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Cerence Inc. (CRNC-6.43%) has submitted its 10-Q filing for the quarterly period ended December 31, 2024.
The filing reveals a decrease in total revenue to $50.9 million from $138.3 million in the same quarter the previous year. This decline is primarily attributed to a reduction in connected services revenue due to the early termination of a legacy contract.
License revenue increased by 9.1% to $22.7 million, driven by higher licensing royalties. However, connected services revenue decreased by 85.8% to $13.7 million, and professional services revenue fell by 30.1% to $14.5 million.
Total cost of revenues decreased by 32.3% to $17.8 million, with gross profit dropping by 70.5% to $33.1 million. The decline in gross profit is largely due to the decrease in connected services revenue.
Operating expenses totaled $50.0 million, a slight decrease from $53.4 million in the previous year. This includes research and development expenses of $20.9 million, sales and marketing expenses of $4.8 million, and general and administrative expenses of $12.8 million.
The company reported a net loss of $24.3 million for the quarter, compared to a net income of $23.9 million in the previous year. The loss is primarily due to decreased revenue and restructuring costs.
Cerence recorded restructuring and other costs of $11.1 million, including charges related to personnel reductions and transformation initiatives.
Interest expense for the quarter was $3.4 million, slightly up from $3.2 million in the previous year, while interest income remained stable at $1.4 million.
The effective income tax rate for the quarter was negative 30.5%, compared to 59.0% in the previous year, resulting in a provision for income taxes of $5.7 million.
Cash provided by operating activities was $9.3 million, compared to cash used of $2.8 million in the previous year. The increase is primarily due to changes in deferred revenue.
As of December 31, 2024, Cerence had $110.5 million in cash, cash equivalents, and marketable securities. The company believes it will meet its liquidity needs over the next 12 months, including the repayment of $60.1 million of the 2025 Modified Notes due in the third quarter of fiscal 2025.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the Cerence Inc. quarterly 10-Q report dated February 6, 2025. To report an error, please email earnings@qz.com.