Cerence Inc. · NASDAQ:CRNC
Cerence — Q3 FY2021 Earnings Presentation
27 slides from Cerence's earnings presentation, Aug 9, 2021
Slide 1: Q3FY21 Earnings Conference Call
Q3FY21 Earnings Conference Call Sanjay Dhawan, CEO Mark Gallenberger, CFO Rich Yerganian, VP of IR August 9, 2021 Exhibit 99.2
Slide 2: Forward Looking Statements
Forward Looking Statements Statements in this presentation regarding Cerence’s future performance, results and financial condition, expected growth, business and market trends, and innovation and our management’s future expectations, beliefs, goals, plans or prospects constitute forward-looking stat
Slide 3: Cerence Delivers Strong Q3FY21
Cerence Delivers Strong Q3FY21 Exceeded company quarterly guidance on all profitability metrics 3 NOTE: Refer to the Appendix for more information on GAAP to non-GAAP reconciliations $0.15 GAAP EPS -diluted $0.62 Non-GAAP EPS -diluted 75.4% GAAP Gross Margin 79.1% Non-GAAP Gross Margin $5.8M GAAP Ne
Slide 4: Notable Events Support Business Momentum
Notable Events Support Business Momentum Record Number of SOPs (Start of Production) in the quarter supported by a record number of OEMs Strategic Events Support Business Momentum Sirius XM to adopt Cerence conversational AI Cerence and Harman collaboration for Harman’s Ignite platform Cerence and V
Slide 5: KPIs Indicate Sustainable Growth Potential
KPIs Indicate Sustainable Growth Potential 81% Repeatable software revenue contribution (TTM) 12% Change in number of Cerence cloud-connected cars shipped (TTM over prior year TTM change in auto production for the same period according to IHS data is 11%) 13% Growth in billings per car (TTM over pri
Slide 6: Adoption KPIs on a Strong Positive Trend
Adoption KPIs on a Strong Positive Trend 6 Covid-19 Impact Transactions are defined as the number of initiated user interactions with the Company's cloud computing platforms.
Slide 7: Multifaceted Strategy Has Delivered Sustainable Growth
Multifaceted Strategy Has Delivered Sustainable Growth 7 Cerence Pay Cerence Mobility Platforms
Slide 8: Long-Term Goal | Key Provider of AI for Mobility
Long-Term Goal | Key Provider of AI for Mobility 8 Road Cabin Driver
Slide 9: Financial Summary
Financial Summary 9
Slide 10: Q3 Exceeded Street Guidance on Key Profitability Metrics
10 Footnote: Non-GAAP excludes acquisition-related costs, amortization of acquired intangible assets, restructuring expense, and stock-based compensation. Refer to the Appendix for more information on GAAP to non-GAAP reconciliations Q3 Exceeded Street Guidance on Key Profitability Metrics
Slide 11: Strong License and New Connected Revenue Drive Growth
Strong License and New Connected Revenue Drive Growth 11
Slide 12: Q4 Guidance Indicates Good Growth from Last Year
Q4 Guidance Indicates Good Growth from Last Year 12 Footnote: Non-GAAP excludes acquisition-related costs, amortization of acquired intangible assets, restructuring expense, and stock-based compensation. Refer to the Appendix for more information on GAAP to non-GAAP reconciliations
Slide 13: Update to FY21 Guidance Based on Q4 Guidance
Update to FY21 Guidance Based on Q4 Guidance 13 Footnote: Non-GAAP excludes acquisition-related costs, amortization of acquired intangible assets, restructuring expense, and stock-based compensation. Refer to the Appendix for more information on GAAP to non-GAAP reconciliations
Slide 14: Key Assumption Changes from Original 2024 Target Model
Key Assumption Changes from Original 2024 Target Model GROWTH Increased penetration rates, offset by lower post-COVID IHS volume production forecast New revenue streams included in Target model Connected renewals New applications and services (Entertainment, Extend, Connect, Browse, etc.) New mobili
Slide 15: Updated FY24 Target Model: Revenue Increase by $100M
Updated FY24 Target Model: Revenue Increase by $100M 15 * Please refer to the note on page 14
Slide 16: Updated FY24 Target Model: Adjusted EBITDA Increase by $50M
Updated FY24 Target Model: Adjusted EBITDA Increase by $50M Footnote: Non-GAAP excludes acquisition-related costs, amortization of acquired intangible assets, restructuring expense, and stock-based compensation. 16 * Please refer to the note on page 14
Slide 17: Thank You!
Thank You! 17
Slide 18: Appendix
Appendix 18
Slide 19: Non-GAAP Financial Measures – Definitions
19 Non-GAAP Financial Measures – Definitions 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 pr
Slide 20: Non-GAAP Financial Measures – Definitions
20 Non-GAAP Financial Measures – Definitions Restructuring and other costs, net. Restructuring and other charges, 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
Slide 21: Non-GAAP Financial Measures – Definitions
Non-GAAP Financial Measures – Definitions 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 a
Slide 22: 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 23: Q3FY21 Reconciliations of GAAP to non-GAAP Results
Q3FY21 Reconciliations of GAAP to non-GAAP Results 23 (unaudited - in thousands, except per share data) (unaudited - in thousands, except per share data) Three Months Ended Nine Months Ended June 30, June 30, 2021 2020 2021 2020 GAAP revenue $96,801 $75,197 $289,106 $239,725 GAAP gross profit $72,96
Slide 24: Calculation of Repeatable Revenue Software Contribution
Calculation of Repeatable Revenue Software Contribution 24 (unaudited - in thousands) Q3FY21 Q2FY21 Q1FY21 Q4FY20 GAAP revenues $96,801 $98,662 $93,643 $91,242 Less: Professional services revenue 16,538 16,555 21,299 19,457 Non-GAAP Repeatable revenues $80,263 $82,107 $72,344 $71,785 GAAP revenues T
Slide 25: Q4FY21 and FY21 Reconciliations of GAAP to non-GAAP Guidance
Q4FY21 and FY21 Reconciliations of GAAP to non-GAAP Guidance 25 (unaudited - in thousands) Q4 2021 FY2021 Low High Low High GAAP revenue $97,000 $101,000 $386,100 $390,100 GAAP gross profit $71,400 $75,400 $283,500 $287,500 Stock-based compensation 1,500 1,500 6,500 6,500 Amortization of intangible
Slide 26: Q4FY21 and FY21 Reconciliations of GAAP to non-GAAP Guidance
Q4FY21 and FY21 Reconciliations of GAAP to non-GAAP Guidance 26 (unaudited - in thousands, except per share data) Q4 2021 FY2021 Low High Low High GAAP net income $3,300 $6,600 $41,400 $44,800 Stock-based compensation 13,200 13,200 55,300 55,300 Amortization of intangibles 5,100 5,100 20,200 20,200
Slide 27: FY19, FY20 and FY21 Reconciliations of GAAP to non-GAAP
FY19, FY20 and FY21 Reconciliations of GAAP to non-GAAP 27 (unaudited - in thousands) FY2019 FY2020 Actual Mid-Point GAAP revenue $303,315 $330,967 $388,100 GAAP gross profit $203,972 $223,116 $285,500 Stock-based compensation 1,896 5,573 6,500 Amortization of intangible assets 8,498 8,337 7,500 Non