Welcome back to Market on Close. I'm Sam Bis on the floor of the New York Stock Exch Exchange. It's now time for overlooked stocks.Shares of VSAT are rallying today after Deutsche Bank upgraded shares to buy. So I'm joined by George Silla, senior markets correspondent to talk about buyers. I suppose it's a bit of a giveaway in the name.But what's Deutsche Bank saying uh that's behind this call. >> Well, I think uh a few things are going on. I mean first off if you look at Vioad um this is a company that's r ...

Summary of Cerence (CRNC) Conference Call - June 10, 2025 Company Overview - Cerence is a global leader in voice AI interaction within the automotive industry, spun off from Nuance Communication in 2019, focusing on automotive software solutions [4][5] - The company claims over 50% penetration in the global automotive market, with technology implemented in over 500 million vehicles [5][6] Key Points Market Position and Growth - Cerence is well-positioned in a growing market for automotive software, with strong relationships with major automotive OEMs [6] - The company has a unique market position with higher margins and less exposure to tariffs compared to other suppliers [8][10] Tariff Impact - As a software company, Cerence is not directly impacted by tariffs, but there are concerns about overall production implications [10][11] - The company anticipates limited production concerns for the upcoming quarter, despite potential tariff impacts [19][20] China Market - Cerence faces challenges penetrating the Chinese market due to strong local competition but maintains relationships with large Chinese OEMs for exports outside of China [12][13] - The company sees potential growth in relationships with Chinese OEMs for their products outside of China [13][15] Revenue and Royalties - Pro forma royalties have been relatively flat over the past year, with expectations for growth tied to new product launches and pricing strategies [20][21] - The company has seen a decline in prepaid license revenue, with a target of around $20 million for the current year [23][24] Pricing Per Unit (PPU) - The PPU metric has shown growth, increasing from $450 to $487 over the trailing twelve months, with expectations for further growth as new products are launched [25][26] - The company aims to increase PPU through higher penetration of its technology in vehicles and the introduction of more valuable AI products [30][31] AI Product Development - Cerence is excited about the upcoming XUI product, which will integrate a large language model for enhanced voice interaction capabilities in vehicles [45][46] - The XUI product aims to provide a unified interface for both embedded and connected features, enhancing user experience [34][60] Competitive Landscape - Competition comes from both big tech companies and smaller competitors, but Cerence believes its proven implementation capabilities give it an advantage [50][51] - There is a reluctance among OEMs to adopt big tech solutions, favoring branded experiences instead [62] Additional Insights - The company is focused on creating win-win situations with OEMs by potentially reducing costs while increasing capabilities [41][43] - Cerence is exploring ways to enhance user interaction through multimodal capabilities, allowing for more natural voice commands [39][40] This summary captures the essential points discussed during the conference call, highlighting Cerence's market position, challenges, and future growth strategies.

Summary of Verra Mobility (VRRM) 2025 Conference Call Company Overview - **Company**: Verra Mobility (VRRM) - **Industry**: Smart mobility solutions, including tolling, automated enforcement, and parking management - **Segments**: - Government Solutions - Commercial Services - Parking - **Global Presence**: Operates in 17 countries with 1,900 employees [4][5] Core Business Insights - **Government Solutions**: - Leading provider of automated enforcement in North America, including red light and speed cameras [7] - Significant contract renewal with New York, which accounts for 15% to 17% of revenue [32][34] - Current camera count in New York is approximately 3,000, with plans to add 450 more red light cameras [39][38] - **Commercial Services**: - Number one provider of toll management solutions for commercial fleets in the U.S. [5] - High single-digit growth expected, driven by increased toll road construction and cashless tolling [18][20] - Growth strategy includes expanding product offerings and increasing adoption rates among rental car companies [19][21] - **Parking Business**: - Provides software and hardware solutions for municipalities and universities [8] - Recent management changes aimed at stabilizing and improving sales execution [72] Financial Performance - **Revenue Growth**: - Strong revenue growth over the past several years, with a significant portion being recurring revenue (approximately 90%) [8] - Non-New York service revenue expected to grow double digits in 2025 [43] - **Margins**: - Government Solutions margins have slightly decreased but are expected to stabilize in the high 20s to 30% range [69] - Overall business expected to accrete margins of 50 basis points annually [69] Market Dynamics - **Travel Correlation**: - Business growth is correlated with travel data; however, the company has built in some insulation against potential travel declines [24][88] - Current travel growth is slightly better than last year, but expectations are tempered due to potential market fluctuations [25][26] - **Competitive Landscape**: - Verra Mobility holds a 70% market share in the U.S. for government solutions [63] - The company has a strong backlog, representing about 13% of revenue, which could lead to significant growth in future quarters [52] Risks and Challenges - **Travel Dependency**: - The biggest risk is a significant decline in travel, which could impact revenue from rental car partnerships [88][89] - Historical context provided with a 99% drop in business during COVID-19 [88] Strategic Initiatives - **Technology Integration**: - Exploring partnerships with OEMs to embed tolling technology directly into vehicles [15] - Continuous investment in new technology to meet evolving client needs, particularly in New York [35] - **Capital Allocation**: - Focus on growth through acquisitions and share buybacks, with a strong cash flow generation strategy [81][84] - Over $500 million in share buybacks executed in recent years [86] Conclusion Verra Mobility is positioned as a leader in the smart mobility sector with strong growth prospects driven by government contracts, commercial services, and a focus on technology integration. The company faces risks primarily related to travel fluctuations but has strategies in place to mitigate these risks and capitalize on market opportunities.