Q4 FY25 Financial Performance - Total revenue increased to $60.6 million, exceeding the guidance of $53 million to $58 million[5] - Gross margin improved to 72.6%, surpassing the guidance of 68% to 69%[5] - Adjusted EBITDA reached $8.3 million, exceeding the guidance of $2 million to $6 million[5] - Cash provided by operating activities was $12.8 million[5] - Cash balance and marketable securities stood at $87.5 million[5] Revenue Breakdown - Total license revenue was $32.3 million, with variable license revenue at $31.6 million and fixed license revenue at $0.7 million[7] - Connected services revenue reached $14.2 million[7] - Professional services revenue amounted to $14.2 million[7] Operational Metrics - Adjusted Total Billings TTM reached $236 million, an increase of 8.4% compared to the same period last year[12] - Cerence technology was present in 52% of worldwide auto production (TTM)[12] - The number of Cerence connected cars shipped increased by 14% (TTM)[12] - The connected attach rate increased to 32.5% versus 28.8% a year ago[12] - Average PPU on a TTM basis was $5.05, up from $4.50 a year ago[12] FY26 Guidance - Revenue is projected to be between $300 million and $320 million[13] - Gross margin is expected to be between 79% and 80%[13] - Adjusted EBITDA is forecasted to be between $50 million and $70 million[13] - Cash provided by operating activities is estimated to be between $61 million and $67 million[13] - Free cash flow is projected to be between $56 million and $66 million[13]

Q3 FY25 Performance - Total revenue decreased to $62.2 million, compared to $70.5 million in Q3 FY24[5] - Gross margin increased to 73.7% from 71.5% in Q3 FY24[5] - Net loss improved to $(2.7) million from $(313.5) million in Q3 FY24[5] - Adjusted EBITDA decreased to $9.0 million from $12.5 million in Q3 FY24[5] - Cash provided by operating activities significantly increased to $48.4 million from $11.1 million in Q3 FY24[5] - Cash balance & marketable securities decreased to $73.7 million from $121.5 million in Q3 FY24[5] Revenue Details - Variable license revenue increased to $34.2 million in Q3 FY25[7] - Pro forma royalties increased to $43.2 million in Q3 FY25[9] - Adjusted Total Billings TTM increased by 3.5% to $226 million[12] Key Performance Indicators - Cerence technology is present in 52% of worldwide auto production (TTM)[12] - Approximately 12 million units shipped with Cerence technology in Q3, a 2.5% YoY increase[12] - Connected attach rate increased to 31% from 27% a year ago[12] - Average PPU on a TTM basis increased to $4.91 from $4.47 a year ago[12] Fiscal Q4 and FY25 Guidance - Q4FY25 revenue is projected to be between $53 million and $58 million[13] - FY25 revenue is projected to be between $244 million and $249 million[13]

Core Insights - Cerence Inc. reported Q3 fiscal year 2025 results, achieving revenue of $62.2 million and Adjusted EBITDA of $9.0 million, exceeding guidance [3][5] - The company generated strong free cash flow of $16.1 million, marking the fifth consecutive quarter of positive free cash flow [3][6] - Full fiscal year revenue guidance has been raised to a range of $244 million to $249 million, along with improved guidance for Adjusted EBITDA and free cash flow [3][10] Financial Performance - Q3 FY2025 GAAP revenue was $62.2 million, down from $70.5 million in Q3 FY2024 [5] - GAAP gross margin improved to 73.7% from 71.5% year-over-year [5] - GAAP net loss for Q3 FY2025 was $(2.7) million compared to a loss of $(313.5) million in Q3 FY2024 [5] - Adjusted EBITDA for the nine months ended June 30, 2025, was $39.8 million, down from $82.6 million in the same period of the previous year [5] Key Performance Indicators - Cerence's technology was utilized in 52% of worldwide auto production over the trailing twelve months [7] - The number of Cerence connected cars shipped increased by 12% year-over-year [7] - Adjusted Total Billings saw a 3% increase year-over-year [7] Future Outlook - For Q4 FY2025, revenue is expected to be between $53 million and $58 million, with gross margins projected at 68% to 69% [9] - Full fiscal year projections include a net loss range of $28 million to $24 million and Adjusted EBITDA expected between $42 million and $46 million [10]

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].

Core Insights - Cerence Inc. will showcase its Cerence xUI™ platform, an AI assistant that operates across edge and cloud, for the first time at Auto Shanghai 2025 in collaboration with Great Wall Motor and TCL [1][2] Company Overview - Cerence Inc. is a global leader in creating AI-powered user experiences in the automotive sector, with over 500 million cars equipped with its technology [3][5] - The company focuses on integrating voice, generative AI, and large language models to enhance user experiences in vehicles [3] Product Features - Cerence xUI includes multi-modal capabilities with CaLLM Edge™, enhancing in-car interactions beyond traditional infotainment [4] - The platform utilizes the CaLLM™ family of language models and integrates real-time and contextual data to create engaging conversational interfaces [4] - Features include dual- and multi-seat interaction, allowing synchronized voice-controlled operations between front and rear seats [4] - Smart home integration enables users to control home systems directly from the vehicle [4] Partnerships - The collaboration with Great Wall Motor aims to bring AI innovation to their vehicles as they expand globally [2] - The partnership with TCL focuses on combining intelligent cockpit technologies with Cerence's automotive expertise to revolutionize mobility [2]