Shares of SoundHound AI (SOUN) staged a sharp rebound after the company delivered a blowout second quarter, setting a new revenue record and lifting its full-year outlook. SOUN stock surged more than 27% in morning today after the results were announced, as investors cheered the company’s accelerating momentum in the fast-growing conversational and voice AI market.

The rally comes after a turbulent stretch for the stock. From a high of $24.98, SOUN endured a steep decline amid mounting concerns about its high valuations and broader economic headwinds. Selling pressure intensified in the months leading up to the Q2 release, leaving the stock deep in the red on a year-to-date basis. Despite the selloff, SoundHound’s business fundamentals have remained strong, with demand for its AI technology continuing to expand across multiple industries.

The first quarter of 2025 had already hinted at the company’s growth potential, with revenue climbing 151% year-over-year to $29.1 million. That performance had surpassed even the impressive 101% year-over-year growth registered in Q4 2024. But Q2 took things to another level. The company reported $42.7 million in revenue, a staggering 217% increase from last year’s second quarter. This was driven by a growing addressable market, the addition of new customers, and successful cross-selling initiatives.

Such explosive top-line growth reflects the surging demand for its voice AI solutions. As businesses in sectors ranging from automotive to hospitality seek to integrate conversational AI into their customer interactions, SoundHound’s technology is gaining traction. This broadening adoption solidifies its leadership position in the space and sets the stage for sustained revenue expansion.

SoundHound’s Expansion Gains Speed

SoundHound is firing on all cylinders, with growth momentum building quarter after quarter, with no signs of slowing down. The company has been making significant inroads across its key business segments, including automotive, AI-powered enterprise customer service, and AI-driven automation for restaurants. In the second quarter, it crossed a significant milestone, processing more than 1 billion queries per month on its platform, underscoring the scale and adoption of its technology.

The rollout of its Agentic AI platform is emerging as the new growth catalyst for the company. This innovation has provided a tailwind across the business, bolstered by strategic channel investments that are beginning to pay off. Expanded enterprise partnerships and deeper engagement with existing partners have contributed meaningfully to results, positioning the company for continued expansion.

In automotive, SoundHound signed a new original equipment manufacturer (OEM) in China, while enjoying a double-digit lift in average selling prices thanks to broader integration of its generative AI solutions. Its restaurant business is also performing exceptionally well, with location deployments accelerating quarter-over-quarter. The company now powers more than 14,000 restaurant locations with its Voice AI ordering technology, an increase of 1,000 locations in Q2 alone.

Diversification has been another bright spot. During the first half of the year, no single customer accounted for more than 10% of total revenue, reducing concentration risk and creating a more stable growth foundation. Q2 also benefited from strong close rates on major deals, a trend that could sustain in future quarters. Thanks to the strong demand, SoundHound raised its 2025 revenue outlook to $160 million to $178 million from $157 million to $177 million.

Recent acquisitions have strengthened both its capabilities and customer base, accelerating growth and creating new opportunities. While expansion has been rapid, SoundHound is keeping a close eye on costs. Management is pursuing operational efficiency through cloud integrations and workforce optimization, with generative AI playing a key role in enhancing productivity.

With profitability in sight, the company remains confident in its path toward achieving adjusted EBITDA profitability by the end of 2025.

The Bottom Line on SoundHound Stock 

SoundHound’s Q2 results showcased explosive revenue growth, expanding market adoption, and a path toward profitability. With diversified revenue streams, strategic partnerships, and its agentic AI platform gaining traction, the company is positioned for sustained momentum.

Analysts label SOUN stock a “Moderate Buy.” Still, if SoundHound maintains this growth trajectory and edges closer to profitability, the current rally could be more than just a short-term rebound.