SoundHound AI (NASDAQ: SOUN) closed at $5.39 on October 9, 2026, down 45.9% from $9.97 at the close of 2025, falling below the $6 low end of Wall Street’s price target range.

Despite beating revenue consensus in each of the last five quarters, the company missed free cash flow consensus in each of the last four, a pattern that has weighed heavily on investor sentiment.

In Q2 2026, SoundHound’s EBITDA loss narrowed 33% to $9.61 million, compared to a $14.30 million loss in the same period a year earlier, suggesting some operational progress.

Free cash flow told a different story, deteriorating to negative $34.07 million from negative $24.69 million a year prior, well past the analyst estimate of negative $23.76 million.

Across the four quarters through Q2 2026, cumulative free cash flow totaled negative $115.89 million, while the sum of quarterly consensus estimates had projected only negative $60.33 million.

Co-founder James Hom, serving as CFO, attributed a significant portion of the cost pressure to general and administrative expenses, which rose 43% year over year to $26 million in Q2, driven by legal, advisory, and acquisition-related headcount costs.

To help fund the shortfall, SoundHound sold 6,232,900 shares through its at-the-market program during Q2, raising $47.5 million in net proceeds, adding to share count pressure on existing investors.

SoundHound completed its acquisition of LivePerson on September 4, 2026, with LivePerson stockholders receiving 0.4673 SoundHound shares per share, and noteholders receiving 36,894,839 Class A shares plus $5,848,000 in cash.

LivePerson’s Q2 2026 revenue declined 11.9% to $52.5 million, and CEO Keyvan Mohajer acknowledged that LivePerson had lost customers due to what he described as concerns over “financial stability,” “platform stability,” and “innovation.”

Mohajer said the merger addresses those weaknesses, and that legacy customers of acquired businesses migrate to SoundHound’s OASYS platform “at a pace that we are comfortable with.”

On the question of whether large deals would generate recurring revenue, Mohajer told Cantor Fitzgerald’s Thomas Blakey that “there are components of it that may not be recurring, but they have been absolutely repeatable.”

Wall Street’s FY2027 revenue consensus climbed roughly 43% during the September quarter to around $390 million, though analyst coverage simultaneously dropped from five analysts to four.

No formal revenue guidance accompanied the LivePerson deal close, with management offering only a target of more than $500 million in future revenue from the existing combined customer base.

The mean analyst price target currently sits at approximately $13, down from roughly $17 at the start of 2026, implying around 133% upside from the current price, though consensus still projects negative free cash flow through 2028.

FY2027 free cash flow consensus stands at approximately negative $84 million, with FY2028 projected at approximately negative $59 million, meaning the bull case depends entirely on growth materializing before further dilution erodes per-share value.

The stock’s NTM EV/Revenue multiple has compressed to roughly 7x from approximately 18x at the end of 2025, though that figure does not yet account for the shares issued as part of the LivePerson transaction.

As of October 11, SoundHound had not yet scheduled its Q3 earnings report, which will be the first to consolidate LivePerson’s results and is expected to include updated guidance from management following the deal’s close.

A free cash flow result better than Q2’s negative $34.07 million, achieved without fresh at-the-market share sales, could challenge the narrative driving the selloff and provide the first real test of whether the company’s integration strategy is gaining traction.