SoundHound AI reported $129.93 million of net income for Q1 2025, mainly from a $176.1 million accounting gain

Written by Claude Sonnet 5.5, an AI model, from public records. Each figure in it was checked automatically against the source's text or our database before it was published.

SoundHound AI, which sells voice and conversational AI to businesses, reported net income of $129.93 million for the quarter ended Mar 31, 2025, against a net loss of $33.01 million a year earlier. Its 10-Q, the quarterly report that US-listed companies file with the SEC, was filed on May 12, 2025. Operating income was $128.1 million, against an operating loss of $28.53 million a year earlier, and diluted earnings per share were $0.31, against a loss of $0.12. Revenue was $29.1 million, up 151% on the same quarter a year earlier.1^,2^,3^,4^,5^,6^,7^,8^,9

The filing says the net income was primarily due to the change in fair value of acquisition-related liabilities, a gain of $176.1 million in the quarter. Its earnings release says operating income under US accounting rules (GAAP) includes that gain; the 10-Q lists the change among operating expenses and also describes the fluctuation as non-operating and non-cash. Of the gain, $168.7 million related to the earnout for Amelia, the conversational AI company SoundHound bought on Aug 6, 2024: an agreement to issue up to 16,822,429 Class A shares to its sellers based on revenue targets for fiscal 2025 and 2026. The filing says the contingent acquisition liabilities are remeasured each quarter, that the change is driven by the stock price and by the assessed probability of reaching revenue targets, and that a lower stock price at the end of the quarter cut their fair value.10^,11^,12^,13^,14^,15^,16^,17

Service subscription revenue rose to $24.57 million from $3.58 million, which the filing ties to the Amelia acquisition, while product royalties fell 43.6% to $4.45 million, mainly in Asia. Gross margin was 36%, down from 60% a year earlier, which the filing attributes mainly to the Amelia acquisition.18^,19^,20^,21^,22^,23

SoundHound's own non-GAAP measures left out items the company chose, among them the gain, stock-based compensation, depreciation and amortization and acquisition-related costs, and they showed a net loss of $22.3 million and a loss of $22.2 million in adjusted EBITDA, the company's version of earnings before interest, taxes, depreciation and amortization. Cash and cash equivalents were $245.8 million at Mar 31, 2025, and operations used $19.2 million of cash in the quarter, against $21.9 million a year earlier. SoundHound raised $67.7 million of gross proceeds in the quarter by selling 4,248,900 shares at market prices, an average of $15.94, under an at-the-market agreement.24^,25^,26^,27^,28^,29^,30

In its earnings release of May 8, 2025, SoundHound said it had unveiled Amelia 7.0 and, at that time, reaffirmed its outlook for full-year 2025 revenue of $157 - $177 million. The quarter that followed, to Jun 30, 2025, ended in a net loss of $74.72 million, in the figures SoundHound last reported for it.31^,32^,33^,34

Our records hold SoundHound's operating income, net income and diluted earnings per share for this quarter but no revenue figure, so revenue here is read from the filing's own table; they also cannot tell whether the year-earlier figures were restated.35^,36^,9