Cerence, a provider of conversational AI technology for vehicles, saw its shares surge 32% in after-hours trading Wednesday after the company reported better-than-expected fourth quarter results and issued fiscal 2026 guidance that significantly exceeded analyst expectations.

The AI technology provider reported fourth quarter revenue of $60.6 million, surpassing the analyst consensus of $55.24 million. The company posted an adjusted loss of -$0.24 per share, slightly better than the -$0.26 analysts had expected. Revenue increased 10.6% compared to the $54.8 million reported in the same quarter last year.

Cerence’s stock jumped dramatically after the company provided fiscal 2026 revenue guidance of $300-320 million, far exceeding analyst expectations of $246 million. The midpoint of this guidance represents a 23% YoY increase, including results from the company’s first successful effort to monetize its intellectual property.

"As I reflect on my first full fiscal year as Cerence AI’s CEO, I’m incredibly proud of what our team has accomplished and excited by the road ahead," said Brian Krzanich, CEO of Cerence. "We strengthened the financial and operational foundation of the Company and increased positive cash flow generation."

For the first quarter of fiscal 2026, Cerence expects revenue between $110-120 million, including a $49.5 million patent license payment from a cross-license agreement with Samsung.

The company reported strong cash flow metrics for fiscal 2025, with net cash from operating activities of $61.2 million and free cash flow of $46.8 million, representing nearly a three-fold increase YoY.

Cerence also highlighted progress with its xUI platform, meeting all technology milestones while driving customer interest and adoption. The first vehicles powered by this platform are expected to hit roads in 2026.