Cerence Inc (CRNC) Surpasses Fiscal Year 2023 Revenue and Profitability Forecasts
Cerence Inc (NASDAQ:CRNC) reports revenue and profitability exceeding the high end of the guided range for FY 2023.
GAAP revenue increased to $80.8 million in Q4, with a 71.5% GAAP gross margin and a 4.8% GAAP operating margin.
Non-GAAP measures show a net income of $3.8 million and an Adjusted EBITDA of $16.6 million for Q4.
Cerence maintains a strong market presence with a 54% penetration in global auto production.
On November 27, 2023, Cerence Inc (NASDAQ:CRNC) released its 8-K filing, announcing its fourth quarter and fiscal year 2023 results, which concluded on September 30, 2023. The company, a leader in AI for the automotive industry, reported exceeding its revenue and profitability targets for the full fiscal year, marking five consecutive quarters of strong execution.
Fiscal Year 2023 Performance Highlights
Cerence Inc (NASDAQ:CRNC) showcased robust financial results with GAAP revenue reaching $80.8 million in the fourth quarter, a significant increase from $58.1 million in the same period last year. The company's GAAP gross margin stood at 71.5%, while the non-GAAP gross margin was slightly higher at 72.9%. The GAAP operating margin for the quarter was reported at 4.8%, a stark contrast to the -394.4% in the prior year, primarily due to a goodwill impairment in fiscal 2022.
The non-GAAP operating margin improved to 17.8%, reflecting better than expected full fiscal year results on all profitability metrics. The Adjusted EBITDA for the quarter was $16.6 million, with a margin of 20.5%, indicating a strong operational performance. Notably, the company also reported a GAAP net loss of $11.6 million for the quarter, which includes non-cash events such as a valuation allowance against deferred tax assets and a goodwill impairment from the previous fiscal year.
Strategic Growth and Market Position
CEO Stefan Ortmanns highlighted the company's strategic achievements, including securing fourteen design wins and maintaining a leadership position with a 54% penetration in global auto production.
We finished the fiscal year strong with revenue for the quarter and fiscal year above the high end of the guidance range. Accordingly, we delivered better than expected full fiscal year results on all profitability metrics.
Ortmanns also emphasized Cerence's expansion into transportation adjacencies and the delivery of fine-tuned Large Language Models (LLMs) to customers, advancing the Destination Next software platform.
Financial Statements and Outlook
The company's balance sheet remains solid with $101.1 million in cash and cash equivalents. The total revenue for the fiscal year was $294.5 million, with a non-GAAP net income of $14.6 million. Looking ahead, Cerence Inc (NASDAQ:CRNC) anticipates revenue for the fiscal quarter ending December 31, 2023, to be in the range of $128 million to $132 million, and GAAP Net Income expected between $19 million and $23 million. For the full fiscal year ending September 30, 2024, revenue is projected to be between $355 million and $375 million, with GAAP Net Income ranging from $20 million to $35 million.
Cerence Inc (NASDAQ:CRNC) continues to innovate and lead in the automotive AI space, with a clear strategy for growth and a strong financial position. Investors and analysts are encouraged to join the live conference call and webcast to discuss these results further.
To learn more about Cerence Inc (NASDAQ:CRNC) and its financial performance, visit Cerence's investor relations.
Explore the complete 8-K earnings release (here) from Cerence Inc for further details.
This article first appeared on GuruFocus.
