Cerence(CRNC) - 2025 Q1 - Quarterly Results

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]