Nvidia's Q3 2025 Earnings: Revenue Growth, Pricing Pressures, and Tariff Contradictions Explored

Revenue and EBITDA Growth:
- Cerence Inc. reported record revenue of $62.2 million for Q3 2025, exceeding the high end of its guidance.
- The company achieved an adjusted EBITDA of $9 million, well above its guidance range of $1 million to $4 million.
- The growth was driven by strong contributions across all revenue lines, including a 48% year-over-year increase in variable license revenue and a 17% year-over-year increase in connected services revenue.

Free Cash Flow and Debt Reduction:
- Cerence generated strong free cash flow of $16.1 million, marking its fifth consecutive quarter of positive free cash flow.
- The company reduced its total debt by $87.5 million, using cash on hand to repurchase and repay convertible notes.
- This was attributed to effective expense management and focus on operational efficiency.

AI Innovation and xUI Development:
- Cerence continues to advance its AI road map, particularly with the development of Cerence xUI, a next-generation hybrid agentic AI assistant platform.
- The company achieved several important milestones, including increases in language availability and contextual reasoning capabilities.
- Progress in AI integration and partnerships with chip providers have enhanced xUI's functionality and market competitiveness.

Customer and Market Engagement:
- Cerence signed a deal with a Volkswagen Group brand for xUI as the basis of its next-gen system and expanded work with JLR to integrate generative AI capabilities.
- The company is also engaged in identifying new verticals and expands its collaboration with LG, leveraging its cloud, neural, and edge text-to-speech capabilities for LG televisions.
- These developments are supported by a strong global customer momentum and a steady stream of proof-of-concept programs across major OEMs.