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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