Cerence Inc. reported its second quarter fiscal year 2025 results, with total revenue reaching $78.0 million, exceeding the high end of its guidance range of $74 million to $77 million. This represents a 15.0% increase year-over-year compared to $67.8 million in Q2 FY2024.
License revenue grew by 44.8% year-over-year to $51.5 million, while connected services revenue saw a slight decrease of 7.0% to $12.6 million, and professional services decreased by 25.7% to $13.9 million. Gross profit increased 28.2% year-over-year to $60.2 million, achieving a gross margin of 77.2%.
Adjusted EBITDA for Q2 FY2025 was $29.5 million, significantly exceeding the guidance of $18 million to $22 million. The company generated $13.1 million in free cash flow, marking its fourth consecutive quarter of positive free cash flow. Cerence reiterated its full-year FY2025 revenue guidance of $236 million to $247 million, while raising its full-year Adjusted EBITDA guidance to $28 million to $34 million and free cash flow guidance to $25 million to $35 million.
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