SoundHound AISOUN +3.07%72 Gross Margin % is 31.09% as of Mar. 2026, which is 50% below its 10-year median of 61.95. GuruFocus rates SOUN with a GF Score™ of 72/100 and a GF Value™ of $11.68 (Possible Value Trap). The stock has 4 warning signs investors should review. Among 2,685 Software companies, SoundHound AI ranks better than 50.2% on this metric.
SoundHound AI Inc gross margin has been in long-term decline. The average rate of decline per year is -6.2%.
The historical rank and industry rank for SoundHound AI's Gross Margin % or its related term are showing as below:
SOUN'
s Gross Margin % Range Over the Past 10 Years
Min: 40.59 Med: 61.95 Max: 75.35
Current: 40.59
During the past 6 years, the highestGross Margin % of SoundHound AI was 75.35%. The lowest was 40.59%. And the median was 61.95%.
SOUN's Gross Margin % is ranked better than 50.2% of 2685
companies
in the Software industry
Industry Median: 40.45
vs SOUN: 40.59
SoundHound AI had a gross margin of 31.09% for the quarter that ended in Mar. 2026 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for SoundHound AI was -6.20% per year.
SoundHound AI (NAS:SOUN) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
SoundHound AI had a gross margin of 31.09% for the quarter that ended in Mar. 2026 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
SoundHound AI Gross Margin % Related Terms
SoundHound AI Gross Margin % Historical Data
* Premium members only.
The historical data trend for SoundHound AI's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Software - Application subindustry, SoundHound AI's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
SoundHound AI Gross Margin % vs Software Industry
For the Software industry and Technology sector, SoundHound AI's Gross Margin % distribution charts can be found below:
* The bar in red indicates where SoundHound AI's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
SoundHound AI (SOUN) has a Gross Margin % of 31.09% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on SoundHound AI and its competitors. This is 50% below median its historical median of 61.95. Over the past decade, SoundHound AI's Gross Margin % has ranged from 40.59 to 75.35. According to the industry distribution chart, SoundHound AI ranks #1337 out of 2685 companies in the Software industry, placing it in the top 49.8%.
Is SoundHound AI's Gross Margin % too high?
SoundHound AI's current Gross Margin % of 31.09% is 50% below median its 10-year median of 61.95. Over the past 10 years, this metric has ranged from a low of 40.59 to a high of 75.35. The Software industry median Gross Margin % is 40.45. SoundHound AI's value of 31.09% is 23.1% below this industry median. Based on the distribution chart, SoundHound AI ranks #1337 out of 2685 companies in the Software industry, which is above the industry midpoint. Overall, SoundHound AI has a GF Score™ of 72/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does SoundHound AI's Gross Margin % compare to SRAD and BILL?
According to the Software industry distribution chart, SoundHound AI ranks #1337 out of 2685 companies for Gross Margin %. This puts SoundHound AI in the upper half of its industry. The industry median Gross Margin % is 40.45. SoundHound AI's value of 31.09% is 23.1% below this benchmark. Historically, SoundHound AI's own Gross Margin % has ranged from 40.59 to 75.35 over the past decade. While the company's 10-year median is 61.95 vs. the industry median of 40.45, SoundHound AI has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Software company?
The median Gross Margin % among Software companies is 40.45, based on 2,685 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. SoundHound AI's current Gross Margin % of 31.09% is 23.1% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on SoundHound AI and its competitors. For the Software industry, the median Gross Margin % is 40.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. SoundHound AI's current Gross Margin % is 31.09%, which is 50% below median its own 10-year median of 61.95. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is SoundHound AI stock overvalued right now?
Based on GuruFocus' analysis, SoundHound AI (SOUN) is currently considered Possible Value Trap. The stock's GF Value™ is $11.68, compared to a current price of $6.39 — trading 45.3% below its estimated fair value. The current Gross Margin % is 31.09%, which is 50% below median its 10-year median of 61.95 and 23.1% below the Software industry median of 40.45. SoundHound AI's overall GF Score™ is 72/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For SoundHound AI (SOUN), the current Gross Margin % is 31.09% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is SoundHound AI (SOUN) Overvalued in 2026?
Based on GuruFocus' analysis, SoundHound AI stock appears to be undervalued.
The current stock price of $6.39 is trading 45.3% below its estimated GF Value™ of $11.68.
GuruFocus considers SoundHound AI to be Possible Value Trap.
Key valuation signals for SOUN:
Gross Margin %: 31.09% (50% below median its 10-year median of 61.95)
GF Value™: $11.68 vs. price of $6.39 (45.3% below fair value)
Industry Position: 23.1% below the Software median (#1337 of 2685)
No single metric tells the full story. See the SOUN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
SoundHound AI Inc is an innovator of conversational intelligence, offering an independent Voice AI platform that enables businesses across industries to deliver high-quality conversational experiences to customers. The company's voice AI delivers speed and accuracy in numerous languages to product creators and service providers across retail, financial services, healthcare, automotive, smart devices, and restaurants via groundbreaking AI-driven products like Smart Answering, Smart Ordering, Dynamic Drive-Thru, and Amelia AI Agents.
72GF Score
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Gross Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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