Q1 CY2025, but sales rose 151% year on year to $29.13 million. Its GAAP profit of $0.31 per share was significantly above analysts’ consensus estimates.
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Revenue: $29.13 million vs analyst estimates of $30.46 million (151% year-on-year growth, 4.4% miss)
EPS (GAAP): $0.31 vs analyst estimates of -$0.08 (significant beat)
Operating Margin: 440%, up from -246% in the same quarter last year
EPS and operating margin are inflated due to a non-recurring benefit of $176 million (change in fair value of contingent acquisition liabilities)
Free Cash Flow was -$19.35 million compared to -$33.2 million in the previous quarter
Market Capitalization: $3.67 billion
Founded in 2005, SoundHound AI (NASDAQ:SOUN) develops independent voice artificial intelligence solutions that enable businesses across various industries to offer customized conversational experiences to consumers.
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, SoundHound AI’s 67.5% annualized revenue growth over the last three years was incredible. Its growth beat the average software company and shows its offerings resonate with customers.
This quarter, SoundHound AI achieved a magnificent 151% year-on-year revenue growth rate, but its $29.13 million of revenue fell short of Wall Street’s lofty estimates.
Looking ahead, sell-side analysts expect revenue to grow 59.8% over the next 12 months, a deceleration versus the last three years. Despite the slowdown, this projection is commendable and indicates the market is forecasting success for its products and services.
Today’s young investors likely haven’t read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
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