10-Q · May 7, 2025
Cerence reported a strong quarter ending March 31, 2025 with total revenue of $78.01M, up $10.19M (15.0%) versus $67.83M a year ago, driven by a large increase in license revenue. Gross margin expanded to 77.2% (gross…
Earnings analysis · 10-Q
CRNC earnings analysis
Filed May 7, 2026 · Our reading of the company's report
The latest report
Cerence Inc. released its Q2 FY26 results, reporting a revenue decline to $64.2 million, down 17.7% year-over-year, significantly affected by lower fixed license contracts. Notably, the company saw a net income of $1.7…
Read full summary
Cerence Inc. released its Q2 FY26 results, reporting a revenue decline to $64.2 million, down 17.7% year-over-year, significantly affected by lower fixed license contracts. Notably, the company saw a net income of $1.7 million, contrasting with a loss in the prior period, while cash flows from operating activities rose sharply by 110.4% to $52 million, supported by effective cost management and improved working capital.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.04
- Segment
- Licensing
- Segment
- Connected Services
- Segment
- Professional Services
What stood out
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Revenue Decline Y-o-Y
Total revenue decreased to $64.2 million, down 17.7% from $78.0 million in Q2 FY25.
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Positive Net Income
Net income for the quarter was $1.7 million, a recovery from previous losses.
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Significant Cash Flow Increase
Operating cash flow reached $52.0 million for the six months ended March 31, 2026, a 110.4% increase from $24.7 million in the same period last year.
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Continued Growth in Connected Services
Connected services revenue increased by 21.0% to $15.3 million compared to Q2 FY25.
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Decline in Professional Services Revenue
Professional services revenue dropped 18.7% to $11.3 million compared to $13.9 million last year.
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R&D Investment Growth
R&D expenses rose by 29.9% to $30.3 million, indicating ongoing commitment to innovation.
What to watch
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Decreased Revenue from Licensing
License revenue fell 27.0% to $37.6 million due to a $15.7 million decline in fixed contracts.
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Higher Operating Expenses
Total operating expenses rose to $49.7 million, up 16.1% from Q2 FY25, driven largely by increasing R&D and general administrative costs.
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Significant Legal Risks
Ongoing lawsuits related to biometric privacy could expose the company to substantial financial penalties.
Management's outlook
Management raised full-year revenue guidance to a range of $305 million to $320 million.
Earlier filings 4
10-Q · February 6, 2025
Cerence reported Q1 (three months ended Dec 31, 2024) revenue of $50,896,000, down materially from $138,335,000 a year earlier, and delivered a GAAP net loss of $24,288,000 (diluted EPS $(0.57)). Gross margin compressed…
10-Q · August 9, 2023
Cerence reported Q3 revenue of $61,660,000 and a GAAP net loss of $16,455,000 (diluted EPS -$0.41). Revenue and all three business lines declined year-over-year (total revenue down 30.8% y/y) while gross margin…
10-Q · May 9, 2023
Cerence reported quarterly revenue of $68,393,000 for the three months ended March 31, 2023, a 20.7% decline versus $86,280,000 in the year‑ago quarter. Gross profit fell to $43,379,000 (63.45% gross margin) and the…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.