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Cerence's (CRNC) Q4 Earnings Lag Estimates, Revenues Beat
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Cerence Inc. (CRNC - Free Report) reported non-GAAP earnings of 9 cents per share in fourth-quarter fiscal 2023, missing the Zacks Consensus Estimate by 30.77%. The company reported a loss of 14 cents per share in fourth-quarter fiscal 2022.
Revenues came in at $80.8 million, up 38.9% year over year, driven by strength in the License, Connected Services and Professional Services segments. The figure beat the Zacks Consensus Estimate by 9.15%.
Top-Line Details
License revenues (53.4% of revenues) of $43.1 million beat the Zacks Consensus Estimate by 34.08% and rose 127% year over year.
Connected Services (23.7% of revenues) of $19.2 million missed the Zacks Consensus Estimate by 5.02% but rose 5.9% year over year.
Professional Services (22.9% of revenues) of $18.5 million missed the Zacks Consensus Estimate by 14.45% and down 12.1% year over year.
The company reported that repeatable software contribution on a trailing 12 months (TTM) for the fiscal fourth quarter stood at 75%.
Growth in billings per car was 6%. The percentage of worldwide auto production with Cerence Technology stood at 54%.
Operating Details
Non-GAAP gross margin expanded on a year-over-year basis to 72.9% compared with 58.9% in the year-ago quarter.
Total operating expenses increased 17.5% year over year to $52.4 million, mainly due to higher research and development (up 38.9% year over year) and general and administrative costs (rising 6.9% year over year).
Adjusted EBITDA was $16.6 billion against an adjusted EBITDA loss of $3.1 million.
Operating income was $14.4 million against an operating loss of $5.7 million reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2023, cash, cash equivalents and marketable securities were $110.3 million compared with $102.8 million as of Jun 30, 2023.
The long-term debt, net of discounts and issuance costs, amounted to $275.9 million as of Sep 30.
In the fiscal fourth quarter, cash provided by operating activities came in at $11.2 million, up from $81.9 million reported in the prior quarter. Free cash flow was $9.7 million compared with cash outflow of $9.7 million reported in the previous quarter.
Guidance
For first-quarter fiscal 2024, Cerence expects revenues between $128 million and $132 million. Adjusted EBITDA is projected in the range of $58-$62 million.
Non-GAAP operating margin is anticipated in the range of 44-46%.
Non-GAAP earnings for the fiscal first quarter are expected to be in the range of 84-92 cents per share.
For fiscal 2024, the company expects revenues in the range of $355-$375 million.
Adjusted EBITDA is forecast to be $94-$109 million for the fiscal year.
Non-GAAP operating margin is anticipated in the range of 24-27%.
Non-GAAP earnings are expected in the range of $1.29-$1.59 per share.
Zacks Rank & Key Picks
CRNC currently carries a Zacks Rank #3 (Hold).
CRNC’s shares have declined 8.6% compared with the Zacks Computer and Technology sector’s rise of 45.7% in the year-to-date period.
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Cerence's (CRNC) Q4 Earnings Lag Estimates, Revenues Beat
Cerence Inc. (CRNC - Free Report) reported non-GAAP earnings of 9 cents per share in fourth-quarter fiscal 2023, missing the Zacks Consensus Estimate by 30.77%. The company reported a loss of 14 cents per share in fourth-quarter fiscal 2022.
Revenues came in at $80.8 million, up 38.9% year over year, driven by strength in the License, Connected Services and Professional Services segments. The figure beat the Zacks Consensus Estimate by 9.15%.
Top-Line Details
License revenues (53.4% of revenues) of $43.1 million beat the Zacks Consensus Estimate by 34.08% and rose 127% year over year.
Connected Services (23.7% of revenues) of $19.2 million missed the Zacks Consensus Estimate by 5.02% but rose 5.9% year over year.
Cerence Inc. Price, Consensus and EPS Surprise
Cerence Inc. price-consensus-eps-surprise-chart | Cerence Inc. Quote
Professional Services (22.9% of revenues) of $18.5 million missed the Zacks Consensus Estimate by 14.45% and down 12.1% year over year.
The company reported that repeatable software contribution on a trailing 12 months (TTM) for the fiscal fourth quarter stood at 75%.
Growth in billings per car was 6%. The percentage of worldwide auto production with Cerence Technology stood at 54%.
Operating Details
Non-GAAP gross margin expanded on a year-over-year basis to 72.9% compared with 58.9% in the year-ago quarter.
Total operating expenses increased 17.5% year over year to $52.4 million, mainly due to higher research and development (up 38.9% year over year) and general and administrative costs (rising 6.9% year over year).
Adjusted EBITDA was $16.6 billion against an adjusted EBITDA loss of $3.1 million.
Operating income was $14.4 million against an operating loss of $5.7 million reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, 2023, cash, cash equivalents and marketable securities were $110.3 million compared with $102.8 million as of Jun 30, 2023.
The long-term debt, net of discounts and issuance costs, amounted to $275.9 million as of Sep 30.
In the fiscal fourth quarter, cash provided by operating activities came in at $11.2 million, up from $81.9 million reported in the prior quarter. Free cash flow was $9.7 million compared with cash outflow of $9.7 million reported in the previous quarter.
Guidance
For first-quarter fiscal 2024, Cerence expects revenues between $128 million and $132 million. Adjusted EBITDA is projected in the range of $58-$62 million.
Non-GAAP operating margin is anticipated in the range of 44-46%.
Non-GAAP earnings for the fiscal first quarter are expected to be in the range of 84-92 cents per share.
For fiscal 2024, the company expects revenues in the range of $355-$375 million.
Adjusted EBITDA is forecast to be $94-$109 million for the fiscal year.
Non-GAAP operating margin is anticipated in the range of 24-27%.
Non-GAAP earnings are expected in the range of $1.29-$1.59 per share.
Zacks Rank & Key Picks
CRNC currently carries a Zacks Rank #3 (Hold).
CRNC’s shares have declined 8.6% compared with the Zacks Computer and Technology sector’s rise of 45.7% in the year-to-date period.
Synopsys (SNPS - Free Report) , ASANA (ASAN - Free Report) and Snowflake (SNOW - Free Report) are some better-ranked stocks that investors can consider in the broader sector, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Synopsys shares have gained 70.2% year to date. SNPS is set to report its fourth-quarter fiscal 2023 results on Nov 29.
ASANA shares have gained 48.9% year to date. ASAN is set to report its third-quarter fiscal 2024 results on Dec 5.
Snowflake shares have returned 18.6% year to date. SNOW is set to report its third-quarter fiscal 2024 results on Nov 29.