We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cerence (CRNC) Q4 Earnings Beat Estimates, Revenues Up Y/Y
Read MoreHide Full Article
Cerence Inc. (CRNC - Free Report) reported fourth-quarter fiscal 2021 non-GAAP earnings of 66 cents per share, up 6.5% on a year-over-year basis. The figure beat the Zacks Consensus Estimate by 20%.
Revenues came in at $98.1 million, up 7.5% year over year driven by strength in the License, Connected Services and Professional Services segments. However, the top line missed the Zacks Consensus Estimate by 0.6%.
In fiscal 2021, the company reported non-GAAP earnings of $2.53 per share, up 48.8% on a year-over-year basis. Revenues came in at $387.2 million, up 17% year over year.
The company reported bookings of $590 million for fiscal 2021. New products represented 20% of the total bookings for the year.
Following the fiscal fourth-quarter announcement, shares of Cerence dropped 20.6% and closed at $82.59 on Nov 22. In the premarket trading on Nov 23, shares are trading up 1.1%.
License revenues of $51.4 million increased 11% year over year. Within License revenues, Variable License revenues were down 13%, while Fixed License revenues were up 54% on a year-over-year basis.
Connected Services revenues of $25.6 million increased 1% from the year-ago quarter’s figure. Within Connected Services revenues, Legacy Connected Services revenues were up 1% and New Connected Services revenues were flat year over year.
Professional Services revenues totaled $21.1 million, up 9% year over year.
In the quarter under review, Vietnam’s domestic car company — VinFast — leveraged Cerence to power conversational AI for its entire range of smart electric vehicles (EVs). The company also won a deal with a client specializing in the manufacturing of elevators to provide voice AI technology and connected services for building next-generation elevators.
The company reported that Repeatable software contribution (TTM) for the fiscal fourth quarter stood at 81%. Growth in billings per car (TTM over prior year TTM and excludes legacy contract) was 8%.
The percent of worldwide auto production with Cerence Technology (TTM) stood at 53%.
Operating Details
Non-GAAP gross margin expanded 230 basis points (bps) on a year-over-year basis to 78.1%.
Total operating expenses increased 27.9% year over year to $63.2 million, mainly due to research and development, sales and marketing along with general and administrative costs.
Operating margin on a non-GAAP basis contracted 490 bps on a year-over-year basis to 37.2%.
Balance Sheet & Cash Flow
As of Sep 30, 2021, cash, cash equivalents and marketable securities were $158.9 million compared with $149.9 million as of Jun 30, 2021.
The long-term debt, net of discounts and issuance costs amounted to $265.1 million as of Sep 30.
In the fiscal fourth quarter, cash provided by operating activities came in at $23.3 million compared with $24.1 million reported in the prior quarter. Free cash flow was $19.3 million compared with $21.2 million reported in the previous quarter.
In fiscal 2021, cash provided by operating activities came in at $74.4 million compared with $44.8 million reported in the prior fiscal year. Free cash flow was $62.3 million compared with $25.8 million reported in the previous fiscal year.
Guidance
For first-quarter fiscal 2022, Cerence expects revenues between $91 million and $96 million.
Non-GAAP earnings per share (EPS) for the fiscal first quarter is expected in the range of 47-53 cents. Non-GAAP operating margin is anticipated in the range of 32-34%.
The company expects IHS auto production to decline 21% in the fiscal first quarter. Adjusted EBITDA is projected in the range of $31-$35 million.
For fiscal 2022, the company expects revenues in the range of $400-$425 million. Adjusted EBITDA is forecast to be $144-$163 million for the fiscal year.
Non-GAAP EPS are expected in the range of $2.17-$2.51 per share. Non-GAAP operating margin is anticipated in the range of 33-36%.
Zacks Rank & Stocks to Consider
Currently, Cerence carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks worth consideration in the broader technology space includes Arrow Electronics (ARW - Free Report) , Alphabet (GOOGL - Free Report) and Monolithic Power Systems (MPWR - Free Report) .
Arrow Electronics’ shares have gained 31.4% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 27.4%.
Alphabet’s shares have surged 66.9% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25.8%.
Monolithic’s shares have rallied 52.3% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Cerence (CRNC) Q4 Earnings Beat Estimates, Revenues Up Y/Y
Cerence Inc. (CRNC - Free Report) reported fourth-quarter fiscal 2021 non-GAAP earnings of 66 cents per share, up 6.5% on a year-over-year basis. The figure beat the Zacks Consensus Estimate by 20%.
Revenues came in at $98.1 million, up 7.5% year over year driven by strength in the License, Connected Services and Professional Services segments. However, the top line missed the Zacks Consensus Estimate by 0.6%.
In fiscal 2021, the company reported non-GAAP earnings of $2.53 per share, up 48.8% on a year-over-year basis. Revenues came in at $387.2 million, up 17% year over year.
The company reported bookings of $590 million for fiscal 2021. New products represented 20% of the total bookings for the year.
Following the fiscal fourth-quarter announcement, shares of Cerence dropped 20.6% and closed at $82.59 on Nov 22. In the premarket trading on Nov 23, shares are trading up 1.1%.
Cerence Inc. Price, Consensus and EPS Surprise
Cerence Inc. price-consensus-eps-surprise-chart | Cerence Inc. Quote
The Top Line in Detail
License revenues of $51.4 million increased 11% year over year. Within License revenues, Variable License revenues were down 13%, while Fixed License revenues were up 54% on a year-over-year basis.
Connected Services revenues of $25.6 million increased 1% from the year-ago quarter’s figure. Within Connected Services revenues, Legacy Connected Services revenues were up 1% and New Connected Services revenues were flat year over year.
Professional Services revenues totaled $21.1 million, up 9% year over year.
In the quarter under review, Vietnam’s domestic car company — VinFast — leveraged Cerence to power conversational AI for its entire range of smart electric vehicles (EVs). The company also won a deal with a client specializing in the manufacturing of elevators to provide voice AI technology and connected services for building next-generation elevators.
The company reported that Repeatable software contribution (TTM) for the fiscal fourth quarter stood at 81%. Growth in billings per car (TTM over prior year TTM and excludes legacy contract) was 8%.
The percent of worldwide auto production with Cerence Technology (TTM) stood at 53%.
Operating Details
Non-GAAP gross margin expanded 230 basis points (bps) on a year-over-year basis to 78.1%.
Total operating expenses increased 27.9% year over year to $63.2 million, mainly due to research and development, sales and marketing along with general and administrative costs.
Operating margin on a non-GAAP basis contracted 490 bps on a year-over-year basis to 37.2%.
Balance Sheet & Cash Flow
As of Sep 30, 2021, cash, cash equivalents and marketable securities were $158.9 million compared with $149.9 million as of Jun 30, 2021.
The long-term debt, net of discounts and issuance costs amounted to $265.1 million as of Sep 30.
In the fiscal fourth quarter, cash provided by operating activities came in at $23.3 million compared with $24.1 million reported in the prior quarter. Free cash flow was $19.3 million compared with $21.2 million reported in the previous quarter.
In fiscal 2021, cash provided by operating activities came in at $74.4 million compared with $44.8 million reported in the prior fiscal year. Free cash flow was $62.3 million compared with $25.8 million reported in the previous fiscal year.
Guidance
For first-quarter fiscal 2022, Cerence expects revenues between $91 million and $96 million.
Non-GAAP earnings per share (EPS) for the fiscal first quarter is expected in the range of 47-53 cents. Non-GAAP operating margin is anticipated in the range of 32-34%.
The company expects IHS auto production to decline 21% in the fiscal first quarter. Adjusted EBITDA is projected in the range of $31-$35 million.
For fiscal 2022, the company expects revenues in the range of $400-$425 million. Adjusted EBITDA is forecast to be $144-$163 million for the fiscal year.
Non-GAAP EPS are expected in the range of $2.17-$2.51 per share. Non-GAAP operating margin is anticipated in the range of 33-36%.
Zacks Rank & Stocks to Consider
Currently, Cerence carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks worth consideration in the broader technology space includes Arrow Electronics (ARW - Free Report) , Alphabet (GOOGL - Free Report) and Monolithic Power Systems (MPWR - Free Report) .
While Arrow Electronics and Alphabet sport a Zacks Rank #1 (Strong Buy) at present, Monolithic carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arrow Electronics’ shares have gained 31.4% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 27.4%.
Alphabet’s shares have surged 66.9% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25.8%.
Monolithic’s shares have rallied 52.3% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25%.