Cerence Inc.
cerence.comWhat Do They Do?
Sells AI software for in-car virtual assistants and sound processing to automakers and automotive suppliers.
10-K for FY2025, filed Nov 20, 2025Cerence builds conversational and agentic AI solutions that make interaction with technology feel effortless. With decades of expertise in…View ↗
Our automotive customers include nearly all major automobile original equipment manufacturers (OEMs) worldwide, including BMW…View ↗
Cerence is a market leader for building integrated, branded and differentiated virtual assistants for automobiles, offering an extensive…View ↗
How Do They Make Money?
Automakers and suppliers pay per-vehicle fees for embedded licenses or royalties tied to use; connected services bring subscription or usage payments, while manufacturers pay for design and consulting work on a project basis.
10-K for FY2025, filed Nov 20, 2025We typically sell our edge software components under a traditional per unit perpetual software license model, in which a per unit fee is…View ↗
Revenue from embedded software and technology licenses sold on a royalty basis, where the license of non-exclusive intellectual property is…View ↗
Connected services, which allow our customers to use the hosted software over the contract period without taking possession of the…View ↗
Fixed fee subscription basis revenue represents a single promise to stand-ready to provide access to our connected services. We recognize…View ↗
We have a large professional services team that works with our customers in the design, development and deployment phases of a vehicle head…View ↗
Revenue from distinct professional services, including training, is recognized over time based upon the progress towards completion of the…View ↗
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10-K for FY2025, filed Nov 20, 2025
FY2025 revenue by product or service ↗
$251.8M
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10-K for FY2025, filed Nov 20, 2025
$251.8M ↗
| Segment | Share | Revenue | How money arrives |
|---|---|---|---|
|
License
Licensed
10-K for FY2025, filed Nov 20, 2025 |
56%
FY2022: 48%
|
License, FY2025
$140.6M Sources
|
Licensed |
|
Connected services
Mix
10-K for FY2025, filed Nov 20, 2025 |
21%
FY2022: 26%
|
Connected services, FY2025
$53.4M Sources
|
Mix |
|
Professional services
|
23%
FY2022: 26%
|
Professional services, FY2025
$57.8M Sources
|
Who Are Their Customers?
Automakers and automotive suppliers each represented approximately 50% of revenue; Cerence sells directly to both through a high-touch sales model.
10-K for FY2025, filed Nov 20, 2025
10-K for FY2025, filed Nov 20, 2025
Do Revenues Turn Into Profits?
Not on paper. It lost $18.7M in FY2025, but brought in more cash than it spent: $46.8M of free cash flow.
10-K for FY2025, filed Nov 20, 2025
−$2.3MView ↗
10-K for FY2025, filed Nov 20, 2025
−$18.7MView ↗
10-K for FY2025, filed Nov 20, 2025
$46.8MView ↗
How Are They Changing?
- Net income
-
Sources
10-Q for Q3 FY2026, filed Aug 6, 2026
$1.5MView ↗
- ▲ Now profitable
- vs −$2.7M in Q3 FY2025
10-Q for Q3 FY2026, filed Aug 6, 2026
Open tableView ↗
Shrinking. Revenue fell 35% in 4 years, from $387.2M in FY2021 to $251.8M in FY2025, about 10% a year.
Generative AI features
The older report describes a virtual-assistant platform built around speech recognition and language understanding; the latest report adds generative AI assistant tools and language models.
10-K for FY2022, filed Nov 29, 2022 10-K for FY2025, filed Nov 20, 2025
Beyond transportation
The older report focuses on automotive and transportation uses; the latest report also points to televisions, smart watches, voice-powered kiosks, and industrial applications for its technology.
10-K for FY2022, filed Nov 29, 2022 10-K for FY2025, filed Nov 20, 2025Cerence builds AI powered virtual assistants for the mobility/transportation market. Our primary target is the automobile market, but our…View ↗
Maintain and extend product leadership. We intend to continue investing in developing our solutions portfolio, especially continuing to…View ↗
Who Do They Compete With?
Competes with Amazon, Apple, Google, Microsoft, Alibaba, Baidu, Tencent, SoundHound, and iFlyTek
10-K for FY2025, filed Nov 20, 2025Large technology companies. Many large technology companies, including Amazon, Apple, Google, Microsoft, Alibaba, Baidu and Tencent, offer…View ↗
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