Cerence Inc. (NASDAQ:CRNC) Q1 2024 Earnings Conference Call February 6, 2024 8:30 AM ET

Company Participants

Stefan Ortmanns - Director & CEO

Tom Beaudoin - CFO

Rich Yerganian - SVP, IR

Conference Call Participants

Jeff Van Rhee - Craig-Hallum Capital Group

Nick Doyle - Needham & Company

Will O'Brien - Goldman Sachs

Operator

Good day, and thank you for standing by. Welcome to the Cerence First Quarter 2024 Earnings Conference Call. [Operator instructions]

I would now like to turn the call over to your speaker, Rich Yerganian, Senior Vice President of Investor Relations. Please go ahead.

Rich Yerganian

Thank you, Michelle. Welcome to Cerence's first quarter of full fiscal year 2024 conference call. Before we begin, I would like to remind you that this call may involve certain forward-looking statements. Any statements that are not statements of historical fact, including statements related to our expectations, estimates, assumptions, strategy, goals, targets, and plans, should be considered to be forward-looking statements. Cerence makes no representations to update those statements after today. These statements are subject to risks and uncertainties which may cause actual results to differ materially from such statements, as described in our SEC filings, including the Form 8-K with the press release preceding today's call, and our Form 10-K filed on November 29, 2023. In addition, the company may refer to certain non-GAAP measures, key performance indicators, and pro forma financial information during this call. Please refer to today's press release for further details of the definitions, limitations, and uses of those measures, and reconciliations of non-GAAP measures to the closest GAAP equivalent. The press release is available in the IR section of our website.

Joining me on today's call are Stefan Ortmanns, CEO of Cerence, and Tom Beaudoin, CFO of Cerence. As a reminder, the only authorized spokespeople for the company are Stefan, Tom, and me. Before handing the call over to Stefan, I would like to mention that we will be presenting at the Baird 2024 Vehicle Technology and Mobility Conference on February 29, and the Raymond James 45th Annual Institutional Investors Conference, and the Morgan Stanley Technology Conference the week of March 4th.

Now onto the call. Stefan?

Stefan Ortmanns

Thank you, Rich. Welcome, everyone, and thank you for joining us to discuss Cerence’s first quarter results. Over the next few minutes, I will update you on the highlights from our first quarter, and provide an update on our AI product strategy and the exciting interest we receive from OEMs, partners and press at CES. But first, a review of our Q1 highlights. As we have briefed you on previous calls, the R&D and product teams at Cerence have been working at full speed, integrating the latest developments in Generative AI and large language models into our automotive and adjacent transportation-focused solutions. We believe our enhanced products and future roadmap represent an industry-leading inflection point for the in-cabin experience for drivers and passengers. Not only are existing customers showing interest in deploying our new solutions as quickly as possible, but we have also seen interest in deploying our new innovations from OEMs that had previously chosen alternative solutions. Discussions with these OEMs and customers gained momentum during Q1 and post CES, resulting in a greater pipeline of business opportunities as we progress through the fiscal year. Notably, we made steady progress during the quarter in aligning our product strategy with key partners. We announced major engagements with NVIDIA and Microsoft leading up to CES. The hardware and tool chains available to us through these partnerships are important contributors to fulfilling our vision of creating the ultimate AI-based immersive in-cabin experience. In December, we introduced the Cerence Automotive Large Language Model called CaLLM. CaLLM is an automotive-specific large language model leveraging NVIDIA’s computing and hardware capabilities for the training of generic and OEM-specific models. Cerence is working with NVIDIA to solve several key challenges, including shortening time to deployment by moving at true AI innovation speed, the collaboration with Microsoft, focusing on the evolving in-cabin user experience and the future of connected mobility.