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Cerence (CRNC) investor relations material

Cerence Q3 2025 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
Logotype for Cerence Inc
Q3 2025 earnings summary6 Aug, 2025

Executive summary

  • Q3 FY25 revenue was $62.2M, surpassing the high end of guidance but down from $70.5M year-over-year; adjusted EBITDA was $9.0M, and net loss improved to $(2.7)M from $(313.5)M last year, which included a $357M goodwill impairment.

  • Free cash flow reached $16.1M, marking the fifth consecutive positive quarter; cash and marketable securities rose to $73.7M.

  • Full-year revenue guidance raised to $244M–$249M, with adjusted EBITDA guidance at $42M–$46M and free cash flow at $38M–$42M.

  • Strategic focus remains on advancing the AI roadmap, expanding business with new and existing customers, and ongoing transformation and cost management.

  • Operating margin improved to negative 1.5% from negative 503.1% year-over-year, reflecting the absence of large impairment charges.

Financial highlights

  • Variable license revenue was $34.2M, up 48% year-over-year, while no fixed license revenue was recognized in Q3 FY25 compared to $20M last year.

  • Connected services revenue grew 17% year-over-year to $12.8M; professional services revenue was $15.2M, down 8% due to a lower mix of custom work.

  • Gross margin improved to 73.7%–74% from 71.5%–72% year-over-year, reflecting a higher mix of technology revenue.

  • Adjusted total billings TTM reached $226M, up 3.5% year-over-year.

  • Cash provided by operating activities was $23.7M for Q3 FY25, up from $12.9M in the prior year quarter.

Outlook and guidance

  • Q4 FY25 revenue expected between $53M–$58M, with gross margin of 68%–69% and adjusted EBITDA of $2M–$6M.

  • FY25 revenue guidance raised to $244M–$249M; adjusted EBITDA to $42M–$46M; free cash flow to $38M–$42M.

  • Net loss for FY25 projected at $(28)M to $(24)M.

  • Management expects revenue to be impacted by global automotive industry dynamics, including production delays, pricing pressure, and macroeconomic uncertainty.

  • Liquidity is considered sufficient for the next 12 months, with $73.7M–$79.1M in cash and marketable securities at quarter-end.

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Frequently asked questions

Cerence Inc. provides AI powered virtual assistants that help enterprises across the mobility and transportation market be more user friendly and productive. With an industry leading 99.97% accuracy rate, Cerence solutions are powered by a deep learning engine that learns from 33 billion data points daily to provide users with intuitive on-site answers, recommendations and automation of recurring tasks, allowing businesses to better understand their customers, improve operational efficiencies and reduce costs. Cerence Inc., was founded in 2019 and is headquartered in Burlington, Massachusetts.

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