SoundHound AI Inc (SOUN) saw its stock price plummet 5.44% in after-hours trading on Thursday, following the release of its Q1 2025 financial results. Despite reporting record quarterly revenue, the AI-powered voice recognition company's performance fell short of market expectations, triggering a sell-off among investors.
The company announced Q1 revenue of $29.1 million, representing an impressive 151% year-over-year increase. However, this figure missed analyst estimates of $30.4 million, according to IBES data. SoundHound AI reported earnings per share (EPS) of $0.31 and a net income of $129.9 million for the quarter. Despite the strong growth, the market reaction suggests investors had set even higher expectations for the AI company's performance.
Looking ahead, SoundHound AI reaffirmed its full-year revenue guidance of $157-177 million, indicating continued optimism for growth. However, the after-hours stock plunge highlights the high bar set for AI companies in the current market environment. Investors will be closely monitoring how SoundHound AI navigates the competitive landscape and delivers on its growth promises in the coming quarters, especially given the recent pressure on its stock price, which has declined 51.7% year-to-date.