Revenue performance remains highly unstable, characterized by a sharp 17.7% contraction in 2026Q2 and an operating margin that swung from 32.2% in 2026Q1 to -3.6% in 2026Q2.
| Sales/Revenue | 302.14M | 251.78M | 331.5M | 294.48M | 327.89M | 387.18M | 330.97M | 303.31M | 276.98M | 244.73M | 211.14M |
| Revenue Growth % | 18.84% | -24.05% | 12.57% | -10.19% | -15.31% | 16.99% | 9.12% | 9.51% | 13.18% | 15.91% | - |
| Cost of Goods Sold | 65.61M | 70.31M | 89.44M | 101.02M | 108.68M | 113.76M | 120.39M | 113.53M | 93.27M | 76.35M | 68.3M |
| COGS % of Revenue | - | 27.93% | 26.98% | 34.3% | 33.15% | 29.38% | 36.38% | 37.43% | 33.67% | 31.2% | 32.35% |
| Gross Profit | 236.53M | 181.47M | 242.07M | 193.46M | 219.21M | 273.42M | 210.57M | 189.79M | 183.71M | 168.38M | 142.83M |
| Gross Margin % | 78.28% | 72.07% | 73.02% | 65.7% | 66.85% | 70.62% | 63.62% | 62.57% | 66.33% | 68.8% | 67.65% |
| Gross Profit Growth % | - | -25.03% | 25.13% | -11.75% | -19.83% | 29.85% | 10.95% | 3.31% | 9.11% | 17.88% | - |
| Operating Expenses | 202.93M | 168.34M | 195.76M | 208.74M | 180.87M | 207.73M | 171.68M | 153.59M | 129.92M | 102.09M | 93.11M |
| OpEx % of Revenue | - | 66.86% | 59.05% | 70.89% | 55.16% | 53.65% | 51.87% | 50.64% | 46.9% | 41.72% | 44.1% |
| Selling, General & Admin | 93.8M | 70.58M | 74.19M | 85.41M | 73.75M | 95.66M | 82.78M | 60.53M | 48.96M | 45.34M | 39.54M |
| SG&A % of Revenue | - | 28.03% | 22.38% | 29% | 22.49% | 24.71% | 25.01% | 19.96% | 17.68% | 18.53% | 18.73% |
| Research & Development | 108.55M | 97.76M | 121.56M | 123.33M | 107.12M | 112.07M | 88.9M | 93.06M | 80.96M | 56.76M | 53.57M |
| R&D % of Revenue | - | 38.83% | 36.67% | 41.88% | 32.67% | 28.95% | 26.86% | 30.68% | 29.23% | 23.19% | 25.37% |
| Other Operating Expenses | 578K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 33.6M | 13.13M | 46.31M | -15.28M | 38.34M | 65.69M | 38.89M | 36.2M | 53.8M | 66.28M | 49.72M |
| Operating Margin % | 11.12% | 5.21% | 13.97% | -5.19% | 11.69% | 16.97% | 11.75% | 11.93% | 19.42% | 27.08% | 23.55% |
| Operating Income Growth % | - | -71.66% | 403.06% | -139.86% | -41.63% | 68.91% | 7.43% | -32.71% | -18.84% | 33.31% | - |
| EBITDA | 43.33M | 23.68M | 56.94M | 756K | 62.28M | 95.35M | 68.93M | 65.07M | 79.56M | 85.95M | 69.47M |
| EBITDA Margin % | 14.34% | 9.4% | 17.18% | 0.26% | 18.99% | 24.63% | 20.83% | 21.45% | 28.72% | 35.12% | 32.91% |
| EBITDA Growth % | 115.41% | -58.42% | 7432.14% | -98.79% | -34.68% | 38.32% | 5.94% | -18.22% | -7.43% | 23.72% | - |
| D&A (Non-Cash Add-back) | 9.73M | 10.55M | 10.63M | 16.04M | 23.94M | 29.66M | 30.04M | 28.87M | 25.77M | 19.67M | 19.75M |
| EBIT | 28.08M | 1.4M | -572.06M | -21.62M | -184.36M | 62.27M | -303K | 11.18M | 36.8M | 63.2M | 47.26M |
| Net Interest Income | -4.24M | -6.37M | -7.2M | -10.3M | -13.39M | -13.89M | -22.15M | 0 | 0 | 0 | 0 |
| Interest Income | 3.02M | 3.85M | 5.35M | 4.47M | 1.01M | 109K | 585K | 0 | 0 | 0 | 0 |
| Interest Expense | 7.26M | 10.22M | 12.55M | 14.77M | 14.39M | 14M | 22.74M | 0 | 0 | 0 | 0 |
| Other Income/Expense | -12.78M | -21.95M | -630.92M | -21.11M | -237.09M | -17.42M | -61.93M | -25.02M | -17M | -3.08M | -2.46M |
| Pretax Income | 20.83M | -8.82M | -584.61M | -36.39M | -198.75M | 48.27M | -23.04M | 11.18M | 36.8M | 63.2M | 47.26M |
| Pretax Margin % | 6.89% | -3.5% | -176.35% | -12.36% | -60.61% | 12.47% | -6.96% | 3.69% | 13.29% | 25.83% | 22.38% |
| Income Tax | 40.47M | 9.89M | 3.47M | 19.86M | 112.08M | 2.38M | -4.72M | -89.08M | 30.92M | 15.93M | 12.32M |
| Effective Tax Rate % | 194.34% | -112.15% | -0.59% | -54.59% | -56.39% | 4.92% | 20.5% | -796.53% | 84.02% | 25.2% | 26.07% |
| Net Income | -19.65M | -18.71M | -588.08M | -56.25M | -310.83M | 45.89M | -18.32M | 100.27M | 5.88M | 47.28M | 34.94M |
| Net Margin % | -6.5% | -7.43% | -177.4% | -19.1% | -94.8% | 11.85% | -5.53% | 33.06% | 2.12% | 19.32% | 16.55% |
| Net Income Growth % | 94.16% | 96.82% | -945.4% | 81.9% | -777.28% | 350.56% | -118.27% | 1604.95% | -87.56% | 35.31% | - |
| Net Income (Continuing) | -19.65M | -18.71M | -588.08M | -56.25M | -310.83M | 45.89M | -18.32M | 100.27M | 5.88M | 47.28M | 34.94M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -0.42 | -0.43 | -14.12 | -1.40 | -7.93 | 1.17 | -0.57 | 2.75 | 0.16 | 1.30 | 0.96 |
| EPS Growth % | -107.68% | 96.95% | -908.57% | 82.35% | -777.78% | 305.26% | -120.73% | 1618.75% | -87.69% | 35.42% | - |
| EPS (Basic) | - | -0.43 | -14.12 | -1.40 | -7.93 | 1.22 | -0.57 | 2.75 | 0.16 | 1.30 | 0.96 |
| Diluted Shares Outstanding | 46.9M | 43.18M | 41.64M | 40.22M | 39.19M | 39.29M | 36.43M | 36.4M | 36.39M | 36.39M | 36.39M |
| Basic Shares Outstanding | 45.09M | 43.18M | 41.64M | 40.22M | 39.19M | 37.75M | 36.43M | 36.4M | 36.39M | 36.39M | 36.39M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - |
Cyclical automotive production dependence
According to historical income statements, Cerence's top-line performance exhibits extreme quarterly variance, with a 126.1% surge in 2026Q1 followed by a 17.7% contraction in 2026Q2, highlighting the inherent instability of a business model heavily reliant on lumpy, fixed-price license recognition rather than consistent recurring subscription growth.
The erratic revenue trajectory suggests that the company's transition toward connected services is not yet providing the intended smoothing effect on the top line. Investors should interpret these fluctuations as a reflection of OEM procurement cycles rather than organic demand growth, as the legacy license runoff appears to be creating significant headwinds.
As reported in financial filings, the company maintains a structurally high gross margin profile, consistently hovering near 73% despite the ongoing shift toward cloud-connected services, which typically carry higher variable hosting costs that could eventually pressure these historically robust software-centric profitability levels over the long term.
The ability to sustain margins above 70% indicates that the core intellectual property remains highly valuable to automotive OEMs. However, the compression observed in periods like 2025Q1 suggests that professional services or lower-margin integration work may be increasingly utilized to bridge the gap during periods of weak license demand.
Based on the provided income statement data, Cerence struggles to demonstrate meaningful operating leverage, as evidenced by the swing from a 32.2% operating margin in 2026Q1 to a -3.6% margin in 2026Q2, indicating that fixed engineering costs remain disproportionately high relative to current revenue generation.
The inability to scale operating income suggests that the company's R&D-heavy cost structure is not yet optimized for the current revenue environment. This lack of efficiency implies that any further top-line weakness will likely result in immediate and significant pressure on the bottom line.
Analysis of recent quarterly reports reveals that GAAP net income is frequently distorted by non-operating items and lumpy revenue recognition, with stock-based compensation consistently consuming a significant portion of gross profit, which warrants caution regarding the sustainability of reported earnings during periods of revenue contraction.
The wide variance in EPS, ranging from a positive $0.46 in 2025Q2 to a loss of $0.57 in 2025Q1, suggests that investors should prioritize cash flow metrics over GAAP net income. The persistent reliance on stock-based compensation as a primary expense component may also be diluting shareholder value during this period of operational transition.
Quick answers to the most common questions about buying CRNC stock.
For fiscal year 2025, Cerence Inc. (CRNC) reported total revenue of $251.8M. This represents a 19.3% increase compared to $211.1M in 2016.
Cerence Inc. (CRNC) reported a net loss of $18.7M for the fiscal year ending 2025.
Cerence Inc. (CRNC) reported an operating income of $13.1M, resulting in an operating profit margin of 5.2%. This margin reflects the operational efficiency of the business before interest and taxes.
Cerence Inc. (CRNC) generated $181.5M in gross profit for the year, representing a gross profit margin of 72.1%. This demonstrates the company's core pricing power and production efficiency.