SoundHound AI (SOUN $4.22 -3.21%) reports Q3 2026 results on Thursday, November 5, after the market closes, with the call at 5:00 p.m. ET. The stock goes in at $4.36, down 56% this year and down 39% since it closed at $7.16 at the end of August, even though Q2 was the largest quarter in the company's history and management raised its full-year revenue guide.
The quarter has one feature that the published consensus has not caught up with. SoundHound closed its acquisition of LivePerson on September 4, so Q3 includes 27 days of a business that booked $52.5 million of revenue in Q2 on its own. The six-analyst consensus of $62.2 million for Q3, and $237.7 million for the full year, sits inside SoundHound's pre-deal guidance and leaves that revenue out. Our forecast is a reported beat that is almost all acquisition, with the SoundHound business on its own roughly in line. The stock will trade on the second number, and on what management now says about 2027.
The data behind this piece
Explore the primary data Equibles carries for SOUN:
Why Q3 will beat consensus on paper
The consensus was built for the company SoundHound was before September. Two numbers show it. The full-year consensus of $237.7 million (six analysts, range $234.7 million to $240.7 million) sits in the lower half of the $230 million to $260 million guide, which management said in August “does not include the acquisition”. And the Q4 consensus of $70.9 million is roughly what SoundHound alone delivered in its best quarter plus seasonal growth, with nothing for a business that has run at $50 million to $60 million a quarter all year.
Our revenue build adds the two parts separately.
SoundHound before the deal: $62.0 million. Q2 revenue was $61.9 million, of which $47.0 million was service subscriptions and $14.8 million product royalties. Royalties were unusually high: $8.4 million in Q1, then $14.8 million in Q2, a quarter in which CFO James Hom said the company signed its largest deal of the quarter in Asia, where its automotive business has grown for five quarters in a row. We hold subscriptions roughly flat at $48.0 million and let royalties ease to $14.0 million. Q3 2025 revenue was 1.5% below Q2 2025, so a flat third quarter is the company's own pattern; the step-up comes in Q4.
LivePerson for 27 days: $14.2 million. LivePerson's revenue fell from $57.0 million in Q1 to $52.5 million in Q2, down 7.8%. Repeating that decline gives a full Q3 of $48.4 million, and 27 of 92 days gives $14.2 million. Acquisition accounting now carries a target's deferred revenue at its book value rather than writing it down, so we do not cut the stub for that.
Our forecast for Q3 and Q4 2026
| $M unless stated | Q2 2026 actual | Q3 2026 our forecast | Q3 consensus | Q4 2026 our forecast | Q4 consensus | FY 2026 our forecast | FY consensus | FY guidance (pre-deal) |
|---|---|---|---|---|---|---|---|---|
| SoundHound before the deal | 61.9 | 62.0 | 62.2 | 74.0 | 70.9 | 242.1 | 237.7 | 230 to 260 |
| LivePerson | n/a | 14.2 | n/a | 46.0 | n/a | 60.2 | n/a | n/a |
| Reported revenue | 61.9 | 76.2 | 62.2 | 120.0 | 70.9 | 302.3 | 237.7 | n/a |
| Adjusted EBITDA | -9.6 | -9.5 | n/a | n/a | n/a | n/a | n/a | n/a |
| GAAP diluted EPS | -$0.10 | -$0.13 | -$0.05 | n/a | -$0.04 | n/a | -$0.16 | n/a |
Consensus is the mean of six analysts for revenue and five for EPS, captured on October 29; the EPS consensus does not state whether it is GAAP or adjusted, and its range of -$0.09 to $0.00 suggests a mix. SoundHound reported Q2 GAAP EPS of -$0.10 and non-GAAP EPS of -$0.02.
Q4. We forecast $74.0 million from SoundHound on its own, a 19% step from Q3, below the 31% step of Q4 2025 because Q2's royalty bump pulled some of the year forward. That puts SoundHound alone at $242.1 million for 2026, in the lower half of its guide. LivePerson adds a full quarter at $46.0 million, a further 5% decline. Reported Q4 revenue of $120.0 million would be the first quarter above $100 million in the company's history.
Base, upside and downside. If Q2's royalties were a one-off and subscriptions slip, SoundHound alone does $57 million and LivePerson's stub $12.5 million, for $69.5 million: still above consensus on paper, but a sequential decline in the core business. If the eight-figure channel commitment signed in Q2 starts billing and LivePerson's decline slows, Q3 reaches about $81 million.
LivePerson: what SoundHound bought
LivePerson pioneered the chat window on company websites. Its revenue has fallen from $64.7 million in Q1 2025 to $52.5 million in Q2 2026, and it reported a Q2 net loss of $72.6 million, including $8.5 million of interest on debt that the deal has now retired. What it brings is a customer list, including 25 of the Fortune 100 according to the closing release, and a gross margin of about 70% against SoundHound's 45%.
The Q3 and Q4 bars are our estimates of LivePerson's full-quarter revenue, not what SoundHound will report for Q3. CEO Keyvan Mohajer described the deal as a turnaround:
“The reason they have lost some customers over the years were reasons that the merger fixes overnight. One was financial stability. One was platform stability. And one was innovation.”
Keyvan Mohajer, chief executive, SoundHound AI, Q2 2026 earnings call, 5 August 2026
The cross-sell is voice: LivePerson's customers have used other vendors for phone calls, and SoundHound's Oasis platform handles both. The first proof will be whether LivePerson's decline slows in Q4.
The 2027 range is the real test
In May, before the deal closed, management gave $350 million to $400 million as the “achievable revenue range” for 2027, including LivePerson, and repeated it in August as a minimum. Our count of the combined business in 2026 is about $446 million: $242 million from SoundHound alone and $204 million from LivePerson for the full year, of which SoundHound will report only the part after September 4.
Taken at face value, the range implies combined revenue falls 10% to 22% next year. There are reasonable explanations: LivePerson customers leaving faster, deliberate exits from low-margin contracts, or a range that was set conservatively and never updated. The analyst consensus for 2027 is $390.2 million (four analysts), near the top of the range. On November 5 SoundHound has its first chance to give combined guidance, and that number matters more than the Q3 beat.
Margins
SoundHound's GAAP gross margin has swung with its mix: 31.1% in Q1, when royalties were low, and 45.1% in Q2. Non-GAAP gross margin was 58.4% in Q2. Hom said the company expects gross margin “exceeding 70% in the future”, as more customers run on SoundHound's own models instead of paying for third-party ones.
LivePerson's higher margin helps the mix: on our numbers, Q3 GAAP gross margin rises to about 50%, before any new amortisation of the intangible assets SoundHound has bought. Adjusted EBITDA was a loss of $9.6 million in Q2. We forecast a $9.5 million loss in Q3, with LivePerson close to breakeven for its 27 days, in line with its own 2026 guide of -$4 million to $7 million of adjusted EBITDA for the full year.
The GAAP loss is wider. We assume a SoundHound loss similar to Q2's $42.8 million, about $12 million of deal costs, $3.5 million of LivePerson operating loss and $3 million of new amortisation, for a net loss of about $60 million. On about 446 million weighted shares that is -$0.13 a share, against the -$0.05 consensus. If the consensus is an adjusted figure, it is closer to our non-GAAP view of about -$0.02 to -$0.03.
Balance sheet and dilution
Cash. SoundHound had $202.8 million of cash and no debt at June 30. LivePerson had $96.7 million. The deal used about $5.8 million of cash to settle LivePerson's notes, plus $3.31 a share for stock held through the Tel Aviv clearing house.
Debt. LivePerson's first-lien convertible notes and 10% second-lien notes were released in exchange for 36.9 million SoundHound shares and $5.8 million of cash. The combined company has no borrowings.
Dilution. LivePerson shareholders received 0.4673 SoundHound shares for each of about 12.2 million shares, about 5.7 million in total. With the noteholders' 36.9 million, the deal added about 42.6 million shares to roughly 430.5 million, close to 10%. The noteholders have registration rights, so their shares can be resold.
ATM. SoundHound has a $300 million at-the-market program and sold nothing under it in Q2. At $4.36, using all of it would add about 69 million shares, so any Q3 sales disclosed on November 5 matter for the share count.
What management said
“Our results were beyond our own expectations, and a significant part of that is attributed to OASIS.”
Keyvan Mohajer, chief executive, SoundHound AI, Q2 2026 earnings call, 5 August 2026
“So the guidance we provided does not include the acquisition, and because of the uncertainty in the timing of the closing, we are not able to provide clear guidance on what it would look like.”
Keyvan Mohajer, chief executive, SoundHound AI, Q2 2026 earnings call, 5 August 2026
On large deals, Mohajer was careful about repeatability:
“So there are components of it that may not be recurring, but they have been absolutely repeatable.”
Keyvan Mohajer, chief executive, SoundHound AI, Q2 2026 earnings call, 5 August 2026
That is the risk in our Q3 number for the core business: Q2's royalty bump came from large deals, and the company itself says their size does not recur every quarter.
Positioning
Short interest. 170.8 million shares were sold short at the October 15 settlement, up 11.9 million from September 30, about 36% of our post-deal share count, with 10.1 days to cover at recent volume. Our short interest model estimates about 170 million shares for the October 30 settlement, which FINRA publishes on November 10; that is an estimate, not a FINRA figure.
Options. Weekly options expiring November 6 price SoundHound near 120% implied volatility, which works out to a move of about 13% either way through the report.
Insiders. The last open-market purchase by an insider was in January 2023. CEO Keyvan Mohajer, COO Michael Zagorsek and three other officers sold shares on June 15; on September 15 the same officers except the CTO sold $1.8 million at $6.33. New CFO John Collins, LivePerson's former CFO, received 1.05 million shares of stock awards on joining.
Our assumptions
| Assumption | Value | Why |
|---|---|---|
| SoundHound service subscriptions, Q3 | $48.0M | Q2 $47.0M; Q3 2025 was flat on Q2 2025 |
| SoundHound product royalties, Q3 | $14.0M | Q2 $14.8M came in the quarter of the largest deal in Asia; Q1 was $8.4M |
| LivePerson full-quarter revenue, Q3 | $48.4M | Q2 $52.5M less the Q1 to Q2 decline of 7.8% |
| LivePerson days consolidated | 27 of 92 | Closed September 4 |
| SoundHound alone, Q4 | $74.0M | A 19% step from Q3, below Q4 2025's 31% |
| LivePerson, Q4 | $46.0M | A further 5% decline |
| Deal costs in Q3 | About $12M | Legal and advisory costs drove Q2 G&A up 43% |
| Weighted shares, Q3 | About 446M | 430.5M in Q2 plus 42.6M new shares for 27 days and vesting |
Risks
- LivePerson may be recognised differently. If SoundHound changes LivePerson's revenue recognition or adjusts deferred revenue more than we assume, the stub could be several million dollars lower.
- The core business could dip. Q2's royalties rose in a quarter of unusually large deals; a sequential decline in SoundHound alone would be the headline, whatever the reported total.
- Combined guidance. A 2027 range kept at $350 million to $400 million would confirm that LivePerson is shrinking faster than its own guide implied.
- Dilution. The ATM, the noteholders' resale rights and stock-based pay, $21 million in Q2, all add shares.
What to watch on the call
- Revenue from SoundHound before the deal, if the company splits it out.
- LivePerson's contribution, its customer retention since closing and any revenue it has decided to exit.
- An updated 2026 range including LivePerson, and whether $350 million to $400 million for 2027 is raised.
- Gross margin, and how many customers run on SoundHound's own models.
- ATM sales in Q3 and the cash balance after closing costs.
- Integration costs and the timeline for cost savings.
Sources
- SoundHound Q2 2026 10-Q, accession 0001840856-26-000022: document.
- SoundHound Q2 2026 earnings release, 8-K filed 5 August 2026, accession 0001840856-26-000019: document.
- SoundHound Q2 2026 earnings call transcript, 5 August 2026: transcript.
- Completion of the LivePerson acquisition, 8-K filed 4 September 2026, accession 0001213900-26-097712: document.
- LivePerson stockholder approval and merger consideration, 8-K filed 2 September 2026, accession 0001213900-26-096796: document.
- LivePerson Q2 2026 10-Q, accession 0001102993-26-000084, and its 2026 guidance in the 8-K of 12 March 2026, accession 0001102993-26-000007.
- Analyst consensus captured on SoundHound's estimates page on 29 October 2026; short interest from FINRA; options from the November 6 chain on 30 October 2026.
This article is our analysis of public filings and our own financial model. It is not investment advice, and forecasts can be wrong. Equibles staff may hold positions in the securities discussed.