Cerence
Cerence's revenue fell 24.1% to $252 million in fiscal 2025. Its operating margin was −0.9%, up from −174.9% a year earlier. Free cash flow was $47 million, up 283.8%. It paid out $2 million in dividends and buybacks, 5% of free cash flow. The diluted share count rose 3.7%.
Operating margin is operating income as a share of revenue. Free cash flow is cash from operations minus capital spending. Return on equity is net income as a share of shareholders' equity. Market cap is the last closing share price times the latest diluted share count, so it is approximate. P/E is the last close divided by diluted earnings per share over the last four quarters, or the latest fiscal year where the quarters aren't available; there is none when the company made a loss.
Charts show fiscal years, from the 10-K filings.
What Cerence does
Cerence sells voice and AI software that carmakers build into their vehicles, so drivers can talk to the car. Its products include a voice assistant based on generative AI, which handles voice activation and natural speech, and audio software that reduces noise and improves calls and voice use inside and outside the car. It sells on a white-label basis, so the assistant carries the carmaker's own brand and personality. Most of its business is automotive, though it says the software could also work in trucks, two-wheelers, televisions, watches and kiosks.
Its customers include nearly all major automakers, such as BMW, Mercedes-Benz, Volkswagen Group, Stellantis, Renault, Toyota, Ford and General Motors. It also works with tier 1 suppliers, the companies that sell components to carmakers, such as Bosch, Continental and Aptiv. In fiscal 2025, automakers represented approximately 50% of revenue, and tier 1 suppliers the other half.
Its revenue is spread across regions: Europe and Asia each made up about 42% of fiscal 2025 revenue. It runs software on the car and in the cloud, and is shifting toward cloud-connected services.
Its biggest risks, as it describes them
- Highly competitive, fast-changing market in which it may not compete successfully.
- Weakness in the auto industry or the wider economy lowering its sales.
- Losing any of its largest customers, which could seriously hurt the business.
- Having to win carmakers' approval and renew service contracts, with no guarantee it will.
- Its shift to cloud-connected services may slow its near-term revenue growth.
Income statement
From fiscal 2018 to 2021, earnings per share grew 94.1% a year and net income 98.1% a year, as new shares raised the share count by 8% and diluted each share's earnings. Cerence then lost money in fiscal 2022, 2023, 2024 and 2025.
Returns on capital
Balance sheet
Five years at a glance
| Fiscal year end | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Cash and short-term investments | — | — | — | — | — |
| Debt incl. finance leases | 273 | 272 | 277 | 282 | 200 |
| Net debt (negative means net cash) | — | — | — | — | — |
| Net debt to EBITDA | — | — | — | — | — |
| Debt to equity | 0.3x | 0.4x | 0.4x | 2.0x | 1.3x |
| Interest coverage | 4.3x | −12.8x | −1.8x | −46.2x | −0.2x |
| Current ratio | 1.7x | 1.6x | 1.5x | 1.2x | 1.9x |
| Quick ratio | 1.7x | 1.6x | 1.5x | 1.2x | 1.9x |
Cash flow
Projections
Project Cerence's revenue, net income and earnings per share five years ahead in a bull, a base and a bear case with your own figures, and see the share prices your P/E estimates give them, or value it with a discounted cash flow model. Every projected figure is yours: it is not a forecast of ours.
Insider trades
Over the 12 months between November 7, 2025 and November 6, 2026, no insider bought Cerence shares on the open market, and 1 insider sold $229,562.
| Date | Insider | Trade | Shares | Price | Value | Filing |
|---|---|---|---|---|---|---|
| Aug 10, 2026 | Jennifer SalinasEVP Chief Admin Officer | Sold | 25,998 | $8.83 | $229,562 | Form 4 |
Indicators
Four widely used measures, worked out from the company's filings. The cutoffs are the ones their authors or users go by, not a verdict of ours.
| Indicator | FY23 | FY24 | FY25 |
|---|---|---|---|
| Piotroski F-score | 4 of 9 | 4 of 9 | 5 of 9 |
| Rule of 40 | −9.4% | 16.2% | −5.5% |
| Altman Z'' | 0.62 | −9.11 | −3.62 |
| Accruals ratio | −4.9% | −60.5% | −12.0% |
The nine F-score tests
| Test | FY23 | FY24 | FY25 |
|---|---|---|---|
| Net income is positive | Fail | Fail | Fail |
| Cash from operations is positive | Pass | Pass | Pass |
| Return on assets rose | Pass | Fail | Pass |
| Cash from operations exceeds net income | Pass | Pass | Pass |
| Debt fell relative to assets | Fail | Fail | Fail |
| Current ratio rose | Fail | Fail | Pass |
| Share count didn't rise | Fail | Fail | Fail |
| Gross margin rose | Fail | Pass | Fail |
| Revenue rose relative to assets | Pass | Pass | Pass |
| F-score | 4 of 9 | 4 of 9 | 5 of 9 |
Compare
Put Cerence side by side with any other company we cover: revenue, growth, margins, cash flow and returns, with ten years of charts.
Similar companies
| Company | Year | Revenue growth | Operating margin | Free cash flow margin | Return on capital | Net debt to EBITDA | F-score | Compare |
|---|---|---|---|---|---|---|---|---|
| Cerence | FY25 | −24.1% | −0.9% | 18.6% | — | — | 5 | |
| C3.ai | FY26 | −35.7% | −199.2% | −76.8% | — | — | — | Compare |
| OneSpan | FY25 | 0.0% | 19.9% | 20.8% | — | — | — | Compare |
| Ooma | FY26 | 6.5% | 1.6% | 8.1% | 4.3% | 4.4x | 6 | Compare |
| i3 Verticals | FY25 | 11.5% | 1.8% | 1.8% | 0.4% | −2.1x | 5 | Compare |
8 years of figures
| Fiscal year | FY18 | FY19 | FY20 | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|---|---|---|
| Income statement | ||||||||
| Revenue | 277 | 303 | 331 | 387 | 328 | 294 | 332 | 252 |
| Revenue growth | — | 9.5% | 9.1% | 17.0% | −15.3% | −10.2% | 12.6% | −24.1% |
| Gross profit | 194 | 204 | 223 | 286 | 231 | 199 | 244 | 183 |
| Research and development | 81 | 93 | 89 | 112 | 107 | 123 | 122 | 98 |
| Operating income | 37 | 11 | 22 | 61 | −184 | −27 | −580 | −2 |
| Net income | 6 | 100 | −18 | 46 | −311 | −56 | −588 | −19 |
| Diluted EPS (US$) | 0.16 | 2.76 | −0.50 | 1.17 | −7.93 | −1.40 | −14.12 | −0.43 |
| Diluted shares (millions) | 36 | 36 | 36 | 39 | 39 | 40 | 42 | 43 |
| Cash flow | ||||||||
| Cash from operations | 115 | 88 | 45 | 74 | −2 | 8 | 17 | 61 |
| Capital expenditure | 6 | 4 | 19 | 12 | 17 | 5 | 5 | 14 |
| Free cash flow | 109 | 84 | 26 | 62 | −20 | 2 | 12 | 47 |
| Dividends paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share buybacks | 0 | 0 | 9 | 46 | 49 | 5 | 10 | 2 |
| Acquisitions | 80 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Stock-based compensation | 22 | 30 | 47 | 61 | 28 | 41 | 24 | 27 |
| Balance sheet at fiscal year end | ||||||||
| Cash and short-term investments | — | — | — | — | — | — | — | — |
| Debt incl. finance leases | — | — | 274 | 273 | 272 | 277 | 282 | 200 |
| Total assets | — | 1,484 | 1,688 | 1,706 | 1,318 | 1,298 | 702 | 631 |
| Total liabilities | — | 416 | 728 | 674 | 606 | 603 | 561 | 480 |
| Shareholders' equity | 993 | 1,068 | 960 | 1,032 | 713 | 695 | 141 | 151 |
| Margins and ratios | ||||||||
| Gross margin | 70.0% | 67.2% | 67.4% | 73.9% | 70.4% | 67.7% | 73.7% | 72.7% |
| Operating margin | 13.3% | 3.6% | 6.8% | 15.7% | −56.2% | −9.2% | −174.9% | −0.9% |
| Net margin | 2.1% | 33.1% | −5.5% | 11.8% | −94.8% | −19.1% | −177.4% | −7.4% |
| Free cash flow margin | 39.3% | 27.6% | 7.8% | 16.1% | −6.0% | 0.8% | 3.7% | 18.6% |
| Rule of 40 (growth + FCF margin) | — | 37.0% | 16.9% | 33.1% | −21.3% | −9.4% | 16.2% | −5.5% |
| Return on capital | — | — | — | — | — | — | — | — |
| Return on equity | — | — | −1.8% | 4.6% | −35.6% | −8.0% | −140.7% | −12.8% |
| Return on assets | — | — | −1.2% | 2.7% | −20.6% | −4.3% | −58.8% | −2.8% |
| Net debt to EBITDA | — | — | — | — | — | — | — | — |