SoundHound AI, Inc. (NASDAQ:SOUN) has agreed to acquire Interactions Corporation, a privately held artificial intelligence company focused on customer service and workflow orchestration, in a deal valued at up to $85 million. The transaction includes $60 million in upfront cash and a $25 million performance-based earn-out.

H.C. Wainwright analyst Scott Buck described the deal as a continuation of SoundHound’s “rinse and repeat” horizontal expansion strategy, which has fueled recent growth. He noted that Interactions brings not only complementary AI technology but also a diversified roster of global enterprise customers across retail, consumer technology, insurance, and automotive industries.

Buck noted that these new relationships create material cross-sell and upsell opportunities as SoundHound integrates its own solutions into Interactions’ client base. He cited last year’s acquisition of Amelia as a successful template the company can replicate.

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The analyst reiterated a Buy rating with an $18 price forecast, implying roughly 20% upside from current levels. While he did not adjust earnings estimates ahead of SoundHound’s third-quarter report in November, Buck emphasized that the acquisition creates an upward bias to forecasts and strengthens the company’s long-term trajectory.

SoundHound has already delivered stronger-than-expected financial results this year. In August, the company reported an adjusted second-quarter loss of 3 cents per share, beating consensus expectations for a 9-cent loss.

Revenue reached $42.7 million, well ahead of the $32.9 million forecast. Management also lifted its 2025 sales outlook to a range of $160 million to $178 million, compared with the prior $157 million to $177 million and above Wall Street’s $159.5 million consensus.

Wainwright continues to value the stock at $18 per share, based on a 32x EV/revenue multiple applied to 2026 revenue projections of $220 million.

Buck acknowledged potential risks, including dilution, heightened competition, customer concentration, and execution challenges.

However, he argued that the Interactions acquisition bolsters SoundHound’s financial profile, expands its growth pipeline, and reinforces confidence in management’s ability to achieve operating profitability by late 2025.

Price Action: SOUN shares were trading higher by 0.19% to $14.72 at last check Wednesday.

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