Slide 1: Cerence Q2 FY25 Earnings Presentation
Cerence Q2 FY25 Earnings Presentation May 7, 2025 Brian Krzanich, Chief Executive Officer Tony Rodriquez, Chief Financial Officer © 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 and momentum; transformation plans and cost efficiency initiatives; strategy; opportunities; business, industry and market t
Slide 3: Q2 FY25 Financial Details
Q2 FY25 Financial Details © 2025 Cerence Inc. 3
Slide 4: Cerence Q2FY25 Results
Cerence Q2FY25 Results Q2FY24 Q2FY25 Q2FY25 Guidance Total Revenue $67.8M $78.0M $74M - $77M Gross Margin 69.2% 77.1% 74% - 76% Net Income (Loss) ($278.0M) $21.7M $1M – $5M EPS – diluted ($6.66) $0.46 $0.03 – $0.12 Adjusted EBITDA(a,b) ($0.3M) $29.5M $18M – $22M Cash Provided by Operating Activities
Slide 5: Detailed Revenue Breakdown
Detailed Revenue Breakdown In millions Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25 Total License: $35.5 $43.1 $25.3 $22.7 $51.5 Variable(a) $25.1 $23.1 $25.3 $22.7 $29.9 Total Fixed(b) $10.4 $20.0 $ ̶ $ ̶ $21.5 Connected Services: $13.6 $10.9 $12.1 $13.7 $12.6 Connected Services $13.6(c) $10.9 $12.1 $13.7(c)
Slide 6: Operational Metrics and Variable License Revenue
Operational Metrics and Variable License Revenue In millions FY24 FY25 Operational Metrics: Q2 Q3 Q4 Q1 Q2 Pro Forma $39.6 $39.6 $41.9 $36.7 $39.7 Royalties(a) Consumption of $14.5 $16.5 $16.6 $14.0 $9.7 Fixed Contracts(b) Variable License $25.1 $23.1 $25.3 $22.7 $29.9 Revenue IHS Production 21.4 22
Slide 7: Q2 FY25 KPI Performance
• Adjusted Total Billings TTM(a) of $224M; Total Billings for Q2 of $77.7M; Both flat as compared to the same period last year. • Percent of worldwide auto production with Q2 FY25 KPI(f) Cerence Technology – 51% (TTM) • Approximately 11.6 million units shipped with Performance Cerence technology in
Slide 8: Fiscal Q3 and FY25 Guidance
Fiscal Q3 and FY25 Guidance(d) Q3FY25 FY25 Guidance Guidance In millions except per share amounts Low High Low High Revenue $52 $56 $236 $247 Gross Margin 66% 68% 69% 71% Net Income (Loss) ($13M) ($10M) ($35M) ($29M) EPS – diluted ($0.31) ($0.24) ($0.81) ($0.67) Adjusted EBITDA (a,b) $1 $4 $28 $34 C
Slide 9: Appendix
Appendix © 2025 Cerence Inc. 9
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 revenue Variable License applied at production on volume 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 Subscription Term 1 – 5 years Amortized evenly over subscription period subscription period (value added to 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 as well as a potentially new KPI, Average PPU. We further believe that providing KPIs allows investors to better und
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 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 measures because
Slide 16: Q2 FY25 Reconciliations of GAAP to Non-GAAP Results
Q2 FY25 Reconciliations of GAAP to Non-GAAP Results (unaudited - in thousands) Free cash flow is net cash provided by operating activities determined in accordance with GAAP less capital expenditures. Free cash flow is not a measure of cash available for discretionary expenditures. © 2025 Cerence In
Slide 17: Q3 FY25 and Full Year FY25 Reconciliations of GAAP to Non-GAAP Guidance
Q3 FY25 and Full Year FY25 Reconciliations of GAAP to Non-GAAP Guidance (unaudited - in thousands) © 2025 Cerence Inc. 17