Canada Markets closed

Cerence Inc. (CRNC)

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
Add to watchlist
50.33-2.37 (-4.50%)
At close: 4:00PM EDT
Full screen
Trade prices are not sourced from all markets
Previous Close52.70
Open52.39
Bid50.40 x 800
Ask50.35 x 800
Day's Range49.30 - 53.68
52 Week Range11.39 - 55.69
Volume712,998
Avg. Volume1,221,584
Market Cap1.848B
Beta (5Y Monthly)N/A
PE Ratio (TTM)N/A
EPS (TTM)N/A
Earnings DateAug. 04, 2020
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateN/A
1y Target Est53.56
  • GlobeNewswire

    Cerence Announces Third Quarter 2020 Results

    Third Quarter Highlights * Bookings momentum continued with the second highest total in the company’s history, supported by strategic wins in all major geographic markets * Secular technology trends continue driving fiscal YTD revenue of $238.8M, up 8% year-over-year despite major impact of COVID-19 on global auto production * Strong financial performance generated $19.3M from cash flow from operations during the quarter * Generated adjusted EBITDA of $23.8M and adjusted EBITDA margin of 31.8% * Successfully refinanced total debt resulting in more than $10M annual cash interest expense savingsBURLINGTON, Mass., Aug. 04, 2020 (GLOBE NEWSWIRE) -- Cerence Inc. (NASDAQ: CRNC), AI for a world in motion, today reported its third fiscal quarter 2020 results for the quarter ended June 30, 2020.Results Summary (1) (in millions, except per share data)  Three Months  Three Months  Nine Months  Nine Months    Ended  Ended  Ended  Ended    June 30, 2020  June 30, 2019  June 30, 2020  June 30, 2019  GAAP Revenue $74.8  $77.6  $238.8  $220.4  GAAP Gross Margin%  63.1%  69.5%  65.5%  67.2% Non-GAAP Gross Margin%  68.7%  72.5%  69.9%  70.6% GAAP Operating Margin%  -6.3%  4.2%  2.2%  2.8% Non-GAAP Operating Margin%  28.4%  33.9%  28.3%  27.7% Adjusted EBITDA $23.8  $28.1  $74.6  $66.9  Adjusted EBITDA margin  31.8%  36.2%  31.2%  30.4% GAAP net (loss) income $(28.2) $1.8  $(27.4) $4.5  Non-GAAP net income $12.1  $18.9  $38.6  $43.7  GAAP net (loss) income per share - diluted $(0.77) $0.05  $(0.76) $0.12  Non-GAAP net income per share - diluted $0.31  $0.52  $1.03  $1.20               (1)  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. Sanjay Dhawan, Chief Executive Officer of Cerence, stated, “While the impact of COVID-19 has weighed on the global economy, our fiscal year to-date revenues are up 8% compared to the same period in the prior year. During a period of a dramatic drop-off in auto production our revenue declined less than 4% in the quarter versus a year ago. This was primarily due to the SaaS revenue contribution of our connected services and continued strength in our professional services business.” Dhawan added, “We recorded the second highest bookings quarter in the company’s history supported by several strategic wins in all major geographic markets. While the business environment in the near term remains challenging, we are maintaining the 2024 growth targets in large part due to the strong bookings we have seen this year and the initial positive reactions by customers to our new product initiatives. These new products such as CarLife and Cerence Pay will play a key role in generating a new line of SaaS or transaction-based revenue as we move toward the 2024 target model.”Dhawan continued, “A key accomplishment in the quarter was the refinancing of our debt. Refinancing will allow us to save over $10M per year in cash interest expense and will be accretive to our earnings. The adjustments we made to our business early in the quarter contributed over $6M in expense savings in the third quarter. While we will continue to prioritize the long-term growth of the company, we will continue to look for ways to minimize any short-term impact of COVID-19 on our operations.”The following table represents a set of KPIs management believes is helpful to investors to gain further insight into Cerence’s business.Key Performance Indicator1 Q3FY20 Q2FY20  Q1FY20  Q4FY19  Q3FY19  Percent of worldwide auto production with Cerence Technology (TTM) 54% 55% 53% 54% 53% Average contract duration (TTM): 6.2  5.7  4.9  5.1  5.2  Repeatable software contribution (TTM): >80%             Change in number of Cerence connected cars shipped2 (TTM over prior year TTM) -3%             Growth in billings per car YTD vs. prior year (excludes legacy contract) 7%             (1)  Please refer to the “Key Performance Indicators” included elsewhere in this release for more information regarding our use of key performance indicators.(2)  Change in connected cars for the same period according to IHS data is approximately -6%.Statement on Guidance While the business environment remains challenging to predict, with a quarter’s experience of operating in the current conditions, management is providing guidance for fiscal Q4. For the fiscal quarter ending September 30, 2020, GAAP revenue is expected to be in the range of $76M to $80M.  Adjusted EBITDA is expected to be in the range of $23M to $26M.  The adjusted EBITDA guidance excludes acquisition-related costs, amortization of purchased intangible assets, stock-based compensation, and restructuring and other costs.  Additional details regarding guidance will be provided on the earnings call.Third Quarter Conference Call The company will host a live conference call and webcast with slides to discuss the results at 10:00 a.m. Eastern Time/7:00 a.m. Pacific Time today. Interested investors and analysts are invited to dial into the conference call by using 1.844.467.7116 (domestic) or +1.409.983.9838 (international) and entering the pass code 8370039. Webcast access will be available on the Investor Information section of the company’s website at https://investors.cerence.com/news-and-events/events-and-presentations.The teleconference replay will be available through August 11, 2020. The replay dial-in number is 1.855.859.2056 (domestic) or +1.404.537.3406 (international) using pass code 8370039. A replay of the webcast can be accessed by visiting our web site 90 minutes following the conference call at https://investors.cerence.com/news-and-events/events-and-presentations.Forward Looking Statements Statements in this presentation regarding Cerence’s future performance, results and financial condition, expected growth and innovation and our management’s future expectations, beliefs, goals, 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,” “anticipates,” “expects,” “intends” 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: impacts of the COVID-19 pandemic on our and our customer’s businesses; the highly competitive and rapidly changing market in which we operate; adverse conditions in the automotive industry or the global economy more generally; our ability to control and successfully manage our expenses and cash position; our strategy to increase cloud; escalating pricing pressures from our customers; our failure to win, renew or implement service contracts; the loss of business from any of our largest customers; effects of customer defaults; the inability to recruit and retain qualified personnel; cybersecurity and data privacy incidents; fluctuating currency rates; and the other factors in our Annual Report on our most recent 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 and nine months ended June 30, 2020 and 2019, our management has either included or excluded items in five 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 other operating gains, and excluding acquisition-related costs, amortization of purchased intangible assets, stock-based compensation, and restructuring and other costs 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, investment income (loss), equity in net income (losses) of investees, and other income (expense), net (as stated in our Consolidated Statement of Income). 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.    Acquisition-related costs, net. In recent years, we have completed a number of acquisitions, which result in operating expenses, which would not otherwise have been incurred. We provide supplementary non-GAAP financial measures, which exclude certain transition, integration and other acquisition-related expense items resulting from acquisitions, to allow more accurate comparisons of the financial results to historical operations, forward looking guidance and the financial results of less acquisitive peer companies. We consider these types of costs and adjustments, to a great extent, to be unpredictable and dependent on a significant number of factors that are outside of our control. Furthermore, we do not consider these acquisition-related costs and adjustments to be related to the organic continuing operations of the acquired businesses and are generally not relevant to assessing or estimating the long-term performance of the acquired assets. In addition, the size, complexity and/or volume of past acquisitions, which often drives the magnitude of acquisition related costs, may not be indicative of the size, complexity and/or volume of future acquisitions. By excluding acquisition-related costs and adjustments from our non-GAAP measures, management is better able to evaluate our ability to utilize our existing assets and estimate the long-term value that acquired assets will generate for us. We believe that providing a supplemental non-GAAP measure, which excludes these items allows management and investors to consider the ongoing operations of the business both with, and without, such expenses.  These acquisition-related costs fall into the following categories: (i) transition and integration costs; (ii) professional service fees and expenses; and (iii) acquisition-related adjustments. Although these expenses are not recurring with respect to past acquisitions, we generally will incur these expenses in connection with any future acquisitions. These categories are further discussed as follows: 1. Transition and integration costs. Transition and integration costs include retention payments, transitional employee costs, and earn-out payments treated as compensation expense, as well as the costs of integration-related activities, including services provided by third-parties. 2. Professional service fees and expenses. Professional service fees and expenses include financial advisory, legal, accounting and other outside services incurred in connection with acquisition activities, and disputes and regulatory matters related to acquired entities. 3. Acquisition-related adjustments. Acquisition-related adjustments include adjustments to acquisition-related items that are required to be marked to fair value each reporting period, such as contingent consideration, and other items related to acquisitions for which the measurement period has ended, such as gains or losses on settlements of pre-acquisition contingencies.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.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 restructuring charges, asset impairments and other charges (credits), net. Other items such as consulting and professional services fees related to separation costs directly attributable to the Cerence business becoming a standalone public company.Backlog. Revenue backlog consists of the following categories: (i) fixed backlog, (ii) variable backlog, and (iii) adjusted backlog. These categories are further discussed as follows: 1. Fixed backlog. Future revenue related to remaining performance obligations and contractual commitments which have not been invoiced. 2. Variable backlog. Estimated future revenue from variable forecasted royalties related to our embedded and connected businesses. Our estimation of forecasted royalties is based on our royalty rates for embedded and connected technologies from expected car shipments under our existing contracts over the term of the programs. Anticipated shipments are based on historical shipping experience and current customer projections that management believes are reasonable. Both our embedded and connected technologies are priced and sold on a per-vehicle or device basis, where we receive a single fee for either or both the embedded license and the connected service term. 3. Adjusted backlog. The total of fixed backlog and variable backlog.Our fixed and variable backlog may not be indicative of our actual future revenue. The revenue we actually recognize is subject to several factors, including the number and timing of vehicles our customers ship, potential terminations or changes in scope of customer contracts and currency fluctuations.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 and nine months ended June 30, 2020 and 2019, 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 Market car sales data. * Average contract duration: The weighted average period over which we expect to recognize the estimated revenues from new license and connected contracts signed during the quarter, calculated on a trailing twelve months (“TTM”) basis. * Repeatable software contribution: The percentage of repeatable revenues as compared to total GAAP revenue in the quarter. Repeatable revenues are defined as the sum of License and Connected Services revenues. * 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. * Growth in billings per car YTD vs. prior year: The rate of growth calculated from the average billings per car on a year to date basis as compared to the prior fiscal year excluding legacy contract.See the tables at the end of this press release for non-GAAP reconciliations to the most directly comparable GAAP measures.About Cerence Inc. Cerence (NASDAQ: CRNC) is the global industry leader in creating unique, moving experiences for the automotive world. As an innovation partner to the world’s leading automakers, it is helping transform how a car feels, responds and learns. Its track record is built on more than 20 years of knowledge and more than 325 million cars on the road today. Whether it’s connected cars, autonomous driving or e-vehicles, Cerence is mapping the road ahead. For more information, visit www.cerence.com.Contact Information Rich Yerganian Cerence Inc. Tel: 617-987-4799 Email: richard.yerganian@cerence.com CERENCE INC. Consolidated and Combined Statements of Operations (unaudited - in thousands, except per share data)  Three Months Ended  Nine Months Ended    June 30,  June 30,    2020  2019  2020  2019  Revenues:                 License $32,454  $43,961  $117,843  $127,287  Connected services  24,996   19,717   71,148   55,830  Professional services  17,360   13,891   49,773   37,240  Total revenues  74,810   77,569   238,764   220,357  Cost of revenues:                 License  820   521   2,344   1,428  Connected services  7,191   8,232   24,742   28,591  Professional services  17,529   12,943   48,773   36,132  Amortization of intangible assets  2,063   1,979   6,408   6,175  Total cost of revenues  27,603   23,675   82,267   72,326  Gross profit  47,207   53,894   156,497   148,031  Operating expenses:                 Research and development  22,041   22,975   66,898   69,344  Sales and marketing  9,180   8,232   24,829   27,476  General and administrative  14,261   6,237   36,456   17,647  Amortization of intangible assets  3,120   3,132   9,376   9,396  Restructuring and other costs, net  3,301   9,691   13,725   17,147  Acquisition-related costs  —   366   —   783  Total operating expenses  51,903   50,633   151,284   141,793  (Loss) income from operations  (4,696)  3,261   5,213   6,238  Interest income  38   —   563   —  Interest expense  (5,546)  —   (19,043)  —  Other income (expense), net  (20,446)  (150)  (20,366)  100  (Loss) income before income taxes  (30,650)  3,111   (33,633)  6,338  (Benefit from) provision for income taxes  (2,469)  1,341   (6,185)  1,859  Net (loss) income $(28,181) $1,770  $(27,448) $4,479  Net (loss) income per share:                 Basic $(0.77) $0.05  $(0.76) $0.12  Diluted $(0.77) $0.05  $(0.76) $0.12  Weighted-average common share outstanding:                 Basic  36,509   36,391   36,315   36,391  Diluted  36,509   36,391   36,315   36,391                                      CERENCE INC. Consolidated and Combined Balance Sheets (unaudited - in thousands, except per share data)  June 30,  September 30,    2020  2019  ASSETS         Current assets:         Cash and cash equivalents $132,844  $-  Accounts receivable, net of allowances of $1,406 and $865 at June 30, 2020 and September 30, 2019, respectively  62,566   65,787  Deferred costs  6,679   9,195  Prepaid expenses and other current assets  34,389   17,343  Total current assets  236,478   92,325  Property and equipment, net  28,366   20,113  Deferred costs  36,913   32,428  Operating lease right of use assets  19,547   -  Goodwill  1,121,616   1,119,329  Intangible assets, net  50,152   65,561  Deferred tax assets  160,140   150,629  Other assets  15,863   3,444  Total assets $1,669,075  $1,483,829  LIABILITIES AND STOCKHOLDERS' EQUITY         Current liabilities:         Accounts payable $11,637  $16,687  Deferred revenue  116,894   88,233  Short-term operating lease liabilities  5,727   -  Short-term debt  6,250   -  Accrued expenses and other current liabilities  54,672   24,194  Total current liabilities  195,180   129,114  Long-term debt  267,172   -  Deferred revenue, net of current portion  219,197   265,051  Long-term operating lease liabilities  16,305   -  Other liabilities  32,528   21,536  Total liabilities  730,382   415,701  Stockholders' Equity:         Common stock, $0.01 par value, 600,000 shares authorized as of June 30, 2020; 36,520 shares issued and outstanding as of June 30, 2020  366   -  Net parent investment  -   1,097,127  Accumulated other comprehensive loss  (8,237)  (28,999) Additional paid-in capital  974,012   -  Accumulated deficit  (27,448)  -  Total stockholders' equity  938,693   1,068,128  Total liabilities and stockholders' equity $1,669,075  $1,483,829                      CERENCE INC. Consolidated and Combined Statements of Cash Flows (unaudited - in thousands)  Nine Months Ended    June 30,    2020  2019  Cash flows from operating activities:         Net (loss) income $(27,448) $4,479  Adjustments to reconcile net (loss) income to net cash provided by  operating activities:         Depreciation and amortization  22,704   21,522  Provision for doubtful accounts  525   -  Stock-based compensation expense  32,954   21,195  Non-cash interest expense  4,025   -  Loss on debt extinguishment  19,279   -  Deferred tax benefit  (12,572)  (469) Changes in operating assets and liabilities:         Accounts receivable  3,853   (7,368) Prepaid expenses and other assets  (21,328)  (5,513) Deferred costs  (749)  1,876  Accounts payable  (170)  6,674  Accrued expenses and other liabilities  19,283   4,441  Deferred revenue  (21,779)  21,822  Net cash provided by operating activities  18,577   68,659  Cash flows from investing activities:         Capital expenditures  (16,075)  (2,868) Net cash used in investing activities  (16,075)  (2,868) Cash flows from financing activities:         Net transactions with Parent  12,964   (65,791) Distributions to Parent  (152,978)  -  Proceeds from long-term debt, net of discount  547,719   -  Payments for long-term debt issuance costs  (5,765)  -  Principal payments of long-term debt  (270,000)  -  Common stock repurchases for tax withholdings for net settlement of equity awards  (1,613)  -  Principal payments of lease liabilities arising from a finance lease  (96)  -  Net cash provided by (used in) financing activities  130,231   (65,791) Effects of exchange rate changes on cash and cash equivalents  111   -  Net change in cash and cash equivalents  132,844   -  Cash and cash equivalents at the beginning of the period  -   -  Cash and cash equivalents at the end of the period $132,844  $-                      CERENCE INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (unaudited - in thousands)  Three Months Ended  Nine Months Ended    June 30,  June 30,    2020  2019  2020  2019  GAAP revenue $74,810  $77,569  $238,764  $220,357                    GAAP gross profit $47,207  $53,894  $156,497  $148,031  Stock-based compensation  2,141   327   3,985   1,460  Amortization of intangible assets  2,063   1,979   6,408   6,175  Non-GAAP gross profit $51,411  $56,200  $166,890  $155,666  GAAP gross margin  63.1%  69.5%  65.5%  67.2% Non-GAAP gross margin  68.7%  72.5%  69.9%  70.6%                   GAAP operating (loss) income $(4,696) $3,261  $5,213  $6,238  Amortization of intangible assets  5,183   5,111   15,784   15,571  Stock-based compensation  17,425   7,828   32,954   21,195  Restructuring and other costs, net  3,301   9,691   13,725   17,147  Acquisition-related costs  -   366   -   783  Non-GAAP operating income $21,213  $26,258  $67,676  $60,935  GAAP operating margin  -6.3%  4.2%  2.2%  2.8% Non-GAAP operating margin  28.4%  33.9%  28.3%  27.7%                   GAAP net (loss) income $(28,181) $1,770  $(27,448) $4,479  Total other income (expense), net  (25,954)  (150)  (38,846)  100  (Benefit from) provision for income taxes  (2,469)  1,341   (6,185)  1,859  Depreciation  2,540   1,837   6,905   5,950  Amortization of intangible assets  5,183   5,111   15,784   15,571  Stock-based compensation  17,425   7,828   32,954   21,195  Restructuring and other costs, net  3,301   9,691   13,725   17,147  Acquisition-related costs  -   366   -   783  Adjusted EBITDA $23,753  $28,095  $74,581  $66,885  GAAP net income margin  -37.7%  2.3%  -11.5%  2.0% Adjusted EBITDA margin  31.8%  36.2%  31.2%  30.4%                                     CERENCE INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (cont.) (unaudited - in thousands, except per share data)  Three Months Ended  Nine Months Ended    June 30,  June 30,    2020  2019  2020  2019  GAAP net (loss) income $(28,181) $1,770  $(27,448) $4,479  Amortization of intangible assets  5,183   5,111   15,784   15,571  Stock-based compensation  17,425   7,828   32,954   21,195  Restructuring and other costs, net  3,301   9,691   13,725   17,147  Acquisition-related costs  -   366   -   783  Non-cash interest expense  1,379   -   4,025   -  Loss on debt extinguishment  19,279   -   19,279   -  Income tax impact of Non-GAAP adjustments  (6,252)  (5,839)  (19,701)  (15,451) Non-GAAP net income $12,134  $18,928  $38,618  $43,725                    Weighted-average common shares outstanding - basic  36,509   36,391   36,315   36,391  Weighted-average common shares outstanding - diluted  39,556   36,391   37,649   36,391  GAAP net (loss) income per share - diluted $(0.77) $0.05  $(0.76) $0.12  Non-GAAP net income per share - diluted $0.31  $0.52  $1.03  $1.20                    GAAP net cash provided by operating activities $19,312  $26,408  $18,577  $68,659  Capital expenditures  (5,930)  (396)  (16,075)  (2,868) Free Cash Flow $13,382  $26,012  $2,502  $65,791                                      CERENCE INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (cont.) (unaudited - in thousands, except per share data)  Q3FY20  Q2FY20  Q1FY20  Q4FY19  Q3FY19  Q2FY19  Q1FY19  Q4FY18   (ASC 606)  (ASC 606)  (ASC 606)  (ASC 606)  (ASC 606)  (ASC 606)  (ASC 606)  (ASC 605) GAAP revenues $74,810  $86,495  $77,459  $82,957  $77,569  $70,304  $72,484  $75,356 Less: Professional services revenue  17,360   18,742   13,671   15,006   13,891   12,122   11,227   11,403 Non-GAAP Repeatable revenues $57,450  $67,753  $63,788  $67,951  $63,678  $58,182  $61,257  $63,953                                  GAAP revenues TTM $321,721  $324,480  $308,289  $303,314  $295,713             Less: Professional services revenue TTM  64,779   61,310   54,690   52,246   48,643             Non-GAAP Repeatable revenues TTM $256,942  $263,170  $253,599  $251,068  $247,070             Repeatable software contribution 80%  81%  82%  83%  84%                                                                     CERENCE INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (cont.) (unaudited - in thousands, except per share data)  Q4 2020    Low  High  GAAP revenue $76,000  $80,000            GAAP gross profit $48,050  $52,050  Stock-based compensation  1,800   1,800  Amortization of intangible assets  1,900   1,900  Non-GAAP gross profit $51,750  $55,750  GAAP gross margin  63%  65% Non-GAAP gross margin  68%  70%           GAAP operating (loss) income $(200) $2,700  Amortization of intangible assets  5,000   5,000  Stock-based compensation  15,100   15,100  Restructuring and other costs, net  500   500  Acquisition-related costs  -   -  Non-GAAP operating income $20,400  $23,300  GAAP operating margin  0%  3% Non-GAAP operating margin  27%  29%           GAAP net loss $(3,755) $(855) Total other income (expense), net  (3,700)  (3,700) Benefit from income taxes  (195)  (195) Depreciation  2,600   2,600  Amortization of intangible assets  5,000   5,000  Stock-based compensation  15,100   15,100  Restructuring and other costs, net  500   500  Acquisition-related costs  -   -  Adjusted EBITDA $22,950  $25,850  GAAP net income margin  -5%  -1% Adjusted EBITDA margin  30%  32%                     CERENCE INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (cont.) (unaudited - in thousands, except per share data)  Q4 2020    Low  High  GAAP net loss $(3,755) $(855) Amortization of intangible assets  5,000   5,000  Stock-based compensation  15,100   15,100  Restructuring and other costs, net  500   500  Acquisition-related costs  -   -  Non-cash interest expense  1,300   1,300  Income tax impact of Non-GAAP adjustments  (4,800)  (5,500) Non-GAAP net income $13,345  $15,545            Weighted-average common shares outstanding - basic  36,879   36,879  Weighted-average common shares outstanding - diluted  43,908   43,908  GAAP net loss per share - diluted $(0.09) $(0.02) Non-GAAP net income per share - diluted $0.30  $0.35

  • GlobeNewswire

    Cerence Introduces Cerence Reader, a “Breathtaking,” Human-Like Virtual Newscaster for the Car

    Cerence Reader, Based on Groundbreaking Neural TTS Innovations, Has Unique Ability to Predict and Adjust Tone and Reading Style for ExpressionBURLINGTON, Mass., Aug. 03, 2020 (GLOBE NEWSWIRE) -- Cerence Inc. (NASDAQ: CRNC), AI for a world in motion, today announced Cerence Reader, a new product based on its neural text-to-speech (TTS) offerings – the most advanced TTS available today – that brings a natural, expressive voice into the car to read the news to drivers on the go. To hear this release read by Cerence Reader, visit https://youtu.be/M3nnyb-bFho. Cerence Reader leverages advances in AI and processing hardware to bring unprecedented levels of human-like speech to the car. Nearly indistinguishable from a human voice, Cerence Reader features long-form reading capabilities, including natural pausing and breathing, and automatic prediction of the appropriate reading style and emotional tone based on content, context, and category of news, including current events, sports, or documentary-style pieces. Cerence Reader can also be adopted for additional scenarios beyond news reading, such as audiobooks, language learning and more.“Cerence Reader is quite breathtaking and will empower the next generation of our cars to interact with our customers on a whole new level,” said Jan Dusik, Head of Development Speech Output, Audi.“Cerence Reader is another example of Cerence’s advanced AI technologies and our expertise in delivering an outstanding voice assistant in the car,” said Stefan Ortmanns, EVP and General Manager, Core Products for Cerence. “Compared to other news-reading offerings on the market, Cerence Reader sets a new bar for expressivity, making it nearly indistinguishable from a human newscaster.”With Cerence Reader, Cerence takes the same flexible approach it has with other recent products like Cerence Pay – offering standard integrations with news content providers while remaining open to integrate with additional content partners if preferred by the OEM. Initially available in US English and German, Cerence Reader will source news content from Reuters and others, with additional content partners to come.For more about Cerence Reader, visit https://youtu.be/AEQ9ITxdeLU. To learn more about Cerence, visit www.cerence.com, and follow the company on LinkedIn and Twitter.About Cerence Inc. Cerence (NASDAQ: CRNC) is the global industry leader in creating unique, moving experiences for the automotive world. As an innovation partner to the world’s leading automakers, it is helping transform how a car feels, responds and learns. Its track record is built on more than 20 years of knowledge and almost 325 million cars on the road today. Whether it’s connected cars, autonomous driving or e-vehicles, Cerence is mapping the road ahead. For more information, visit www.cerence.com.Contact Information Kate Hickman Cerence Inc. Tel: 857-239-0131 Email: kate.hickman@cerence.com

  • GlobeNewswire

    Cerence Introduces Cerence Pay for Secure, Voice-Powered Payments in the Car as Contactless Payment Demand Soars

    * Cerence working with Audi on implementation in future Audi cars * Arrive and Parkopedia sign on as first in growing ecosystem of parking partners * Visa signs on as a payment partner for Central European regionBURLINGTON, Mass., July 30, 2020 (GLOBE NEWSWIRE) -- Cerence Inc. (NASDAQ: CRNC), AI for a world in motion, today launched Cerence Pay, a new product that delivers a secure, contactless payment experience in the car through voice-powered AI. Cerence Pay is designed to anticipate drivers’ needs and provide a seamless payment transaction from intent to authentication via voice and facial biometrics and through to purchase. The company is currently working with Audi on a joint project to build Cerence Pay into future Audi head units.Just as the demand for in-car voice assistants soars, so does the need for fast, contactless, voice-powered payments for common needs on the road, including parking, fuel, electric vehicle charging, restaurant reservation booking, fast food, and more. Contactless payment was already on the rise, but the COVID-19 pandemic has exacerbated the desire for touch-free payment options. In fact, according to a recent announcement by Visa, more than 70% of all Visa transactions in Europe are now made by contactless card or mobile devices.“As contactless pay becomes an everyday occurrence for people at grocery stores, coffee shops, and other retailers, we want to deliver that same great experience on the road, where safety and convenience are of the utmost importance,” said Nils Lenke, VP and General Manager of Cerence Applications business. “Beyond the benefits to drivers and passengers, Cerence Pay enables OEMs to offer a superior, intuitive experience with safe and secure transactions via voice and facial biometrics and seamless integration with the car’s head unit and companion apps.”“We’ve set out to build a natural, intuitive in-car experience centered around an intelligent companion that meets drivers’ every need while on the go,” said Andreas Reich, Executive Director, Development of Connected Car & Infotainment, Audi. “Cerence Pay is a relevant module, making the travel experience that much simpler and safer through secure, voice-powered payments – a must in today’s world.”Building a World-Class Cerence Pay Partner EcosystemTo support this need for payments in the car, Cerence is building an ecosystem of partners that it will continue to expand over time. In addition, Cerence Pay is easily integrated with an automaker’s preferred payment partners and companion apps. This powers a flexible platform that enables OEMs to create their own unique experience and meet the specific needs of their drivers: more convenient, secure payment options driven by personalized and relevant content in their moment of need. It also offers OEMs and content providers new transaction-based revenue streams to stay competitive in today’s digital economy.The initial Cerence Pay partners include: * Arrive offers a single, seamless mobility experience that leverages AI to predict and recommend the best parking solution for your destination. * Parkopedia is the world’s leading parking service provider used by millions of drivers and organizations to find and pay for parking. Parkopedia brings new and improved parking experiences to drivers and connected cars in 15,000 cities across 89 countries covering over 70 million parking spaces. * Visa is the world’s leader in digital payments. Visa’s advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The Central European markets at Visa include Germany, Austria, Switzerland and the Netherlands“Visa aims to provide seamless commerce experiences to consumers around the world. In-vehicle payments are just one part of Internet of Things where we see tremendous potential. This is why we are excited to be working together with Cerence in Central Europe,” says Jürgen Schübel, Head of MS&A at Visa in Central Europe. “For consumers, paying from inside of their car is as simple as using their debit or credit card in store – and it is just as secure, thanks to the Visa tokenization technology. This opens up a whole new world of convenient transportation and paves the way for the next generation of in-car payments.”“Arrive pioneered voice-enabled parking in 2017, and our investment in AI has transformed the consumer experience. In-car assistants powered by Arrive’s recommendation engine makes parking intuitive and easy, allowing consumers to focus on the road,” said Ed Lewis, Senior Vice President of Arrive. “Cerence is a market leader in voice AI and a trusted partner of the world’s leading automakers. We anticipate Cerence Pay will benefit hundreds of millions of consumers and parking will be among the most used services.”Commenting on the announcement, Parkopedia’s COO, Hans Puvogel said, “Parkopedia is the leading provider of multi-vendor parking payment solutions to the automotive and mapping companies around the world. Parkopedia provides its parking payment platform to Cerence as an extension of our long-standing relationship building on our existing integration with Cerence’s cloud service. We are delighted to assist in delivering a seamless voice assistant payment experience to drivers around the world.”Compelling User Experience Creates Safer, More Enjoyable Journey for EveryoneCerence Pay is more than on-the-road payments; it delivers context-aware commerce to drivers, enabling transactions that are relevant and easy to interact with. Through contemporary AI-based technology, personalized payment experiences eliminate the need to dig for credit cards or to enter difficult information on the head unit, so users can get what they want and keep their focus on the road. Further, Cerence Pay leverages voice and facial biometrics for secure authentication and payment. For example:  * Fuel Up: The driver needs to fuel up on the way to work and asks the system for the nearest gas station. Upon arrival, the driver is presented with the ability to choose a pump and pay for fuel directly from the car. The driver could also add a coffee from the convenience store or a quick car wash. * Dining and Drive Through: After work, the driver is making plans for dinner. The system can offer relevant choices, then book a reservation for dining if needed. The driver could also order and pay for food to pick up and take home. * Parking: When navigating to a busy destination downtown for the dinner, the voice assistant proactively tells the driver that there is no street parking available, then locates a garage with available space in walking distance from their destination. Once confirmed, the system provides a stall number and starts the payment process. * Tolls: On the way home from dinner, the driver takes a toll route and uses the system to authorize payment.For more about Cerence Pay, visit www.cerence.com/solutions/cerence-pay. To learn more about Cerence, visit www.cerence.com, and follow the company on LinkedIn and Twitter.About Cerence Inc. Cerence (NASDAQ: CRNC) is the global industry leader in creating unique, moving experiences for the automotive world. As an innovation partner to the world’s leading automakers, it is helping transform how a car feels, responds and learns. Its track record is built on more than 20 years of knowledge and more than 325 million cars on the road today. Whether it’s connected cars, autonomous driving or e-vehicles, Cerence is mapping the road ahead. For more information, visit www.cerence.com.Trademark reference: Cerence and the Cerence logo are registered trademarks or trademarks of Cerence Inc. or its affiliates in the United States and/or other countries. All other trademarks referenced herein are the property of their respective owners.Contact Information Kate Hickman Cerence Inc. Tel: 857-239-0131 Email: kate.hickman@cerence.com