SOUNDHOUND AI, INC.
For the period ended Sep 30, 2026. Filed Nov 9, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 9, 2026
SOUN$4.05-1.5%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001840856-26-000022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-09.
0001840856-26-000028
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 166 previous paragraphs and 186 current paragraphs.
117 unchanged; 40 reworded; 27 added; 8 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
On September 4, 2026, the Company completed its acquisition of LivePerson, Inc., a provider of digital customer engagement and conversational AI software serving enterprise customers across retail, financial services, telecommunications, healthcare and consumer industries. The LivePerson Acquisition unifies the Company’s voice and agentic AI platform with LivePerson’s digital engagement capabilities and is expected to expand the Company’s omnichannel product offering and extend its enterprise customer base. Refer to Note 3 for further information on the LivePerson Acquisition.
Current report
Other (Expense) Income, Net
Current report
Total revenues increased by $20.4 million, or 48%, in the three months ended September 30, 2026 compared to the same period in 2025. The increase of $20.8 million in service subscription revenue, primarily in the Americas and EMEA regions, was driven by contributions from acquisitions.
Current report
Total revenues increased by $54.7 million, or 48%, in the nine months ended September 30, 2026 compared to the same period in 2025. The increase of $46.9 million in service subscription revenue, primarily in the Americas, was mainly driven by contributions from acquisitions. The increase of $7.8 million in product royalties revenue was driven by licensing revenue in Asia and increased royalties in EMEA.
Current report
Sales and marketing expenses increased by $1.8 million, or 11%, in the three months ended September 30, 2026 compared to the same period in 2025, primarily due to increases in 2026 of $2.0 million in personnel-related costs, out of which $1.8 million was incurred for employees of LivePerson acquired during the three months ended September 30, 2026, $0.4 million in advertising expense, $0.1 million in consulting fees, and $0.1 million in equipment expense, which were partially offset by decreases of $0.6 million in legal and professional fees, $0.2 million in office expense, and $0.1 million in travel expense.
Current report
Research and development expenses increased by $8.0 million, or 35%, in the three months ended September 30, 2026 compared to the same period in 2025, primarily due to increases in 2026 of $3.0 million in personnel-related costs, out of which $2.1 million was incurred for employees of LivePerson acquired during the three months ended September 30, 2026, $2.2 million in cloud computing service, $1.3 million in office expense, $0.9 million in equipment expense, $0.8 million in consulting fees, and $0.4 million in AI spend, which were partially offset by decreases of $0.5 million in legal and professional fees, and $0.1 million in travel expense.
Current report
Other (Expense) Income, Net
Current report
On September 4, 2026, we completed the LivePerson Acquisition. The consideration consisted substantially of shares of our common stock, and the cash and cash equivalents acquired exceeded the cash consideration paid, so the transaction did not reduce our cash and cash equivalents at closing. During the three months ended September 30, 2026, we incurred $7.0 million of transaction costs in connection with the acquisition, and we expect to incur additional integration costs over the next twelve months. We also assumed LivePerson’s convertible notes due 2026, substantially all of which have since been repaid, and LivePerson’s contractual obligations, including operating lease and purchase commitments. We expect to fund these requirements through existing cash and cash equivalents, cash flows from operating activities and, if required, proceeds from our ATM program.
Current report
We also agreed to pay up to 16,822,429 shares of Class A Common Stock to the selling shareholders based on achievement of certain annual revenue targets in fiscal years 2025 and 2026. The Company accounted for the Contingent Amelia Earnout Consideration as a liability within contingent acquisition liabilities on the Company’s condensed consolidated balance sheets and will subsequently remeasure the liability at each reporting date with changes in fair value recognized as a component of operating expense in the Company’s condensed consolidated statement of operations and comprehensive loss.
Current report
For the three and nine months ended September 30, 2026, we recognized a gain of $24.0 million and $65.4 million, respectively, related to the Contingent Amelia Earnout Consideration, reflected in the change in fair value of contingent acquisition liabilities in the condensed consolidated statement of operations and comprehensive loss. For the three and nine months ended September 30, 2025, we recognized a loss of $65.9 million and a gain of $70.1 million, respectively, related to the Contingent Amelia Earnout Consideration, reflected in the change in fair value of contingent acquisition liabilities in the condensed consolidated statement of operations and comprehensive loss.
Current report
As of September 30, 2026, the 2025 revenue target was met. In July 2026, we issued 8,126,674 shares of Class A Common Stock to the selling shareholders of the Amelia Acquisition to settle the 2025 portion of the Contingent Amelia Earnout Consideration. We assessed the 2026 revenue target as not probable of being met.
Current report
Interactions Acquisition
Current report
On September 4, 2026, we acquired all of the issued and outstanding equity of LivePerson, a provider of digital customer engagement and conversational AI software serving enterprise customers across retail, financial services, telecommunications, healthcare and consumer industries. The fair value of the preliminary purchase consideration was $289.8 million.
Current report
The LivePerson Acquisition was effected pursuant to the Agreement and Plan of Merger entered into on April 21, 2026, which was amended and restated on July 2, 2026 by the Amended and Restated Merger Agreement. Under the Amended Merger Agreement, the acquisition was structured as two successive mergers, so that holders of LivePerson common stock held through the Tel Aviv Stock Exchange Clearing House could receive cash rather than shares of the our Class A Common Stock.
Current report
At the effective time of the First Merger, each share of LivePerson common stock outstanding immediately prior to that time, other than TASE Shares, was converted into the right to receive 0.4673 shares of our Class A Common Stock. At the effective time of the Second Merger, each TASE Share was converted into the right to receive $3.31 in cash. We issued 4,974,627 shares of our Class A Common Stock with a fair value of $33.5 million based on the closing market price of $6.74 per share on the LivePerson Acquisition Date, and paid $5.8 million in cash to former holders of LivePerson common stock.
Current report
The LivePerson Acquisition did not include any holdback, escrow or contingent earnout consideration.
Current report
Settlement of LivePerson Secured Notes
Current report
We concluded that the settlement of the Secured Notes pursuant to the Notes Restructuring Agreement was contingent upon and effected contemporaneously with the closing, extinguished pre-existing obligations of LivePerson, and was an integral part of the exchange for control of LivePerson. Accordingly, the fair value of the consideration issued and paid by us to the Secured Holders has been included in the purchase consideration for the LivePerson Acquisition.
Current report
In connection with the closing, we also entered into a Registration Rights Agreement, dated September 4, 2026, with the Secured Holders, pursuant to which we agreed to register the resale of the shares of Class A Common Stock issued to the Secured Holders. We satisfied this obligation on the LivePerson Acquisition Date.
Current report
LivePerson 2026 Convertible Notes
Current report
In connection with the LivePerson Acquisition on September 4, 2026, we assumed obligations related to LivePerson’s 0% Convertible Senior Notes due 2026 (the “2026 Notes”), which were originally issued by LivePerson in December 2020 pursuant to an indenture between LivePerson and the trustee named therein (the “Indenture”). In accordance with the acquisition method of accounting, these obligations were recognized at their acquisition-date fair value of $5.0 million. See Note 3 to our unaudited condensed consolidated financial statements for more information on the LivePerson Acquisition.
Current report
In September 2026, subsequent to the LivePerson Acquisition, we settled $1.2 million of the aggregate $5.0 million in obligations assumed. As of September 30, 2026, $3.8 million aggregate principal amount of the 2026 Notes remained outstanding.
Current report
In October 2026, we repurchased $3.3 million principal amount of the 2026 Notes at 99.5% of par for $3.3 million in cash. We expect to recognize an immaterial gain on extinguishment in other (expense) income, net, in the fourth quarter of 2026. Following this repurchase, approximately $0.5 million principal amount of the 2026 Notes remains outstanding and matures on December 15, 2026.
Current report
See Note 8 and 19 to our unaudited condensed consolidated financial statements for more information on the 2026 Notes.
Current report
Replacement Equity Awards
Current report
Certain outstanding LivePerson restricted stock unit were assumed by us and converted into restricted stock units denominated in shares of our Class A Common Stock.
Current report
The portion of the Replacement Awards attributable to pre-combination service of $1.3 million was included in purchase consideration, and the portion attributable to post-combination service will be recognized as stock-based compensation expense over the remaining requisite service period. See Note 12 to our unaudited condensed consolidated financial statements for more information on stock-based awards assumed in connection with the LivePerson Acquisition.
Removed paragraphs (8)
Previous report
Other Income (Expense), Net
Previous report
Total revenues increased by $19.2 million, or 45%, in the three months ended June 30, 2026 compared to the same period in 2025. Service subscription revenue increased by $14.9 million, mainly driven by revenue from acquisitions in the Americas. Product royalty revenue in Asia also increased, partially offset by reduced license revenue in the EMEA region.
Previous report
Total revenues increased by $34.3 million, or 48%, in the six months ended June 30, 2026 compared to the same period in 2025. Service subscription revenue increased by $26.1 million, mainly driven by revenue from acquisitions in the Americas. Product royalty revenue in Asia also increased, partially offset by reduced license revenue in the EMEA region.
Previous report
Sales and marketing expenses increased by $0.8 million, or 5%, in the three months ended June 30, 2026 compared to the same period in 2025, primarily due to increases in 2026 of $1.2 million in personnel-related costs, and $0.3 million in advertising cost, which were partially offset by decreases of $0.4 million in office expense and $0.2 million in legal and professional fees.
Previous report
Research and development expenses increased by $1.3 million, or 5%, in the three months ended June 30, 2026 compared to the same period in 2025, primarily due to increases in 2026 of $2.3 million in office expense, $0.8 million in legal and professional fees, $0.6 million in consulting fees, and $0.4 million in cloud computing services, which are partially offset by decreases of $2.6 million in personnel-related costs caused by lower stock-based compensation of $2.6 million, and $0.2 million in rent expense.
Previous report
Other Income, Net
Previous report
We agreed to pay up to 16,822,429 in shares of Class A Common Stock to the selling shareholders based on achievement of certain revenue targets in fiscal years 2025 and 2026 (the “Contingent Amelia Earnout Consideration”). We accounted for the Contingent Amelia Earnout Consideration as a liability within contingent acquisition liabilities on our condensed consolidated balance sheet and will subsequently remeasure the liability at each reporting date with changes in fair value recognized as a component of operating expense in our condensed consolidated statement of operations and comprehensive income (loss). For the three months ended June 30, 2026, we recognized a gain of $4.0 million and $41.4 million, respectively, related to the Contingent Amelia Earnout Consideration, reflected in the change in fair value of contingent acquisition liabilities in the condensed consolidated statement of operations and comprehensive income (loss). For the three and six months ended June 30, 2025, we recognized a loss of $32.6 million and a gain of $136.1 million, respectively, related to the Contingent Amelia Earnout Consideration, reflected in the change in fair value of contingent acquisition liabilities in the condensed consolidated statement of operations and comprehensive income (loss). As of June 30, 2026, the 2025 revenue target was met. We assessed the 2026 revenue targets was probable of being met.
Previous report
LivePerson Acquisition
Reworded paragraphs (40)
Previous wording
Our market position is strengthened by the technical barriers to entry in the Voice AI space, which tend to discourage new market participants. Furthermore, our technology is backed by significant investments in intellectual property, with over 382 patents granted and 97 patents pending, spanning multiple fields including speech recognition, natural language understanding, machine learning, monetization and more. We have achieved this critical momentum in part thanks to a long-tenured leadership team with deep expertise and proven ability to attract and retain talent. We believe that SoundHound has extensive technical expertise and a proven track record of innovation and value creation for us to continue to attract customers in the growing market for Voice AI transactions.
Current wording
Our market position is strengthened by the technical barriers to entry in the Voice AI space, which tend to discourage new market participants. Furthermore, our technology is backed by significant investments in intellectual property, with over 719 patents granted and 127 patents pending, spanning multiple fields including speech recognition, natural language understanding, machine learning, monetization and more. We have achieved this critical momentum in part thanks to a long-tenured leadership team with deep expertise and proven ability to attract and retain talent. We believe that SoundHound has extensive technical expertise and a proven track record of innovation and value creation for us to continue to attract customers in the growing market for Voice AI transactions.
Previous wording
We have incurred certain significant costs relating to the SYNQ3, Amelia and Interactions acquisitions, such as legal, accounting, financial advisory and other professional services fees, as well as other customary payments. Refer to the "Liquidity and Capital Resources" section for discussion on the purchase price and the Acquisition's impact on SoundHound's liquidity.
Current wording
We have incurred certain significant costs relating to the Interactions, LivePerson and other acquisitions, such as legal, accounting, financial advisory and other professional services fees, as well as other customary payments. Refer to the "Liquidity and Capital Resources" section for discussion on the purchase price and the Acquisition's impact on SoundHound's liquidity.
Previous wording
•Revenue Growth. Our commercial success, including acceptance and use of our applications, will depend on a number of factors, some of which are beyond our control, such as size of the market opportunity, successful integration with original equipment manufacturers (“OEM”), competition and demand from the public and members of the conversational AI community. Our product offerings, including those offerings that we have acquired, have disruptive effects in the ways human interact with computers and we are developing new, innovative economic models and acquiring companies such as SYNQ3, Amelia and Interactions which have synergistic businesses to ours that we believe will enhance value to customers, partners and stockholders. For our revenue growth to continue, we will need to invest in sales and marketing to ensure our messaging, capabilities and offerings are well understood and valued by customers. With our primary focus on enterprise customers, we also need to align with enterprise sales cycles, which can be longer than consumer cycles. As we build new customer relationships, we continually focus on maintaining and growing our existing relationships through long-term partnerships through significant upfront investment in customer specific engineering projects. In addition to our acquisitions of SYNQ3, Amelia and Interactions, we may look to acquire other companies in the industry to develop synergies with our existing business, including LivePerson.
Current wording
•Revenue Growth. Our commercial success, including acceptance and use of our applications, will depend on a number of factors, some of which are beyond our control, such as size of the market opportunity, successful integration with original equipment manufacturers (“OEM”), competition and demand from the public and members of the conversational AI community. Our product offerings, including those offerings that we have acquired, have disruptive effects in the ways human interact with computers and we are developing new, innovative economic models and acquiring companies such as SYNQ3, Amelia, Interactions and LivePerson which have synergistic businesses to ours that we believe will enhance value to customers, partners and stockholders. For our revenue growth to continue, we will need to invest in sales and marketing to ensure our messaging, capabilities and offerings are well understood and valued by customers. With our primary focus on enterprise customers, we also need to align with enterprise sales cycles, which can be longer than consumer cycles. As we build new customer relationships, we continually focus on maintaining and growing our existing relationships through long-term partnerships through significant upfront investment in customer specific engineering projects. In addition to our acquisitions of SYNQ3, Amelia, Interactions and LivePerson, we may look to acquire other companies in the industry to develop synergies with our existing business.
Previous wording
•Cost of Revenues. The results of our business will depend in part on our ability to establish and increase our gross margins by scaling our business model and effectively managing our costs to produce our applications. Our revenue will be directly supported by data center investments in technology, both on premise and in the cloud. The associated workloads, along with supporting labor costs, will need to be managed effectively as we scale to improve our margins over time. Our Houndify platform is also powered by a library of over 100 content domains, including commonly used domains for points of interest, weather, flight status, sports and more.
Current wording
•Cost of Revenues. The results of our business will depend in part on our ability to establish and increase our gross margins by scaling our business model and effectively managing our costs to produce our applications. Our revenue will be directly supported by data center investments in technology, both on premise and in the cloud. The associated workloads, along with supporting labor costs, will need to be managed effectively as we scale to improve our margins over time.
Previous wording
“Amelia Software Platform” and “Virtual Assistance” meaning our AI-based digital resource solution that enables AI in our customers’ services, ranging across multiple industries. This generally includes revenue from hosted services if the customer elects our SaaS offering, or from licensing revenue if the customer requires an on-premise solution. Professional services are also offered and included within professional services revenue. The revenues from Amelia Software Platform and Virtual Assistance are included within Service Subscriptions, and are recognized point in time or over time depending on the arrangement.
Current wording
“Amelia Software Platform”, “Virtual Assistance”, and “Conversational Cloud” meaning our AI-based digital resource solution that enables AI in our customers’ services, ranging across multiple industries. This generally includes revenue from hosted services if the customer elects our SaaS offering, or from licensing revenue if the customer requires an on-premise solution. Professional services are also offered and included within professional services revenue. The revenues from Amelia Software Platform, Virtual Assistance, and Conversational Cloud are included within Service Subscriptions, and are recognized point in time or over time depending on the arrangement.
Previous wording
We have and may continue to experience volatility for our remaining performance obligations and deferred revenue as a result of the timing for completing our performance obligations. We had remaining performance obligations in the amount of $60.0 million as of June 30, 2026. Given the applicable contract terms, $37.3 million is expected to be recognized as revenue within one year, $20.1 million is expected to be recognized between 2 to 5 years and the remainder of $2.6 million is expected to be recognized after 5 years. Deferred revenue consists of billings or payments received in advance of revenue being recognized and can fluctuate with changes in billing frequency and other factors. As a result of these factors, as well as our mix of revenue streams and billing frequencies, we do not believe that changes in our remaining performance obligations and deferred revenue in a given period are directly correlated with our revenue growth in that period.
Current wording
We have and may continue to experience volatility for our remaining performance obligations and deferred revenue as a result of the timing for completing our performance obligations. We had remaining performance obligations in the amount of $191.4 million as of September 30, 2026. Given the applicable contract terms, $143.2 million is expected to be recognized as revenue within one year, $45.7 million is expected to be recognized between 2 to 5 years and the remainder of $2.5 million is expected to be recognized after 5 years. Deferred revenue consists of billings or payments received in advance of revenue being recognized and can fluctuate with changes in billing frequency and other factors. As a result of these factors, as well as our mix of revenue streams and billing frequencies, we do not believe that changes in our remaining performance obligations and deferred revenue in a given period are directly correlated with our revenue growth in that period.
Previous wording
SoundHound’s cost of revenues are comprised of direct costs associated directly with SoundHound’s revenue streams as described above. This primarily includes costs and depreciation related to hosting for cloud-based services, such as data centers, electricity charges, content fees and certain personnel-related expenses including personnel costs under call centers that are directly related to these revenue streams. Additionally, our cost of revenues also includes the amortization of developed technology acquired from SYNQ3, Amelia, Interactions and other acquisition as intangible assets.
Current wording
SoundHound’s cost of revenues are comprised of direct costs associated directly with SoundHound’s revenue streams as described above. This primarily includes costs and depreciation related to hosting for cloud-based services, such as data centers, electricity charges, content fees and certain personnel-related expenses including personnel costs under call centers that are directly related to these revenue streams. Additionally, our cost of revenues also includes the amortization of developed technology acquired from Interactions, LivePerson and other acquisition as intangible assets.
Previous wording
The change in fair value of contingent acquisition liabilities is related to contingent consideration from the SYNQ3, Amelia and Interactions acquisitions. The contingent consideration was determined to be liability classified and is remeasured as of each reporting period with a corresponding change in fair value recorded.
Current wording
The change in fair value of contingent acquisition liabilities is related to contingent consideration from the SYNQ3, Amelia, Interactions and LivePerson acquisitions. The contingent consideration was determined to be liability classified and is remeasured as of each reporting period with a corresponding change in fair value recorded.
Previous wording
The issuance of debt instruments with direct transaction costs, embedded derivatives and warrant instruments has resulted in debt discounts. Direct transaction costs consist of various transaction fees and third-party costs, such as bank and legal fees, that are incurred upon issuance. No interest expense was incurred during the three and six months ended June 30, 2026 due to the repayment of Amelia Debt in December 2024 and the repayment of Term Loan in June 2024.
Current wording
The issuance of debt instruments with direct transaction costs, embedded derivatives and warrant instruments has resulted in debt discounts. Direct transaction costs consist of various transaction fees and third-party costs, such as bank and legal fees, that are incurred upon issuance. No interest expense was incurred during the three and nine months ended September 30, 2026 due to the repayment of Amelia Debt in December 2024 and the repayment of Term Loan in June 2024.
Previous wording
Other income (expense), net consists of the change in fair value related to our derivative liability, interest income and other expense.
Current wording
Other (expense) income, net consists of the change in fair value related to our derivative liability, interest income and other expense.
Previous wording
The following tables set forth the significant components of our results of operations for the three and six months ended June 30, 2026 and 2025 ($ in thousands):
Current wording
The following tables set forth the significant components of our results of operations for the three and nine months ended September 30, 2026 and 2025 ($ in thousands):
Previous wording
*The change in fair value of acquisition related liabilities is mainly driven by the movements in our stock price during the reporting period and changes in the assessed probability of achieving certain future revenue targets defined as part of the acquisition agreements. See Note 14 to our unaudited condensed consolidated financial statements included within this report for more information.
Current wording
*The change in fair value of acquisition related liabilities is mainly driven by the movements in our stock price during the reporting period and changes in the assessed probability of achieving certain future revenue targets defined as part of the acquisition agreements. See Note 16 to our unaudited condensed consolidated financial statements for more information.
Previous wording
The following tables summarize our revenues by type and geographic regions for the three and six months ended June 30, 2026 and 2025 ($ in thousands):
Current wording
The following tables summarize our revenues by type and geographic regions for the three and nine months ended September 30, 2026 and 2025 ($ in thousands):
Previous wording
Cost of revenues increased by $7.9 million and $19.9 million, or 31% and 45% in the three and six months ended June 30, 2026, respectively, compared to the same period in 2025. Gross margin increased to 45% and 39% during the three and six months ended June 30, 2026 compared to 39% and 38%, respectively, during the same period in 2025 primarily due to certain new, higher margin license deals closed in the second quarter of 2026, which was partially offset by the acquisition of Interactions in the third quarter of 2025, which resulted in amortization of acquired intangible assets of $0.6 million and $1.2 million for the three and six months ended June 30, 2026, respectively. In the past, our gross margin has fluctuated and may continue to fluctuate from quarter to quarter due to revenue contributions from varying product mixes. However, we expect to gradually improve gross margins in the mid-term, especially as it relates the integration of Amelia, Interactions and SYNQ3.
Current wording
Cost of revenues increased by $17.0 million and $36.9 million, or 71% and 54% in the three and nine months ended September 30, 2026, respectively, compared to the same period in 2025. Gross margin decreased to 34% and 37% during the three and nine months ended September 30, 2026 compared to 43% and 40%, respectively, during the same period in 2025 primarily due to the acquisition of Interactions in 2025, which included a amortization of acquired intangible assets in the amount of $0.6 million and $1.8 million for the three and nine months ended September 30, 2026, respectively, and the acquisition of LivePerson in 2026, which included a amortization of acquired intangible assets in the amount of $1.0 million for the three months ended September 30, 2026. In the past, our gross margin has fluctuated and may continue to fluctuate from quarter to quarter due to revenue contributions from varying product mixes. However, we expect to gradually improve gross margins in the mid-term, especially as it relates the integration of SYNQ3, Amelia, Interactions and LivePerson.
Previous wording
Sales and marketing expenses increased by $8.0 million, or 29%, in the six months ended June 30, 2026 compared to the same period in 2025, primarily due to increases in 2026 of $5.9 million in personnel-related costs, $1.3 million in office expense, $0.7 million in advertising expenses, and $0.3 million in travel expenses, which were partially offset by decreases of $0.1 million in legal and professional fees.
Current wording
Sales and marketing expenses increased by $9.8 million, or 22%, in the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to increases in 2026 of $7.9 million in personnel-related costs, out of which $1.8 million was incurred for employees of LivePerson acquired during the three months ended September 30, 2026, $1.1 million in office expense, $1.1 million in advertising expenses, $0.2 million in travel expenses, $0.1 million in consulting fees, and $0.1 million in equipment expense, which were partially offset by a decrease of $0.7 million in legal and professional fees.
Previous wording
Research and development expenses increased by $2.8 million, or 5%, in the six months ended June 30, 2026 compared to the same period in 2025, primarily due to increases in 2026 of $4.2 million in office expense, $1.8 million in legal and professional fees, $0.9 million in consulting fees, $0.1 million in utilities, which were partially offset by decreases of $3.6 million in personnel-related costs mainly caused by lower stock-based compensation of $5.7 million, $0.4 million in cloud computing services and $0.3 million in rent expense.
Current wording
Research and development expenses increased by $10.8 million, or 15%, in the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to increases in 2026 of $5.6 million in office expense, $1.8 million in cloud computing services, $1.7 million in consulting fees, $1.3 million in legal and professional fees, $0.9 million in equipment expense, $0.4 million in AI spend, and $0.1 million in utilities, which were partially offset by decreases of $0.5 million in personnel-related costs caused by lower stock-based compensation, $0.3 million in rent expense, and $0.1 million in travel expense.
Previous wording
General and administrative expenses increased by $15.0 million, or 41%, in the six months ended June 30, 2026 compared to the same period in 2025. The increase in general and administrative expenses was primarily due to increases in 2026 of $5.8 million in legal and professional fees mainly caused by acquisitions, $5.7 million in personnel-related costs, out of which $1.2 million was incurred for employees of Interactions acquired in the third quarter of 2025, $1.7 million in consulting fees, $1.7 million in bad debt expense, $0.5 million in software expense, $0.4 million in rent expense, and $0.3 million in taxes and licenses, which were partially offset by decreases of $0.8 million in office expense and $0.3 million in cloud computing services.
Current wording
General and administrative expenses increased by $11.6 million, or 48%, in the three months ended September 30, 2026 compared to the same period in 2025. The increase in general and administrative expenses was primarily due to increases in 2026 of $7.1 million in legal and professional fees mainly caused by acquisitions, $2.9 million in personnel-related costs, out of which $2.6 million was incurred for employees of LivePerson acquired during the three months ended September 30, 2026, $2.0 million in consulting fees, $0.4 million in office expense, $0.2 million in insurance expense, and $0.1 million in equipment expense, which were partially offset by decreases of $0.8 million in bad debt expense, $0.2 million in taxes and licenses, $0.1 million in rent expense, and $0.1 million in utilities.
Previous wording
General and administrative expenses increased by $7.8 million, or 43%, in the three months ended June 30, 2026 compared to the same period in 2025. The increase in general and administrative expenses was primarily due to increases in 2026 of $3.5 million in legal and professional fees mainly caused by acquisitions, $1.9 million in bad debt expense, $1.5 million in consulting fees, $1.1 million in personnel-related costs, $0.2 million in software expense, $0.1 million in taxes and licenses, and $0.1 million in rent expense, which were partially offset by decreases of $0.6 million in office expense and $0.1 million in cloud computing services.
Current wording
General and administrative expenses increased by $26.6 million, or 44%, in the nine months ended September 30, 2026 compared to the same period in 2025. The increase in general and administrative expenses was primarily due to increases in 2026 of $12.9 million in legal and professional fees mainly caused by acquisitions, $8.6 million in personnel-related costs, out of which $2.6 million was incurred for employees of LivePerson acquired during the three months ended September 30, 2026, $3.7 million in consulting fees, $0.9 million in bad debt expense, $0.6 million in equipment expense, $0.3 million in rent expense, $0.3 million in insurance expense, $0.1 million in taxes and licenses, and $0.1 million in payroll processing fees, which were partially offset by decreases of $0.4 million in office expense, $0.3 million in cloud computing services. and $0.1 million in utilities.
Previous wording
The change in fair value of acquisition related liabilities, which is marked-to-market based on the movements in our stock price and changes in the assessed probability of achieving certain future revenue targets, was a gain of $3.7 million and $43.1 million for the three and six months ended June 30, 2026. The decrease of the Company's stock price as of June 30, 2026 compared to the stock price as of December 31, 2025, resulted in a decrease in its fair value of contingent acquisition liabilities during the three and six months ended June 30, 2026. The fluctuation is non-operating and non-cash in nature. We will continue to review our estimates on a quarterly basis over the remaining earnout period. See Note 14 to our unaudited condensed consolidated financial statements included within this report for more information.
Current wording
The change in fair value of acquisition related liabilities, which is marked-to-market based on the movements in our stock price and changes in the assessed probability of achieving certain future revenue targets, was a gain of $24.0 million and $67.1 million for the three and nine months ended September 30, 2026. The changes in the assessed probability of achieving certain future revenue targets defined as part of the acquisition agreements and the decrease of the Company's stock price as of September 30, 2026 compared to the stock price as of December 31, 2025, resulted in a decrease in its fair value of contingent acquisition liabilities during the three and nine months ended September 30, 2026. The fluctuation is non-operating and non-cash in nature. We will continue to review our estimates on a quarterly basis over the remaining earnout period. See Note 16 to our unaudited condensed consolidated financial statements for more information.
Previous wording
Amortization of intangibles increased by $2.3 million and $4.2 million, or 30% and 28% in the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily attributable to the intangibles of $39.5 million acquired from Interactions Acquisition that was closed during the third quarter of 2025, which is expected to be amortized over five years after the Interactions Acquisition Date, and the intangible of $28.0 million acquired under the MIPA Agreement during the three months ended June 30, 2026, which is expected to be amortized over nine years after the MIPA Closing Date.
Current wording
Amortization of intangibles increased by $3.6 million and $7.7 million, or 43% and 33% in the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025. The increase was primarily attributable to the intangible of $28.0 million acquired under the MIPA Agreement during the second quarter of 2026, which is expected to be amortized over nine years after the MIPA Closing Date, and the intangibles of $146.2 million acquired under the LivePerson Acquisition which closed during the three months ended September 30, 2026, which is expected to be amortized over 2 to 12 years from the LivePerson Acquisition Date for intangible assets with definite useful lives. Refer to Note 3 for further information on the LivePerson Acquisition.
Previous wording
The following tables summarize our other income, net, by type ($ in thousands):
Current wording
The following tables summarize our other (expense) income, net, by type ($ in thousands):
Previous wording
Interest income decreased by $0.6 million and $1.1 million or 23% and 24% for the three and six months ended June 30, 2026, respectively, compared to the same period in 2025. The decrease was primarily attributable to reduced balance of interest bearing money market fund during the three and six months ended June 30, 2026 compared to the same period in 2025.
Current wording
Interest income decreased by $1.4 million and $2.5 million or 51% and 34% for the three and nine months ended September 30, 2026, respectively, compared to the same period in 2025. The decrease was primarily attributable to reduced balance of interest bearing money market fund during the three and nine months ended September 30, 2026 compared to the same period in 2025.
Previous wording
Change in fair value of derivative decreased by $1.0 million and $4.8 million, or 116% and 221% in the three and six months ended June 30, 2026, respectively, compared to the same period in 2025. The decrease was primarily attributable to the remeasurement loss from the change in fair value of a derivative assumed from Amelia acquisition caused by the decrease in the Company's stock price in the three and six months ended June 30, 2026. See Note 14 to our unaudited condensed consolidated financial statements included within this report for more information.
Current wording
Change in fair value of derivative decreased by $5.7 million and $10.5 million, or 111% and 144% in the three and nine months ended September 30, 2026, respectively, compared to the same period in 2025. The decrease was primarily attributable to the remeasurement loss from the change in fair value of a derivative assumed from Amelia acquisition caused by the decrease in the Company's stock price in the three and nine months ended September 30, 2026. See Note 16 to our unaudited condensed consolidated financial statements for more information.
Previous wording
Total unrestricted cash and cash equivalents on hand as of June 30, 2026 was $202.8 million. Although we have incurred recurring losses each year since our inception, we expect we will be able to fund our operations for at least the next twelve months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash balances and expected cash proceeds from future use of our ATM program. Our condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business.
Current wording
Total unrestricted cash and cash equivalents on hand as of September 30, 2026 was $207.6 million. Although we have incurred recurring losses each year since our inception, we expect we will be able to fund our operations for at least the next twelve months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash balances and expected cash proceeds from future use of our ATM program. Our condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business.
Previous wording
During the three and six months ended June 30, 2025, we sold 646,000 and 4,894,900 shares, respectively, of our common stock under the Second Equity Distribution Agreement, at an average price of $12.16 and $15.44 per share, respectively, and raised $7.9 million and $75.6 million of gross proceeds, respectively. The commissions and offering costs borne by us were approximately $0.2 million and $1.5 million, respectively. During the three and six months ended June 30, 2026, we sold 6,232,900 shares of our common stock under the Second Equity Distribution Agreement, at an average price of $7.78 per share and raised $48.5 million of gross proceeds. The commissions and offering costs borne by us were approximately $1.0 million. As of June 30, 2026, we had no remaining capacity to sell our common stock under the Second Equity Distribution Agreement.
Current wording
During the three months ended September 30, 2026, there was no issuance of the Company's common stock under the Second Equity Distribution Agreement. During the nine months ended September 30, 2026, we sold 6,232,900 shares of our common stock under the Second Equity Distribution Agreement, at an average price of $7.78 per share and raised $48.5 million of gross proceeds. The commissions and offering costs borne by us were approximately $1.0 million. As of September 30, 2026, we had no remaining capacity to sell our common stock under the Second Equity Distribution Agreement.
Previous wording
During the three months ended June 30, 2026, we sold no shares of our common stock under the Third Equity Distribution Agreement. As of June 30, 2026, we had a remaining capacity of $300.0 million to sell our common stock under the Second Equity Distribution Agreement.
Current wording
During the three and nine months ended September 30, 2026, we sold no shares of our common stock under the Third Equity Distribution Agreement. As of September 30, 2026, we had a remaining capacity of $300.0 million to sell our common stock under the Second Equity Distribution Agreement.
Previous wording
In April 2025, the Contingent SYNQ3 Holdback Consideration was settled by issuing 472,501 shares of the Company’s Class A Common Stock and paying $0.2 million in cash. After the holdback settlement, any remaining indemnifications by the sellers to cover unsettled claims was offset against the Contingent SYNQ3 Earnout Consideration to the extent of its fair value as of June 30, 2026. See Note 16 to our unaudited condensed consolidated financial statements included within this report for more information on the fair value measurement of Contingent SYNQ3 Holdback Consideration.
Current wording
In April 2025, the Contingent SYNQ3 Holdback Consideration was settled by issuing 472,501 shares of the Company’s Class A Common Stock and paying $0.2 million in cash. After the holdback settlement, any remaining indemnifications by the sellers to cover unsettled claims was offset against the Contingent SYNQ3 Earnout Consideration to the extent of its fair value as of September 30, 2026. See Note 16 to our unaudited condensed consolidated financial statements for more information on the fair value measurement of Contingent SYNQ3 Holdback Consideration.
Previous wording
We also agreed to pay in aggregate up to $0.8 million in cash and 1,434,936 in shares of Class A Common Stock, to certain stockholders of SYNQ3 based on tiered annual revenue targets for each fiscal year 2024, 2025 and 2026 (the “Contingent SYNQ3 Earnout Consideration”). We accounted for the Contingent SYNQ3 Earnout Consideration as a liability within contingent acquisition liabilities on our condensed consolidated balance sheets and will subsequently remeasure the liability at each reporting date with changes in fair value recognized as a component of operating expense in our condensed consolidated statement of operations and comprehensive income (loss).
Current wording
We also agreed to pay in aggregate up to $0.8 million in cash and 1,434,936 in shares of Class A Common Stock, to certain stockholders of SYNQ3 based on tiered annual revenue targets for each fiscal year 2024, 2025 and 2026 (the “Contingent SYNQ3 Earnout Consideration”). We accounted for the Contingent SYNQ3 Earnout Consideration as a liability within contingent acquisition liabilities on our condensed consolidated balance sheets and will subsequently remeasure the liability at each reporting date with changes in fair value recognized as a component of operating expense in our condensed consolidated statement of operations and comprehensive loss.
Previous wording
For the three months ended June 30, 2026, we recognized a loss of zero and $0.4 million, respectively, related to the Contingent SYNQ3 Earnout Consideration, reflected in the change in fair value of contingent acquisition liabilities in the condensed consolidated statement of operations and comprehensive income (loss). For the three and six months ended June 30, 2025, we recognized a gain of $3.6 million and $8.7 million, respectively, related to the Contingent SYNQ3 Earnout Consideration, reflected in the change in fair value of contingent acquisition liabilities in the condensed consolidated statement of operations and comprehensive income (loss). See Note 14 to our unaudited condensed consolidated financial statements included within this report for more information on the fair value measurement of Contingent SYNQ3 Earnout Consideration.
Current wording
For the three months ended September 30, 2026, we recognized a loss of zero and $0.4 million, respectively, related to the Contingent SYNQ3 Earnout Consideration, reflected in the change in fair value of contingent acquisition liabilities in the condensed consolidated statement of operations and comprehensive loss. For the three and nine months ended September 30, 2025, we recognized a gain of zero and $8.7 million, respectively, related to the Contingent SYNQ3 Earnout Consideration, reflected in the change in fair value of contingent acquisition liabilities in the condensed consolidated statement of operations and comprehensive loss. See Note 16 to our unaudited condensed consolidated financial statements for more information on the fair value measurement of Contingent SYNQ3 Earnout Consideration.
Previous wording
The 2,033,156 restricted shares of our Class A Common Stock issued at the SYNQ3 Acquisition Date to certain continuing employees of SYNQ3 subject to time and performance-based vesting conditions was determined to be a separate transaction from the SYNQ3 Acquisition and therefore is excluded from purchase consideration. See Note 10 to our unaudited condensed consolidated financial statements included within this report for more information on stock-based awards issued in connection with the SYNQ3 Acquisition.
Current wording
The 2,033,156 restricted shares of our Class A Common Stock issued at the SYNQ3 Acquisition Date to certain continuing employees of SYNQ3 subject to time and performance-based vesting conditions was determined to be a separate transaction from the SYNQ3 Acquisition and therefore is excluded from purchase consideration. See Note 12 to our unaudited condensed consolidated financial statements for more information on stock-based awards issued in connection with the SYNQ3 Acquisition.
Previous wording
On the Amelia Acquisition Date, we issued and deposited 2,149,530 shares of our Class A Common Stock into an escrow account in order to partially secure the indemnification obligations of the selling shareholders under the purchase agreement. We accounted for the escrow consideration as equity issued as part of consideration transferred. Upon the settlement of any valid indemnification claims against the sellers, the escrow agent will return a number of shares to us equal to the dollar value of the indemnified loss divided by the reference price of $5.35 as stipulated in the purchase agreement. We concluded that this variability in settlement value is a derivative that is required to be remeasured to fair value due to changes in stock price.
Current wording
On the Amelia Acquisition Date, we issued and deposited 2,149,530 shares of our Class A Common Stock into an escrow account in order to partially secure the indemnification obligations of the selling shareholders under the purchase agreement. We accounted for the escrow consideration as equity issued as part of consideration transferred. Upon the settlement of any valid indemnification claims against the sellers, the escrow agent will return a number of shares to us equal to the dollar value of the indemnified loss divided by the reference price of $5.35 as stipulated in the purchase agreement. We concluded that this variability in settlement value is a derivative that is required to be remeasured to fair value due to changes in stock price. In September 2026, 297,366 shares of the our Class A Common Stock were released to the selling shareholders from the escrow account, and 1,478,333 shares remained in escrow as of September 30, 2026.
Previous wording
For the three and six months ended June 30, 2026, we recognized a loss of $0.1 million and $2.6 million. respectively, related to remeasurement of the derivative, reflected in the other income (expense), net in the condensed consolidated statement of operations and comprehensive income (loss). For the three and six months ended June 30, 2025, we recognized a gain of $0.9 million and $2.2 million. respectively, related to remeasurement of the derivative, reflected in the other income (expense), net in the condensed consolidated statement of operations and comprehensive income (loss). Upon the expiration of the escrow period, any remaining shares in the escrow account will be released to the selling shareholders. See Note 14 to our unaudited condensed consolidated financial statements included within this report for more information on the fair value measurement of the derivative related to indemnification rights. Upon the expiration of the escrow period, any remaining shares within the escrow account will be released to the selling shareholders.
Current wording
For the three and nine months ended September 30, 2026, we recognized a loss of $0.6 million and $3.2 million. respectively, related to remeasurement of the derivative, reflected in the other (expense) income, net in the condensed consolidated statement of operations and comprehensive loss. For the three and nine months ended September 30, 2025, we recognized a gain of $5.1 million and $7.3 million. respectively, related to remeasurement of the derivative, reflected in the other (expense) income, net in the condensed consolidated statement of operations and comprehensive loss. See Note 16 to our unaudited condensed consolidated financial statements for more information on the fair value measurement of the derivative related to indemnification rights. Upon the expiration of the escrow period, any remaining shares in the escrow account will be released to the selling shareholders.
Previous wording
The indemnity holdback consideration of$0.2 million was recorded within other current liabilities, which was withheld for a period of 12 months subsequent to the Interactions Acquisition Date (the "Interactions Indemnity Holdback Consideration").
Current wording
The indemnity holdback consideration of$0.2 million was recorded within other current liabilities, which was withheld for a period of 12 months subsequent to the Interactions Acquisition Date (the "Interactions Indemnity Holdback Consideration") and was paid to Interactions' former stockholders during the three months ended September 30, 2026.
Previous wording
We also agreed to pay up to $25.0 million in cash to the selling shareholders based on achievement of certain annual revenue targets in fiscal years 2026 and 2027 and renewal or extension of an existing contract with a specific customer on or before March 31, 2026. We accounted for the Contingent Interactions Earnout Consideration as a liability within contingent acquisition liabilities on the condensed consolidated balance sheets and will subsequently remeasure the liability at each reporting date with changes in fair value recognized as a component of operating expense in the condensed consolidated statement of operations and comprehensive income (loss). As of the Interactions Acquisition Date, the Contingent Interactions Earnout Consideration had an estimated fair value of $9.9 million. For the three and six months ended June 30, 2026, we recognized a loss of $0.3 million and a gain of $2.1 million, respectively, related to the Contingent Interactions Earnout Consideration, reflected in the change in fair value of contingent acquisition liabilities in the condensed consolidated statement of operations and comprehensive income (loss). On January 23, 2026, we paid $4.7 million to the selling shareholders of the Interaction Acquisition to settle a portion of the Contingent Interactions Earnout Consideration due to the achieved renewal of an existing contract with a specific customer. As of June 30, 2026, we assessed the 2026 revenue target as not probable of being met, but the 2027 revenue targets as probable of being met.
Current wording
We also agreed to pay up to $25.0 million in cash to the selling shareholders based on achievement of certain annual revenue targets in fiscal years 2026 and 2027 and renewal or extension of an existing contract with a specific customer on or before March 31, 2026. We accounted for the Contingent Interactions Earnout Consideration as a liability within contingent acquisition liabilities on the condensed consolidated balance sheets and will subsequently remeasure the liability at each reporting date with changes in fair value recognized as a component of operating expense in the condensed consolidated statement of operations and comprehensive loss. As of the Interactions Acquisition Date, the Contingent Interactions Earnout Consideration had an estimated fair value of $9.9 million. For the three and nine months ended September 30, 2026, we recognized a gain of zero and $2.1 million, respectively, related to the Contingent Interactions Earnout Consideration, reflected in the change in fair value of contingent acquisition liabilities in the condensed consolidated statement of operations and comprehensive loss. On January 23, 2026, we paid $4.7 million to the selling shareholders of the Interaction Acquisition to settle a portion of the Contingent Interactions Earnout Consideration due to the achieved renewal of an existing contract with a specific customer. As of September 30, 2026, we assessed the 2026 revenue target as not probable of being met, but the 2027 revenue targets as probable of being met.
Previous wording
As of June 30, 2026, we incurred$5.5 millionin acquisition related expenses, of which zero and $0.5 million was incurred during thethree and six months ended June 30, 2026, respectively, and recorded as general and administration expenses in its condensed consolidated statements of operations and comprehensive income (loss).
Current wording
As of September 30, 2026, we incurred$5.5 millionin acquisition related expenses, of which less than$0.1 million and $0.5 million were incurred during thethree and nine months ended September 30, 2026, respectively, and recorded as general and administration expenses in the condensed consolidated statements of operations and comprehensive loss.
Previous wording
On April 21, 2026, we announced and entered into a Merger Agreement (the "Original Merger Agreement"), which was amended and restated on July 2, 2026 by the Amended and Restated Merger Agreement (the "Amended Merger Agreement"), to acquire LivePerson, Inc. ("LivePerson") for approximately $42.8 million of consideration payable to holders of LivePerson Common Stock in a mix of cash and Company Class A Common Stock. Concurrent with the execution and delivery of the Original Merger Agreement, we entered into a Notes Restructuring Agreement with LivePerson and each of the holders of LivePerson’s First Lien Convertible Secured Notes due 2029 and LivePerson’s Second Lien Senior Subordinated Secured Notes due 2029 (together the “Secured Notes”), pursuant to which the holders of the Secured Notes have agreed to release and deem satisfied the Secured Notes for approximately $261.2 million of consideration payable in a potential mix of cash and Class A Common Stock at the Company’s discretion. The combination will unify SoundHound’s voice and agentic AI platform with LivePerson’s digital engagement capabilities, and delivers additional revenue and scale to us. The transaction is expected to close in the third quarter of 2026, subject to customary closing conditions, including regulatory approvals.
Current wording
Concurrently with the execution of the Original Merger Agreement, we entered into a notes restructuring agreement with LivePerson and each of the holders of LivePerson's First Lien Convertible Senior Secured Notes due 2029 and LivePerson's Second Lien 10.0% Senior Subordinated Secured Notes due 2029, pursuant to which the Secured Holders agreed to release and deem satisfied the Secured Notes in exchange for a combination of our Class A Common Stock and cash. On the LivePerson Acquisition Date, we issued an aggregate of 36,894,839 shares Class A Common Stock to the Secured Holders, of which 25,142,335 shares were issued to the holders of the First Lien Convertible Senior Secured Notes due 2029 and 11,752,504 shares to the holders of the Second Lien 10.0% Senior Subordinated Secured Notes due 2029. The Secured Holders also received cash of $5.8 million, of which $0.5 million was paid by us at closing and the remainder by LivePerson. The amount paid by us represented the portion of LivePerson’s cash at closing in excess of the minimum cash balance specified in the Notes Restructuring Agreement, which was allocated to the Secured Holders under that agreement.
Previous wording
On May 12, 2026 ("the MIPA Closing Date"), we completed an asset acquisition by entering a Membership Interest Purchase Agreement (the "MIPA Agreement") with a private company to purchase its outstanding membership interests and agreed to pay up to $30.2 million in cash, adjusted by any reduction amount defined by the MIPA Agreement. As of June 30, 2026, we have paid $26.1 million to the seller under the MIPA Agreement. As part of the total purchase consideration, we recorded deferred holdback liabilities of $1.5 million in cash within other current liabilities, payable to the seller based on a historic performance target achieved as of the MIPA Closing Date.
Current wording
On May 12, 2026 (the “MIPA Closing Date”), we completed an asset acquisition by entering into a Membership Interest Purchase Agreement (the “MIPA Agreement”) with a private company to purchase its outstanding membership interests, and agreed to pay up to $30.2 million in cash, adjusted by any reduction amount defined by the MIPA Agreement. As part of the total purchase consideration, we recorded a deferred holdback liability of $1.5 million within other current liabilities, payable to the seller based on a historic performance target achieved as of the MIPA Closing Date. We paid $26.1 million to the seller during the three months ended June 30, 2026. Upon expiration of the adjustment period under the MIPA Agreement during the three months ended September 30, 2026, we paid the $1.5 million deferred holdback to the seller. As of September 30, 2026, we paid $27.6 million to the seller under the MIPA Agreement, and no deferred holdback liability remains outstanding.
Previous wording
Net cash used in operating activities was $60.0 million during the six months ended June 30, 2026 compared to $43.7 million during the six months ended June 30, 2025. The $16.3 million increase in cash used in operating activities was primarily due to decreases of $123.1 million in net income, $7.5 million increase in operating assets and liabilities, $2.1 million increase in stock-based compensation, and $1.8 million in net other operating cash spend, which is partially offset by the movement of $101.7 million from change in the fair value of contingent acquisition liabilities, $5.5 million increase in depreciation and amortization, the movement of $4.8 million from change in fair value of derivative, $3.5 million increase in bad debt expenses, $1.4 million in foreign currency gain from remeasurement, $1.0 million increase in amortization of capitalized commissions, and $0.3 million increase in non-cash lease amortization.
Current wording
Net cash used in operating activities was $96.0 million during the nine months ended September 30, 2026 compared to $76.3 million during the nine months ended September 30, 2025. The $19.7 million increase in cash used in operating activities was primarily due to $59.6 million increase in net loss, $3.3 million decrease in net other operating cash spend, $1.5 million increase in deferred income taxes, which is partially offset by the movement of $11.4 million from change in the fair value of contingent acquisition liabilities, the movement of $10.5 million from change in fair value of derivative, $10.3 million increase in depreciation and amortization, $7.3 million decrease in operating assets and liabilities, $3.8 million increase in bad debt expenses, $1.1 million increase in foreign currency gain from remeasurement, $0.3 million increase in non-cash lease amortization, and $0.1 million increase in amortization of capitalized commissions.
Previous wording
Net cash used in investing activities was $32.7 million during the six months ended June 30, 2026 compared to $0.4 million during the six months ended June 30, 2025. The $32.4 million increase in cash used in investing activities was primarily driven by the $26.5 million increase in payment related to asset acquisition, $5.4 million increases in software development costs and $0.5 million increase in purchases of property and equipment.
Current wording
Net cash provided by investing activities was $9.8 million during the nine months ended September 30, 2026 compared to $57.0 million of cash used in investing activities during the nine months ended September 30, 2025. The $66.8 million increase in cash provided by investing activities was primarily driven by the $106.3 million decrease in the payment related to acquisitions, net of cash acquired, which is partially offset by $28.0 million increase in the payment related to asset acquisition, $5.9 million increases in software development costs, $5.0 million increase in the purchase of equity investment, and $0.6 million increase in purchases of property and equipment.
Previous wording
Net cash used in used in financing activities was $46.7 million during the six months ended June 30, 2026 compared to $76.6 million provided by financing activities during the six months ended June 30, 2025. The $29.9 million decrease in cash provided by financing activities was primarily due to $27.1 million decrease in net proceeds from Second Equity Distribution Agreement, $3.3 million increase in the payment to settle contingent earnout liabilities, $1.0 million increase in the payment to settle deferred holdback liabilities, and $0.2 million increase in the payment on finance leases, which is partially offset by $1.2 million increase in proceeds from exercise of stock options and employee stock purchase plan, and $0.5 million decrease in the payment of financing costs associated with the Second Equity Distribution Agreement.
Current wording
Net cash used in used in financing activities was $45.3 million during the nine months ended September 30, 2026 compared to $204.5 million provided by financing activities during the nine months ended September 30, 2025. The $159.2 million decrease in cash provided by financing activities was primarily due to $153.0 million decrease in net proceeds from Second Equity Distribution Agreement, $3.3 million increase in the payment to settle contingent earnout liabilities, $3.2 million decrease in proceeds from exercise of stock options and employee stock purchase plan, $1.2 million increase in the payment to settle deferred holdback liabilities, $1.2 million increase in the payment on convertible notes, and $0.2 million increase in the payment on finance leases, which is partially offset by $3.1 million decrease in the payment of financing costs associated with the Second Equity Distribution Agreement.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
During the three and nine months ended September 30, 2025, we sold 9,018,114 and 13,913,014 shares, respectively, of our common stock under the Second Equity Distribution Agreement, at an average price of $13.97 and $14.48 per share, respectively, and raised $126.0 million and $201.5 million of gross proceeds, respectively. The commissions and offering costs borne by us were approximately $2.5 million and $4.0 million, respectively.
Current report — wording carried from elsewhere
As of September 30, 2026, we incurred$12.0 millionin acquisition related expenses, of which$7.0 million and $12.0 million were incurred during thethree and nine months ended September 30, 2026, respectively, and recorded as general and administration expenses in our condensed consolidated statements of operations and comprehensive loss.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
On September 3, 2025 (the “Interactions Acquisition Date”), we acquired all of the issued and outstanding equity of Interactions Corporation (the “Interactions Acquisition”), a pioneer in AI for customer service and workflow orchestration. This strategic deal is expected to strengthen and extend SoundHound’s growing leadership in Agentic AI and accelerate its market penetration in customer service across enterprise businesses. The combination also introduces certain major new powerhouse brands to the SoundHound customer portfolio, including global consumer icons, large technology device brands, insurers, automakers, and other preeminent Fortune 100 companies across industries.