Cerence Q3 revenue beats expectations

Overview

• Cerence Q3 fiscal revenue of $62.2 mln beats analyst expectations

• Co achieves fifth consecutive quarter of positive free cash flow

Outlook

• Cerence expects Q4 revenue between $53 mln and $58 mln

• Company projects Q4 gross margins of 68% to 69%

• Cerence sees FY2025 revenue at $244 mln to $249 mln

• Company anticipates FY2025 free cash flow of $38 mln to $42 mln

Result Drivers

• CERENCE xUI - Advancement of hybrid LLM-based platform driving customer momentum

• AUTOMOTIVE PARTNERSHIPS - Automakers increasingly partnering with Cerence for in-car experience innovation

• CASH FLOW - Fifth consecutive quarter of positive free cash flow reported

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy."

• Wall Street's median 12-month price target for Cerence Inc is $10.00, about 14.5% above its August 5 closing price of $8.55

• The stock recently traded at 25 times the next 12-month earnings vs. a P/E of 33 three months ago

Press Release: ID:nGNX58wbtx