Cerence (CRNC) Q2 2025 Earnings Call May 07, 2025 05:00 PM ET Company Participants Kate Hickman - VP - Corporate Communications & Investor RelationsBrian Krzanich - President & CEOTony Rodriquez - EVP & CFONick Doyle - Vice President Conference Call Participants Daniel Hibshman - Research AnalystMark Delaney - AnalystItay Michaeli - Equity Analyst Kate Hickman Hello, everyone, and welcome to Cerence's second quarter twenty twenty five conference call. I'm Kate Hickman, VP of corporate communications and inv ...

Cerence (CRNC) Q2 2025 Earnings Call May 07, 2025 05:00 PM ET Company Participants Kate Hickman - VP - Corporate Communications & Investor RelationsBrian Krzanich - President & CEOTony Rodriquez - EVP & CFONick Doyle - Vice President Conference Call Participants Daniel Hibshman - Research AnalystMark Delaney - AnalystItay Michaeli - Equity Analyst Kate Hickman Hello, everyone, and welcome to Cerence's second quarter twenty twenty five conference call. I'm Kate Hickman, VP of corporate communications and inv ...

Financial Data and Key Metrics Changes - The company reported Q2 revenue of $78 million, exceeding the high end of guidance which was $74 million to $77 million [17] - Adjusted EBITDA for Q2 was $29.5 million, surpassing the guidance range of $18 million to $22 million [21] - Free cash flow for the quarter was $13.1 million, marking the fourth consecutive quarter of positive free cash flow [4] - Net income for Q2 was $21.7 million, a significant improvement from a net loss of $278 million in the same quarter last year [21][22] - Gross margin for the quarter was 77%, exceeding the guidance range of 74% to 76% [19] Business Line Data and Key Metrics Changes - Variable license revenue was $29.9 million, up 19% year-over-year [22] - Fixed license revenue for Q2 was $21.5 million, compared to $10.4 million in the same quarter last year [22] - Connected services revenue decreased to $12.6 million, down 7% from $13.6 million year-over-year [22] - Professional services revenue was down approximately $4.8 million year-over-year, reflecting a trend towards more standardized solutions [23] Market Data and Key Metrics Changes - The penetration of global auto production for the trailing twelve months was 51%, with approximately 11.6 million cars using Cerence technology shipped in Q2 [25] - Worldwide car production increased by 1.3% year-over-year but decreased by 10.9% quarter-over-quarter [26] - The number of cars produced using connected services increased by 10% on a trailing twelve-month basis compared to the previous year [27] Company Strategy and Development Direction - The company is focused on expanding partnerships and diversifying its offerings beyond automotive, including a new solution for self-service kiosks [9][10] - Strategic investments are being made in IP protection, with ongoing lawsuits against Samsung, Microsoft, and Nuance [10][62] - The company aims to enhance its hybrid agentic AI platform, Cerence XUI, with new features and capabilities [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning despite macro challenges in the automotive industry [5] - The impact of tariffs on business remains limited, with ongoing cooperation with customers to optimize partnerships [6] - Future revenue growth is anticipated from new verticals and increased demand for connected vehicles [9][27] Other Important Information - The company plans to use cash on hand to repay $60.1 million of convertible notes due in June, maintaining a cash balance above $70 million for the rest of the fiscal year [31] - The five-year backlog metric is approximately $960 million, consistent with previous quarters [29] Q&A Session Summary Question: Can you walk through the metrics and what is driving the changes? - Management noted that overall volumes were in line with expectations, with an increase in connected car rates indicating future revenue potential [37][38] Question: What is driving the sequential increase in new connected revenue? - The increase is attributed to previous billings amortizing into revenue, with expectations for continued growth in Q3 and Q4 [39][40] Question: How is AI impacting connected services and pricing? - AI is integrated into both connected and non-connected vehicles, driving consumer demand and increasing pricing per unit [42][44] Question: Where are macro impacts being felt? - Management indicated that pricing pressures from OEMs are emerging, but they are working to provide value through cost-saving measures [47][49] Question: Can you elaborate on the lawsuit against Microsoft? - The lawsuit is focused on protecting intellectual property, with ongoing collaboration with Microsoft on technical projects despite the legal issues [92][94] Question: What are the non-automotive opportunities being explored? - The company is leveraging its technology for applications in kiosks and other verticals, aiming for cost-effective growth through partnerships [106][107]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-39030 CERENCE INC. (Exact name of registrant as specified in its charter) Delaware 83-4177087 (State or oth ...

Cerence Q2 FY25 Earnings Presentation May 7, 2025 Brian Krzanich, Chief Executive Officer Tony Rodriquez, Chief Financial Officer © 2025 Cerence Inc. Q2 FY25 Financial Details © 2025 Cerence Inc. 3 Cerence Q2FY25 Results Forward-Looking Statements Statements in this presentation regarding: Cerence's future performance, results and financial condition; expected growth and profitability; outlook and momentum; transformation plans and cost efficiency initiatives; strategy; opportunities; business, industry and ...

Exhibit 99.1 Cerence Announces Second Quarter Fiscal 2025 Results; Revenue and Profitability Exceed High End of Guidance "I'm incredibly proud of what our team has accomplished. We surpassed the high end of our revenue and adjusted EBITDA guidance and posted our fourth consecutive quarter of positive free cash flow, demonstrating the high value we provide to the world's leading automakers as they work through the ongoing macro uncertainties and complexities facing the industry today," said Brian Krzanich, C ...

Core Viewpoint - Cerence Inc. reported strong financial results for Q2 FY2025, exceeding revenue and adjusted EBITDA guidance, and achieving its fourth consecutive quarter of positive free cash flow, indicating robust performance amid industry challenges [4][6]. Financial Performance - GAAP revenue for Q2 FY2025 was $78.0 million, up from $67.8 million in Q2 FY2024, representing a year-over-year increase of approximately 1.8% [2][27]. - GAAP gross margin improved to 77.1% in Q2 FY2025 from 69.2% in Q2 FY2024 [2][32]. - GAAP net income for Q2 FY2025 was $21.7 million, a significant recovery from a net loss of $278.0 million in Q2 FY2024 [2][27]. - Adjusted EBITDA for Q2 FY2025 was $29.5 million, compared to a loss of $0.3 million in Q2 FY2024 [2][32]. Key Performance Indicators - Cerence's technology was present in 51% of worldwide auto production over the trailing twelve months [5]. - The number of Cerence connected cars shipped increased by 10% year-over-year [5]. - Adjusted Total Billings remained unchanged year-over-year [5][7]. Future Outlook - For Q3 FY2025, revenue is projected to be between $52 million and $56 million, with gross margins expected to be between 66% and 68% [8][9]. - The full-year revenue guidance remains unchanged, but the net loss is now projected to be between $35 million and $29 million, with adjusted EBITDA expected to range from $28 million to $34 million [9]. Company Overview - Cerence Inc. is a leader in AI-powered user experiences in the automotive sector, with over 500 million cars shipped with its technology [25]. - The company focuses on enhancing user experiences through innovations like Cerence xUI, which supports automakers in developing next-generation infotainment platforms [4].

BURLINGTON, Mass., May 06, 2025 (GLOBE NEWSWIRE) -- Cerence Inc. (NASDAQ: CRNC) (“Cerence AI”), a global leader pioneering conversational AI-powered user experiences, today announced the filing of a copyright infringement and breach of contract lawsuit against Microsoft and Nuance Communications in the United States District Court for the District of Delaware. Cerence AI and its predecessors have an extensive history of industry-leading innovation and technological achievement. This has resulted in a strong ...

BURLINGTON, Mass., May 05, 2025 (GLOBE NEWSWIRE) -- Cerence Inc. (NASDAQ: CRNC) (“Cerence AI”), a global leader pioneering conversational AI-powered user experiences, today announced an expanded collaboration with its long-time partner and distributor, Code Factory, to introduce VoiceTopping, a new solution that will bring conversational AI to self-service kiosks in a variety of industries. The announcement marks an important step as Cerence AI begins its strategic expansion into new markets, bringing the p ...

Core Insights - Cerence Inc. has announced a partnership with MediaTek and expanded collaboration with NVIDIA to enhance its CaLLM™ Edge, an embedded small language model designed for automotive user experiences [1][2] - The new multi-modal capabilities powered by NVIDIA AI Enterprise software will improve in-car interactions, making them smarter, safer, and more secure [1][2] - The partnership aims to deliver advanced features for both drivers and automakers, unlocking new subscription-based services and revenue streams [3][4] Group 1: Partnership and Technology - The collaboration between Cerence, MediaTek, and NVIDIA focuses on integrating MediaTek's automotive-grade Dimensity Auto Cockpit chipsets with NVIDIA's technologies to create a high-performance, cost-efficient solution for automakers [2][4] - CaLLM Edge will be showcased at Auto Shanghai 2025, demonstrating its capabilities in a production-ready automotive reference design [3][6] - The multi-modal edge solution is designed to enhance contextual awareness both inside and outside the vehicle, improving the overall in-vehicle experience [2][5] Group 2: Innovations and Features - Key innovations include the ability for the in-car assistant to understand and respond to multiple users simultaneously, enhancing interaction [5] - The system can provide contextual information about the vehicle's surroundings, such as translating road signs and identifying buildings [5] - Cerence AI has developed automotive guardrails optimized for NVIDIA DRIVE AGX to ensure safe and reliable in-car interactions, even with limited connectivity [5][6] Group 3: Market Impact - The advancements in CaLLM Edge are expected to reduce cloud bandwidth requirements and costs for OEMs, while also enabling new revenue opportunities through generative AI-powered features [3][4] - The collaboration is positioned as a significant addition to the automotive ecosystem, allowing global automotive brands to accelerate their next-generation designs [4][6] - Cerence AI's technology has been integrated into over 500 million cars, highlighting its established presence in the automotive industry [8]