Slide 1: Q3FY20 Earnings Conference Call
Q3FY20 Earnings Conference Call Sanjay Dhawan, CEO Mark Gallenberger, CFO August 4, 2020 Exhibit 99.2
Slide 2: Forward Looking Statements and Non-GAAP Financial Measures
Forward Looking Statements and Non-GAAP Financial Measures 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 s
Slide 3: Innovation Engine at Full Throttle
Innovation Engine at Full Throttle “Cerence Reader is quite breathtaking and will empower the next generation of our cars to interact with our customers on a whole new level.” - Jan Dusik, Head of Development Speech Output at Audi "I think voice AI is the future in technology and automotive.“ - Nils
Slide 4: Groundbreaking Innovations from Cerence at Heart of Mercedes MBUX
Groundbreaking Innovations from Cerence at Heart of Mercede’s MBUX The Most Advanced and Intelligent Multimedia System Cerence Drive Biometry & First-Time UX (Adoption) WuW & Silent Dialog Continuation Cerence Text I/O Solutions Cerence Studio Emergency Vehicle Detection (EVD) In-Car Communication M
Slide 5: Introducing Cerence Pay
Introducing Cerence Pay Gas station Coffee/Food Restaurant EV Charging Fuel Toll Car Wash Drive through Concerts Parking Embedded/Hybrid Embedded & cloud architecture for safe credential storage and linking Experience UX expertise and insights into which use cases work, and how, where Speech/NLU/dia
Slide 6: Cerence Delivers Strong Q3 Results Despite Impact of Covid-19
Cerence Delivers Strong Q3 Results Despite Impact of Covid-19 Revenue Non-GAAP Operating Margin Non-GAAP EPS $74.8M 28.4% $23.8M $0.31 AEBITDA Team focus leads to solid Q3 results Second highest bookings quarter in company history Fast pace of new product innovations
Slide 7: KPIs Indicate Long Term Growth Potential
KPIs Indicate Long Term Growth Potential -3% Change in Number of Cerence Cloud Connected Cars Shipped (TTM over prior year TTM) (change in connected cars for the same period according to IHS data is -6%) 80+% Repeatable Software Revenue Contribution (TTM) 7% Growth in Billing / Car YTD vs. Prior Yea
Slide 8: Adjacent Markets Strategic Plans Align With Emerging Trends
Adjacent Markets Strategic Plans Align With Emerging Trends Core Expansion Aftermarket Expansion Extending Consumer Digital Life New Applications $ Two Wheelers Cruise Fleets Trains Public Transit Elevators ARK New Languages My Car My Voice Just Talk Look Reader New Domains Text I/O New Applications
Slide 9: Financial Summary
Financial Summary Afor a World in Mation omer cerence @
Slide 10: Business Update for COVID-19 Impact
Business Update for COVID-19 Impact All offices have technically reopened except 4 locations Global occupancy at ~25% and we do not expect that to change until government guidance on work from home changes (i.e., a vaccine or pandemic slows) China is near full capacity (~15% of global workforce) Low
Slide 11: Strong Connected and Professional Services Growth Offset License Softness
Strong Connected and Professional Services Growth Offset License Softness $ in millions Q3FY20 Q3FY19 YoY License: $32.5M $44.0M -26% Variable $18.3M $32.8M -44% Prepay $14.2M $11.1M +28% Connected Services: $25.0M $19.7M +27% Legacy $15.6M $14.8M +5% New $9.5M $4.9M +94% Professional Services $17.4
Slide 12: Q3 Delivers Solid Results Despite Challenging Environment
Q3 Delivers Solid Results Despite Challenging Environment Footnote: Non-GAAP excludes acquisition-related costs, amortization of acquired intangible assets, restructuring expense, and stock-based compensation. Q3FY20 GAAP Revenue $74.8M Non-GAAP GM %(a) 68.7% Non-GAAP Operating Margin%(a) 28.4% Adju
Slide 13: Solid Balance Sheet Metrics
Solid Balance Sheet Metrics $ in millions As of June 30, 2020 Cash & Equivalents $132.8M Intra Quarter Cash Requirements $25-30M Debt (Convert Note + Term Loan A) $300M Secured Leverage Ratio* 0.7x * Secured Leverage ratio calculation defined as (Total Secured Debt minus $50M of unrestricted cash)/(
Slide 14: Q4 FY20 Guidance
Q4 FY20 Guidance Footnote: Non-GAAP excludes acquisition-related costs, amortization of acquired intangible assets, restructuring expense, and stock-based compensation. Q4 FY20 $ in millions except per share data Low High GAAP Revenue $76M $80M Non-GAAP GM %(a) 68% 70% Non-GAAP Operating Margin%(a)
Slide 15: Thank You!
Thank You! Afor a World in Mation omer corence @
Slide 16: Appendix
Appendix Afor a World in Mation omer corence @
Slide 17: Non-GAAP Financial Measures – Definitions
Non-GAAP Financial Measures – Definitions Non-GAAP revenue We consider the use of non-GAAP revenue helpful in understanding the performance of our business, as it excludes the purchase accounting impact on acquired deferred revenue and other acquisition-related adjustments to revenue. We provide sup
Slide 18: KPI Measures – Definitions
KPI Measures – Definitions 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 informatio
Slide 19: Q3FY20 Reconciliations of GAAP to non-GAAP Results
Q3FY20 Reconciliations of GAAP to non-GAAP Results (unaudited - in thousands, except per share data) (unaudited - in thousands, except per share data) 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 $
Slide 20: Q4FY20 Reconciliations of GAAP to non-GAAP Guidance
Q4FY20 Reconciliations of GAAP to non-GAAP Guidance (unaudited - in thousands) (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