Cerence : Presentation Q3 2026

Cerence Q3

August 6, 2026

Brian Krzanich, Chief Executive Officer Tony Rodriquez, Chief Financial Officer

	Q3FY25	Q3FY26	Q3FY26 Guidance
Total Revenue	$62.2M	$69.6M	$68M - $72M
Gross Margin	73.7%	76.0%	75% - 76%
Net (Loss) income	$(2.7)M	$1.5M	$(0.8M) - $3.2M
EPS - diluted	$(0.06)	$0.03	$(0.02) - $0.07
Adjusted EBITDA(a,b)	$9.0	$13.5	$8M - $12M
Cash Provided by Operating Activities	$23.7M	$20.0M
Cash Balance & Marketable Securities	$73.7M	$127.6M

Q3FY25		Q4FY25	Q1FY26	Q2FY26	Q3FY26
Total License:	$34.2	$32.3	$87.8	$37.6	$41.6
Variable(a)	$34.2	$31.6	$30.5	$31.8	$29.1
Total Fixed(b)	$-	$0.7	$7.8	$5.8	$12.5
IP License(c)	$-	$-	$49.5	$-	$-
Connected Services:	$12.8	$14.2	$14.5	$15.3	$15.5
Professional Services	$15.2	$14.2	$12.8	$11.3	$12.5
Total Revenue	$62.2	$60.6	$115.1	$64.2	$69.6

In millions

Q3	FY25	Q4	Q1	FY26 Q2	Q3
$43.2		$40.1	$39.3	$40.3	$37.8
$9.1		$8.5	$8.8	$8.5	$8.7

In millions Operational Metrics:

Pro Forma Royalties(a)

Consumption of Fixed Contracts(b)

Variable License Revenue $34.2 $31.6 $30.5 $31.8 $29.1

IHS Production (units) 22.9 23.1 24.8 21.9 22.5

Q3 FY26 KPI(d) Performance

1. Adjusted Total Billings excludes professional services and fixed license contracts and is adjusted for fixed license consumption. Trailing Twelve Months ("TTM") over prior year TTM.

2. Based on IHS Markit data, global auto production increased 1.2% TTM over prior year TTM.

3. TTM units connected divided by TTM units embedded. This indicates our penetration of connected technology.

4. Please refer to the appendix for KPI definitions.

   • Adjusted Total Billings TTM(a) of $240.0 million, an increase of 6.3% compared to the same period last year.

   • Percent of worldwide auto production with Cerence Technology - 50% (TTM)

   • Approximately 11.4 million units shipped with Cerence technology in Q3

     • a decrease of 8.1% YoY (IHS down 1.8% YoY)

     • an increase of 0.9% QoQ (IHS up 2.9% QoQ)

   • Change in number of Cerence connected cars shipped up 4% (TTM)(b)

   • Connected attach rate increased to 34.1% versus 31.0% a year ago(c)

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In millions except per share Low		High	Low	High
Revenue	$61	$65	$310	$314
Gross Margin	72%	75%	78%	79%
Net Income (Loss)	$1	$5	($1)	$3
EPS - diluted	$0.02	$0.10	$(0.02)	$0.06
Adjusted EBITDA (a,b)	$1	$5	$66	$70
Cash Provided by Operating $81 $85
Activities
Free Cash Flow (c)	$76			$82

Q4FY26

Guidance

FY26

Guidance

amounts

Type of Contract Description GAAP Revenue Recognition Cash Receipt

Variable License applied at production Quarter car is produced. Based on volume

Quarter following GAAP revenue recognition

Fixed (Prepaid) Bulk inventory purchase ($ based) Full value of contract at signing.

Volume independent

Standard payment terms for full value (upfront payment)

Intellectual Property

Terms and conditions drive accounting treatment.

Accounting treatment depends on contract structure and performance obligations. When recognized as revenue, treatment is consistent with other license arrangements.

Dependent on terms and conditions.

Connected Services Typical Period GAAP Revenue Recognition Cash Receipt

Subscription Term 1 - 5 years Amortized evenly over subscription period

Usage Contract(a) 1 - 5 years Recognized at same time of billing based on actual usage

Billed/collected full amount at start of subscription period (value added to deferred revenue)

Billed every quarter based on actual usage

Customer Hosted(b) License Quarter in which license is delivered to customer

Upon delivery

Professional Services Period GAAP Revenue Recognition Cash Receipt

Custom Design Services Ongoing

Revenue is recognized over time based upon the progress towards completion of the project

Billed/collected on milestone completion

Q3 FY26 Reconciliations of GAAP to Non-GAAP Results

(unaudited - in thousands)	Three Months Ended June 30, 2026 2025		Nine Months Ended June 30,
			2026	2025
GAAP revenue	$ 69,587	$ 62,236	$ 248,855	$ 191,142
GAAP gross profit	$ 52,914	$ 45,888	$ 199,560	$ 139,141
GAAP gross margin	76.0%	73.7%	80.2%	72.8%
GAAP total operating expenses	$ 51,039	$ 46,836	$ 170,817	$ 139,670
Stock-based compensation*	7,100	5,796	18,418	15,488
Amortization of intangible assets	-	578	-	1,668
Restructuring and other costs, net*	1,259	850	9,180	14,744
Goodwill impairment	-	-	-	-
Non-GAAP total operating expenses	$ 42,680	$ 39,611	$ 143,219	$ 107,769
GAAP net income (loss)	$ 1,533	$ (2,721)	$ (2,033)	$ (5,353)
Stock-based compensation*	7,515	6,345	19,615	17,084
Amortization of intangible assets	-	578	-	1,668
Restructuring and other costs, net*	1,259	850	9,180	14,744
Goodwill impairment	-	-	-	-
Depreciation	2,847	2,140	7,822	6,844
Total other expense (income), net	327	(159)	112	2,824
Provision for income taxes	15	1,932	30,664	2,000
Adjusted EBITDA	$ 13,496	$ 8,966	$ 65,360	$ 39,811
GAAP net cash provided by operating activities	$ 19,960	$ 23,700	$ 71,961	$ 48,421
Capital expenditures	(340)	(7,649)	(3,071)	(11,353)
Free cash flow	$ 19,620	$ 16,051	$ 68,890	$ 37,068
*-$3.0 million in stock-based compensation is included in Restructuring and other costs, net for the nine months ended June 30, 2025. cl e u Free cash flow is net cash provided by operating activities determined in accordance with GAAP less capital expenditures. Free cash flow is not a measure of cash available for discretionary expenditures.

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Q4 FY26 and Full Year FY26 Reconciliations of GAAP to Non-GAAP Guidance

(unaudited - in thousands, except per share data)	Q4 2026 Low High		FY2026 Low High
GAAP revenue	$ 61,145	$ 65,145	$ 310,000	$ 314,000
GAAP gross profit	$ 43,719	$ 48,691	$ 243,252	$ 248,252
GAAP gross margin	72 %	75 %	78 % 79 %
GAAP total operating expenses	$ 53,603	$ 54,603	$ 224,421	$ 225,421
Stock-based compensation	6,921	6,921	25,340	25,340
Restructuring and other costs, net	100	100	9,279	9,279
Non-GAAP total operating expenses	$ 46,582 $ 47,582		$ 189,802 $ 190,802
GAAP net (loss) income	$ 981	$ 4,953	$ (1,080)	$ 2,920
Stock-based compensation	7,625	7,625	27,240	27,240
Restructuring and other costs, net	100	100	9,279	9,279
Depreciation	3,188	3,188	11,010	11,010
Total other expense (income), net	(305)	(305)	(193)	(193)
(Benefit from) provision for income taxes	(10,560)	(10,560)	20,104	20,104
Adjusted EBITDA	$ 1,029 $ 5,001		$ 66,360 $ 70,360
GAAP net (loss) income per share:
Basic	$ 0.02	$ 0.11	$ (0.02)	$ 0.06
Diluted	$ 0.02	$ 0.10	$ (0.02)	$ 0.06
Weighted-average common shares outstanding:
Basic	45,237	45,237	45,050	45,050
Diluted	48,677	48,677	45,050	47,661
GAAP net cash provided by operating activities			$ 80,500	$ 85,000
Capital expenditures			(4,500)	(3,000)
Free cash flow			$ 76,000	$ 82,000

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