SoundHound AI reports Q2 revenue growth amid stock decline

SoundHound AI reported second-quarter results featuring significant revenue growth, though the company continues to face profitability challenges. For the period ending June 30, revenue reached $61.9 million, a 45% increase year-over-year. The company also improved its gross margin to over 45%, up from 39% in the previous year, which helped reduce its net loss to $42.8 million from $74.7 million in the prior-year period.

Despite the revenue growth and an increase in full-year guidance to a range of $230 million to $260 million, the company's stock experienced a decline of approximately 7%. Analysts noted concerns regarding high cash burn, with the company using nearly $60 million for operating activities over the last six months. While some analysts maintain a "Moderate Buy" consensus with a price target of $14.00, others have adjusted targets downward following the earnings report.