Cerence Beats Analyst Estimates for the Quarter, But Annual Revenue May Not Meet Expectations
- Cerence’s $95 million in revenue beat analyst estimates of $87.9 million.
- Cerence said the 23% rise in revenue for the quarter from last year set a new quarterly record.
- Cerence offered guidance for the second quarter of 2021, projecting $92 million to $95 million in revenue or $34 million to $37 million with adjusted EBITDA.
Breaking Records, Recovered Contracts
Cerence (CRNC), the automotive voice technology developer, announced Q1 FY2021 and financial results that beat analyst projections yet again. The company reported $95 million in revenue, well above the $87.9 million predicted by analysts. The company broke its quarterly record again, with a 23% rise in revenue from the year before, a 103% rise in earnings. Cerence attributed its strong showing to recovering automotive production after slow-downs due to the COVID-19 pandemic last year. Cerence also marked a couple of notable successes, including winning back a European contract for its services that will start in 2023, although it didn’t say what the manufacturer was.
“We had a stronger than expected start to the fiscal year as auto production continued to recover from the impact of Covid-19. Our 23% revenue growth, compared to the same quarter last year, reflects our strong competitive position enabled by our continued focus on innovation and speed of execution,” Cerence CEO Sanjay Dhawan told investors. “We received multiple contract awards for our new applications in the quarter. We won back a major European OEM for both our core technology and new connected services and applications. This was a significant win that will start production in 2023. Another highlight was our agreement with Xevo, a Lear Company, to supply Cerence Pay conversational-AI powered voice technology to Xevo Marketplace consumers. With this contract, along with the launch of our latest application, Cerence TourGuide, we are building a solid foundation to achieve our FY24 target revenue for this category of products.”
Cerence had plenty of new features and products to brag about. The new Cerence Drive 2.0 came out last month, completely revamping the platform for voice AI and the Cerence Cloud Services that Toyota in Japan will be the first to try. There’s also the new Cerence Look, which combines online databases and gaze-tracking cameras to turn a car’s voice assistant into a real-time tour guide, and the new Cerence Mobility Platform, which expands the voice AI platform to motorcycles, scooters, and even elevators.
For the next quarter, Cerence projected $92 million to $95 million in revenue, with analysts pegging expectations at $93 million. The company predicted revenue of $370 million to $380 for the fiscal year, with the $375 million mid-point below analyst predictions of $377.6 million. That may be why the company’s stock price on Monday rose to a record high of 131.63 before falling down to about $112 and slowly rising again as of this writing to 119.63.
“We expect continued year-over-year revenue growth in our second quarter as the auto industry recovers from Covid-19,” Dhawan said. “Overall the company is progressing well in all directions; introducing a steady stream of new products, winning new customers, successfully entering adjacent markets, and increasing revenue and profitability.”