Cerence Beats On Q1 Backed By Design Wins In Automotive Markets

Cerence Inc CRNC reported a first-quarter FY23 revenue decline of 11.4% year-on-year to $83.66 million, beating the consensus of $76.55 million.
Non-GAAP EPS of $0.36 beat the consensus of $0.09.
Segments: Revenue from License fell 3.1% Y/Y to $45.42 million, Connected services decreased by 34.7% Y/Y to $18.39 million, and Professional services grew by 2.2% Y/Y to $19.85 million.
Margins: The non-GAAP gross margin contracted 710 bps to 70.4%.
The non-GAAP operating margin decreased by 1,630 bps to 20.5%.
The adjusted EBITDA margin declined by 1,560 bps to 23.5%.
Cerence used $(2.8) million in free cash flow and held $107.17 million in cash and equivalents.
Stefan Ortmanns, Chief Executive Officer at Cerence, commented, ""We had a number of key design wins in the quarter in both the automotive and two-wheeler markets, including two win-backs from competitors." "While our customers are still navigating a cloudy macro environment due to issues such as semiconductor shortages, we remain confident in our full-year guidance," Ortmanns added.
Outlook: Cerence expects Q2 revenue of $64 million - $68 million (consensus $68.25 million).
Cerence raised the low end of the initial FY23 revenue guidance to $275 million - $290 million, up from the prior $270 million - $290 million (consensus $280.71 million).
Price Action: CRNC shares traded higher by 6.39% at $30.14 on the last check Wednesday.