NEW YORK — SoundHound Global Inc. shares fell 8 percent in early trading after the voice AI technology firm reported a wider-than-expected second-quarter loss driven by integration costs from recent acquisitions.
The company posted a net loss of $0.18 per share, missing analyst estimates of a $0.12 loss and marking a 50 percent increase from the prior year. Revenue rose 25 percent to $38 million, but gross margins compressed to 55 percent from 62 percent a year earlier.
Management attributed the margin decline to increased amortization of acquired intangibles and operational expenses from integrating recent purchases, which hurt adjusted EBITDA by an additional $5 million this quarter.
Sarah Chen, senior analyst at Griffin Capital, cut her price target to $5 from $7.50 while maintaining a hold rating. Chen said the acquisitions—including December's Conversa AI purchase and February's Vocalis Technologies deal—are strategically sound for expanding intellectual property but create a prolonged financial drag that pushes sustained profitability to late 2027, a year later than previous projections.
SoundHound is pursuing rapid expansion through acquisitions to compete against larger rivals Alphabet Inc. and Amazon.com Inc. which have deeper R&D budgets. The strategy requires substantial capital for both deals and subsequent integration, creating a challenging cash flow environment.
The market reaction suggests investors prefer clearer near-term profitability over a prolonged investment phase. Management faces pressure to demonstrate revenue synergies and cost efficiencies from the integrated businesses in coming quarters.
