Cerence Q3 revenue slightly misses estimates dragged by professional services segment

Cerence

06/08/2026 21:18

Overview
US conversational AI provider's Q3 revenue rose 12% yr/yr, slightly missing analyst expectations
Adjusted EBITDA for Q3 rose 50% yr/yr and exceeded high end of company guidance
Company authorized first-ever $30 mln share repurchase program

Outlook
Cerence expects Q4 revenue of $61 mln to $65 mln
Company sees Q4 GAAP EPS between $0.02 and $0.10
Cerence forecasts full-year revenue of $310 mln to $314 mln

Result Drivers
CONNECTED SERVICES - Revenue from Connected Services rose more than 20% yr/yr, reflecting continued adoption of co's connected solutions
FIXED LICENSE CONTRACTS - Revenue growth was primarily driven by the timing of fixed license contract execution
PROFESSIONAL SERVICES DECLINE - Professional Services revenue fell yr/yr as co focused on standardization and higher-margin implementations

Company press release: ID:nGNX656kVW

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Revenue
Slight Miss*
$69.59 mln
$70.05 mln (5 Analysts)
Q3 EPS
 
$0.03
 
Q3 Net Income
 
$1.53 mln
 
Q3 Gross Margin
 
76.00%
 
*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the software peer group is "buy."
Wall Street's median 12-month price target for Cerence Inc. is $11.00, about 19.3% above its August 5 closing price of $9.22
The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 12 three months ago

Reuters Recommended Reads
Aug 5 - SoundHound AI Q2 revenue jumps on enterprise AI deals, raises outlook
Aug 3 - Palantir lifts annual revenue forecast on steady demand for AI-powered data analytics
Aug 4 - Israel's AudioCodes Q2 revenue rises on strong demand in Voice AI and managed services segments

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)