Slide 1: Cerence Q1 FY25 Earnings Presentation
Cerence Q1 FY25 Earnings Presentation Brian Krzanich, Chief Executive Officer Tony Rodriquez, Chief Financial Officer February 6, 2025 © 2025 Cerence Inc.
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation regarding: Cerence’s future performance, results and financial condition; expected growth and profitability; outlook; transformation plans and cost efficiency initiatives, including the estimated net annualized cost savings; strategy; opport
Slide 3: Q1 FY25 Financial Details
@)cerence ai Q1 FY25 Financial Details
Slide 4: Cerence Q1FY25 Results
Cerence Q1FY25 Results Q1FY24 Q1FY25 Q1FY25 Guidance Total Revenue $138.3M(a) $50.9M $47M - $50M Gross Margin 81.0% 65.0% 58% - 60% Net Income (Loss) $23.9M ($24.3M) ($26M) – ($23M) EPS – diluted $0.53 ($0.57) ($0.62) – ($0.55) Adjusted EBITDA(b,c) $70.4M $1.4M ($9M) – ($6M) Cash Provided by Operati
Slide 5: Detailed Revenue Breakdown
Detailed Revenue Breakdown In millions Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Total License: $20.8 $35.5 $43.1 $25.3 $22.7 Variable(a) $20.8 $25.1 $23.1 $25.3 $22.7 Total Fixed(b) $ ̶ $10.4 $20.0 $ ̶ $ ̶ Connected Services: $96.8 $13.6 $10.9 $12.1 $13.7 Connected Services $10.2 $13.6(c) $10.9 $12.1 $13.
Slide 6: Q1FY25 KPI Performance
• Adjusted Total Billings TTM(b) of $227M, Increased 3%; Total Billings for Q1 of $69M Increased 7% Q1FY25 KPI(c) • Percent of worldwide auto production with Cerence Technology declined slightly to 51% Performance (TTM)(a) • Approximately 11.0 million units shipped with Cerence technology in Q1 • Do
Slide 7: Operational Metrics and Variable License Revenue
Operational Metrics and Variable License Revenue In millions FY24 FY25 Operational Metrics: Q1 Q2 Q3 Q4 Q1 Pro Forma $35.3 $39.6 $39.6 $41.9 $36.7 Royalties(a) Consumption of $14.5 $14.5 $16.5 $16.6 $14.0 Fixed Contracts(b) Variable License $20.8 $25.1 $23.1 $25.3 $22.7 Revenue IHS Production 24.2 2
Slide 8: Fiscal Q2 and FY25 Guidance
Fiscal Q2 and FY25 Guidance Q2FY25 FY25 • $20 million of fixed contracts Guidance Guidance expected during the second quarter. In millions except per share amounts Low High Low High • Q2 and Full Year 2025 Revenue $74 $77 $236 $247 GAAP operating results guidance includes approximately $1 million Gr
Slide 9: Appendix
@)cerence ai Appendix
Slide 10: License Business Revenue Recognition
License Business Revenue Recognition GAAP Revenue Type of Contract Description Cash Receipt Recognition Quarter car is produced. Based Quarter following GAAP Variable License applied at production on volume revenue recognition Bulk inventory purchase Full value of contract at signing. Standard payme
Slide 11: Connected and Professional Services Revenue Recognition
Connected and Professional Services Revenue Recognition Connected Services Typical Period GAAP Revenue Recognition Cash Receipt Billed/collected full amount at start of Amortized evenly over subscription Subscription Term 1 – 5 years subscription period (value added to period deferred revenue) Recog
Slide 12: KPI Measures – Definitions
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. We further believe that providing KPIs allows investors to better understand information used by management to eval
Slide 13: 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 14: Non-GAAP Financial Measures – Definitions
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 amortization
Slide 15: Non-GAAP Financial Measures – Definitions
Non-GAAP Financial Measures – Definitions Non-cash expenses. We provide non-GAAP information relative to the following non-cash expenses: (i) stock-based compensation; and (ii) non-cash interest. These items are further discussed as follows: • (i) Stock-based compensation. Because of varying valuati
Slide 16: Q1 FY25 Reconciliations of GAAP to Non-GAAP Results
Q1 FY25 Reconciliations of GAAP to Non-GAAP Results (unaudited - in thousands) (unaudited - in thousands) Three Months Ended Three Months Ended December 31, December 31, 2024 2023 2024 2023 GAAP net (loss) income $ (24,288) $ 23,857 GAAP revenue $ 50,896 $ 138,335 Stock-based compensation* 4,808 8,3
Slide 17: Q2 FY25 and Full Year FY25 Reconciliations of GAAP to non-GAAP Guidance
Q2 FY25 and Full Year FY25 Reconciliations of GAAP to non-GAAP Guidance (unaudited - in thousands) Q2 2025 FY2025 Low High Low High GAAP revenue $ 74,000 $ 77,000 $ 236,000 $ 247,000 GAAP gross profit $ 54,700 $ 58,700 $ 158,400 $ 169,400 Stock-based compensation 700 700 2,500 2,500 Amortization of
Slide 18: Q2 FY25 and FY25 Reconciliations of GAAP to Non-GAAP Guidance
Q2 FY25 and FY25 Reconciliations of GAAP to Non-GAAP Guidance (unaudited - in thousands) Q2 2025 FY2025 Low High Low High GAAP net income (loss) $ 1,200 $ 5,200 $ (39,600 ) $ (28,600 ) Stock-based compensation 7,000 7,000 22,500 22,500 Amortization of intangibles 500 500 1,600 1,600 Restructuring an