📊 CRNC Key Takeaways
Investment Thesis
Cerence demonstrates strong operational efficiency with 86.3% gross margins and solid free cash flow generation of $35.6M (31% FCF margin), indicating quality earnings. However, significant headwinds including 24% revenue decline YoY, negative net income of -$5.2M, and elevated leverage (1.14x debt-to-equity) raise concerns about sustainability and growth trajectory.
CRNC Strengths
- Exceptional gross margin of 86.3% demonstrates pricing power and operational efficiency in software services
- Strong free cash flow generation of $35.6M with 31% FCF margin shows business can fund operations and debt service
- Solid liquidity position with 1.88x current ratio providing adequate working capital buffer
- Operating margin of 25.5% indicates core business remains fundamentally profitable before non-operating items
CRNC Risks
- Sharp 24% year-over-year revenue decline signals deteriorating market demand or loss of major customers
- Negative net income of -$5.2M despite positive operating income suggests material non-operating charges or tax impacts
- Elevated leverage with 1.14x debt-to-equity and $171.9M long-term debt relative to $150.4M equity creates financial vulnerability
- Declining revenues combined with fixed cost base may compress margins further if downturn continues
Key Metrics to Watch
- Revenue stabilization and return to growth trajectory
- Net income recovery and operating leverage improvement
- Debt reduction strategy and deleveraging progress toward <1.0x debt-to-equity
- Free cash flow sustainability as revenue base contracts
CRNC Financial Metrics
💡 AI Analyst Insight
The 31.0% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments.
CRNC Profitability Ratios
CRNC vs Technology Sector
How Cerence Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
CRNC Balance Sheet & Liquidity
CRNC 5-Year Financial Trend
5-Year Trend Summary: Cerence Inc.'s revenue has declined by 14% over the 5-year period, indicating business contraction. The most recent EPS of $-1.40 indicates the company is currently unprofitable.
CRNC Growth Metrics (YoY)
CRNC Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $50.9M | -$5.2M | $-0.12 |
| Q3 2025 | $62.2M | -$2.7M | $-0.06 |
| Q2 2025 | $67.8M | -$2.6M | $-0.06 |
| Q1 2025 | $50.9M | $23.9M | $0.53 |
| Q3 2024 | $61.7M | -$16.5M | $-0.41 |
| Q2 2024 | $67.8M | -$26.1M | $-0.65 |
| Q1 2024 | $83.7M | -$2.2M | $-0.05 |
| Q3 2023 | $61.7M | -$16.5M | $-0.41 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
CRNC Capital Allocation
CRNC SEC Filings
Access official SEC EDGAR filings for Cerence Inc. (CIK: 0001768267)
📋 Recent SEC Filings
❓ Frequently Asked Questions about CRNC
What is the AI rating for CRNC?
Cerence Inc. (CRNC) has an AI rating of HOLD with 62% confidence, based on fundamental analysis of SEC EDGAR filings.
What are CRNC's key strengths?
Exceptional gross margin of 86.3% demonstrates pricing power and operational efficiency in software services. Strong free cash flow generation of $35.6M with 31% FCF margin shows business can fund operations and debt service.
What are the risks of investing in CRNC?
Sharp 24% year-over-year revenue decline signals deteriorating market demand or loss of major customers. Negative net income of -$5.2M despite positive operating income suggests material non-operating charges or tax impacts.
What is CRNC's revenue and growth?
Cerence Inc. reported revenue of $115.1M.
Does CRNC pay dividends?
Cerence Inc. does not currently pay dividends.
Where can I find CRNC SEC filings?
Official SEC filings for Cerence Inc. (CIK: 0001768267) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CRNC's EPS?
Cerence Inc. has a diluted EPS of $-0.12.
How is the AI analysis conducted?
Our AI (Claude) analyzes publicly available SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports to evaluate financial health, profitability ratios, balance sheet strength, and growth metrics.