Revenue has lurches without a clear trend — from a 63.2% drop in 2025Q1 to a 126.1% jump in 2026Q1, now at $69.6M in 2026Q3 with 11.8% growth — while gross margins have ranged widely from 62.7% to 86.3% and now sit at 76.0%, yet operating income remains thin at just 2.7% due to R&D running at 42-48% of revenue in five of the last six quarters.
Cerence Inc. (CRNC) annual income statement — 10-year revenue, gross profit & net income history
| Metric | TTM | Sep'25 | Sep'24 | Sep'23 | Sep'22 | Sep'21 | Sep'20 | Sep'19 | Sep'18 | Sep'17 | Sep'16 |
|---|
| Sales/Revenue | 309.49M | 251.78M | 331.5M | 294.48M | 327.89M | 387.18M | 330.97M | 303.31M | 276.98M | 244.73M | 211.14M |
| Revenue Growth % | 25.84% | -24.05% | 12.57% | -10.19% | -15.31% | 16.99% | 9.12% | 9.51% | 13.18% | 15.91% | - |
| Cost of Goods Sold | 65.94M | 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 | 243.56M | 181.47M | 242.07M | 193.46M | 219.21M | 273.42M | 210.57M | 189.79M | 183.71M | 168.38M | 142.83M |
| Gross Margin % | 78.69% | 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 | 207.98M | 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 | 96.08M | 70.58M | 74.19M | 85.41M | 73.75M | 95.66M | 82.78M | 62.19M | 50.43M | 47.39M | 40.95M |
| SG&A % of Revenue | - | 28.03% | 22.38% | 29% | 22.49% | 24.71% | 25.01% | 20.5% | 18.21% | 19.37% | 19.4% |
| Research & Development | 110.64M | 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 | 1000K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 35.58M | 13.13M | 46.31M | -15.28M | 38.34M | 65.69M | 38.89M | 36.2M | 53.8M | 66.28M | 49.72M |
| Operating Margin % | 11.49% | 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 | 45.43M | 23.68M | 56.94M | 756K | 62.28M | 95.35M | 68.93M | 65.04M | 79.56M | 85.95M | 69.47M |
| EBITDA Margin % | 14.68% | 9.4% | 17.18% | 0.26% | 18.99% | 24.63% | 20.83% | 21.44% | 28.72% | 35.12% | 32.91% |
| EBITDA Growth % | 176.85% | -58.42% | 7432.14% | -98.79% | -34.68% | 38.32% | 5.97% | -18.25% | -7.43% | 23.72% | - |
| D&A (Non-Cash Add-back) | 9.86M | 10.55M | 10.63M | 16.04M | 23.94M | 29.66M | 30.04M | 28.84M | 25.77M | 19.67M | 19.75M |
| EBIT | 29.46M | 1.4M | -572.06M | -21.62M | -184.36M | 62.27M | -303K | 11.18M | 36.8M | 63.2M | 47.26M |
| Net Interest Income | -3.46M | -6.37M | -7.2M | -10.3M | -13.39M | -13.89M | -22.15M | 0 | 0 | 0 | 0 |
| Interest Income | 2.83M | 3.85M | 5.35M | 4.47M | 1.01M | 109K | 585K | 0 | 0 | 0 | 0 |
| Interest Expense | 6.3M | 10.22M | 12.55M | 14.77M | 14.39M | 14M | 22.74M | 0 | 0 | 0 | 0 |
| Other Income/Expense | -12.41M | -21.95M | -630.92M | -21.11M | -237.09M | -17.42M | -61.93M | -25.02M | -17M | -3.08M | -2.46M |
| Pretax Income | 23.16M | -8.82M | -584.61M | -36.39M | -198.75M | 48.27M | -23.04M | 11.18M | 36.8M | 63.2M | 47.26M |
| Pretax Margin % | 7.48% | -3.5% | -176.35% | -12.36% | -60.61% | 12.47% | -6.96% | 3.69% | 13.29% | 25.83% | 22.38% |
| Income Tax | 38.56M | 9.89M | 3.47M | 19.86M | 112.08M | 2.38M | -4.72M | -89.08M | 30.92M | 15.93M | 12.32M |
| Effective Tax Rate % | 166.46% | -112.15% | -0.59% | -54.59% | -56.39% | 4.92% | 20.5% | -796.53% | 84.02% | 25.2% | 26.07% |
| Net Income | -15.39M | -18.71M | -588.08M | -56.25M | -310.83M | 45.89M | -18.32M | 100.27M | 5.88M | 47.28M | 34.94M |
| Net Margin % | -4.97% | -7.43% | -177.4% | -19.1% | -94.8% | 11.85% | -5.53% | 33.06% | 2.12% | 19.32% | 16.55% |
| Net Income Growth % | 40.26% | 96.82% | -945.4% | 81.9% | -777.28% | 350.56% | -118.27% | 1604.95% | -87.56% | 35.31% | - |
| Net Income (Continuing) | -15.39M | -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) | -0.32 | -0.43 | -14.12 | -1.40 | -7.93 | 1.17 | -0.57 | 2.75 | 0.16 | 1.30 | 0.96 |
| EPS Growth % | 45.04% | 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 | 47.74M | 43.18M | 41.64M | 40.22M | 39.19M | 39.29M | 36.43M | 36.4M | 36.39M | 36.39M | 36.39M |
| Basic Shares Outstanding | 45.18M | 43.18M | 41.64M | 40.22M | 39.19M | 37.75M | 36.43M | 36.4M | 36.39M | 36.39M | 36.39M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - |
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.
Key Metrics
Top Statement Risk
Volatile revenue, thin operating margins
Metrics are mathematically derived from official filings.
Revenue Lurches Without a Clear Trend
Based on Cerence's ten-quarter revenue history, top-line performance swings from a 63% contraction in 2025Q1 to a 126% surge in 2026Q1, before recently settling near $65-70M, suggesting contracted revenue-recognition lumpiness rather than a durable organic growth trajectory.
Revenue has not grown in a consistent directional pattern across the sample, moving from $67.8M in 2024Q2 down to $50.9M in 2025Q1, up to $115.1M in 2026Q1, and back down to $64.2M the following quarter. The magnitude of the 2026Q1 print, followed by a roughly 44% sequential decline, appears more consistent with project or term-based booking timing than with steady recurring demand, which would warrant closer examination of the revenue mix. The most recent quarter's 11.8% year-over-year growth off a depressed base does not yet establish a trajectory, so durability remains unproven from these figures alone.
Gross Margins High but Erratic
As reported across Cerence's recent quarterly filings, gross margin has ranged from 62.7% in 2024Q4 to 86.3% in 2026Q1, and now sits near 76%, roughly eight points above Lattice's 68.2% peer level, though the swings appear driven more by revenue mix than pricing.
Cost of goods sold has stayed remarkably tight, fluctuating only between $15.7M and $21.4M while revenue spanned $50.9M to $115.1M, which implies a largely fixed delivery cost base whose margin effect amplifies with whatever revenue happens to land in a given quarter. The resulting gross margin profile, running near 73-76% in recent quarters, sits meaningfully above peer levels at SoundHound (42.4%) and Xiao-I (44.4%), suggesting the underlying unit economics are comparatively sound even if the headline margin print is timing-sensitive. The gap between the 86.3% peak and the 72.6% trough argues against treating any single quarter as the normalized structural margin, and the 2026Q3 recovery to 76.0% has not fully reversed the compression seen in 2026Q2.
R&D Drag Caps Operating Leverage
Per Cerence's reported quarterly income statements, R&D has run at 42-48% of revenue in five of the last six quarters, yet operating income has hovered near breakeven, suggesting limited operating leverage despite a high fixed engineering cost base.
Operating margin has swung from -16.2% to 32.2% across the sample, but only two quarters produced meaningfully positive operating income, and both of those, 2025Q2 at 25.9% and 2026Q1 at 32.2%, coincided with revenue above $78M. That pattern appears to imply an approximate breakeven revenue threshold near the upper end of Cerence's recent quarterly range, a level the company has struggled to sustain. SG&A has held comparatively steady at $15-22M for most quarters, which suggests overhead discipline rather than aggressive cost inflation is the binding constraint, with engineering spend the primary line that has not flexed down as revenue contracted.
Bottom Line Distorted by One-Offs
As disclosed in Cerence's income statement history, net losses of $278.0M and $313.5M in 2024Q2 and 2024Q3 occurred alongside positive or near-zero operating income, indicating substantial non-operating items that obscure the underlying earnings quality of the business.
The divergence between operating income of $3.7M in 2024Q3 and a $313.5M net loss in that same quarter, repeated in the prior period, indicates that a large share of the historical bottom-line damage originated outside core operations rather than from product economics. Stock-based compensation compounds the picture, reaching $19.6M in 2026Q3 against just $1.5M of net income and $1.9M of operating income, which suggests reported profitability would be materially thinner on a fully diluted economic basis. There is also an internal inconsistency in the per-share data, as 2024Q4 shows positive $13.56 diluted EPS against a $20.4M net loss, so the EPS series should be verified against source filings before being used for valuation.
What Could Undermine the Turnaround
Drawing from the reported figures, a short-seller thesis would focus on the fact that Cerence's only two profitable operating quarters coincided with lumpier revenue prints, and that 2026Q3 SBC of $19.6M nearly offset the entire $1.9M operating income.
The strongest challenge to the current narrative is that gross margin compression from 86.3% in 2026Q1 to 73.7% in 2026Q2 as revenue normalized suggests the margin peak may not be repeatable, and the partial recovery to 76.0% has not restored that level. Coupled with operating income of only $1.9M in the latest quarter against $49.7M of combined R&D and SG&A, the earnings base appears far less durable than the headline gross margin implies, and the $2.2% net margin offers little cushion if revenue softens again. Investors should test whether the roughly $65-70M recent quarterly revenue run-rate can carry the fixed engineering load without relying on non-operating items or temporary margin effects.