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Cerence(CRNC) - 2025 Q1 - Quarterly Results
CRNCCerence(CRNC)2025-02-06 21:14

Financial Performance - GAAP revenue for Q1 FY2025 was 50.9million,adecreaseof63.250.9 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 24.3million,comparedtoanetincomeof24.3 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 1.4million,downfrom1.4 million, down from 70.4 million in Q1 FY2024, with an adjusted EBITDA margin of 2.7%[2] - Total revenues for Q1 2024 were 50,896thousand,adecreaseof63.250,896 thousand, a decrease of 63.2% compared to 138,335 thousand in Q1 2023[27] - Net loss for Q1 2024 was 24,288thousand,comparedtoanetincomeof24,288 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 509thousand,adeclinefromanoperatingincomeof509 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 74millionand74 million and 77 million, including 20millionfromprojectedFixedLicenserevenue[4]−GrossmarginsforQ2FY2025areprojectedtobebetween7420 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,withFY2025expectedtobebetween77,000, with FY2025 expected to be between 236,000 and 247,000[34]−Non−GAAPgrossprofitforQ22025isestimatedtobebetween247,000[34] - Non-GAAP gross profit for Q2 2025 is estimated to be between 55,400 and 59,400,whileFY2025isprojectedbetween59,400, while FY2025 is projected between 160,900 and 171,900[34]−GAAPnetincomeforQ22025isexpectedtorangefrom171,900[34] - GAAP net income for Q2 2025 is expected to range from 1,200 to 5,200,withalossprojectedforFY2025between5,200, with a loss projected for FY2025 between (39,600) and (28,600)[35]−Non−GAAPnetincomeforQ22025isanticipatedtobebetween(28,600)[35] - Non-GAAP net income for Q2 2025 is anticipated to be between 13,000 and 17,000,withFY2025expectedtorangefrom17,000, with FY2025 expected to range from (6,600) to 4,400[35]−AdjustedEBITDAforQ22025isprojectedbetween4,400[35] - Adjusted EBITDA for Q2 2025 is projected between 17,800 and 21,800,whileFY2025isexpectedtobebetween21,800, while FY2025 is expected to be between 15,300 and 26,300[34]−GAAPoperatingmarginforQ22025isestimatedtobebetween1026,300[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−GAAPnetincome(loss)pershare−dilutedisexpectedtobebetween30,000[35] - Non-GAAP net income (loss) per share - diluted is expected to be between 0.28 and 0.36forQ22025[35]−GAAPnetcashprovidedbyoperatingactivitiesforFY2025isprojectedtobebetween0.36 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−basedcompensationforQ22025isestimatedat40,000[35] - Stock-based compensation for Q2 2025 is estimated at 7,000, with FY2025 expected to be 22,500[34]OperationalHighlights−ThepercentageofworldwideautoproductionutilizingCerencetechnologyreached5122,500[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 121,485thousandattheendofQ42023[29]−Totalcurrentassetsdecreasedto121,485 thousand at the end of Q4 2023[29] - Total current assets decreased to 200,072 thousand in Q1 2024 from 265,509thousandinQ42023[28]−Totalliabilitiesdecreasedto265,509 thousand in Q4 2023[28] - Total liabilities decreased to 496,826 thousand in Q1 2024 from 561,261thousandinQ42023[28]−FreecashflowforQ12024was561,261 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)thousandinQ12023[32]−Thecompanyreportedasignificantincreaseinaccountsreceivable,withanetamountof(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]