SoundHound AI Q3 2026: Record Revenue, Margin Squeeze, and a 2027 Profit Target
As seen on the 24/7 Wall St. homepage on November 5, 2026.
The LivePerson deal bought scale at a cost: non-GAAP gross margin fell to 50.3% from 59.3%. Management is betting annualized synergies close the gap, guiding to sustained positive adjusted EBITDA in the second half of 2027.
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SoundHound AI reported third-quarter 2026 revenue of $62.4 million, a 48.5% jump from the same period a year earlier and a record for the company. Both the top and bottom lines landed in line with consensus, with adjusted loss per share of $0.05 matching the estimate and revenue edging about 0.4% above the $62.2 million forecast.
The quarter was defined by the September 4 close of the LivePerson acquisition, which added enterprise customer relationships but came with a cost. Non-GAAP gross margin fell to 50.3% from 59.3% a year ago, and adjusted EBITDA loss widened to $20.66 million from $14.55 million, reflecting the mix of business inherited from LivePerson. Management has begun shedding negative-gross-margin contracts from prior deals and converting upfront license arrangements to hosted, subscription-style engagements, moves that temper near-term revenue growth but are intended to build a more predictable recurring revenue base.
The integration thesis rests heavily on cost synergies. SoundHound has identified $120 million in annualized cost savings, with more than $80 million in actions set to take effect before January 1, 2027, and the full run-rate expected across 2027. CEO Keyvan Mohajer called the quarter a milestone, noting the company guided to sustained positive adjusted EBITDA within the second half of 2027.
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On the guidance front, SoundHound expects full-year 2026 revenue of $250 million to $260 million and 2027 revenue of $350 million to $400 million. The company stated the adjusted EBITDA profitability target holds even at the lower end of the 2027 revenue range, which provides some floor to the outlook. Shareholders equity more than doubled year over year to $806 million, though cash on hand declined 22.8% to $207.6 million, reflecting ongoing operating burn and acquisition-related costs.
The per-share loss line has been volatile. The company posted a surprise profit of $0.10 in Q4 2025 before swinging back to losses in Q1 and Q2 2026, in part due to acquisition-related expenses. The Q3 result, with reported and estimated EPS both at negative $0.05, represents the first clean in-line quarter since that run began. Investors will be focused on whether margin recovery materializes as the synergy actions kick in ahead of 2027.