Cerence, the specialist in conversational AI for the automotive sector, continues to show promise in its latest – and very strong – quarterly results.
For Q1 of its 2021 fiscal year – the three-month period ended December 31, 2020 – the company saw a considerable jump in GAAP revenue compared to its first quarter as its own, standalone company in late 2019. Revenues came in at $95 million, compared to $77.5 million the year before.
That impressive revenue increase is reflected in Cerence’s GAAP net income, which came in at $21.6 million for its most recent quarter, compared to a GAAP net loss of $11.8 million in Q1 of fiscal 2020. Adjusted EBITDA rose from $21.8 million in Q1 2020 to $40.3 million in Q1 of 2021.
Commenting on the results, Cerence CEO Sanjay Dhawan suggested that broader trends in the automotive market helped to spur his company’s success.
“We had a stronger than expected start to the fiscal year as auto production continued to recover from the impact of Covid-19,” he explained. “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.”
Looking to specific operational highlights, Dhawan noted that Cerence had won multiple contracts during the quarter, including winning back “a major European OEM” to its customer portfolio. He also singled out Xevo’s order of Cerence’s automotive payments solution for its Xevo Marketplace platform, framing it as an important building block in establishing a foundation for future sales in this particular area.
Looking to the second quarter of fiscal 2021, Cerence anticipates revenues in the range of $92 million to $95 million. That will represent a six to 10 percent year-over-year increase, but “accounts for the expected impact of semiconductor shortages on auto production in the first half of the calendar year,” Dhawan explained.
GAAP net income is anticipated to be between $5 million and $6 million, and adjusted EBITDA is expected to be in the $34-37 million range.