Cerence Inc. Files Q1 2025 10-Q

TL;DR

Cerence Inc. filed its Q1 2025 10-Q on Feb 6, 2025. Check financials.

AI Summary

Cerence Inc. filed its 10-Q for the period ending December 31, 2024. The filing covers the first quarter of their fiscal year. Key financial details and operational updates for this period are detailed within the report, which was filed on February 6, 2025.

Why It Matters

This 10-Q filing provides investors and analysts with the latest financial performance and operational insights for Cerence Inc. during the first quarter of fiscal year 2025.

Risk Assessment

Risk Level: medium — The filing is a standard quarterly report, but the underlying business of automotive software can be subject to rapid technological changes and economic cycles.

Key Numbers

• Q1 — Fiscal Quarter (Reporting period is the first quarter of fiscal year 2025.)
• 20241231 — Period End Date (The 10-Q covers financial data up to this date.)
• 20250206 — Filing Date (The date the report was officially submitted to the SEC.)

Key Players & Entities

• Cerence Inc. (company) — Filer of the 10-Q
• 2024-12-31 (date) — End of reporting period
• 2025-02-06 (date) — Filing date
• 25 MALL ROAD, SUITE 416 (location) — Business and mailing address
• BURLINGTON, MA (location) — City and State of business address

FAQ

Key Financial Figures

• $0.01 — ch registered Common Stock, par value $0.01 per share CRNC The Nasdaq Global Se

Filing Documents

• crnc-20241231.htm (10-Q) — 2539KB
• crnc-ex10_1.htm (EX-10.1) — 305KB
• crnc-ex10_7.htm (EX-10.7) — 34KB
• crnc-ex10_8.htm (EX-10.8) — 25KB
• crnc-ex31_1.htm (EX-31.1) — 18KB
• crnc-ex31_2.htm (EX-31.2) — 18KB
• crnc-ex32_1.htm (EX-32.1) — 10KB
• crnc-ex32_2.htm (EX-32.2) — 10KB
• img173888838_0.jpg (GRAPHIC) — 268KB
• img174812359_0.jpg (GRAPHIC) — 268KB
• 0000950170-25-015440.txt ( ) — 12710KB
• crnc-20241231.xsd (EX-101.SCH) — 1605KB
• crnc-20241231_htm.xml (XML) — 2309KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 25 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 38 Item 4.

Controls and Procedures

Controls and Procedures 39 PART II. OTHER INFORMATION 40 Item 1.

Legal Proceedings

Legal Proceedings 40 Item 1A.

Risk Factors

Risk Factors 41 Item 5 Other Information 41 Item 6. Exhibits 42

Signatures

Signatures 44 i CAUTIONARY STATEMENT CONCERNIN G FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q ("Form 10-Q"), filed by Cerence Inc. together with its consolidated subsidiaries, "Cerence," the "Company," "we," "us" or "our" unless the context indicates otherwise, contains "forward-looking statements" that involve risks and uncertainties. These statements can be identified by the fact that they do not relate strictly to historical or current facts, but rather are based on current expectations, estimates, assumptions, plans and projections about our business, operations, industry, financial results, financial condition, strategy, goals or prospects. Forward-looking statements often include words such as "anticipates," "estimates," "expects," "projects," "forecasts," "intends," "plans," "continues," "believes," "may," "will," "goals," "objectives" and words and terms of similar substance in connection with discussions of our business and future operating or financial performance. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. Our actual results may vary materially from those expressed or implied in our forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statement made by us or on our behalf. Although we believe that the forward-looking statements contained in this Form 10-Q are based on reasonable assumptions as of the date of this report, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in such forward-looking statements, including but not limited to: the highly competitive and rapidly changing market in which we operate; adverse conditions in the automotive industry or the global economy more generally, including the continuation of the semiconductor shortage being experienced by the automo

—FINANCI AL INFORMATION

PART I—FINANCI AL INFORMATION

Condensed Consolidated Financi al Statements

Item 1. Condensed Consolidated Financi al Statements. CERENCE INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited) Three Months Ended December 31, 2024 2023 Revenues: License $ 22,725 $ 20,823 Connected services 13,707 96,820 Professional services 14,464 20,692 Total revenues 50,896 138,335 Cost of revenues: License 1,782 1,604 Connected services 6,311 7,303 Professional services 9,731 17,325 Amortization of intangible assets — 103 Total cost of revenues 17,824 26,335 Gross profit 33,072 112,000 Operating expenses: Research and development 20,869 33,306 Sales and marketing 4,766 6,071 General and administrative 12,754 12,793 Amortization of intangible assets 554 545 Restructuring and other costs, net 11,062 705 Total operating expenses 50,005 53,420 (Loss) income from operations ( 16,933 ) 58,580 Interest income 1,437 1,432 Interest expense ( 3,393 ) ( 3,236 ) Other income, net 272 1,422 (Loss) income before income taxes ( 18,617 ) 58,198 Provision for income taxes 5,671 34,341 Net (loss) income $ ( 24,288 ) $ 23,857 Net (loss) income per share: Basic $ ( 0.57 ) $ 0.58 Diluted $ ( 0.57 ) $ 0.53 Weighted-average common share outstanding: Basic 42,897 41,186 Diluted 42,897 49,255 Refer to accompanying Notes to the unaudited condensed consolidated financial statements. 3 CERENC E INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (In thousands) (unaudited) Three Months Ended December 31, 2024 2023 Net (loss) income $ ( 24,288 ) $ 23,857 Other comprehensive (loss) income: Foreign currency translation adjustments ( 3,849 ) 4,280 Pension adjustments, net ( 3 ) 27 Net unrealized (loss) gains on available-for-sale securities ( 21 ) 163 T

Business

Business Cerence Inc. (referred to in this Quarterly Report on Form 10-Q as "we," "our," "us," "ourselves," the "Company" or "Cerence") is a global, premier provider of AI-powered assistants and innovations for connected and autonomous vehicles. Our customers include nearly all major automobile original equipment manufacturers ("OEMs"), or their tier 1 suppliers worldwide. We deliver our solutions on a white-label basis, enabling our customers to deliver customized virtual assistants with unique, branded personalities and ultimately strengthening the bond between automobile brands and end users. We generate revenue primarily by selling software licenses and cloud-connected services. In addition, we generate professional services revenue from our work with OEMs and suppliers during the design, development and deployment phases of the vehicle model lifecycle and through maintenance and enhancement projects. Note 2. Significant Accounting Policies Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, as well as those of our wholly owned subsidiaries. All significant intercompany transactions and balances are eliminated in consolidation. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnote disclosures required by GAAP for complete financial statements. The condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation of the consolidated results of operations and financial position for the interim periods presented. All such adjustments are of a normal recurring nature. The results of operatio