Slide 1: Q2FY20 Earnings Conference Call
Q2FY20 Earnings Conference Call Sanjay Dhawan, CEO Mark Gallenberger, CFO May 7, 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 and our management’s future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation
Slide 3: Cerence Delivers Strong Q2 Results and Record Bookings
Cerence Delivers Strong Q2 Results and Record Bookings 23% 39% 31% Year-Over-Year Growth Revenue Non-GAAP Operating Margin Non-GAAP EPS Highest revenue in company history Highest first half bookings in company history Exceeded most key financial goals for the quarter
Slide 4: Long Term Outlook Remains Bright Despite Near Term Covid-19 Clouds
Long Term Outlook Remains Bright Despite Near Term Covid-19 Clouds Top priority is the health and safety of our employees Operating at 90%+ operational efficiency Adjustments to business to reflect near term headwinds due to Covid-19 Maintaining full investment in key projects such as One Cloud, Cer
Slide 5: Q2FY20 Achievements Builds on FY19 Momentum
Q2FY20 Achievements Builds on FY19 Momentum Historic, record first half bookings for the company Signed the two largest contracts in the company’s history, one for Edge, one for cloud-connected services Strategic wins for Cerence ARK and Cerence Drive Competitive position remains strong
Slide 6: Long Term Trends Drive Cerence's Strategic Planning
Brand-aligned user experience “Hey, Mercedes” “Ni hao, Geely” “Hello, Ford” Single digital identity within and outside vehicle Ecosystem centered on vehicle Continuous updates and enhancements User-centric design with advanced HMI and full integration with car sensors and car data Long Term Trends D
Slide 7: Financial Summary
Financial Summary
Slide 8: Q2 Results Primarily Exceed Guidance
Q2 Results Primarily Exceed Guidance Footnote: Non-GAAP excludes acquisition-related costs, amortization of acquired intangible assets, restructuring expense, and stock-based compensation. Q2FY20 $ in millions except per share data Guidance Actual GAAP Revenue $80M - $82M $86.5M Non-GAAP GM %(a) 71%
Slide 9: Strong Year Over Year Growth
Strong Year Over Year Growth $ in millions Q2FY20 (ASC 606) Q2FY19 (ASC 606) YoY License: $44.6M $39.3M +13% Variable $28.2M $30.6M -8% Prepay $16.4M $8.7M +88% Connected Services: $23.1M $18.9M +23% Legacy $15.4M $14.1M +10% New $7.7M $4.8M +61% Professional Services $18.7M $12.1M +55% Total Revenu
Slide 10: Increasing Market Penetration of Edge and Cloud Services
Increasing Market Penetration of Edge (In-Car) A.I. Products Automated driving technologies are linked to the growth of edge innovations within the vehicle Increased focus on limiting distracted driving and convenience of controlling the infotainment system Expansion of solutions from premium to ent
Slide 11: Proactive Measures to Adjust Business for COVID-19 Impact
Proactive Measures to Adjust Business for COVID-19 Impact Reduction of contractors Workforce reduction of about 5% Executive team pay reductions Lowering of planned capex spend from $35M to $27M Additional miscellaneous expense reductions Result: $12M second half op-ex savings
Slide 12: Balance Sheet Metrics
Balance Sheet Metrics $ in millions As of March 31, 2020 Cash & Equivalents $95.6M Intra Quarter Cash Requirements $25-30M Debt $267M Leverage Ratio* (covenant 6x) 2.0x * Leverage ratio calculation defined as (Cash & Cash Equivalents minus $50M)/(Trailing 12-month Adjusted EBITDA)
Slide 13: CefENnCce”
CefENnCce”
Slide 14: Appendix
Appendix ee c4erence @
Slide 15: 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 16: Q2FY20 GAAP Results Reconciliation
Q2FY20 GAAP Results Reconciliation (unaudited - in thousands, except per share data) (unaudited - in thousands, except per share data) Three Months Ended Six Months Ended March 31, March 31, 2020 2019 2020 2019 GAAP revenue $86,495 $70,304 $163,954 $142,788 GAAP gross profit $57,765 $45,860 $109,290