Data set and deep relationships with our customers will continue to be true differentiators for Cerence. As we progress through the second half of the fiscal year, we have prioritized several objectives in order to strengthen our position in our core automotive business. First, balance our cost structure in accordance with our current levels of business while still ensuring we can successfully deliver on our Gen AI roadmap and customer commitments; second, release several Gen AI solutions into production with high end user satisfaction; and third, convert the deals currently in the pipeline, including some win-back opportunities. Before I turn the call over to Dan Tempesta, our new CFO, I would like to take a moment to introduce him. Dan joined us in mid-March and was previously CFO of Nuance. As such, he is very familiar and experienced with the auto business and our solutions. With Dan's track record of leadership and experience in the space, we are happy to have Dan on board at this important moment in Cerence's journey. I would also like to take the opportunity to thank Tom Beaudoin for his contributions and partnership during his tenure as Cerence's CFO and look forward to his continuing support as a Cerence Board member. With that, I would like to hand the call over to Dan to review our Q2 results in detail and share more about our guidance for Q3 and the full fiscal year. Dan?

Thank you, Stefan. Before I begin, let me just say to our shareholders that while this is clearly a challenging quarter to come on board, I am optimistic about the roadmap and new products that Stefan discussed. Also, I look forward to meeting with many of you during the several investor conferences and NDRs we have in the coming weeks. Turning to our results. Our Q2 revenue of $67.8 million was above the high end of the guidance, mainly due to an unplanned fixed license of approximately $5 million. This license was directly related to a settlement of an obligation created by a large customer's over-reporting of royalties discussed and reported on last quarter's conference call. In addition, our connected services revenue line also benefited from an unplanned OEM under-reporting true-up of approximately $2.6 million. Excluding these unplanned items, revenue would have landed within the lower end of our Q2 guidance range. Our adjusted EBITDA for the quarter was approximately breakeven and benefited from higher-than-expected revenue in the quarter. Our Q2 profitability was negatively impacted by approximately $6 million related to the write-off of a long-term unbilled contract asset associated with one of our nonautomotive customers that declared bankruptcy during the quarter. Our cash flow from operations was $1 million, and our balance sheet had total cash and marketable securities of approximately $115 million. As Stefan mentioned a few minutes ago, our GAAP results were also negatively affected by a $252 million goodwill impairment. This is a noncash impairment charge that only affects our GAAP results. Turning to our detailed revenue breakdown. Variable license revenue was $25.1 million, down 4% from the same quarter last year and up 21% sequentially quarter-over-quarter. Fixed license revenue came in at $10.4 million for the quarter, $5 million higher than originally expected due to the unplanned fixed license previously mentioned. Looking forward, we expect $20 million of fixed licenses in the third quarter. This will bring our fiscal '24 fixed license total to approximately $30 million, including the unplanned $5 million settlement, which is above our initial expectations of $20 million. Connected services revenue, excluding the legacy contract, was $13.6 million as discussed earlier, and as discussed earlier, benefited from the $2.6 million true-up from under-reporting by a customer, resulting in 30% growth for the same quarter last year and up 33% from the prior quarter. Excluding the true-up, connected services revenue was approximately $11 million, up 8% compared to the prior quarter. Excluding the impacts of legacy and the true-up, we expect only a modest ramp in connected services in the second half of 2024 compared to the first half. Our professional services revenue was flat year-over-year and down 10% quarter-over-quarter. As a reminder, while professional services is an enabler of both license and connected services revenue, we expect professional services revenue to remain generally flat. Going a bit deeper into our variable license revenue, we have adjusted this schedule. First, we've added a row to highlight the periodic adjustments that can occur with OEM reporting. While there are always small adjustments that can occur in the ordinary course, our intention is to include within this line individual OEM-related adjustments that are greater than $2 million in any given quarter. This will allow us to highlight items that are impacting the variable license trends. Second, we have updated the format to show, at the bottom of the page, the operational metrics that we have discussed and presented in the past. As previously mentioned, variable license this quarter was $25.1 million. Looking at our operational metrics, consumption of our previous fixed license contracts totaled $14.5 million this quarter, a reduction of 14% compared to the same quarter last year and in line with our expectations. As a reminder, because we have been managing down the annual value of fixed contracts, over time, this will result in a smaller consumption of royalties associated with past fixed contracts. As consumption levels decline, we expect that to correspondingly result in variable license growth in future periods as royalties will accrue directly into revenue as production occurs. We continue to expect to normalize our consumption run rate by the end of fiscal year 2026, at which time any new fixed contracts should roughly align to the level of consumption during the year. Our pro forma royalties were $39.6 million and show a recent declining trend. As we review our key performance indicators this quarter, our penetration of global auto production for the trailing 12 months remained steady at 54%. We shipped 11.7 million cars with Cerence technology in the quarter, down 6% year-over-year, while IHS production for the same period declined 1%. Cars produced that use our connected services increased 23% on a trailing 12-month basis compared to the same metric a year ago as some programs that were previously delayed went into production. Total adjusted billings increased 9% in the second quarter compared to the previous year. Turning to our 5-year backlog metric. We are making an approximately $200 million reduction to our 5-year backlog, which brings that figure to approximately $1 billion. Incorporating the impacts just discussed, we are guiding our third quarter revenue to be between $66 million and $72 million, which includes the $20 million fixed license previously mentioned. For the full fiscal year, we expect revenue to be between $318 million and $332 million. Excluding the impact of any restructuring activities that may occur as we consider cost reductions, we expect fiscal year 2024 cash flow from operations to be in the range of $5 million to $15 million. Before I provide our thoughts on fiscal '25, since the legacy Toyota contract is now behind us, I think it's important to discuss the 2024 revenues excluding the impacts of those services. We believe this view provides the new run rate revenue profile for the company. If you take the midpoint of our current fiscal year '24 revenue guidance I just discussed on the previous page of $325 million and exclude approximately $87 million of legacy-related revenue recognized in Q1, the adjusted revenue for the company for fiscal year '24 is approximately $238 million. We consider this new estimated run rate revenue relevant for both assessing our cost model as well as planning our business activities going forward. As we exit the first half of fiscal '24 with this new adjusted view of the run rate of our expected revenues, I do want to take a minute to look forward. While I am not prepared to provide '25 or midterm guidance at this time, I can provide a framework for how to begin to think about fiscal year '25 revenue. If you assume flat OEM production and flat pricing mix, similar to what is incorporated in our last '24 guidance, our latest '24 guidance, we would expect significantly less fixed license consumption in fiscal '25 compared to fiscal year '24 as our past commitments continue to wind down. In addition, if you assume $20 million in new fixed licenses in fiscal year '25 and very modest growth in our run rate connected services, it would be reasonable to anticipate mid single-digit growth off of the new estimated run rate of $238 million. For some additional color on the sensitivity of this view, those growth rates could be lower or higher, depending on global auto production changes, date shifts in the introduction of new platforms, and pricing and mix shifts. Again, this does not represent guidance but is rather a framework for how to think about fiscal '25 revenue. Also, this framework is subject to change based on a number of industry and customer-related factors. With regards to our business in the adjacent markets, as previously mentioned by Stefan, they are developing slower than anticipated. Although we do believe there is an opportunity for revenue growth in these markets in the midterm, we are not expecting a meaningful uplift in revenue contribution in fiscal '25. Wrapping up my comments, I'd like to leave you with a few key thoughts. We believe that generative AI and LLM technologies are critical to our future product road maps, and we plan to ensure that our resources are focused on investing in these technologies and related product offerings. Additionally, we believe that our position in the industry, our long-standing relationships with our customers, and our initial success with our recently announced Gen AI products provide us with a solid foundation to reinvigorate growth in the future. And finally, given the current financial headwinds, we plan to take cost actions in the near term that will position us to deliver stronger profit margins and stronger cash flows.

And your first question comes from Jeff Van Rhee with Craig-Hallum.

I missed the first part of the discussion, so I apologize if I'm repeating anything, Stefan. Considering the significant reduction at the midpoint of the revenue forecast, it's clearly a substantial figure. How does this decrease influence your perspective on gaining or losing market share and the competitive landscape? Could you please elaborate on that?

Yes, let me share my perspective, and then I will also get Dan's input. After reviewing the Q1 royalty reports, we noticed some downward trends. In Q2, we conducted a thorough account-by-account analysis that began in February and concluded in April. We identified a few factors contributing to a reduction in our forecast. Our projections were based on the latest and historical data, along with feedback from customers and IHS. We currently have a high penetration of 54%, but for this fiscal year, IHS remains flat. We had anticipated a growth of 3%, but observed a quarter-over-quarter decline of 12%. Additionally, as we mentioned in previous calls, there have been impacts from delays in programs, which have also resulted in postponed production starts and a slower initiation of new programs. This affects our revenue forecasts and increases costs due to a higher price per unit. This impacts our core business around running royalties as well. We also see a slower ramp-up in 2-wheelers than we expected. Regarding your question about market share, I would like to divide it into two parts. One part is related to real-time adjustments. We have lost some deals in the past, which we had already factored into our initial forecast. However, we are optimistic about regaining these opportunities based on our success at CES, where we believe there are significant prospects for recovery. We also think that the large hyperscalers are currently underperforming. Since CES, we have secured six new OEM programs and are currently engaged in predevelopment for about 14 more, indicating that we are moving in the right direction with our new Gen AI roadmap.

Along the lines of the second part there, if you look at the competitive win-backs, you said you've got a bunch of them kind of percolating here. Can you expand on that a little bit? In terms of the last couple of years, where have the competitive losses taken place and in terms of against whom? And then secondly, those that you think are on path to win back, where do you see most of your win-backs coming?

So when looking back, that was actually prior to the spin at Nuance days. So we lost, for example, GM against Google, yes? There was another loss at Volvo and a few others. But I think now we have huge opportunities for winning back a lot of deals here. And also with our new product road map and also with our new AI computing platform, I think we are forward to a breakthrough here for the conversational AI in the automotive world. And that's the feedback from more or less all OEMs across the globe.

Yes. I mean, obviously, a lot of the OEM programs and particularly around software have struggled mightily. So certainly, there have been some delays, although it seems your revenue is falling short of that. Is there any reduction now versus their expectations the OEMs a year ago, 18 months ago, in terms of the quantity of your product they're taking and expecting to put into each car, the ARPU per car?

I mean, when looking at the current automotive trends, I see obviously actually 3 major trends. One is related to EV and we are all aware that there is a slowdown in the EV field. Secondly, as I also mentioned, the software-defined cars, it's creating another dimension of complexity, right? And unfortunately, we're seeing also some delays in new programs where we can provide actually a higher PPU. For us, you're right, that's missing. And the third one is the emergence of Gen AI. And this is really appreciated by more or less all carmakers across the globe, even in China, in Europe and North America.

Your next question comes from the line of Nick Doyle with Needham.

The first question is about the fixed contract consumption. I understand you are referring to lower consumption over time and the factors influencing that. However, in the near term, should we expect to maintain the same $15 million level, around $14 million to $15 million, throughout fiscal year '24? Could you also provide some insights on the fiscal '25 consumption? Would modeling around less than half the rate we are seeing in '24 be a reasonable estimate?

Thanks for the question, Nick. I believe that the trends we've seen in the past provide a good indication for the rest of the year. Regarding your second point, by the end of 2026, we should be approaching parity in the fixed licenses for those years, with an ongoing goal of reaching $20 million. That's our target for next year, and if there are any changes to that goal, we will inform you. We anticipate that if we reach around $20 million, that could decrease over the next two years. This should help you gauge how things will trend in the coming year and the following year to achieve that target.

Yes. That's helpful. And the base that we're running on the fixed contract base is around $60 million today?

Yes, approximately. It was a little higher last year. That number can fluctuate up and down, but that's a reasonable estimation.

My second question is about the average billings per car. We observed a nice increase this quarter from the lowest point. However, considering the various factors in your guidance, it seems like average selling prices may remain flat or possibly decline, although they could rise in the fourth quarter. I would appreciate more detail on how average selling prices are trending throughout the year, as it appears that the expectations for 2024 provide a solid framework for future modeling.

I'll comment quickly, and then I'll let Stefan continue. Given the reset, it's fair to say we should not expect significant growth in average selling prices just yet. We continue to be affected by various factors. One way average selling prices improve is when we avoid startup production delays, as these often lead us from older programs with lower average selling prices to new programs with higher prices. However, at this time, average selling prices are relatively flat for this fiscal year.

It's relatively flat for this fiscal year, right? So overall, with the new products, we will see or I believe we will see a higher ASP because we are creating a complete solution for the new in-cabin experience with respect to conversational AI and going also beyond. So as we also said, we will see the first launch in 4 weeks from now. That's good, yes? Secondly, also, I mean, in the era of AI or generative AI, there's also a new speed, to give you also some ideas here, we can easily integrate our new Cerence assistant based on large language models and generative AI within 1 to 2 weeks on an automotive platform, fully tested and integrated in a car, but then it's all about the customization, the branding and so on and so forth. So overall, that's the path we are going here. And as Dan mentioned also in his script here, we are going for a transitioning for a cost-cutting approach here. But nevertheless, for us, the most important thing is also to drive innovation in the field of generative AI and large language models. The new platform, what we call the new AI computing platform goes far beyond automotive.

There are no questions. I will now turn the conference back over to Rich Yerganian, Vice President of Investor Relations, for closing remarks.

Thank you very much, and we will be, again, at several conferences upcoming, and look forward to speaking with you. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.