Cerence Inc.

Good day and thank you for standing by. Welcome to the CIRN's fourth quarter 2021 earnings call. At this time, all participant lines are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star then 1 on your telephone keypad. Please be advised, today's conference may be recorded. If you require operator assistance during the call, please press star then 0. I'd now like to hand the conference over to Rich Yerganian, Vice President of Investor Relations. Please go ahead.

Thank you, Liz. Welcome to Serence's fourth quarter and fiscal year 2021 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, 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. Joining me on today's call are Sanjay Dhawan, President and CEO of Sarence, and Mark Gellenberger, CFO of Sarence. As a reminder, the only authorized spokespeople for the company are Sanjay, Mark, and me. Before handing the call over to Sanjay, I would like to announce several upcoming investor events. The conferences include the Credit Suisse 25th Annual Technology Conference on November 30th in Scottsdale, Arizona, and several virtual events, including the Goldman Sachs Global Automotive Conference on December 2nd, Raymond James Virtual Technology Investors Conference on December 6th, and the 24th Annual Needham Growth Conference on January 11th. Please visit the events page in the investor section of the CERN's website for the most up-to-date information on our participation at these conferences. Now on to the call. Sanjay?

Thank you, Rich. Good morning, everyone. Welcome to everyone on the call, and thank you for joining us to discuss our fourth quarter and fiscal year 2021 financial results. For our call, I'll first review our strong financial performance in the fourth quarter and full fiscal 2021, followed by a review of some of the key products we introduced during the year, awards recognizing our leadership in conversational AI, and notable events that took place during the year. Next, I'll update our key performance indicators and then hand the call over to Mark to review the detailed financial results, including our outlook for fiscal 2022. We're pleased that we have been consistent in delivering strong results on key profitability metrics throughout the first two fiscal years as an independent company. We're still in the midst of our customers' production constraints due to the semiconductor shortage, Yet, we were able to deliver year-over-year growth of 7.5%. Our revenue came in just about the midpoint of the range, was aided by strong year-over-year growth in our fixed license contract, which was up 54% from the previous year. The degree that the semiconductor shortage will continue to impact our customer's production plan is still an open question as we start the new fiscal year. For the full fiscal year, I am especially proud of our results given the challenges due to the semiconductor shortage impact on auto production and some lingering effects due to COVID. Topline growth was up 17% compared to fiscal 2020 and nearly all of the other profitability metrics were significantly above our original guidance provided at the beginning of the year. Bookings at 590 million came in very strong, including nearly $120 million for our new products and services, which will provide a strong, solid foundation for the revenue target for these products in our 2024 model. We believe these bookings will allow us to maintain market share for our licensed products and gain share for our connected services. These bookings led to a record backlog for the company of approximately $2 billion. What I'm most proud of was the win back from a competitor with the European OEM. This was business loss when the business was still part of nuance and the win back represents validation of the effort that the sales team has done to continue to innovate and elevate our product to a level the competition will find hard to match. For those of you I have had the pleasure of speaking with, you have heard me talk about the three key principles that I drive the company. Innovation, speed of execution, and cost. As a tech company, it is imperative for us to continue to innovate and bring new products to market that enhance our existing technology or provide new features or capabilities. This is how we will maintain our technology and market share leadership. I'm very proud of our R&D team that has delivered so many new products this year. In some cases, such as Serence Browse or Extend, the products were introduced during the year. In others, such as Serence Look, Swipe, and EVD, they were in production for the first time. I'm especially excited about our Serence Browse product. Browse fits perfectly with our core, and Extend, it would be common digital life ecosystem. Browse literally allows the driver to search the web for any information by using their voice while driving. Current Browse is also a good example of our speed of execution as the product went from inception to start of production with one of the top customers in just eight months. I'm also excited about our EVD or emergency vehicle detection products. We're the first company to provide emergency vehicle detection in the car and to be able to alert the driver so that they can safely get out of the way. This is an important safety feature that we expect will be adopted by more and more automakers. This capability is now in production. Two of our new products, Terrence Ride and Building Mobility, leverage our core technology for the car into the adjacent market of two two-wheel vehicles, and elevators. We have now won business in both of these adjacent markets and believe they can be significant generators of revenue in the future. As a company where these are focused on transportation and mobility space, this focus allows us to work very closely with our customers to make sure we're meeting their needs for their next generation infotainment system. You can expect another steady increase stream of enhanced AI technology and new products from CERN in fiscal year 2022 as well. Of course, as CEO, you would expect me to be excited about the new products we have brought to market, but it's always great to get independent acknowledgement of what we have accomplished. You can see from the slide, our AI technology leadership is recognized by companies and organizations from around the world. The Baidu Award is especially pleasing because, in some ways, they could be considered a competitor. They also rarely recognize non-Indigenous Chinese companies. The Automotive News Pace Award for Serence Pay is another one we are especially proud of since it recognized one of our newer applications, Serence Pay. These awards recognize not only the leadership we offer in conversational AI technologies, but also our ability to execute and deliver these new products to our customers. Serence is dedicated to our customer success, and we work extremely hard and collaboratively with our customers. Several of these awards are representative of that. While fiscal year 2021 was a good one from the perspective of our financial performance, there were also several important accomplishments we expect to keep that momentum going. Firstly, we had several wins in two-wheeler market, one with the leading global provider of two-wheeler motorcycles and four-wheel ATVs. We expect the first product to hit start production with our technology in calendar 2022. Second, We have been talking about the potential of our technology in the elevator market for some time now. I'm excited to report that we have won our first business. It is with one of the top manufacturers in the world, and we are excited to help them create the elevator of the future using computational AI. We expect to expand further in this market during this fiscal year. We have also won our first piece of business in another adjacent market that we have not yet disclosed. You will hear more about this in the near future. We had approximately $120 million in bookings for our new products and services, which is roughly 20% of our total bookings for the year. The interest in these new products has been very high, and bookings in fiscal year 2021 was what gave us confidence to raise our revenue target for these products in our fiscal 2024 model we shared with you last quarter. While the adjacent markets and new apps and services are key to our future growth, we still have a laser focus on strengthening our core business. To that end, we have added 14 new logo bins during the year, meaning 14 distinct pieces of business we did not already have. This included five competitive takeaways, including three in China. At 174, we have record number of SOPs, startup productions, during the fiscal year. As auto production recovers, we would expect this high number of SOPs to be an added acceleration to our business. In summary, fiscal 2021 was a very good year for setting the foundation for future expansion of the business. We fully expect to build on this success in fiscal 2022. Moving on to our KPIs, the results represent continued strength in the business. While auto production may be down due to the semiconductor shortage and COVID, we continue to ship our technology in more than one of every two cars produced on a global basis. More importantly, We saw an increase of 20% in the number of cars produced with our connected services compared to the total auto production growth of 9% over the same time period. Our strong growth is likely due to a combination of the penetration of connected car technology and market share gains. Our average billings per car increased a solid 8% year over year. The average contract duration continued to expand primarily due to the increasing mix of connected contracts with longer subscription periods. While still on positive trends, the data on KPIs shows a slowdown in monthly active users. We believe this is attributable to the lack of availability of new cars and COVID-19's residual impact on car usage in different parts of the world. I want to close my remarks by reminding you of our long-term vision for the company. Our goal is to be the central AI brain of the car, essentially becoming a driver's trusted co-pilot. To that end, we will see significant opportunity in the combination of vision and voice AI with applications in driver monitoring as well as road and cabin monitoring. This is an area you will hear more from us in 2022. Finally, before turning the call over to Mark, I'd like to acknowledge the launch of our inaugural ESG report this past Thursday. We believe we are good stewards of the principles of ESG and this report is a significant step in sharing that with all of you. You can download the full report from our website. I'd like to now turn the call over to Mark so he can review with you the details of the quarter and full fiscal year and provide Q1 guidance and our initial guidance for fiscal year 2022. Mark? Thank you, Sanjay.