Cerence Inc

Cerence announced on Wednesday that it has agreed to repurchase $10 million of its 1.50% convertible senior notes due 2028 at 92.75% of principal value. The repurchase is expected to reduce interest expense, lower leverage, and eliminate potential dilution related to the repurchased notes. Following the transaction, the company will have $170 million of the notes outstanding and will continue to evaluate repurchases through maturity in 2028. Shares rose 5.94% in response.

Cerence raised its fiscal 2026 free cash flow guidance to a range of $76 million to $82 million, up from its prior outlook of $66 million to $76 million, and announced its first-ever share repurchase program authorizing up to $30 million in buybacks over the next 12 months. The company reported third-quarter revenue of approximately $70 million, in line with guidance, with adjusted EBITDA of $13.5 million and free cash flow of $20 million. For the fourth quarter, Cerence expects revenue between $61 million and $65 million, reflecting the absence of additional fixed license revenue and normal seasonal patterns. Management highlighted that approximately 100,000 vehicles equipped with its xUI platform are now on the road, with a ramp expected to begin at the end of 2026 and impact revenue in fiscal 2027 and beyond. The company also signed a new xUI deal with Stellantis and secured its first customer for a mobile work agent developed in collaboration with Microsoft.