SoundHound AI Says Polaris Speech Recognition Model Outperforms Google, OpenAI: Company Forays Into Energy Sector With 7-Figure Deal

SoundHound AI Inc.‘s SOUN speech recognition model “outperformed” Google and OpenAI during the fourth quarter, the company’s CEO said. The company also announced a new seven-figure deal, foraying into the energy sector as it exceeded analyst expectations in the fourth quarter.

What Happened: SoundHound achieved a new milestone as its multimodal and multilingual foundation model — Polaris outperformed the models from Alphabet Inc.’s GOOG GOOGL Google along with OpenAI, which is backed by Microsoft Corp. MSFT.

CEO Keyvan Mohajer, during the earnings call highlighted that Polaris was benchmarked against models in diverse, real-world conditions, including noisy environments and those requiring speed and low latency. The testing also accounted for variations in human speech, such as accents and background noise.

Against Google’s models, “We outperformed by north of 20% better accuracy. We also beat them on speed with four times better latency. Against OpenAI’s Whisper model, we are 26% to 36% more accurate on various benchmarks, and we are able to do this on models one-tenth of the size of what OpenAI uses,” added Mohajer.

The CEO further said “Our largest deal in Q4 was in energy.” Without disclosing many details, the management said that it was a seven-figure, multi-year deal.

Why It Matters: SoundHound beat fourth quarter revenue estimates with $34.54 million, up 101% year-on-year. It also exceeded earnings expectations, reporting a 5 cent loss per share. The company reported an adjusted EBITDA loss of $16.8 million and ended the quarter with $198 million in cash.

SoundHound boosted its 2025 revenue guidance to $157 million-$177 million, up from the previous forecast of $155 million-$175 million.

“There will be a ramp in revenue through the year given the nature of our customer base, underlying seasonality, and expected large deal timing,” said CFO Nitesh Sharan. He added that the firm remains “committed” to the path to profitability. “We will get there through continued scale and through surgical high ROI investments,” Sharan said.

Price Action: SoundHound fell 3.76% on Thursday and jumped 8.9% in after-hours, this outpaced the 2.66% fall in the Fidelity NASDAQ Composite Index ETF ONEQ, which tracks the Nasdaq Composite index.

The stock remains 54.32% lower on a year-to-date basis, however, it’s up 45.27% over a year.

Benzinga tracks seven analysts with an average price target of $12.36 for the stock, reflecting a “hold” rating. Estimates range widely from $7 to $26. Recent ratings from Northland Capital Markets, HC Wainwright & Co., and HC Wainwright & Co. average $20, suggesting a potential 99.40% upside.