Cerence Inc. · Q3 2024 earnings

Briefing

Cerence's Q3 2024 financial performance was in line with expectations, marked by positive cash flow and progress in generative AI product development.

Cerence reported Q3 revenue in line with guidance and positive cash flow from operations of $12.9 million. The company released five generative AI customer programs to production and expects transformation plans to deliver net annualized cost savings of $35-40 million, predominantly realized in FY25.

• Q3 revenue was in line with guidance, with positive cash flow from operations of $12.9 million.
• Five generative AI customer programs were released to production.
• Transformation plans are estimated to deliver net annualized cost savings of $35-40 million, mainly in FY25.
• Eight generative AI wins year-to-date and four additional customer launches expected by the end of the calendar year.

Headline financials

Revenue & EPS history

For the fiscal quarter ending September 30, 2024, revenue is expected to be in the range of $44 million to $50 million. GAAP net loss is expected to be in the range of ($32) million to ($28) million. Adjusted EBITDA is expected to be in the range of approximately ($19) million to ($13) million. For the full fiscal year ending September 30, 2024, the company expects revenue to be in the range of $321 million to $327 million which includes an estimated $30 million of fixed contracts. GAAP net loss is expected to be in the range of ($600) million to ($596) million, which includes a goodwill impairment charge of $357.1 million for the three months ended June 30, 2024, in addition to the impairment charge for the three months ended March 31, 2024, of $252.1 million. Adjusted EBITDA is expected to be in the range of approximately $64 million to $70 million.