BURLINGTON, Mass., Feb. 08, 2021 (GLOBE NEWSWIRE) -- Cerence Inc. (NASDAQ: CRNC), AI for a world in motion, today reported its first fiscal quarter 2021 results for the quarter ended December 31, 2020.
Results Summary (1) (in millions, except per share data)| Three Months Ended | |||||||||||
| December 31, | |||||||||||
| 2020 | 2019 | ||||||||||
| GAAP Revenue | $95.0 | $77.5 | |||||||||
| GAAP Gross Margin | 71.7% | 66.5% | |||||||||
| Non-GAAP Gross Margin | 75.3% | 70.8% | |||||||||
| GAAP Operating Margin | 21.3% | -2.7% | |||||||||
| Non-GAAP Operating Margin | 39.7% | 25.4% | |||||||||
| GAAP Net (loss) Income | $21.6 | $(11.8) | |||||||||
| Non-GAAP Net Income | $24.6 | $10.3 | |||||||||
| Adjusted EBITDA | $40.3 | $21.8 | |||||||||
| Adjusted EBITDA Margin | 42.4% | 28.1% | |||||||||
| GAAP Net (loss) Income per Share - diluted | $0.54 | $(0.33) | |||||||||
| Non-GAAP Net Income per Share - diluted | $0.59 | $0.29 | |||||||||
(1) Please refer to the “Discussion of Non-GAAP Financial Measures” and “Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures” included elsewhere in this release for more information regarding our use of non-GAAP financial measures.
Sanjay Dhawan, Chief Executive Officer of Cerence, stated, “We had a stronger than expected start to the fiscal year as auto production continued to recover from the impact of Covid-19. Our 23% revenue growth, compared to the same quarter last year, reflects our strong competitive position enabled by our continued focus on innovation and speed of execution.”
Dhawan continued, “We received multiple contract awards for our new applications in the quarter. We won back a major European OEM for both our core technology and new connected services and applications. This was a significant win that will start production in 2023. Another highlight was our agreement with Xevo, a Lear Company, to supply Cerence Pay conversational-AI powered voice technology to Xevo Marketplace consumers. With this contract, along with the launch of our latest application, Cerence TourGuide, we are building a solid foundation to achieve our FY24 target revenue for this category of products.”
Dhawan concluded, “We expect continued year-over-year revenue growth in our second quarter as the auto industry recovers from Covid-19. However, our second quarter guidance accounts for the expected impact of semiconductor shortages on auto production in the first half of the calendar year. According to IHS Markit’s current forecast, these shortages should be resolved by mid-year resulting in auto production growth of 13.7% for the 2021 calendar year. Overall the company is progressing well in all directions; introducing a steady stream of new products, winning new customers, successfully entering adjacent markets, and increasing revenue and profitability.”
Cerence Key Performance Indicators To help investors gain further insight into Cerence’s business and its performance, management provides a set of key performance indicators that includes:| Key Performance Indicator1 | Q1FY21 | |||
| Percent of worldwide auto production with Cerence Technology (TTM) | 54% | |||
| Average contract duration (TTM): | 6.0 | |||
| Repeatable software contribution (TTM): | 78% | |||
| Change in number of Cerence connected cars shipped2 (TTM over prior year TTM) | -17% | |||
| Growth in billings per car (TTM over prior year TTM) (excludes legacy contract)3 | 20% | |||
(1) Please refer to the “Key Performance Indicators” included elsewhere in this release for more information regarding the definition and our use of key performance indicators. (2) Based on IHS Markit data, global auto production declined 16% over the same time period ending December 31, 2020. Compared to the same quarter in the prior year, the change in the number of Cerence connected cars shipped was +11%. (3) The calculation for this KPI was modified from comparing fiscal year-to-date versus previous fiscal year, to trailing twelve months (“TTM”) versus prior year TTM.
Second Quarter Fiscal 2021 and Full Year Outlook For the fiscal quarter ending March 31, 2021, revenue is expected to be in the range of $92M to $95M representing a 6% to 10% increase compared to the same period in the prior year. GAAP Net Income is expected to be in the range of $5M to $6M, and Adjusted EBITDA is expected to be in the range of $34M to $37M.
For the fiscal year ending September 30, 2021, we are updating our guidance to reflect our stronger than expected first quarter revenue and margin performance, and also in consideration of the risks and uncertainties surrounding the semiconductor device shortages. Therefore, the lower end of the revenue range was increased and is now expected to be in the range of $370M to $380M, representing a 12% to 15% increase compared to the prior year. GAAP Net Income for the fiscal year is expected to be in the range of $33 to $39M. Adjusted EBITDA for the full year is expected to be in the range of $131M to $140M, which is up from our original guidance of $122M to $135M due to better than expected profitability and the updated revenue guidance. The Adjusted EBITDA guidance excludes acquisition-related costs, amortization of acquired intangible assets, stock-based compensation, and restructuring and other costs. Additional details regarding guidance are included in the tables in this press release.
About Cerence Inc. Cerence (NASDAQ: CRNC) is the global industry leader in creating unique, moving experiences for the mobility world. As an innovation partner to the world’s leading automakers and mobility OEMs, it is helping advance the future of connected mobility through intuitive, powerful interaction between humans and their cars, two-wheelers, and even elevators, connecting consumers’ digital lives to their daily journeys no matter where they are. Cerence’s track record is built on more than 20 years of knowledge and more than 350 million cars shipped with Cerence technology. Whether it’s connected cars, autonomous driving, e-vehicles, or buildings, Cerence is mapping the road ahead. For more information, visit www.cerence.com.
