The following is a summary of the Cerence Inc. (CRNC) Q2 2024 Earnings Call Transcript:
Financial Performance:
Cerence reported Q2 revenue of $67.8 million including gains from an unplanned fixed license of $5 million and an underreporting adjustment of $2.6 million.
Full-year guidance was lowered by $40 million due to unmet production expectations, slow development in the adjacent and IoT markets, and an auto production slowdown.
A goodwill impairment charge of approximately $252 million has affected the GAAP results.
There was a significant increase in average billings per car in the quarter.
Business Progress:
Cerence is transitioning towards Generative AI and larger language model products, with six contracts signed post-CES and the first product set to enter production next month.
The company is developing an AI computing platform that integrates voice and touch, which is under review by three major global automakers.
Anticipated advancements in conversational AI for automobiles are being positively received by global OEMs.
Cerence identified key automotive trends including an EV slowdown, delays in new programs due to the complexity of software-defined cars, and the rise of Gen AI.
New products focused on improving the in-cabin experience are underway, their launch will likely result in increased average billings per vehicle.
More details: Cerence IR
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