Cerence Announces First Quarter Fiscal 2025 Results
Cerence Inc. (NASDAQ: CRNC) reported its Q1 FY2025 results with revenue of $50.9 million, down from $138.3 million in Q1 FY2024. The company experienced significant declines across key metrics, with GAAP gross margin falling to 65.0% from 81.0% and operating margin dropping to -33.3% from 42.3%. The quarter resulted in a GAAP net loss of $24.3 million, compared to a profit of $23.9 million in the prior year.
Despite the declining numbers, the company reported positive developments including six design wins, two wins for generative AI solutions, and six major customer SOPs. Cerence maintains a 51% share of worldwide auto production with its technology, and showed a 5% increase in connected cars shipped.
For Q2 FY2025, Cerence projects revenue between $74-77 million, including $20 million in Fixed License revenue, with adjusted EBITDA expected between $18-22 million. The company maintained its full-year fiscal 2025 guidance unchanged.
Cerence Inc. (NASDAQ: CRNC) ha riportato i risultati del Q1 FY2025 con un fatturato di 50,9 milioni di dollari, in calo rispetto ai 138,3 milioni di dollari del Q1 FY2024. L'azienda ha registrato declini significativi su metriche chiave, con il margine lordo GAAP sceso al 65,0% dall'81,0% e il margine operativo sceso al -33,3% dal 42,3%. Il trimestre ha comportato una perdita netta GAAP di 24,3 milioni di dollari, rispetto a un profitto di 23,9 milioni di dollari dell'anno precedente.
Nonostante le cifre in calo, l'azienda ha riportato sviluppi positivi tra cui sei vittorie nel design, due vittorie per soluzioni di intelligenza artificiale generativa e sei importanti SOP di clienti. Cerence mantiene una quota del 51% nella produzione automobilistica mondiale con la sua tecnologia e ha mostrato un incremento del 5% nelle auto connesse spedite.
Per il Q2 FY2025, Cerence prevede un fatturato tra 74-77 milioni di dollari, inclusi 20 milioni di dollari di fatturato da licenza fissa, con un EBITDA rettificato atteso tra 18-22 milioni di dollari. L'azienda ha mantenuto invariata la sua guida per l'intero anno fiscale 2025.
Cerence Inc. (NASDAQ: CRNC) reportó sus resultados del Q1 FY2025 con ingresos de 50,9 millones de dólares, en comparación con los 138,3 millones de dólares del Q1 FY2024. La compañía experimentó disminuciones significativas en métricas clave, con el margen bruto GAAP cayendo al 65,0% desde el 81,0% y el margen operativo disminuyendo al -33,3% desde el 42,3%. El trimestre resultó en una pérdida neta GAAP de 24,3 millones de dólares, en comparación con una ganancia de 23,9 millones de dólares en el año anterior.
A pesar de los números descendentes, la compañía reportó desarrollos positivos que incluyen seis victorias de diseño, dos victorias para soluciones de IA generativa y seis principales SOP de clientes. Cerence mantiene una participación del 51% en la producción automotriz mundial con su tecnología, y mostró un aumento del 5% en los automóviles conectados enviados.
Para el Q2 FY2025, Cerence proyecta ingresos entre 74-77 millones de dólares, incluidos 20 millones de dólares en ingresos por licencias fijas, con un EBITDA ajustado esperado entre 18-22 millones de dólares. La compañía mantuvo su guía anual para el año fiscal 2025 sin cambios.
Cerence Inc. (NASDAQ: CRNC)는 FY2025 1분기 결과를 보고하며 수익이 5,090만 달러로 FY2024 1분기의 1억 3,830만 달러에서 감소했다고 밝혔습니다. 회사는 주요 지표 전반에 걸쳐 상당한 감소를 경험했으며, GAAP 총 이익률은 81.0%에서 65.0%로 감소하고 운영 이익률은 42.3%에서 -33.3%로 떨어졌습니다. 이번 분기에는 GAAP 기준으로 2,430만 달러의 순손실이 발생했으며, 이는 전년도의 2,390만 달러의 이익과 비교됩니다.
하락하는 수치에도 불구하고, 회사는 6건의 디자인 승소, 생성적 AI 솔루션을 위한 2건의 승소, 6명의 주요 고객 SOP 등 긍정적인 발전을 보고했습니다. Cerence는 자사의 기술로 전 세계 자동차 생산의 51% 시장 점유율을 유지하고 있으며, 연결된 자동차의 배송량이 5% 증가했습니다.
FY2025 2분기를 위해 Cerence는 7,400만~7,700만 달러의 수익을 예측하고 있으며, 여기에는 2천만 달러의 고정 라이선스 수익이 포함되며, 조정 EBITDA는 1,800만~2,200만 달러로 예상됩니다. 회사는 2025회계연도 전체에 대한 가이던스를 변경하지 않았습니다.
Cerence Inc. (NASDAQ: CRNC) a annoncé ses résultats du Q1 FY2025 avec un chiffre d'affaires de 50,9 millions de dollars, en baisse par rapport à 138,3 millions de dollars au Q1 FY2024. L'entreprise a connu des baisses significatives dans des indicateurs clés, le taux de marge brute GAAP tombant à 65,0% contre 81,0% et la marge opérationnelle chutant à -33,3% contre 42,3%. Le trimestre a entraîné une perte nette GAAP de 24,3 millions de dollars, comparé à un bénéfice de 23,9 millions de dollars l'année précédente.
Malgré ces chiffres en déclin, l'entreprise a rapporté des évolutions positives comprenant six succès en conception, deux succès pour des solutions d'IA générative et six SOP majeurs de clients. Cerence détient une part de 51% dans la production automobile mondiale avec sa technologie et a enregistré une augmentation de 5% des voitures connectées expédiées.
Pour le Q2 FY2025, Cerence prévoit un chiffre d'affaires compris entre 74-77 millions de dollars, comprenant 20 millions de dollars de revenus fixes de licences, avec un EBITDA ajusté attendu entre 18-22 millions de dollars. La société a maintenu son orientation pour l'ensemble de l'année fiscale 2025 inchangée.
Cerence Inc. (NASDAQ: CRNC) hat die Ergebnisse für das Q1 FY2025 bekannt gegeben, mit einem Umsatz von 50,9 Millionen US-Dollar, was einen Rückgang von 138,3 Millionen US-Dollar im Q1 FY2024 bedeutet. Das Unternehmen verzeichnete erhebliche Rückgänge in wichtigen Kennzahlen, mit einem GAAP-Bruttomargenrückgang auf 65,0% von 81,0% und einem Rückgang des Betriebsgewinns auf -33,3% von 42,3%. Das Quartal führte zu einem GAAP-Nettoverlust von 24,3 Millionen US-Dollar, verglichen mit einem Gewinn von 23,9 Millionen US-Dollar im Vorjahr.
Trotz der sinkenden Zahlen berichtete das Unternehmen von positiven Entwicklungen, darunter sechs Designgewinne, zwei Erfolge bei generativen KI-Lösungen und sechs große SOPs von Kunden. Cerence hält einen Anteil von 51% an der weltweiten Automobilproduktion mit seiner Technologie und verzeichnete einen Anstieg von 5% bei den ausgelieferten vernetzten Fahrzeugen.
Für das Q2 FY2025 prognostiziert Cerence einen Umsatz zwischen 74-77 Millionen US-Dollar, einschließlich 20 Millionen US-Dollar an Fixlizenzumsätzen, wobei ein bereinigtes EBITDA zwischen 18-22 Millionen US-Dollar erwartet wird. Das Unternehmen hat seine Prognose für das gesamte Geschäftsjahr 2025 unverändert gelassen.
- Six design wins and two generative AI solution wins secured
- 51% market share in worldwide auto production
- 5% increase in connected cars shipped year-over-year
- 3% growth in Adjusted Total Billings
- Beat guidance on revenue and adjusted EBITDA
- Revenue declined 63.2% YoY to $50.9M from $138.3M
- GAAP net loss of $24.3M vs profit of $23.9M YoY
- GAAP operating margin fell to -33.3% from 42.3%
- GAAP gross margin decreased to 65.0% from 81.0%
- Non-GAAP operating margin dropped to -1.0% from 49.4%
Insights
The Q1 FY2025 results present a complex picture that requires careful analysis beyond the headline numbers. While the revenue decline to
Several key metrics warrant attention:
- The
5% growth in connected car shipments outperformed the global auto production decline of2% , indicating market share gains - Six design wins and two generative AI wins demonstrate continued competitive strength
- Maintaining
51% penetration of worldwide auto production shows resilient market position
The margin compression, while concerning, appears to be actively addressed through transformation and cost reduction initiatives. The positive free cash flow and beat on guidance suggest these efforts are gaining traction. Looking forward, the Q2 guidance of
The company's strategic focus on generative AI, evidenced by the development milestones and two generative AI SOPs (Start of Production), positions it well in the evolving automotive AI landscape. This transition period, while challenging for margins, could lay the foundation for more sustainable growth as these next-generation solutions come to market.
BURLINGTON, Mass., Feb. 06, 2025 (GLOBE NEWSWIRE) -- Cerence Inc. (NASDAQ: CRNC) (“Cerence AI”), a global industry leader in AI for transportation, today reported its first quarter fiscal year 2025 results for the quarter ended December 31, 2024.
| ResultsSummary(1,2) (in millions, except per share data) | ||||||||
| Three Months Ended | ||||||||
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| GAAP revenue | $ | 50.9 | $ | 138.3 | ||||
| GAAP gross margin | 65.0 | % | 81.0 | % | ||||
| Non-GAAP gross margin | 65.9 | % | 81.5 | % | ||||
| GAAP operating margin | -33.3 | % | 42.3 | % | ||||
| Non-GAAP operating margin | -1.0 | % | 49.4 | % | ||||
| GAAP net (loss) income | $ | (24.3 | ) | $ | 23.9 | |||
| GAAP net (loss) income margin | -47.7 | % | 17.2 | % | ||||
| Non-GAAP net (loss) income | $ | (1.5 | ) | $ | 54.3 | |||
| Adjusted EBITDA | $ | 1.4 | $ | 70.4 | ||||
| Adjusted EBITDA margin | 2.7 | % | 50.9 | % | ||||
| GAAP net (loss) income per share - diluted | $ | (0.57 | ) | $ | 0.53 | |||
| Non-GAAP net (loss) income per share - diluted | $ | (0.03 | ) | $ | 1.12 | |||
| (1) | As previously disclosed, Q1FY24 revenue includes the non-cash revenue associated with the Toyota “Legacy” contract and related impacts totaling |
| (2) | Please refer to the “Discussion of Non-GAAP Financial Measures” and “Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures” included elsewhere in this release for more information regarding our use of non-GAAP financial measures. |
“I’m incredibly proud of the team’s progress and our performance in Q1, most notably beating the upper end of guidance on top-line revenue and adjusted EBITDA and showing strong free cash flow,” said Brian Krzanich, CEO, Cerence AI. “We believe we have solid momentum for 2025: we’ve made significant progress on our generative AI roadmap, achieving critical development milestones for our next-gen agentic, conversational AI platform. We have continued momentum with our automaker customers, including six design wins and two wins for our generative AI solutions, as well as six major customer SOPs and two generative AI SOPs within the quarter. In addition, our transformation and cost reduction initiatives are having a solid impact on the business. As we look to the future, we believe we are well positioned to continue on our path to long-term, sustainable growth and profitability.”
Cerence Key Performance Indicators
To help investors gain further insight into the Cerence business and its performance, management provides a set of key performance indicators that includes:
| Key Performance Indicator1 | Q1FY25 | |||
| Percent of worldwide auto production with Cerence Technology (TTM) | 51 | % | ||
| Change in number of Cerence connected cars shipped2 (TTM over prior year TTM) | 5 | % | ||
| Change in Adjusted Total Billings (TTM over prior year TTM) | 3 | % | ||
| (1) | Please refer to the “Key Performance Indicators” section included elsewhere in this release for more information regarding the definitions and our use of key performance indicators. |
| (2) | Based on IHS Markit data, global auto production decreased |
Second Quarter and Full Year Fiscal 2025 Outlook
For the fiscal quarter ending March 31, 2025, revenue is expected to be in the range of
Guidance for the full fiscal year ending September 30, 2025 remains unchanged.
The adjusted EBITDA guidance excludes amortization of acquired intangible assets, stock-based compensation, restructuring and other costs.
Additional details regarding guidance will be provided during the earnings call.
Cerence Conference Call and Webcast
The company will host a live conference call and webcast with slides to discuss the results today at 5:00pm Eastern Time / 2:00pm Pacific Time. Interested investors and analysts are invited to dial into the conference call by registering here.
Webcast access will also be available on the Investor Information section of the company’s website at https://www.cerence.com/investors/events-and-resources.
A replay of the webcast can be accessed by visiting the company’s website 90 minutes following the conference call at https://www.cerence.com/investors/events-and-resources.
Forward Looking Statements
Statements in this press release regarding: Cerence’s future performance, results and financial condition; expected growth and profitability; outlook and momentum; transformation plans and cost efficiency initiatives, including the estimated net annualized cost savings; strategy; opportunities; business, industry and market trends; strategy regarding fixed contracts and its impact on financial results; backlog; revenue visibility; revenue timing and mix; demand for Cerence products; innovation and new product offerings, including AI technology; expected benefits of technology partnerships; cost efficiency initiatives; and management’s future expectations, estimates, assumptions, beliefs, goals, objectives, targets, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “goal,” “anticipates,” “projects,” “forecasts,” “expects,” “intends,” “continues,” “will,” “may,” or “estimates” or similar expressions) should also be considered to be forward-looking statements. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risk, uncertainties and other factors, which may cause actual results or performance of the company to be materially different from any future results or performance expressed or implied by such forward-looking statements including but not limited to: the highly competitive and rapidly changing market in which we operate; adverse conditions in the automotive industry, the related supply chain and semiconductor shortage, or the global economy more generally; volatility in the political, legal and regulatory environment in which we operate, including trade, tariffs and other policies implemented by the new administration or actions taken by other countries in response; automotive production delays; changes in customer forecasts; the impacts of the COVID-19 pandemic on our and our customers’ businesses; the ongoing conflicts in Ukraine and the Middle East; our inability to control and successfully manage our expenses and cash position; our inability to deliver improved financial results from process optimization efforts and cost reduction actions; escalating pricing pressures from our customers; the impact on our business of the transition to a lower level of fixed contracts, including the failure to achieve such a transition; our failure to win, renew or implement service contracts; the cancellation or postponement of existing contracts; the loss of business from any of our largest customers; effects of customer defaults; our inability to successfully introduce new products, applications and services; our strategies to increase cloud offerings and deploy generative AI and large language models (LLMs); the inability to expand into adjacent markets; the inability to recruit and retain qualified personnel; disruptions arising from transitions in management personnel, including the transition to our new Chief Executive Officer; cybersecurity and data privacy incidents; failure to protect our intellectual property; defects or interruptions in service with respect to our products; fluctuating currency rates and interest rates; inflation; financial and credit market volatility; restrictions on our current and future operations under the terms of our debt, the use of cash to service or repay our debt; and our inability to generate sufficient cash from our operations; and the other factors discussed in our most recent Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the Securities and Exchange Commission. We disclaim any obligation to update any forward-looking statements as a result of developments occurring after the date of this document.
Discussion of Non-GAAP Financial Measures
We believe that providing the non-GAAP information in addition to the GAAP presentation, allows investors to view the financial results in the way management views the operating results. We further believe that providing this information allows investors to not only better understand our financial performance, but more importantly, to evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance. The non-GAAP information should not be considered superior to, or a substitute for, financial statements prepared in accordance with GAAP.
We utilize a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of the business, for making operating decisions and for forecasting and planning for future periods. While our management uses these non-GAAP financial measures as a tool to enhance their understanding of certain aspects of our financial performance, our management does not consider these measures to be a substitute for, or superior to, the information provided by GAAP financial statements.
Consistent with this approach, we believe that disclosing non-GAAP financial measures to the readers of our financial statements provides such readers with useful supplemental data that, while not a substitute for GAAP financial statements, allows for greater transparency in the review of our financial and operational performance. In assessing the overall health of the business during the three months ended December 31, 2024 and 2023, our management has either included or excluded the following items in general categories, each of which is described below.
Adjusted EBITDA.
Adjusted EBITDA is defined as net income attributable to Cerence Inc. before net income (loss) attributable to income tax (benefit) expense, other income (expense) items, net, depreciation and amortization expense, and excluding amortization of acquired intangible assets, stock-based compensation, and restructuring and other costs, net or impairment charges related to fixed and intangible assets and gains or losses on the sale of long-lived assets, if any. From time to time we may exclude from Adjusted EBITDA the impact of events, gains, losses or other charges (such as significant legal settlements) that affect the period-to-period comparability of our operating performance. Other income (expense) items, net include interest expense, interest income, and other income (expense), net (as stated in our Condensed Consolidated Statement of Operations). Our management and Board of Directors use this financial measure to evaluate our operating performance. It is also a significant performance measure in our annual incentive compensation programs.
Restructuring and other costs, net.
Restructuring and other costs, net include restructuring expenses as well as other charges that are unusual in nature, are the result of unplanned events, and arise outside the ordinary course of our business such as employee severance costs, consulting costs relating to our transformation initiatives, and costs for consolidating duplicate facilities.
Amortization of acquired intangible assets.
We exclude the amortization of acquired intangible assets from non-GAAP expense and income measures. These amounts are inconsistent in amount and frequency and are significantly impacted by the timing and size of acquisitions. Providing a supplemental measure which excludes these charges allows management and investors to evaluate results “as-if” the acquired intangible assets had been developed internally rather than acquired and, therefore, provides a supplemental measure of performance in which our acquired intellectual property is treated in a comparable manner to our internally developed intellectual property. Although we exclude amortization of acquired intangible assets from our non-GAAP expenses, we believe that it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Future acquisitions may result in the amortization of additional intangible assets.
Non-cash expenses.
We provide non-GAAP information relative to the following non-cash expenses: (i) stock-based compensation; and (ii) non-cash interest. These items are further discussed as follows:
| i) | Stock-based compensation. Because of varying valuation methodologies, subjective assumptions and the variety of award types, we exclude stock-based compensation from our operating results. We evaluate performance both with and without these measures because compensation expense related to stock-based compensation is typically non-cash and awards granted are influenced by the Company’s stock price and other factors such as volatility that are beyond our control. The expense related to stock-based awards is generally not controllable in the short-term and can vary significantly based on the timing, size and nature of awards granted. As such, we do not include such charges in operating plans. Stock-based compensation will continue in future periods. |
| ii) | Non-cash interest. We exclude non-cash interest because we believe that excluding this expense provides management, as well as other users of the financial statements, with a valuable perspective on the cash-based performance and health of the business, including the current near-term projected liquidity. Non-cash interest expense will continue in future periods. |
Other expenses.
We exclude certain other expenses that result from unplanned events outside the ordinary course of continuing operations, in order to measure operating performance and current and future liquidity both with and without these expenses. By providing this information, we believe management and the users of the financial statements are better able to understand the financial results of what we consider to be our organic, continuing operations. Included in these expenses are items such as other charges (credits), net, (gains) losses from extinguishment of debt, and changes in indemnification assets corresponding with the release of pre-spin liabilities for uncertain tax positions.
Adjustments to income tax provision.
Adjustments to our GAAP income tax provision to arrive at non-GAAP net income is determined based on our non-GAAP pre-tax income. Additionally, as our non-GAAP profitability is higher based on the non-GAAP adjustments, we adjust the GAAP tax provision to remove valuation allowances and related effects based on the higher level of reported non-GAAP profitability. We also exclude from our non-GAAP tax provision certain discrete tax items as they occur.
Key Performance Indicators
We believe that providing key performance indicators (“KPIs”) allows investors to gain insight into the way management views the performance of the business. We further believe that providing KPIs allows investors to better understand information used by management to evaluate and measure such performance. KPIs should not be considered superior to, or a substitute for, operating results prepared in accordance with GAAP. In assessing the performance of the business during the three months ended December 31, 2024, our management has reviewed the following KPIs, each of which is described below:
- Percent of worldwide auto production with Cerence Technology: The number of Cerence enabled cars shipped as compared to IHS Markit car production data.
- Change in number of Cerence connected cars shipped: The year-over-year change in the number of cars shipped with Cerence connected solutions. Amounts calculated on a TTM basis.
- Change in Adjusted total billings YoY (TTM): The year over year change in total billings excluding Professional Services, prepay billings and adjusted for prepay consumption.
____________
See the tables at the end of this press release for non-GAAP reconciliations to the most directly comparable GAAP measures.
To learn more about Cerence AI, visit www.cerence.ai, and follow the company on LinkedIn.
About Cerence Inc.
Cerence Inc. (NASDAQ: CRNC) is a global industry leader in creating intuitive, seamless, AI-powered experiences across automotive and transportation. Leveraging decades of innovation and expertise in voice, generative AI, and large language models, Cerence powers integrated experiences that create safer, more connected, and more enjoyable journeys for drivers and passengers alike. With more than 500 million cars shipped with Cerence technology, the company partners with leading automakers, transportation OEMs, and technology companies to advance the next generation of user experiences. Cerence is headquartered in Burlington, Massachusetts, with operations globally and a worldwide team dedicated to pushing the boundaries of AI innovation. For more information, visit www.cerence.ai.
Contact Information
Investor Relations | Email: investorrelations@cerence.com
| CERENCE INC. Condensed Consolidated Statements of Operations (in thousands, except per share data) | ||||||||
| Three Months Ended | ||||||||
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenues: | ||||||||
| License | $ | 22,725 | $ | 20,823 | ||||
| Connected services | 13,707 | 96,820 | ||||||
| Professional services | 14,464 | 20,692 | ||||||
| Total revenues | 50,896 | 138,335 | ||||||
| Cost of revenues: | ||||||||
| License | 1,782 | 1,604 | ||||||
| Connected services | 6,311 | 7,303 | ||||||
| Professional services | 9,731 | 17,325 | ||||||
| Amortization of intangible assets | — | 103 | ||||||
| Total cost of revenues | 17,824 | 26,335 | ||||||
| Gross profit | 33,072 | 112,000 | ||||||
| Operating expenses: | ||||||||
| Research and development | 20,869 | 33,306 | ||||||
| Sales and marketing | 4,766 | 6,071 | ||||||
| General and administrative | 12,754 | 12,793 | ||||||
| Amortization of intangible assets | 554 | 545 | ||||||
| Restructuring and other costs, net | 11,062 | 705 | ||||||
| Total operating expenses | 50,005 | 53,420 | ||||||
| (Loss) income from operations | (16,933 | ) | 58,580 | |||||
| Interest income | 1,437 | 1,432 | ||||||
| Interest expense | (3,393 | ) | (3,236 | ) | ||||
| Other income, net | 272 | 1,422 | ||||||
| (Loss) income before income taxes | (18,617 | ) | 58,198 | |||||
| Provision for income taxes | 5,671 | 34,341 | ||||||
| Net (loss) income | $ | (24,288 | ) | $ | 23,857 | |||
| Net (loss) income per share: | ||||||||
| Basic | $ | (0.57 | ) | $ | 0.58 | |||
| Diluted | $ | (0.57 | ) | $ | 0.53 | |||
| Weighted-average common share outstanding: | ||||||||
| Basic | 42,897 | 41,186 | ||||||
| Diluted | 42,897 | 49,255 | ||||||
| CERENCE INC. Condensed Consolidated Balance Sheets (in thousands, except per share amounts) | ||||||||
| December 31, | September 30, | |||||||
| 2024 | 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 104,103 | 121,485 | |||||
| Marketable securities | 3,889 | 5,502 | ||||||
| Accounts receivable, net of allowances of | 47,671 | 62,755 | ||||||
| Deferred costs | 4,739 | 5,286 | ||||||
| Prepaid expenses and other current assets | 39,670 | 70,481 | ||||||
| Total current assets | 200,072 | 265,509 | ||||||
| Long-term marketable securities | 2,552 | 3,453 | ||||||
| Property and equipment, net | 29,371 | 30,139 | ||||||
| Deferred costs | 15,539 | 18,051 | ||||||
| Operating lease right of use assets | 13,156 | 12,879 | ||||||
| Goodwill | 288,886 | 296,858 | ||||||
| Intangible assets, net | 1,059 | 1,706 | ||||||
| Deferred tax assets | 46,035 | 51,398 | ||||||
| Other assets | 20,858 | 22,365 | ||||||
| Total assets | $ | 617,528 | $ | 702,358 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 7,609 | $ | 3,959 | ||||
| Deferred revenue | 47,626 | 52,822 | ||||||
| Short-term operating lease liabilities | 3,828 | 4,528 | ||||||
| Short-term debt | 59,954 | 87,094 | ||||||
| Accrued expenses and other current liabilities | 32,967 | 68,405 | ||||||
| Total current liabilities | 151,984 | 216,808 | ||||||
| Long-term debt | 196,208 | 194,812 | ||||||
| Deferred revenue, net of current portion | 113,444 | 114,354 | ||||||
| Long-term operating lease liabilities | 10,071 | 8,803 | ||||||
| Other liabilities | 25,119 | 26,484 | ||||||
| Total liabilities | 496,826 | 561,261 | ||||||
| Stockholders' Equity: | ||||||||
| Common stock, | 430 | 419 | ||||||
| Accumulated other comprehensive loss | (29,785 | ) | (25,912 | ) | ||||
| Additional paid-in capital | 1,096,085 | 1,088,330 | ||||||
| Accumulated deficit | (946,028 | ) | (921,740 | ) | ||||
| Total stockholders' equity | 120,702 | 141,097 | ||||||
| Total liabilities and stockholders' equity | $ | 617,528 | $ | 702,358 | ||||
| CERENCE INC. Condensed Consolidated Statements of Cash Flows (in thousands) | ||||||||
| Three Months Ended | ||||||||
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) income | $ | (24,288 | ) | $ | 23,857 | |||
| Adjustments to reconcile net (loss) income to net cash provided by (used in) operations: | ||||||||
| Depreciation and amortization | 2,445 | 2,686 | ||||||
| Provision for expected credit loss reserve | 207 | - | ||||||
| Stock-based compensation | 7,771 | 8,380 | ||||||
| Non-cash interest expense | 1,861 | 1,468 | ||||||
| Gain on debt extinguishment | (327 | ) | - | |||||
| Deferred tax provision | 4,927 | 30,298 | ||||||
| Unrealized foreign currency transaction losses (gains) | 1,997 | (2,012 | ) | |||||
| Other, net | (33 | ) | 382 | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 8,800 | 4,933 | ||||||
| Prepaid expenses and other assets | 27,201 | 1,170 | ||||||
| Deferred costs | 1,859 | 2,589 | ||||||
| Accounts payable | 3,814 | 2,382 | ||||||
| Accrued expenses and other liabilities | (33,087 | ) | 3,712 | |||||
| Deferred revenue | 6,107 | (82,660 | ) | |||||
| Net cash provided by (used in) operating activities | 9,254 | (2,815 | ) | |||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | (1,360 | ) | (931 | ) | ||||
| Sale and maturities of marketable securities | 2,493 | 2,442 | ||||||
| Other investing activities | (374 | ) | (322 | ) | ||||
| Net cash provided by investing activities | 759 | 1,189 | ||||||
| Cash flows from financing activities: | ||||||||
| Principal payments of short-term debt | (26,964 | ) | - | |||||
| Common stock repurchases for tax withholdings for net settlement of equity awards | (1,369 | ) | (6,209 | ) | ||||
| Principal payment of lease liabilities arising from a finance lease | (115 | ) | (122 | ) | ||||
| Proceeds from the issuance of common stock | 1,364 | 6,201 | ||||||
| Net cash used in financing activities | (27,084 | ) | (130 | ) | ||||
| Effects of exchange rate changes on cash and cash equivalents | (311 | ) | (662 | ) | ||||
| Net change in cash and cash equivalents | (17,382 | ) | (2,418 | ) | ||||
| Cash and cash equivalents at beginning of period | 121,485 | 101,154 | ||||||
| Cash and cash equivalents at end of period | $ | 104,103 | $ | 98,736 | ||||
| CERENCE INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (unaudited - in thousands) | ||||||||
| Three Months Ended | ||||||||
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| GAAP revenue | $ | 50,896 | $ | 138,335 | ||||
| GAAP gross profit | $ | 33,072 | $ | 112,000 | ||||
| Stock-based compensation | 490 | 641 | ||||||
| Amortization of intangible assets | - | 103 | ||||||
| Non-GAAP gross profit | $ | 33,562 | $ | 112,744 | ||||
| GAAP gross margin | 65.0 | % | 81.0 | % | ||||
| Non-GAAP gross margin | 65.9 | % | 81.5 | % | ||||
| GAAP operating (loss) income | $ | (16,933 | ) | $ | 58,580 | |||
| Stock-based compensation* | 4,808 | 8,380 | ||||||
| Amortization of intangible assets | 554 | 648 | ||||||
| Restructuring and other costs, net* | 11,062 | 705 | ||||||
| Non-GAAP operating (loss) income | $ | (509 | ) | $ | 68,313 | |||
| GAAP operating margin | -33.3 | % | 42.3 | % | ||||
| Non-GAAP operating margin | -1.0 | % | 49.4 | % | ||||
| GAAP net (loss) income | $ | (24,288 | ) | $ | 23,857 | |||
| Stock-based compensation* | 4,808 | 8,380 | ||||||
| Amortization of intangible assets | 554 | 648 | ||||||
| Restructuring and other costs, net* | 11,062 | 705 | ||||||
| Depreciation | 1,891 | 2,038 | ||||||
| Total other expense, net | (1,684 | ) | (382 | ) | ||||
| Provision for income taxes | 5,671 | 34,341 | ||||||
| Adjusted EBITDA | $ | 1,382 | $ | 70,351 | ||||
| GAAP net (loss) income margin | -47.7 | % | 17.2 | % | ||||
| Adjusted EBITDA margin | 2.7 | % | 50.9 | % | ||||
| * - | ||||||||
| CERENCE INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (cont.) (unaudited - in thousands, except per share data) | ||||||||
| Three Months Ended | ||||||||
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| GAAP net (loss) income | $ | (24,288 | ) | $ | 23,857 | |||
| Stock-based compensation* | 4,808 | 8,380 | ||||||
| Amortization of intangible assets | 554 | 648 | ||||||
| Restructuring and other costs, net* | 11,062 | 705 | ||||||
| Gain on debt extinguishment | (327 | ) | - | |||||
| Non-cash interest expense | 1,861 | 1,468 | ||||||
| Other | (33 | ) | (27 | ) | ||||
| Adjustments to income tax expense | 4,895 | 19,259 | ||||||
| Non-GAAP net (loss) income | $ | (1,468 | ) | $ | 54,290 | |||
| Adjusted EPS: | ||||||||
| GAAP Numerator: | ||||||||
| Net (loss) income attributed to common shareholders - basic | $ | (24,288 | ) | $ | 23,857 | |||
| Interest on the Notes, net of tax | - | 2,250 | ||||||
| Net (loss) income attributed to common shareholders - diluted | $ | (24,288 | ) | $ | 26,107 | |||
| Non-GAAP Numerator: | ||||||||
| Net (loss) income attributed to common shareholders - basic | $ | (1,468 | ) | $ | 54,290 | |||
| Interest on the Notes, net of tax | - | 1,120 | ||||||
| Net (loss) income attributed to common shareholders - diluted | $ | (1,468 | ) | $ | 55,410 | |||
| GAAP Denominator: | ||||||||
| Weighted-average common shares outstanding - basic | 42,897 | 41,186 | ||||||
| Adjustment for diluted shares | - | 8,069 | ||||||
| Weighted-average common shares outstanding - diluted | 42,897 | 49,255 | ||||||
| Non-GAAP Denominator: | ||||||||
| Weighted-average common shares outstanding- basic | 42,897 | 41,186 | ||||||
| Adjustment for diluted shares | - | 8,069 | ||||||
| Weighted-average common shares outstanding - diluted | 42,897 | 49,255 | ||||||
| GAAP net (loss) income per share - diluted | $ | (0.57 | ) | $ | 0.53 | |||
| Non-GAAP net (loss) income per share - diluted | $ | (0.03 | ) | $ | 1.12 | |||
| GAAP net cash provided by (used in) operating activities | $ | 9,254 | $ | (2,815 | ) | |||
| Capital expenditures | (1,360 | ) | (931 | ) | ||||
| Free Cash Flow | $ | 7,894 | $ | (3,746 | ) | |||
| * - | ||||||||
| CERENCE INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (cont.) (unaudited - in thousands) | ||||||||||||||||
| Q2 2025 | FY2025 | |||||||||||||||
| Low | High | Low | High | |||||||||||||
| GAAP revenue | $ | 74,000 | $ | 77,000 | $ | 236,000 | $ | 247,000 | ||||||||
| GAAP gross profit | $ | 54,700 | $ | 58,700 | $ | 158,400 | $ | 169,400 | ||||||||
| Stock-based compensation | 700 | 700 | 2,500 | 2,500 | ||||||||||||
| Amortization of intangible assets | - | - | - | - | ||||||||||||
| Non-GAAP gross profit | $ | 55,400 | $ | 59,400 | $ | 160,900 | $ | 171,900 | ||||||||
| GAAP gross margin | 74 | % | 76 | % | 67 | % | 69 | % | ||||||||
| Non-GAAP gross margin | 75 | % | 77 | % | 68 | % | 70 | % | ||||||||
| GAAP operating income (loss) | $ | 7,100 | $ | 11,100 | $ | (27,100 | ) | $ | (16,100 | ) | ||||||
| Stock-based compensation | 7,000 | 7,000 | 22,500 | 22,500 | ||||||||||||
| Amortization of intangible assets | 500 | 500 | 1,600 | 1,600 | ||||||||||||
| Restructuring and other costs, net | 1,300 | 1,300 | 8,100 | 8,100 | ||||||||||||
| Non-GAAP operating income | $ | 15,900 | $ | 19,900 | $ | 5,100 | $ | 16,100 | ||||||||
| GAAP operating margin | 10 | % | 14 | % | -11 | % | -7 | % | ||||||||
| Non-GAAP operating margin | 21 | % | 26 | % | 2 | % | 7 | % | ||||||||
| GAAP net income (loss) | $ | 1,200 | $ | 5,200 | $ | (39,600 | ) | $ | (28,600 | ) | ||||||
| Stock-based compensation | 7,000 | 7,000 | 22,500 | 22,500 | ||||||||||||
| Amortization of intangible assets | 500 | 500 | 1,600 | 1,600 | ||||||||||||
| Restructuring and other costs, net | 1,300 | 1,300 | 8,100 | 8,100 | ||||||||||||
| Depreciation | 1,900 | 1,900 | 10,200 | 10,200 | ||||||||||||
| Total other expense, net | (1,300 | ) | (1,300 | ) | (5,100 | ) | (5,100 | ) | ||||||||
| Provision for income taxes | 4,600 | 4,600 | 7,400 | 7,400 | ||||||||||||
| Adjusted EBITDA | $ | 17,800 | $ | 21,800 | $ | 15,300 | $ | 26,300 | ||||||||
| GAAP net income (loss) margin | 2 | % | 7 | % | -17 | % | -12 | % | ||||||||
| Adjusted EBITDA margin | 24 | % | 28 | % | 6 | % | 11 | % | ||||||||
| CERENCE INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (cont.) (unaudited - in thousands) | ||||||||||||||||
| Q2 2025 | FY2025 | |||||||||||||||
| Low | High | Low | High | |||||||||||||
| GAAP net income (loss) | $ | 1,200 | $ | 5,200 | $ | (39,600 | ) | $ | (28,600 | ) | ||||||
| Stock-based compensation | 7,000 | 7,000 | 22,500 | 22,500 | ||||||||||||
| Amortization of intangibles | 500 | 500 | 1,600 | 1,600 | ||||||||||||
| Restructuring and other costs, net | 1,300 | 1,300 | 8,100 | 8,100 | ||||||||||||
| Non-cash interest expense | 1,500 | 1,500 | 5,500 | 5,500 | ||||||||||||
| Other | - | - | (100 | ) | (100 | ) | ||||||||||
| Adjustments to income tax expense | 1,500 | 1,500 | (4,600 | ) | (4,600 | ) | ||||||||||
| Non-GAAP net income (loss) | $ | 13,000 | $ | 17,000 | $ | (6,600 | ) | $ | 4,400 | |||||||
| Adjusted EPS: | ||||||||||||||||
| GAAP Numerator: | ||||||||||||||||
| Net income (loss) attributed to common shareholders - basic and diluted | $ | 1,200 | $ | 5,200 | $ | (39,600 | ) | $ | (28,600 | ) | ||||||
| Non-GAAP Numerator: | ||||||||||||||||
| Net income (loss) attributed to common shareholders - basic | $ | 13,000 | $ | 17,000 | $ | (6,600 | ) | $ | 4,400 | |||||||
| Interest on the Notes, net of tax | 900 | 900 | - | - | ||||||||||||
| Net income (loss) attributed to common shareholders - diluted | $ | 13,900 | $ | 17,900 | $ | (6,600 | ) | $ | 4,400 | |||||||
| GAAP Denominator: | ||||||||||||||||
| Weighted-average common shares outstanding - basic | 43,000 | 43,000 | 43,000 | 43,000 | ||||||||||||
| Adjustment for diluted shares | 100 | 100 | - | - | ||||||||||||
| Weighted-average common shares outstanding - diluted | 43,100 | 43,100 | 43,000 | 43,000 | ||||||||||||
| Non-GAAP Denominator: | ||||||||||||||||
| Weighted-average common shares outstanding- basic | 43,000 | 43,000 | 43,000 | 43,000 | ||||||||||||
| Adjustment for diluted shares | 6,800 | 6,800 | - | 100 | ||||||||||||
| Weighted-average common shares outstanding - diluted | 49,800 | 49,800 | 43,000 | 43,100 | ||||||||||||
| GAAP net income (loss) per share - diluted | $ | 0.03 | $ | 0.12 | $ | (0.92 | ) | $ | (0.67 | ) | ||||||
| Non-GAAP net income (loss) per share - diluted | $ | 0.28 | $ | 0.36 | $ | (0.15 | ) | $ | 0.10 | |||||||
| GAAP net cash provided by operating activities | $ | 34,000 | $ | 40,000 | ||||||||||||
| Capital expenditures | (14,000 | ) | (10,000 | ) | ||||||||||||
| Free Cash Flow | $ | 20,000 | $ | 30,000 | ||||||||||||
FAQ
What was Cerence's (CRNC) revenue in Q1 FY2025?
What is Cerence's (CRNC) market share in worldwide auto production for Q1 FY2025?
What is Cerence's (CRNC) revenue guidance for Q2 FY2025?
How many design wins did Cerence (CRNC) secure in Q1 FY2025?
What was Cerence's (CRNC) adjusted EBITDA in Q1 FY2025?
