Slide 1: Cerence Q2 FY25 Earnings Presentation
— @ cerence ai Cerence Q2 FY25 Earnings Presentation May 7, 2025 Brian Krzanich, Chief Executive Officer Tony Rodriquez, Chief Financial Officer
Slide 2: Forward-Looking Statements
; Ocerenceai Forward-Looking Statements Statements in this presentation regarding: Cerence’s future performance, results and financial condition; expected growth and profitability; outlook and momentum; transformation plans and cost efficiency initiatives; strategy; opportunities; business, industry
Slide 3: Q2 FY25 Financial Details
wi @ cerenceai’ Q2 FY25 Financial Details
Slide 4: Cerence Q2 FY25 Results
4 Oceenceai Cerence Q2FY25 Results Total Revenue $67.8M $78.0M $74M - $77M Gross Margin 69.2% T71% 74% - 76% Net Income (Loss) ($278.0M) $21.7M $1M —$5M EPS — diluted ($6.66) $0.46 | $0.03-$0.12 Adjusted EBITDA») ($0.3M) $29.5M $18M —$22M Cash Provided by Operating Activities Cash Balance & Marketab
Slide 5: Detailed Revenue Breakdown
Detailed Revenue Breakdown Variable®) Total Fixed®) a) Based on volume shipments of licenses net of the consumption of fixed contracts. ») Fixed license revenue consists of prepaid deals. ¢) Connected services in Q2F Y24 and Q1FY25 includes a $2.6 milion and $2.0 milion true up adjustment, respectiv
Slide 6: Operational Metrics and Variable License Revenue
4 Oceenceai Operational Metrics and Variable License Revenue Operational Metrics: Q2 Q3 a4 Qi crepomma $306 $396 $419 $36.7 Royalties!) 7 7 ° . Consumption of Fixed Contracts) $14.5 $16.5 $16.6 $14.0 Variable License Revenue $25.1 $23.1 $253 $227 IHS Production (units) 21.4 221 21.6 23.9 a) Pro form
Slide 7: Q2 FY25 KPI Performance
wil Ocerenceai Q2 FY25 KPI‘ Performance Adjusted Total Billings excludes professional services and prepay contracts and is adjusted for prepay consumption. Trailing Twelve Months (“TTM") over prior year TTM. Based on IHS Markit data, global auto production decreased 1%, calculated TTM over prior yea
Slide 8: Fiscal Q3 and FY25 Guidance
cerence ai’ Fiscal Q3 and FY25 Guidance) In millions except per share amounts Gross Margin Net Income (Loss) EPS — diluted Adjusted EBITDA @») Cash Provided by Operating Activities Free Cash Flow expense, and stock-based compensation. ses 2 Adjusted EBITDA excludes goodwill impairment, amortization
Slide 9: Appendix
- @cerenceai’ Appendix
Slide 10: License Business Revenue Recognition
License Business Revenue Recognition Variable License applied at production Quarter car is produced. Based on volume Quarter following GAAP revenue recognition Bulk inventory purchase Fixed (Prepaid) ($ based) Full value of contract at signing. Volume independent Standard payment terms for full valu
Slide 11: Connected and Professional Services Revenue Recognition
Connected and Professional Services Revenue Recognition Billed/collected full amount at start of Subscription Term 1-5years Amortized evenly over subscription period | subscription period (value added to deferred revenue) Recognized at same time of billing based Billed every quarter based on actual
Slide 12: KPI Measures — Definitions
wil Ocerenceai KPI Measures — Definitions We believe that providing key performance indicators (“KPIs”) allows investors to gain insight into the way management views the performance of the business as well as a potentially new KPI, Average PPU. We further believe that providing KPIs allows investor
Slide 13: Non-GAAP Financial Measures — Definitions
wil Ocerenceai 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 bel
Slide 14: Non-GAAP Financial Measures — Definitions
,. Ocerenceai Non-GAAP Financial Measures — Definitions 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
Slide 15: Non-GAAP Financial Measures — Definitions
-_ Ocerenceai Non-GAAP Financial Measures — Definitions 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 mea
Slide 16: Q2 FY25 Reconciliations of GAAP to Non-GAAP Results
Ocerenceai Q2 FY25 Reconciliations of GAAP to Non-GAAP Results {unaudited - in thousands) Three Months Ended Six Months Ended March 31 March 31 2025 2024 2025 2024 GAAP revenue 78,010 $ 67,825 128,906 $ 206,160 GAAP gross profit 60,181 $ 46,943 93,253 $ 158,943 GAAP gross margin T7A% 69.2% 72.3% 71%
Slide 17: Q3 FY25 and Full Year FY25 Reconciliations of GAAP to Non-GAAP Guidance
Ocerenceai Q3 FY25 and Full Year FY25 Reconciliations of GAAP to Non-GAAP Guidance (unaudited - in thousands) GAAP revenue GAAP gross profit GAAP gross margin GAAP total operating expenses Stock-based compensation ‘Amortization of intangible assets Restructuring and other costs, net Non-GAAP total o