Why Is Software Company Cerence Stock Trading Higher Monday?

Cerence Inc CRNC reported a fourth-quarter FY23 revenue growth of 38.9% year-on-year to $80.8 million, beating the consensus of $73.4 million. 

Adjusted gross margin expanded by 1,400 bps to 72.9%. Adjusted EPS of $0.09 missed the consensus of $0.15.

Adjusted operating margin was 17.8%, versus (9.8)% in the year-ago period. Adjusted EBITDA margin was 20.5%, versus (5.3)% a year ago.

The company exited the quarter with cash and equivalents worth $110.4 million.

CEO Stefan Ortmanns said, "During the year, we won more than a dozen strategic deals in our core auto business, including five winbacks. In addition, we made strong progress in transportation adjacencies like two-wheelers and trucks. We are becoming a primary supplier of conversational AI technology in the two-wheeler space, having won every two-wheeler deal we've pitched." 

Outlook: Cerence expects Q1 revenue of $128 million - $132 million (consensus $80.37 million). Cerence expects FY24 revenue of $355 million - $375 million versus the $354.68 million consensus.

Price Action: CRNC shares traded higher by 4.68% at $18.10 premarket on the last check Monday.