Revenue Performance - Total revenue for the three months ended June 30, 2024, increased by $8.8 million, or 14.4%, to $70.5 million from $61.7 million in the same period of 2023[82]. - Total revenue for the nine months ended June 30, 2024, increased by $63.0 million, or 29.5%, to $276.7 million from $213.7 million in the same period of 2023[82]. - License revenue for the three months ended June 30, 2024, was $43.1 million, compared to $25.8 million in the same period of 2023[84]. - Connected services revenue for the three months ended June 30, 2024, was $10.9 million, down from $18.6 million in the same period of 2023[84]. - Professional services revenue for the three months ended June 30, 2024, was $16.5 million, compared to $17.2 million in the same period of 2023[84]. - Total revenues for the three months ended June 30, 2024 were $70.5 million, an increase of $8.8 million, or 14.4%, from $61.7 million for the same period in 2023[88]. - License revenue for the three months ended June 30, 2024 was $43.1 million, an increase of $17.3 million, or 66.6%, from $25.8 million for the same period in 2023[89]. - Connected services revenue for the three months ended June 30, 2024 was $10.9 million, a decrease of $7.7 million, or 41.1%, from $18.6 million for the same period in 2023[90]. - Total revenues for the nine months ended June 30, 2024 were $276.7 million, an increase of $63.0 million, or 29.5%, from $213.7 million for the same period in 2023[92]. - License revenue for the nine months ended June 30, 2024 was $99.4 million, a decrease of $2.7 million, or 2.6%, from $102.1 million for the same period in 2023[93]. - Connected services revenue for the nine months ended June 30, 2024 was $121.4 million, an increase of $65.5 million, or 117.1%, from $55.9 million for the same period in 2023[94]. Operating Performance - Operating margin for the three months ended June 30, 2024, decreased by 489.3 percentage points to negative 503.1% from negative 13.8% in the same period of 2023[82]. - Total operating expenses for the three months ended June 30, 2024, were $405.3 million, compared to $49.2 million in the same period of 2023[84]. - Net loss for the three months ended June 30, 2024, was $313.5 million, compared to a net loss of $16.5 million in the same period of 2023[84]. - Total gross profit for the three months ended June 30, 2024 was $50.4 million, an increase of $9.7 million, or 23.8%, from $40.7 million for the same period in 2023[97]. - Total gross profit increased by $67.8 million, or 47.9%, from $141.6 million for the nine months ended June 30, 2023, to $209.4 million for the nine months ended June 30, 2024[102]. - Connected services gross profit increased by $65.3 million, or 173.3%, from $37.7 million for the nine months ended June 30, 2023, to $103.0 million for the nine months ended June 30, 2024[104]. - Professional services gross profit increased by $3.6 million, or 43.2%, from $8.3 million for the nine months ended June 30, 2023, to $11.9 million for the nine months ended June 30, 2024[106]. Cash Flow and Liquidity - Cash provided by operating activities for the three months ended June 30, 2024, was $12.9 million, a net change of $21.0 million from cash used in operating activities of $8.2 million in the same period of 2023[82]. - Net cash provided by operating activities for the nine months ended June 30, 2024 was $11.1 million, a 394.7% increase from a net cash used of $3.8 million in the same period of 2023[140]. - Net cash provided by investing activities for the nine months ended June 30, 2024 was $4.3 million, a 276.8% increase from cash used of $2.4 million in the same period of 2023[141]. - Cash, cash equivalents, and marketable securities as of June 30, 2024 totaled $126.3 million, indicating strong liquidity[126]. - The company maintained a minimum liquidity of at least $50 million as per the amended Credit Agreement[138]. - The company’s ability to secure additional liquidity may be adversely affected by economic conditions, including inflation and rising interest rates[129]. - The company held approximately $115.5 million in cash and cash equivalents as of June 30, 2024[148]. Restructuring and Costs - The company expects to incur cash restructuring charges of approximately $18 to $22 million in connection with the announced restructuring plan[87]. - The implementation of the restructuring plan is expected to be substantially complete by the end of the first quarter of fiscal year 2025[87]. - The company expects additional personnel-related restructuring costs in fiscal year 2024 to align its cost structure with current revenue levels[115]. - Restructuring and other costs for the nine months ended June 30, 2024 totaled $6.7 million, a decrease of 39.1% from $11.1 million in the same period of 2023[119]. Debt and Interest - The company issued $190.0 million in aggregate principal amount of 1.50% Senior Convertible Notes due 2028, with initial net proceeds of $193.2 million after transaction costs[130]. - The company repurchased $87.5 million in aggregate principal amount of 3.00% Senior Convertible Notes due 2025 as part of the offering of the 2028 Notes[131]. - The interest expense related to the Notes for the three months ended June 30, 2024, was $2.926 million, compared to $1.672 million for the same period in 2023[135]. - Total interest expense related to the Senior Credit Facilities for the three months ended June 30, 2024 was $0.1 million, down from $2.4 million in the same period of 2023[139]. - The company recorded a loss of $1.3 million on the extinguishment of debt after borrowing $24.7 million under the Revolving Facility and paying $106.3 million towards the Term Loan Facility[136]. - The carrying amount of the 2025 Modified Notes was $159.8 million as of June 30, 2024, net of unamortized costs of $15.2 million[131]. - The carrying amount of the 2028 Notes was $120.6 million, with unamortized issuance costs of $1.9 million[133]. - The conversion rate for the 2028 Notes is 24.5586 shares per $1,000 principal amount, equivalent to an initial conversion price of approximately $40.72 per share[130]. - The company incurred transaction costs of $2.4 million related to the issuance of the 2028 Notes, which are being amortized as interest expense[131]. Other Financial Metrics - Goodwill impairment for the three months ended June 30, 2024 was $357.1 million, reflecting a 100% increase due to macroeconomic conditions[115]. - Effective income tax rate for the three months ended June 30, 2024 was 11.9%, compared to negative 22.4% for the same period in 2023[124]. - Total other expense, net for the three months ended June 30, 2024 was $1.2 million, a decrease of 75.9% from $4.9 million in the same period of 2023[122]. - Interest income for the nine months ended June 30, 2024 was $3.9 million, an increase of 20.6% from $3.2 million in the prior year[123]. - The fair value of the reporting unit was estimated at approximately $154.2 million as of June 30, 2024, leading to significant goodwill impairment charges[120]. - Total material cash requirements amount to $326.914 million, with $3.261 million due in 2024 and $103.187 million in 2025-2026[128]. - The net secured leverage ratio requirement was adjusted to not greater than 3.00 to 1.00 under the latest amendment to the Credit Agreement[138]. - The aggregate notional amount of outstanding foreign currency forward contracts was $72.1 million at June 30, 2024[147]. - A 10% unfavorable exchange rate movement in the foreign currency contracts would have resulted in unrealized losses of $6.1 million[147]. - Assuming a 1% increase in interest rates, interest income on highly liquid investments would increase by $0.8 million per annum[148].

Cerence Inc. (NASDAQ:CRNC) Q3 2024 Earnings Conference Call August 8, 2024 8:30 AM ET Company Participants Richard Yerganian – Senior Vice President, Investor Relations Stefan Ortmanns – Chief Executive Officer Tony Rodriquez – Interim Chief Financial Officer Conference Call Participants Jeff Van Rhee – Craig-Hallum Colin Langan – Wells Fargo Nick Doyle – Needham & Company Luke Junk – Baird Mark Delaney – Goldman Sachs Operator Good day and thank you for standing by. Welcome to the Cerence’s Third Quarter 2 ...

X X | --- | --- | |-------------------------------------------------------------------------------------------|-------| | | | | | | | | | | | | | | | | | | | Cerence Q3 FY24 | | | Earnings Presentation Stefan Ortmanns, Chief Executive Officer | | | Tony Rodriquez, Interim Chief Financial Officer Rich Yerganian, SVP of Investor Relations | | | August 8, 2024 | | Statements in this presentation regarding: Cerence's future performance, results and financial condition; expected growth and profitability; outlook ...

Cerence (CRNC) came out with quarterly earnings of $0.19 per share, beating the Zacks Consensus Estimate of $0.05 per share. This compares to loss of $0.04 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 280%. A quarter ago, it was expected that this automotive artificial intelligence developer would post a loss of $0.23 per share when it actually produced a loss of $0.09, delivering a surprise of 60.87%. Over the last four qu ...

Exhibit 99.1 Cerence Announces Third Quarter Fiscal Year 2024 Results Headlines • Q3 revenue in-line with guidance; positive cash flow from operations of $12.9 million • Five generative AI customer programs released to production • Transformation plans estimated to deliver net annualized cost savings of $35-40 million, predominantly realized in FY25 BURLINGTON, Mass., August 8, 2024 – Cerence Inc. (NASDAQ: CRNC), AI for a world in motion, today reported its third quarter fiscal year 2024 results for the qua ...

Cerence (NASDAQ: CRNC) is the global industry leader in creating unique, moving experiences for the mobility world. As an innovation partner to the world's leading automakers and mobility OEMs, it is helping advance the future of connected mobility through intuitive, AI-powered interaction between humans and their vehicles, connecting consumers' digital lives to their daily journeys no matter where they are. Cerence's track record is built on more than 20 years of knowledge and 500 million cars shipped with ...

To learn more about Cerence, visit www.cerence.com, and follow the company on LinkedIn and Twitter. across multiple markets in China and Europe and continued expansion into high-potential markets in Southeast Asia and the Middle East. From 2022 to 2025, smart will bring an all-new model to customers each year, further enriching the new generation all-electric product portfolio. For its next-gen platform, smart has prioritized leveraging AI to enhance the user experience, turning to Cerence and its industry- ...

"It is a privilege to take on this additional responsibility at an important time for the company," said Nils Schanz, Chief Product Officer, Cerence. "Bringing our product and technology teams together reflects how we've already been operating as a company to seamlessly deliver for our customers. We have a strong team in place, and I look forward to continuing to advance our strategy and execute on our generative AI roadmap." Mr. Schanz joined Cerence in October 2022 following a 15-year tenure at Mercedes-B ...

"As Chief Product Officer, Nils has been a driving force behind our continued innovation across our core products and new generative AI portfolio. He was instrumental to launching Cerence Chat Pro, our uniquely intelligent, automotive-grade ChatGPT integration that has quickly been adopted by Volkswagen, Audi, and others, as well as generative AI-powered Cerence Car Knowledge," said Stefan Ortmanns, CEO, Cerence. "Our product and technology teams already work closely together to create immersive, AI-powered ...

Core Insights - Cerence Inc. announced a partnership with Audi to enhance its in-car assistant using generative AI technology [1][2] - Audi will implement Cerence Chat Pro in vehicles equipped with the MIB 3 infotainment platform, starting with model year 2021 and future models [2][3] - The collaboration aims to improve the user experience by providing automotive-grade generative AI applications for safer and more enjoyable driving [3][4] Company Overview - Cerence is a leader in AI-powered interaction for the automotive industry, with over 20 years of experience and 475 million cars equipped with its technology [5] - The company focuses on creating intuitive, AI-driven experiences that connect consumers' digital lives with their mobility needs [5] - Cerence's solutions are designed to enhance safety, comfort, and productivity for drivers and passengers [4][5]