Earnings Season Update: SoundHound AI Surges, The Trade Desk Drops
As the second quarter earnings season approaches its close, most companies have delivered positive results. Expectations entering the quarter were tempered due to tariff concerns, high stock valuations, and economic uncertainty in the US. This week featured earnings reports from major players like Tyson (TSN), AMD (AMD), Snap (SNAP), McDonald's (MCD), Disney (DIS), Uber (UBER), Lyft (LYFT), and Palantir (PLTR). Next week, investors will hear from AMC (AMC), Cisco (CSCO), Deere (DE), and others.
FactSet data shows that with 90% of S&P 500 companies reporting, earnings per share (EPS) are expected to jump 11.8% year-over-year for Q2. This is more than double the 5% growth analysts anticipated at the quarter’s start, which was the slowest pace since late 2023.
Earnings Trends and Market Valuation
- Strong Earnings Growth: The blended earnings growth rate for Q2 2025 stands at 11.8%, potentially marking the third straight quarter of double-digit growth for the S&P 500.
- Mixed Guidance: For Q3 2025, 38 companies issued negative EPS guidance while 40 gave positive outlooks.
- Valuation Metrics: The forward 12-month price-to-earnings (P/E) ratio is 22.1, above both the 5-year average of 19.9 and the 10-year average of 18.5.
Wendy’s Lowers 2025 Outlook Despite Q2 Beat
Wendy’s topped earnings and revenue estimates for Q2 but issued a weaker full-year outlook, pushing shares down about 1% premarket. Adjusted EPS guidance was lowered to $0.82–$0.89 from $0.92–$0.98. Systemwide sales are now expected to decline 3% to 5%, compared to the previous forecast of flat to a 2% decline. Q2 sales dropped 1.8% to $3.7 billion, with a 3.3% decline in the US market.
The Trade Desk Shares Plummet on Tariff Concerns
The Trade Desk (TTD) stock fell roughly 33% in premarket trading after CEO Jeff Green highlighted tariff-related pressure on major global advertisers. The company reported Q2 EPS of $0.18, matching estimates, and revenue of $694 million, beating expectations. Q3 revenue guidance of at least $717 million aligns with analyst projections but did little to calm investor nerves.
SoundHound AI Rockets on Record Revenue Growth
SoundHound AI (SOUN) surged 24% premarket following a record-breaking Q2 revenue report, driven by expansion into new sectors like restaurants and healthcare. Revenue jumped 217% year-over-year to $42.7 million, with strong growth in automation, automotive, and enterprise AI for customer service. Despite a GAAP loss of $0.19 per share, revenue more than tripled from last year’s $13 million. The company also raised its 2025 revenue forecast to $160–$178 million.
Under Armour Forecasts Disappoint, Shares Drop
Under Armour (UA) shares fell 12% premarket after forecasting Q2 revenue below Wall Street expectations. The company cited weak demand in North America amid persistent inflation and tariff uncertainty.
Expedia Raises Growth Forecast on US Travel Recovery
Expedia Group (EXPE) stock jumped 15% after hours on signs of a travel rebound. The company raised its 2025 gross bookings and revenue growth forecast to 3%–5%, up from 2%–4%, reflecting stronger US travel demand and double-digit profit growth.
Live Nation Sees Strong Concert Revenue
Live Nation Entertainment (LYV) reported a 16% revenue increase to $7.01 billion for Q2, beating analyst estimates of $6.84 billion. The stock edged higher after hours, underscoring resilience in discretionary consumer spending on live events.
Sportsbooks Benefit From Gamblers’ Losing Streak
Flutter Entertainment (FLUT), owner of FanDuel, raised its full-year profit growth outlook after a better-than-expected Q2. Core profits surged 54% to $400 million, benefiting from a recent winning streak reversal among US gamblers.
Gilead Posts Flat Profit but Raises Outlook
Gilead Sciences reported flat adjusted EPS at $2.01 for Q2, slightly above estimates, with modest revenue growth. The company raised its full-year guidance driven by strong sales of HIV medications.
Pinterest Beats Revenue, Misses Earnings
Pinterest (PINS) saw its shares drop over 10% after hours despite 17% revenue growth to $998 million. Earnings per share came in at $0.33, missing analyst expectations.
Block Stock Jumps on Profit Growth and Guidance
Block's shares rose 10% following a 14% gross profit increase and an upward revision of its annual profit forecast, signaling strong momentum for the fintech firm.
Texas Roadhouse Warns on Inflation, Shares Fall
Texas Roadhouse (TXRH) expects higher commodity inflation in the second half of the year, pressuring profitability. The company anticipates 5% commodity inflation and 4% labor inflation, including tariff impacts. Shares dropped 3% after hours.
Market Reaction: High Sensitivity to Earnings Misses
Stocks are facing heavier penalties than usual for missing earnings or sales expectations. Companies that missed Wall Street EPS or revenue estimates have experienced average one-day declines of 7.4% as over two-thirds of the S&P 500 have reported.
For finance professionals tracking these developments, staying alert to guidance changes and sector-specific headwinds remains critical. SoundHound's AI-driven growth and Expedia's travel rebound highlight pockets of strength, while tariff pressures continue to weigh on advertising and consumer spending.
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