Slide 1: Q4FY20 Earnings Conference Call
Q4FY20 Earnings Conference Call Sanjay Dhawan, CEO Mark Gallenberger, CFO November 16, 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: Cerence Delivers Best Ever Quarterly Results
Cerence Delivers Best Ever Quarterly Results Exceeded all key financial metrics $91M 41.9% $0.61 75.7% $38M $26M Revenue Non-GAAP Gross Margin Non-GAAP Operating Margin Non-GAAP Operating Income Non-GAAP EPS CFFO(1) 3 44.4% AEBITDA Margin $40M AEBITDA (1) CFFO equals GAAP net cash provided by operat
Slide 4: Cerence Established as a Key Player in Conversational AI for Transportation and Mobility
Cerence Established as a Key Player in Conversational AI for Transportation and Mobility # Seamless separation from Nuance Consumer Electronics Show helped position Cerence among the leaders of auto tech and innovation Hosted our first analyst day and opened the Nasdaq market Hosted a technology sho
Slide 5: Cerence Innovation Continues to Lead the Industry
Cerence Innovation Continues to Lead the Industry # Key priorities: Innovation, speed of execution and costs Introduced a steady stream of new products and innovations leveraging the sensors, cameras and microphones in the car New SaaS applications Hosted a technology showcase for investors to gain
Slide 6: KPIs Indicate Long Term Growth Potential
KPIs Indicate Long Term Growth Potential # Q4FY20 Q3FY20 Q2FY20 Q1FY20 Q4FY19 % of worldwide Auto production with Cerence Technology (TTM) 53% 54% 56% 54% 54% Average Contract Duration (TTM) 6.1 6.2 5.7 4.9 5.1 79% Repeatable software revenue contribution (TTM) -16% Change in number of Cerence cloud
Slide 7: Adoption KPIs Show Increasing Usage
Adoption KPIs Show Increasing Usage #
Slide 8: Fiscal Year 2021 Momentum Expected to Continue
Fiscal Year 2021 Momentum Expected to Continue # Accelerate Penetration Expand in Horizontal Markets Grow in Geographic Regions Increase Revenue Per Car Drive User Adoption
Slide 9: Financial Summary
Financial Summary Afor a World in Mation omer cerence @
Slide 10: Q4 Exceeded Street Guidance on All Key Financial Metrics
Q4 Exceeded Street Guidance on All Key Financial Metrics Q4 Actual Results Q4 Guidance Revenue $90.9M $76M - $80M Non-GAAP GM (a) 75.7% 68% - 70% Non-GAAP OM (a) 41.9% 27% - 29% Adjusted EBITDA(a) $40.3M $23M - $26M Adjusted EBITDA (a) 44.4% 30% - 32% Non-GAAP EPS(a) $0.61 $0.30 - $0.35 CFFO $26.2M
Slide 11: Strong Connected and Pro Services Growth Offset License Softness
Strong Connected and Pro Services Growth Offset License Softness Q4FY20 Q4FY19 YoY FY20 FY19 YoY License: $46.4M $45.1M 3% $164.3M $172.4M (5%) Variable $29.9M $33.8M (12%) $110.1M $128.9M (15%) Prepay $16.5M $11.3M 46% $54.1M $43.5M 24% Connected Services: $25.0M $22.9M 9% $96.1M $78.7M 22% Legacy
Slide 12: Fiscal Year Results Beat Pre-COVID Estimates
Fiscal Year Results Beat Pre-COVID Estimates Fiscal Year 2020 Actual Guidance (Pre-COVID) GAAP Revenue $329.6M $321 - $336M Non-GAAP GM (a) 71.5% 70% -71% Non-GAAP Operating Margin(a) 32.1% 24% - 25% Adjusted EBITDA(a) $114.9M $91 - $98M CFFO $44.8M $43 - $51M FCF(b) $25.8M NA Non-GAAP EPS(a) $1.68
Slide 13: ~$1.8 Billion Backlog Creates High Revenue Visibility
~$1.8 Billion Backlog Creates High Revenue Visibility ($ in millions) Backlog as of September 30, 2019 (approximately $1.36 billion+) 1 (1) These figures are estimates and based on existing customer contracts and management estimates about future vehicle shipments. The revenue that we actually recog
Slide 14: Q1 FY21 Guidance Shows Strong Year Over Year Growth
Q1 FY21 Guidance Shows Strong Year Over Year Growth Footnote: Non-GAAP excludes acquisition-related costs, amortization of acquired intangible assets, restructuring expense, and stock-based compensation. Q1 FY21 Q1FY20 (midpoint) Low High Actual YoY Growth Revenue $85M $90M $77.5M 13% Non-GAAP GM (a
Slide 15: FY21 Guidance
FY21 Guidance Footnote: Non-GAAP excludes acquisition-related costs, amortization of acquired intangible assets, restructuring expense, and stock-based compensation. FY21 FY20 (midpoint) Low High Actual YoY Revenue $360M $380M $329.6M 12% Non-GAAP GM (a) 72% 74% 71.5% 2% Non-GAAP Operating Margin(a)
Slide 16: Thank You!
Thank You! Afor a World in Mation omer corence @
Slide 17: Appendix
Appendix Afor a World in Mation omer corence @
Slide 18: Non-GAAP Financial Measures – Definitions
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 provi
Slide 19: Non-GAAP Financial Measures – Definitions
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 emp
Slide 20: 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 21: 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 22: Q4FY20 and FY20 Reconciliations of GAAP to non-GAAP Results
Q4FY20 and FY20vReconciliations of GAAP to non-GAAP Results (unaudited - in thousands, except per share data) (unaudited - in thousands, except per share data) CERENCE INC. Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (unaudited - in thousands) Three Months Ended Twelve
Slide 23: Reconciliations of GAAP Financial Measures to non-GAAP Financial Measures
Reconciliations of GAAP Financial Measures to non-GAAP Financial Measures (unaudited - in thousands) Q4FY20 Q3FY20 Q2FY20 Q1FY20 Q4FY19 Q3FY19 Q2FY19 Q1FY19 Q4FY18 GAAP revenues $90,882 $74,810 $86,495 $77,459 $82,958 $77,569 $70,304 $72,484 $75,356 Less: Professional services revenue 19,457 17,360
Slide 24: Q1FY21 and FY21 Reconciliations of GAAP to non-GAAP Guidance
Q1FY21 and FY21 Reconciliations of GAAP to non-GAAP Guidance (unaudited - in thousands) (unaudited - in thousands, except per share data) Q1 2021 FY2021 Low High Low High GAAP revenue $85,000 $90,000 $360,000 $380,000 GAAP gross profit $57,500 $62,100 $248,100 $270,100 Stock-based compensation 1,000