Cerence (CRNC) came out with a quarterly loss of $0.03 per share versus the Zacks Consensus Estimate of a loss of $0.27. This compares to earnings of $1.12 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 88.89%. A quarter ago, it was expected that this automotive artificial intelligence developer would post a loss of $0.32 per share when it actually produced a loss of $0.07, delivering a surprise of 78.13%.Over the last four q ...

Cerence Q1 FY25 Earnings Presentation Brian Krzanich, Chief Executive Officer Tony Rodriquez, Chief Financial Officer February 6, 2025 © 2025 Cerence Inc. Forward-Looking Statements Statements in this presentation regarding: Cerence's future performance, results and financial condition; expected growth and profitability; outlook; transformation plans and cost efficiency initiatives, including the estimated net annualized cost savings; strategy; opportunities; business, industry and market trends; strategy r ...

Revenue Performance - Total revenue for the three months ended December 31, 2024, decreased by $87.4 million, or 63.2%, to $50.9 million from $138.3 million in the same period of 2023[135]. - License revenue increased by $1.9 million, or 9.1%, to $22.7 million, representing 44.6% of total revenues, up from 15.1% in the prior year[145]. - Connected services revenue decreased by $83.1 million, or 85.8%, to $13.7 million from $96.8 million[144]. - Professional services revenue decreased by $6.2 million, or 30.1%, to $14.5 million from $20.7 million[144]. - Connected services revenue for Q1 FY2025 was $13.7 million, a decrease of $83.1 million, or 85.8%, from $96.8 million in Q1 FY2024, primarily due to contract terminations[146]. - Professional services revenue for Q1 FY2025 was $14.5 million, a decrease of $6.2 million, or 30.1%, from $20.7 million in Q1 FY2024, driven by contract fulfillment timing[147]. - Total gross profit for Q1 FY2025 was $33.1 million, a decrease of $78.9 million, or 70.5%, from $112.0 million in Q1 FY2024, primarily due to declines in connected services revenue[150]. Operating Performance - Operating margin decreased by 75.6 percentage points to negative 33.3% from 42.3%[135]. - Cash provided by operating activities was $9.3 million, a net change of $12.1 million from cash used in operating activities of $2.8 million[135]. - Total cost of revenues for Q1 FY2025 was $17.8 million, a decrease of $8.5 million, or 32.3%, from $26.3 million in Q1 FY2024[149]. - R&D expenses for Q1 FY2025 were $20.9 million, a decrease of $12.4 million, or 37.3%, from $33.3 million in Q1 FY2024[158]. - Sales and marketing expenses for Q1 FY2025 were $4.8 million, a decrease of $1.3 million, or 21.5%, from $6.1 million in Q1 FY2024[159]. - General and administrative expenses for Q1 FY2025 were $12.8 million, flat compared to $12.8 million in Q1 FY2024[160]. - Restructuring and other costs for Q1 FY2025 were $11.1 million, a significant increase from $0.7 million in Q1 FY2024, primarily due to personnel elimination charges[164][165]. Future Outlook - The company expects revenue to continue to be impacted by production delays and slowdowns in the global automotive industry due to macroeconomic conditions[143]. - A restructuring plan was announced in August 2024 to reduce operating expenses and position the company for profitable future growth[143]. - The implementation of the restructuring plan was substantially complete by the end of the first quarter of fiscal year 2025[143]. - The company has existing relationships with nearly all major OEMs or their tier 1 suppliers, providing some visibility into future revenue despite potential delays[130]. Tax and Cash Position - The provision for income taxes for the three months ended December 31, 2024 was $5.7 million, a decrease of 83.5% from $34.3 million in the same period of 2023[169]. - The effective income tax rate for the three months ended December 31, 2024 was negative 30.5%, compared to 59.0% for the same period in 2023[169]. - As of December 31, 2024, the company had $110.5 million in cash, cash equivalents, and marketable securities, with net working capital of $91.0 million[170]. - The total material cash requirements for future periods amount to $298.3 million, with $67.2 million due in 2025[174]. Debt and Financing Activities - The company issued $190.0 million in aggregate principal amount of 2028 Notes, with initial net proceeds of $193.2 million after transaction costs[175]. - The 2025 Modified Notes have a carrying amount of $135.4 million as of December 31, 2024, net of unamortized costs[179]. - Net cash provided by operating activities for the three months ended December 31, 2024 was $9.3 million, a significant increase of 428.7% from a net cash used of $2.8 million in the same period of 2023[193]. - The company repurchased $27.4 million aggregate principal amount of its 2025 Notes for $27.0 million in cash, resulting in a gain on extinguishment of debt of $0.3 million[186]. - Total interest expense related to the Notes for the three months ended December 31, 2024 was $2.97 million, compared to $2.91 million in 2023[187]. - The company terminated its Credit Agreement on December 31, 2024, with no revolving loans outstanding at that time[190]. - Net cash used in financing activities for Q4 2024 was $27.1 million, a significant increase of $27.0 million from $0.1 million in Q4 2023, driven by a $70.5 million decrease in income before non-cash charges[196]. - The company experienced a $88.8 million increase in deferred revenue, contributing positively to cash flow changes in financing activities[196]. Market Risks - The company is exposed to market risks from foreign currency exchange rates and interest rates, which could impact operating results and cash flows[200]. - The primary foreign currency exposure includes transactions in Canadian dollar, Chinese yuan, Euro, and Japanese yen[202]. - The company utilizes foreign currency forward contracts to hedge against foreign currency exchange risks associated with forecasted payments[203]. - The aggregate notional amount of outstanding foreign currency forward contracts was $43.2 million at December 31, 2024, with a potential unrealized loss of $3.7 million from a 10% unfavorable exchange rate movement[203]. - Cash and cash equivalents totaled approximately $104.1 million at December 31, 2024, with a potential increase of $0.6 million in interest income from a 1% rise in interest rates[204]. Accounting and Estimates - Critical accounting estimates significantly affecting financial condition include revenue recognition and allowance for credit losses[198]. - Recent accounting standards may impact future results of operations, as detailed in the company's annual report[199].

Financial Performance - GAAP revenue for Q1 FY2025 was $50.9 million, a decrease of 63.2% from $138.3 million in Q1 FY2024[2] - GAAP gross margin dropped to 65.0% in Q1 FY2025 from 81.0% in Q1 FY2024[2] - GAAP net loss for Q1 FY2025 was $24.3 million, compared to a net income of $23.9 million in Q1 FY2024, resulting in a net loss margin of -47.7%[2] - Adjusted EBITDA for Q1 FY2025 was $1.4 million, down from $70.4 million in Q1 FY2024, with an adjusted EBITDA margin of 2.7%[2] - Total revenues for Q1 2024 were $50,896 thousand, a decrease of 63.2% compared to $138,335 thousand in Q1 2023[27] - Net loss for Q1 2024 was $24,288 thousand, compared to a net income of $23,857 thousand in Q1 2023, representing a significant shift in performance[27] - GAAP gross margin for Q1 2024 was 65.0%, down from 81.0% in Q1 2023[30] - Non-GAAP operating loss for Q1 2024 was $509 thousand, a decline from an operating income of $68,313 thousand in Q1 2023[30] Future Projections - The company expects Q2 FY2025 revenue to be between $74 million and $77 million, including $20 million from projected Fixed License revenue[4] - Gross margins for Q2 FY2025 are projected to be between 74% and 76%[4] - GAAP revenue for Q2 2025 is projected between $74,000 and $77,000, with FY2025 expected to be between $236,000 and $247,000[34] - Non-GAAP gross profit for Q2 2025 is estimated to be between $55,400 and $59,400, while FY2025 is projected between $160,900 and $171,900[34] - GAAP net income for Q2 2025 is expected to range from $1,200 to $5,200, with a loss projected for FY2025 between $(39,600) and $(28,600)[35] - Non-GAAP net income for Q2 2025 is anticipated to be between $13,000 and $17,000, with FY2025 expected to range from $(6,600) to $4,400[35] - Adjusted EBITDA for Q2 2025 is projected between $17,800 and $21,800, while FY2025 is expected to be between $15,300 and $26,300[34] - GAAP operating margin for Q2 2025 is estimated to be between 10% and 14%, while the non-GAAP operating margin is expected to range from 21% to 26%[34] - Free Cash Flow for FY2025 is projected to be between $20,000 and $30,000[35] - Non-GAAP net income (loss) per share - diluted is expected to be between $0.28 and $0.36 for Q2 2025[35] - GAAP net cash provided by operating activities for FY2025 is projected to be between $34,000 and $40,000[35] - Stock-based compensation for Q2 2025 is estimated at $7,000, with FY2025 expected to be $22,500[34] Operational Highlights - The percentage of worldwide auto production utilizing Cerence technology reached 51%[3] - There was a 5% year-over-year increase in the number of Cerence connected cars shipped[3] - The company achieved six design wins and two wins for generative AI solutions in the quarter[2] - Cerence's transformation and cost reduction initiatives are positively impacting the business, positioning it for sustainable growth[2] Cash and Assets - Cash and cash equivalents at the end of Q1 2024 were $104,103 thousand, down from $121,485 thousand at the end of Q4 2023[29] - Total current assets decreased to $200,072 thousand in Q1 2024 from $265,509 thousand in Q4 2023[28] - Total liabilities decreased to $496,826 thousand in Q1 2024 from $561,261 thousand in Q4 2023[28] - Free cash flow for Q1 2024 was $7,894 thousand, compared to a negative free cash flow of $(3,746) thousand in Q1 2023[32] - The company reported a significant increase in accounts receivable, with a net amount of $47,671 thousand in Q1 2024 compared to $62,755 thousand in Q4 2023[28]

BURLINGTON, Mass., Feb. 06, 2025 (GLOBE NEWSWIRE) -- Cerence Inc. (NASDAQ: CRNC) (“Cerence AI”), a global industry leader in AI for transportation, today reported its first quarter fiscal year 2025 results for the quarter ended December 31, 2024. ResultsSummary(1,2)(in millions, except per share data) Three Months Ended December 31, 2024 2023 GAAP revenue $50.9 $<td s ...

BURLINGTON, Mass., Jan. 21, 2025 (GLOBE NEWSWIRE) -- Cerence Inc. (NASDAQ: CRNC) (“Cerence AI”), a global industry leader in AI for transportation, will announce its first quarter financial results for the quarter ended December 31, 2024, on Thursday, February 6, 2025, at 4:05pm Eastern Time / 1:05pm Pacific Time. The company will host a live conference call and webcast, with supplementary slides, to discuss the results on the same day at 5:00pm Eastern Time / 2:00pm Pacific Time. Interested investors and a ...

Cerence, Inc. (NASDAQ: CRNC ) provides AI-powered virtual assistants for the automotive industry. Its technology is installed in 500 million vehicles and supports 70 languages. After working in the industry for years, it has acquired the ability toInvesting in high-growth opportunities across industries, employing a value investing approach that prioritizes robust business models and strategic foresight. Focusing on companies with the potential to profoundly influence the global landscape in the years ahead ...

Share Performance and Growth Drivers - Cerence's shares surged 387.1% over the trailing six months, significantly outperforming the Zacks Computer & Technology Sector's 1.1% return and the Zacks Computers - IT Services industry's 13.6% appreciation [1] - The share price movement was driven by successful integration of generative AI solutions, record platform launches, and a robust partner network [2] - Strong revenue performance and a focus on automotive AI innovations contributed to the growth [2] AI Integration and Partnerships - Cerence collaborated with NVIDIA to utilize advanced chip technology, enhancing the performance and scalability of its offerings [2] - The company achieved 10 customer wins and launched six Gen AI programs in fiscal 2024, demonstrating strong momentum in deploying advanced AI solutions [4] - Cerence's AI technology powers more than 500 million cars globally, highlighting its extensive market reach [5] Market Reach and Customer Wins - Major automotive OEMs, including Microsoft, Volkswagen, BMW, and Renault, have implemented Cerence's voice assistance systems [5] - The company recorded 22 platform launches in 2024, including four in the fourth quarter of fiscal 2024 [6] - Cerence secured a multi-year agreement with JLR to develop next-generation in-car experiences using AI-enabled technologies [6] - Audi selected Cerence's Gen AI technology to enhance its in-car assistant capabilities [6] Competitive Landscape - Rising competition in the automotive AI sector, particularly from companies like SoundHound AI, poses a challenge to Cerence's market share [3][7] - Cerence's technology was integrated into 52% of global auto production for the trailing 12 months, showing a minor dip due to lower production volumes from key customers [7] Financial Performance and Estimates - The Zacks Consensus Estimate for Q2 fiscal 2025 revenues is $57.71 million, indicating a 14.92% year-over-year decline [8] - The non-GAAP earnings estimate for Q2 fiscal 2025 is 2 cents per share, unchanged over the past 30 days, marking a 122.22% year-over-year surge [8] - Fiscal 2025 revenue is expected to be between $236 million and $247 million, with headwinds of $5-$7 million due to a strategic shift from professional service projects [9] - The Zacks Consensus Estimate for 2025 revenues is $241.27 million, indicating a 27.22% year-over-year decline [10] - The non-GAAP loss per share for fiscal 2025 is projected between 92 cents and 67 cents, with a consensus earnings estimate of 15 cents per share, marking an 87.80% year-over-year decline [10] Historical Performance - Cerence has a history of strong quarterly performances, with earnings surpassing the Zacks Consensus Estimate in the trailing four quarters, averaging a 110.86% surprise [11]

Small-Cap Tech Stocks Overview - Innovative small-cap tech stocks like Cerence Inc (NASDAQ: CRNC), Rigetti Computing (NASDAQ: RGTI), and Airship AI (NASDAQ: AISP) are gaining traction in both business and stock prices, indicating potential for significant gains in 2025 [1] - These stocks are benefiting from short-covering rallies, but the sustainability of their market traction and upward trends in 2025 remains uncertain [1] Rigetti Computing - Rigetti Computing builds quantum computers and offers quantum-computing-as-a-service, benefiting from a short squeeze and increased trading volume [2] - The company's stock rally is driven by advancements in quantum computing technology, its industry position, and improved investor confidence, particularly due to Google's Willow chip advancements [2] - Catalysts for 2025 include the anticipated launches of 36- and 100-qubit systems, which could open an $8 billion addressable market [3] - Revenue is expected to grow exponentially from $15 million, but the company may need to raise more cash before achieving profitability, with shareholder value diluted by over 30% in the first nine months of F2024 [3] Cerence Inc - Cerence Inc provides AI assistants for mobility, transportation, and autonomous driving, focusing on voice/audio assistants [4] - The company recently expanded its partnership with NVIDIA, which helps scale its business, improve performance, and advance its technology [4] - Despite weak 2025 guidance, the company benefits from AI growth in the transportation industry, with assistants embedded in both legacy ICE and newer EVs [4] - A short squeeze, fueled by 18% short interest, led to a 700% spike in share price, with the stock expected to consolidate and trend higher in 2025 [5] Airship AI - Airship AI uses AI and machine learning to power its video surveillance platform, enabling real-time monitoring and threat response [7] - The company serves government agencies and Fortune 500 companies, with revenue expected to grow by 50% in F2025 and profitability anticipated next year [8] - Analysts rate the stock as a Buy, viewing it as a deep value with an 80% upside potential from current levels [8] - Despite its growth outlook, Airship AI is not among the top five stocks recommended by top-rated analysts [9]

Stock Performance - Cerence stock has experienced a significant increase, skyrocketing by 150% recently [1] Video Content - The video covers recent updates regarding Cerence (CRNC 8 79%) [1] - Stock prices used in the video were from the trading day of Jan 3, 2025 [1] - The video was published on Jan 6, 2025 [1]