SEC Filings

SoundHound AI Plans Approximately 27% Workforce Cut As Adjusted Losses Widen

The voice AI company is moving toward hosted services and targeting $120 million in annual savings after buying LivePerson.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

— 3 min read
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SoundHound AI Plans Approximately 27% Workforce Cut As Adjusted Losses Widen

SoundHound AI, which builds conversational voice software for businesses, plans to cut approximately 27% of its global workforce under a restructuring it implemented Wednesday, according to an SEC filing Thursday. The cuts accompany a shift toward hosted services as preliminary third-quarter sales grew but adjusted losses widened.

More Sales, Less Left Over

SoundHound reported preliminary, unaudited revenue of $62.4 million, up 48.5% from a year earlier and a quarterly record. Direct costs consumed a larger share of those sales: gross margin under standard accounting fell to 34.1% from 42.6%, while adjusted gross margin dropped to 50.3% from 59.3%.

The adjusted loss before interest, taxes, depreciation and amortization widened 42% year over year to $20.7 million. Adjusted net loss rose 63% to $21.2 million, or $0.05 a share, from $0.03 a share a year earlier.

The standard-accounting net loss narrowed to $46.4 million, or $0.10 a share, from $109.3 million, or $0.27 a share. That measure included a $23.4 million non-cash gain from revaluing acquisition-related obligations; the company's adjusted measures exclude that item.

SOUN shares tumbled about 5% to $4.03 in Friday trading.

The Price Of Cutting Jobs

The workforce reductions are expected to bring pre-tax charges of $18 million to $22 million, largely for severance and post-employment benefits. SoundHound estimates cash expenditures of approximately $16 million to $19 million, with most charges and payments expected during the fourth quarter of 2026.

The company expects employee restructuring to be substantially finished by year-end. Position eliminations remain subject to local legal and consultation requirements and business needs, and SoundHound says savings from the plan will support its strategic initiatives.

SoundHound had cash of $207.6 million at September 30. Operating activities used $95.986 million during the first nine months, compared with $76.336 million in the same period of 2025.

The restructuring follows the completed purchase of LivePerson on September 4. SoundHound retired nearly all of LivePerson's debt and expects to repay the remainder at maturity in the fourth quarter; short-term debt assumed in the purchase stood at $3.8 million at September 30.

Hosted Services And A TV Channel

SoundHound's software handles spoken interactions across cars, connected devices, restaurants and customer-service operations. Its business earns royalties from product makers and subscription revenue from service providers, with a smaller revenue stream tied to leads and transactions.

John Collins, SoundHound AI's chief financial officer, said the company is “shifting upfront license deals to hosted structures and exiting non-core, dilutive business lines, making our revenue more stable and predictable.” SoundHound is also dropping certain inherited contracts whose direct costs exceed their revenue, a move it expects to improve margins and adjusted earnings.

The commercial expansion includes an LG agreement for a U.S. commerce channel covering approximately 20 million smart TVs. SoundHound's updates included a Greaves Electric deal and the OASYS Edge launch.

For 2027, SoundHound projects $350 million to $400 million in sales; its 2026 forecast is $250 million to $260 million. Management has identified $120 million in annual cost savings, expects more than $80 million in cost actions to take effect before January 1, 2027, and expects the full annual savings pace in 2027.

SoundHound's target for sustained adjusted EBITDA profitability is the latter half of 2027.

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