Cerence Inc.

Gentlemen, thank you for standing by, and welcome to the CERNS Q1 2020 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Mr. Rich Yerganian. VP of Investor Relations. Thank you. Please go ahead, sir.

Thank you, Dylan. Welcome to Serence's first quarter fiscal year 2020 conference call. Before we begin, I would like to remind you that this call may involve certain forward-looking statements. These statements are subject to risks and uncertainties as described in the press release preceding today's call. Serence makes no representations to update those statements after the date hereof. In addition, we may refer to certain non-GAAP measures in 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. Joining me on today's call is Sanjay Dwan, Serence's CEO, and Mark Gallenberger, Serence's CFO. As a reminder, the only authorized spokespeople for the company are Sanjay, Mark, and myself. Before handing the call over to Sanjay, I'd like to announce a few upcoming investor events. Next week on February 18th, we will be hosting an analyst day at the NASDAQ market site in New York City. There is very limited space still available, so if you are interested in attending, please send me an email. Attendance is restricted to institutional investors and sell-side analysts. However, the event will be webcast and accessible to the general public from our website. We will also be participating at the Morgan Stanley Technology Media and Telecommunications Investor Conference in San Francisco on March 2nd and the Raymond James 2020 Investors Conference in Orlando on March 4th. We will also be participating at the 32nd Roth Annual Conference in Laguna Miguel, California on March 16th. Now onto the call. Sanjay?

Thank you, Rich, and welcome to everyone on the call. Salinas is off to a strong start. Our first quarter as an independent company delivered better than expected results on just about every financial metric. The good work that began over a year ago to separate the business from nuance and continuing to be executed by Salinas led to no major issues or surprises in the quarter. The plan to stand up the company into A separate standalone business was well thought out and well executed. The result was that we met our revenue and gross margin guidance and exceeded on other key financial metrics in the quarter, including operating margins and adjusted EBITDA. Mark will share more details with you on the quarter in a few minutes. With the mechanics of separating from nuance mostly behind us, We are now laser focused on profitably growing the business. It starts with design wins that generate license revenue once the car starts production in 18 to 36 months after the win. In Q1, we had 30 different cars start production. Our success rate for design wins continue unbated with seven decisions during the quarter. These wins include decisions over both large tech giants and smaller niche competitors across five geographic regions, reflecting a success rate of approximately 90%. One of the deals we signed in the quarter was one of the largest contracts in the history of the business. Our leading AI for automotive voice assistant technology and ability to support over 70 different languages and dialects are distinct competitive advantage for us. We will continue to extend our lead as we innovate and deliver new products that advance safety, information, and entertainment in the car, such as our patent-pending emergency vehicle detection capability. One of the major misconceptions about the competitive environment is the belief that it is either Serence technology in the car or a tech giant. The reality is that in most cases it is Serence and tech giant story, not an or story. Our goal is to help our customers extend the full digital life of their customers into the car so that they can have access to all virtual assistance. This is where our cognitive arbitration technology uses AI to determine what is the best channel to service the request of the driver. There is no need to specifically request a virtual assistant. Simply request the car to do something, and then our technology will do the rest. Seamless routing that requests to the appropriate service, whether it's Google, Amazon, Apple, or Microsoft, or if you are in China, Baidu, Alibaba, or Tencent. We do this while at the same time providing a white label solution that allows the OEM to brand the experience to themselves and not to a third party. As the car continues to become more digital, the driver experience in the car is becoming a key differentiator from one OEM brand to another, and we enable our customers to create that differentiation. With the mechanics of spinning out into an independent company behind us, our focus is now on enhancing and expanding our product portfolio. We recently announced several new products leading up to the Consumer Electronics Show in early January. Emergency vehicle detection offers the ability for our AI to detect an approaching emergency vehicle and then alert the driver so that they can safely get out of the way. My car, my voice is a voice cloning technology that will allow you to engage with familiar voice in the car instead of an unfamiliar one. Sedans Arc, initially targeted at China market, provides a more comprehensive infotainment solution that speeds time to market. Lastly, our car-like product enhances car ownership in different phases for CAR's product lifecycle, providing an opportunity for an annual recurring revenue model. These products and more are examples of our pushing the envelope of the AI technology in the CAR with the goal of increasing revenue per CAR while also adding new products that deliver that revenue to CERN. It was our first time as an exhibitor at CES as CERN's and the interest in these products and more led to over 500 plus meetings and product demos, reinforcing our position as a leader of AI and voice powered assistance in the auto industry. In summary, we are off to a strong start as an independent company with a deep pipeline of new business opportunities and expanding portfolio of new products and a business model delivering profitable growth. If you are able to join us next week for our analyst day, you will hear more about our plans to add more content per car, additional information about some of our new products, and how we're looking to add new revenue streams without being solely tied to new car cycles. I'd like to now turn the call over to Mark to review the financial results of the quarter.