Cerence Breaks Quarterly and Annual Revenue Records, Beats Pre-COVID Estimates
- Cerence’s $90.9 million in revenue was well above the analyst estimates of $79.61 million.
- Cerence said bookings broke records for the quarter and the fiscal year and met or exceeded all financial projections for the year made before the COVID-19.
- Cerence offered guidance for the first quarter of 2021, projecting $85 million to $90 million in revenue or $31 million to $35 million with adjusted EBITDA.
Beating All Expectations Despite COVID-19
Cerence (CRNC), the automotive voice technology developer, announced Q4 FY2020 and full-year financial results that beat analyst projections. The company reported $90.9 million in revenue, far more than the $79.61 million that analysts predicted. The company broke previous quarterly and annual records for revenue, jumping 21% from last quarter and 10% from last year. Cerence’s bookings also hit a new high, with a backlog that has risen to more than $1.8 billion. The company’s stock rose 10% at the news to $71.22.
“Cerence’s first year as a stand-alone business established the company as a major player in conversational AI for the car,” Cerence CEO Sanjay Dhawan told investors. “We had to separate the business from Nuance and deal with the economic impact of COVID-19, but we did so while at the same time continuing a relentless introduction of new products and upgraded technologies. We’re more agile and more aggressive in our approach to innovation and more dedicated to the success of our customers than ever. I’m especially proud of the recognition that the Cerence team has received from our customers regarding our support in helping them achieve their start of production dates without delay.”
New Features and Renewed Deals
The conference call for the quarterly report also broke new ground by having a synthetic clone of Dhawan’s voice reading out the first part of the results using the Cerence Reader feature that debuted earlier this year. It’s one of several additions to Cerence’s platform, including driver-customized wake words and both the turn-key Cerence ARK Assistant and more customizable Cerence Studio variants of the company’s platform. Dhawan also pointed to renewed contracts as an indicator of Cerence’s financial strength, including adding bringing back some clients who had previously switched to Cerence rivals like iFlytek and SoundHound.
“Further demonstrating the depth of our customer relationships, we recently signed a renewal agreement for our SaaS-based connected services with a major global automaker, marking the successful renewal of an expiring contract since Cerence became a standalone public company,” Dhawan said. “This contract extension is an important endorsement from a long-time, respected partner on the strength and value of Cerence Connected Services and ensures that we will continue providing cloud-based services for this popular app suite for drivers. As we start the new fiscal year, we are expecting another year of growth supported by a strong backlog and a solid pipeline of new business opportunities. The company’s competitive position remains strong as we rely on innovation and speed of execution to continue to drive our business forward.”