NASDAQ$CRNC

Cerence Inc. · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Cerence reported strong financial performance in its first quarter as an independent company.

Cerence's Q1 2020 GAAP revenue increased by approximately 7% year over year. The company won 7 new OEM design wins, including a next-generation platform decision for a major European OEM, and achieved 30 Vehicle Model SOPs with 10 different OEMs.

  • GAAP revenue increased approximately 7% year over year.
  • Delivered strong financial performance first quarter as an independent company.
  • Won 7 new OEM design wins including a next generation platform decision for a major European OEM.
  • Achieved 30 Vehicle Model SOPs (Start of Production) with 10 different OEMs.

Headline financials

Total Revenue

$77.5M

Previous: $72.5M+6.9%
EPS (adj)

$0.29

Previous: $0.06+383.3%
GAAP Gross Margin

66.5%

Previous: 66.6%-0.2%
Adjusted EBITDA

$21.8M

Previous: $20.1M+8.4%
Capital Expenditures

-$3.61M

Previous: $498K-825.3%
Free Cash Flow

-$15.4M

Previous: $16.2M-194.9%
Net Income

-$11.8M

Previous: $2.26M-621.6%
Operating Income

-$2.1M

Previous: $2.81M-174.7%
Gross Profit

$51.5M

Previous: $48.3M+6.7%
Cash & Equivalents

$113M

No prior period
Total Assets

$1.66B

No prior period
Stock-Based Comp

$8.97M

Previous: $6.57M+36.4%

Revenue & EPS history

Cerence · Revenue · Quarterly

$77.5M

Q1 2020+6.9%vs Q1 2019
Beat estimate in 7 of 9 quarters(78%)
ActualEstimate

Revenue by segment

Cerence · $77.5M total across 3 segments · Q1 2020

  • License
    $40.8M-7.4%
  • Connected Services
    $23M+33.4%
  • Professional Services
    $13.7M+21.8%

Forward guidance

For the fiscal quarter ending March 31, 2020, GAAP revenue is expected to be in the range of $80M to $82M representing a 15% increase at the midpoint compared to the same period in the prior year. Adjusted EBITDA for Q2FY20 is expected to be in the range of $22M to $24M. Cerence reaffirms its full-year GAAP revenue guidance of $321M to $336M that was previously disclosed on December 17, 2019, while raising all its profitability metrics including non-GAAP gross margin, non-GAAP operating margin and adjusted EBITDA.

Tailwinds

  • GAAP revenue is expected to be in the range of $80M to $82M, representing a 15% increase at the midpoint compared to the same period in the prior year.
  • Adjusted EBITDA for Q2FY20 is expected to be in the range of $22M to $24M.
  • Reaffirms full-year GAAP revenue guidance of $321M to $336M.
  • Raising all its profitability metrics including non-GAAP gross margin.
  • Raising all its profitability metrics including non-GAAP operating margin and adjusted EBITDA.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

+6.5%

Avg return

Earnings day

+6.5%

Avg return

5 days after

+8.5%

Avg return

30 days after

67%

20 / 30 earnings

Positive

+155.3%

Q4 2024

Best reaction

-44.0%

Q2 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q2 2026+3.8%+1.3%+0.5%
Q1 2026+4.1%-18.6%-29.2%
Q4 2025+26.8%+29.5%+41.7%
Q2 2025-12.1%+1.7%+1.8%
Q1 2025+13.7%+12.1%-19.1%
Q4 2024+155.3%+129.4%+172.0%
Q3 2024+6.3%+6.1%+23.2%
Q2 2024-44.0%-47.8%-68.2%
Q1 2024-20.2%-16.6%-29.5%
Q4 2023+2.2%+1.7%+15.4%
Q3 2023+2.1%+1.4%-7.0%
Q2 2023-13.6%-10.7%+14.5%
Q1 2023+3.7%+1.9%-9.5%
Q4 2022+33.5%+25.0%+22.1%
Q3 2022-20.4%-20.7%-37.3%
Q2 2022-1.6%+10.2%+11.3%
Q1 2022-28.0%-31.8%-48.5%
Q4 2021-24.8%-25.9%-30.6%
Q3 2021+12.9%+10.0%-1.4%
Q2 2021-4.3%-5.3%+29.0%
Q1 2021-3.8%+6.2%-19.1%
Q4 2018+19.0%+22.7%+43.0%
Q4 2020+6.0%+27.4%+42.4%
Q3 2019+4.3%-1.3%-1.4%
Q3 2020+31.2%+21.3%+24.4%
Q2 2019+9.3%+8.0%+63.5%
Q2 2020+13.8%+27.1%+83.3%
Q1 2019+3.3%+2.5%-25.7%
Q1 2020+2.5%+5.9%-28.6%
Q4 2019+15.5%+21.1%+21.0%
Q3 2018
Q2 2018
Q1 2018

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