10-Q
--09-30falseQ30001768267http://fasb.org/us-gaap/2023#AccountingStandardsUpdate202006CumulativeEffectPeriodOfAdoptionMemberP1YP1YP1YP1YP4Yhttp://fasb.org/us-gaap/2023#OtherNonoperatingIncomeExpensehttp://fasb.org/us-gaap/2023#OtherNonoperatingIncomeExpensehttp://fasb.org/us-gaap/2023#OtherNonoperatingIncomeExpensehttp://fasb.org/us-gaap/2023#OtherNonoperatingIncomeExpense0001768267crnc:CustomerOneMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2023-04-012023-06-300001768267crnc:NetOfForfeituresDueToResignationOfFormerCFOAndGeneralCounselMember2021-10-012022-06-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:LIBORMember2020-12-172020-12-170001768267crnc:CreditAgreementAmendmentOneMembercrnc:NetLeverageRatioScenarioThreeMember2020-12-172020-12-170001768267country:JP2021-10-012022-06-300001768267us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2021-10-012022-06-300001768267us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300001768267us-gaap:AdditionalPaidInCapitalMembercrnc:ThreePointZeroZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2022-10-012023-06-300001768267crnc:CreditAgreementAmendmentTwoMembercrnc:SecuredOvernightFinancingRateMembercrnc:NetLeverageRatioScenarioThreeMember2022-11-222022-11-220001768267crnc:OtherAsiaPacificMember2021-10-012022-06-300001768267us-gaap:AdditionalPaidInCapitalMember2023-06-300001768267crnc:OtherEuropeMiddleEastAndAfricaMember2023-04-012023-06-300001768267us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001768267us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMemberus-gaap:OtherLiabilitiesMember2023-06-300001768267crnc:OtherFacilityMember2023-06-3000017682672021-10-012022-06-300001768267crnc:ConversionOptionOfNotesMember2023-04-012023-06-300001768267us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-10-012022-06-300001768267country:US2022-04-012022-06-3000017682672023-06-300001768267crnc:CustomerOneMember2022-10-012023-06-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:LIBORMembercrnc:NetLeverageRatioScenarioTwoMember2020-12-172020-12-170001768267crnc:CreditAgreementAmendmentOneMembercrnc:NetLeverageRatioScenarioOneMember2020-12-170001768267crnc:CreditAgreementAmendmentOneMembercrnc:LIBORMembercrnc:NetLeverageRatioScenarioOneMember2020-12-170001768267crnc:OtherOneTimeGainsMember2023-04-012023-06-300001768267us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2022-09-300001768267us-gaap:LicenseMember2023-04-012023-06-300001768267srt:MaximumMembercrnc:CreditAgreementAmendmentTwoMembercrnc:NetLeverageRatioScenarioThreeMember2022-11-220001768267us-gaap:AdditionalPaidInCapitalMember2022-09-300001768267crnc:ContingentlyIssuableStockAwardsMember2023-04-012023-06-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:NetLeverageRatioScenarioOneMember2020-12-172020-12-170001768267us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasuryAndGovernmentMember2023-06-300001768267us-gaap:EmployeeSeveranceMember2023-06-300001768267crnc:CustomerTwoMember2023-04-012023-06-3000017682672022-03-310001768267us-gaap:RestrictedStockUnitsRSUMember2022-09-300001768267crnc:CreditAgreementAmendmentTwoMembercrnc:SecuredOvernightFinancingRateMember2022-11-222022-11-220001768267us-gaap:OtherRestructuringMember2022-09-300001768267us-gaap:FairValueInputsLevel2Memberus-gaap:BankTimeDepositsMember2023-06-300001768267crnc:CostOfProfessionalServicesMember2021-10-012022-06-300001768267crnc:CreditAgreementAmendmentTwoMembercrnc:SofrPlusTenBasisPointCreditSpreadMembercrnc:NetLeverageRatioScenarioOneMember2022-11-222022-11-220001768267us-gaap:RetainedEarningsMember2022-09-300001768267us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2022-09-300001768267crnc:RestructuringMember2023-06-300001768267crnc:OtherAmericasMember2022-04-012022-06-300001768267crnc:ThreePointZeroZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2022-10-012023-06-300001768267crnc:CreditAgreementAmendmentTwoMember2022-11-222022-11-220001768267us-gaap:ForeignCountryMember2022-10-012023-06-300001768267us-gaap:TechnologyBasedIntangibleAssetsMember2023-06-300001768267crnc:ThreePointZeroZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2020-06-022020-06-020001768267us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2021-10-012022-09-300001768267us-gaap:RevenueFromContractWithCustomerMembercrnc:CustomerTwoMemberus-gaap:CustomerConcentrationRiskMember2021-10-012022-06-300001768267crnc:CostOfProfessionalServicesMember2022-04-012022-06-300001768267crnc:OtherOneTimeGainsMember2022-10-012023-06-300001768267us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2023-06-300001768267srt:MinimumMember2023-06-300001768267crnc:CustomerOneMemberus-gaap:CreditConcentrationRiskMemberus-gaap:AccountsReceivableMember2022-10-012023-06-300001768267crnc:AccruedExpensesAndOtherCurrentLiabilitiesMemberus-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2022-09-300001768267us-gaap:CommonStockMember2023-04-012023-06-300001768267crnc:RestructuringAndOtherCostsNetMember2023-04-012023-06-300001768267crnc:CreditAgreementAmendmentOneMembersrt:MaximumMembercrnc:NetLeverageRatioScenarioTwoMember2020-12-170001768267crnc:CustomerOneMemberus-gaap:CreditConcentrationRiskMemberus-gaap:AccountsReceivableMember2021-10-012022-09-300001768267crnc:RestructuringMember2023-04-012023-06-300001768267srt:MaximumMembercrnc:CreditAgreementAmendmentTwoMembercrnc:NetLeverageRatioScenarioTwoMember2022-11-220001768267crnc:CreditAgreementAmendmentOneMembercrnc:NetLeverageRatioScenarioFiveMember2020-12-172020-12-170001768267crnc:ThreePointZeroZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2022-09-300001768267us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMember2023-06-300001768267crnc:OnePointFiveZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyEightMember2023-06-262023-06-2600017682672024-01-012023-06-300001768267us-gaap:CreditConcentrationRiskMemberus-gaap:AccountsReceivableMember2022-10-012023-06-300001768267us-gaap:FairValueInputsLevel2Memberus-gaap:DebtSecuritiesMember2023-06-300001768267us-gaap:RetainedEarningsMember2021-10-012022-06-300001768267us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2022-10-012023-06-300001768267crnc:RestructuringAndOtherCostsNetMember2021-10-012022-06-300001768267country:JP2022-04-012022-06-3000017682672023-07-012023-06-300001768267us-gaap:CreditConcentrationRiskMembercrnc:CustomerTwoMemberus-gaap:AccountsReceivableMember2022-10-012023-06-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:NetLeverageRatioScenarioOneMemberus-gaap:BaseRateMember2020-12-172020-12-170001768267crnc:ProfessionalServicesMember2023-04-012023-06-300001768267us-gaap:ResearchAndDevelopmentExpenseMember2023-04-012023-06-300001768267crnc:BellevueWashingtonOfficeSpaceMember2023-06-300001768267crnc:OnePointFiveZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyEightMember2023-06-260001768267crnc:TimeBasedRestrictedStockUnitsMember2022-09-300001768267crnc:CreditAgreementAmendmentOneMembersrt:MinimumMembercrnc:NetLeverageRatioScenarioTwoMember2020-12-170001768267us-gaap:RetainedEarningsMember2022-10-012023-06-3000017682672021-09-300001768267us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2023-04-012023-06-300001768267crnc:CustomerTwoMember2021-10-012022-06-300001768267crnc:CostOfConnectedServicesMember2022-04-012022-06-300001768267crnc:CreditAgreementAmendmentTwoMembercrnc:SofrPlusTenBasisPointCreditSpreadMembercrnc:NetLeverageRatioScenarioTwoMember2022-11-222022-11-220001768267crnc:TwoThousandAndNineteenEquityIncentivePlanMember2019-10-020001768267crnc:CreditAgreementAmendmentTwoMembercrnc:NetLeverageRatioScenarioOneMember2022-11-220001768267crnc:NegligentViolationMember2023-03-242023-03-240001768267crnc:CreditAgreementAmendmentTwoMembersrt:ScenarioForecastMember2023-01-012023-12-310001768267crnc:OnePointFiveZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyEightMember2023-06-302023-06-300001768267us-gaap:CommonStockMember2022-03-310001768267srt:MaximumMembercrnc:OnePointFiveZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyEightMember2023-06-262023-06-260001768267srt:RestatementAdjustmentMemberus-gaap:AccountingStandardsUpdate202006Member2022-10-010001768267us-gaap:RevenueFromContractWithCustomerMembercrnc:CustomerTwoMemberus-gaap:CustomerConcentrationRiskMember2022-10-012023-06-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:NetLeverageRatioScenarioFiveMemberus-gaap:BaseRateMember2020-12-172020-12-170001768267us-gaap:FacilityClosingMember2022-04-012022-06-300001768267us-gaap:CommonStockMember2023-06-300001768267crnc:TwoThousandAndNineteenEmployeeStockPurchasePlanMember2019-10-020001768267crnc:CreditAgreementMember2023-06-3000017682672022-09-300001768267crnc:CreditAgreementAmendmentOneMember2022-10-012023-06-300001768267crnc:CreditAgreementAmendmentTwoMember2022-10-012023-06-300001768267us-gaap:GeneralAndAdministrativeExpenseMember2023-04-012023-06-300001768267us-gaap:AdditionalPaidInCapitalMember2022-03-310001768267us-gaap:LicenseMember2022-04-012022-06-300001768267crnc:CreditAgreementAmendmentOneMembersrt:MinimumMembercrnc:NetLeverageRatioScenarioFourMember2020-12-170001768267crnc:CreditAgreementAmendmentTwoMember2022-04-012022-06-300001768267crnc:CreditAgreementAmendmentTwoMemberus-gaap:BaseRateMember2022-11-222022-11-220001768267us-gaap:CommonStockMember2022-10-012023-06-300001768267us-gaap:AdditionalPaidInCapitalMember2022-10-012023-06-300001768267crnc:ThreePointZeroZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2020-06-0200017682672023-04-012023-06-300001768267crnc:OnePointFiveZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyEightAndThreePointZeroZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2022-04-012022-06-300001768267us-gaap:ResearchAndDevelopmentExpenseMember2022-04-012022-06-300001768267us-gaap:CommonStockMember2023-03-310001768267us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2022-10-012023-06-3000017682672022-04-012022-06-300001768267us-gaap:OtherRestructuringMember2023-06-300001768267us-gaap:SellingAndMarketingExpenseMember2022-04-012022-06-300001768267us-gaap:ResearchAndDevelopmentExpenseMember2021-10-012022-06-300001768267us-gaap:RevenueFromContractWithCustomerMembercrnc:CustomerTwoMemberus-gaap:CustomerConcentrationRiskMember2023-04-012023-06-300001768267us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001768267crnc:CostOfProfessionalServicesMember2022-10-012023-06-300001768267crnc:CostOfProfessionalServicesMember2023-04-012023-06-300001768267crnc:CustomerOneMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2021-10-012022-06-300001768267us-gaap:FacilityClosingMember2023-06-300001768267crnc:OtherAsiaPacificMember2022-10-012023-06-300001768267us-gaap:EmployeeSeveranceMember2022-10-012023-06-300001768267crnc:CreditAgreementAmendmentTwoMembercrnc:SofrPlusTenBasisPointCreditSpreadMember2022-11-222022-11-220001768267crnc:RestructuringMember2022-10-012023-06-300001768267crnc:OtherEuropeMiddleEastAndAfricaMember2022-04-012022-06-300001768267us-gaap:AdditionalPaidInCapitalMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2022-09-300001768267crnc:CreditAgreementMembercrnc:FourYearSeniorSecuredTermLoanFacilityMember2020-06-120001768267crnc:OnePointFiveZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyEightAndThreePointZeroZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2021-10-012022-06-300001768267us-gaap:CommonStockMember2022-04-012022-06-300001768267us-gaap:RetainedEarningsMember2022-03-310001768267crnc:CreditAgreementAmendmentTwoMembercrnc:SecuredOvernightFinancingRateMembercrnc:NetLeverageRatioScenarioFiveMember2022-11-222022-11-220001768267us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2023-06-300001768267us-gaap:OtherRestructuringMember2022-10-012023-06-3000017682672023-08-020001768267crnc:CreditAgreementAmendmentOneMembersrt:MaximumMembercrnc:NetLeverageRatioScenarioFourMember2020-12-170001768267crnc:PerformanceBasedRestrictedStockUnitsMember2023-06-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:LIBORMembercrnc:NetLeverageRatioScenarioFiveMember2020-12-172020-12-1700017682672023-03-310001768267crnc:PerformanceBasedRestrictedStockUnitsMember2022-09-300001768267crnc:RestructuringMember2022-09-300001768267crnc:OtherOneTimeGainsMember2022-04-012022-06-300001768267us-gaap:NondesignatedMembercrnc:AccruedExpensesAndOtherCurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMember2023-06-300001768267srt:MaximumMember2022-10-012023-06-300001768267country:DE2022-04-012022-06-300001768267crnc:CreditAgreementAmendmentTwoMembercrnc:SecuredOvernightFinancingRateMembercrnc:NetLeverageRatioScenarioFourMember2022-11-222022-11-220001768267crnc:ThirdPartyFeesMember2023-04-012023-06-300001768267crnc:OnePointFiveZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyEightMember2023-06-300001768267us-gaap:EmployeeSeveranceMember2021-10-012022-06-300001768267us-gaap:RetainedEarningsMember2021-09-300001768267us-gaap:GeneralAndAdministrativeExpenseMember2022-04-012022-06-300001768267srt:MinimumMember2022-10-012023-06-300001768267crnc:CreditAgreementMember2021-10-012022-09-300001768267crnc:CreditAgreementAmendmentTwoMember2023-04-012023-06-3000017682672023-03-242023-03-240001768267crnc:OtherEuropeMiddleEastAndAfricaMember2021-10-012022-06-300001768267us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2023-06-300001768267crnc:CustomerOneMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2022-10-012023-06-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:FourYearSeniorSecuredTermLoanFacilityMember2020-12-172020-12-170001768267crnc:CreditAgreementAmendmentTwoMembercrnc:NetLeverageRatioScenarioOneMemberus-gaap:BaseRateMember2022-11-222022-11-220001768267crnc:CreditAgreementMember2023-03-3100017682672019-10-022019-10-020001768267crnc:RestructuringAndOtherCostsNetMember2022-10-012023-06-300001768267crnc:ConversionOptionOfNotesMember2022-04-012022-06-300001768267srt:ScenarioPreviouslyReportedMember2022-10-010001768267crnc:OnePointFiveZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2023-06-300001768267us-gaap:GeographicConcentrationRiskMembersrt:MaximumMemberus-gaap:RevenueFromContractWithCustomerMembercountry:CN2023-04-012023-06-300001768267crnc:CreditAgreementAmendmentTwoMembercrnc:NetLeverageRatioScenarioThreeMemberus-gaap:BaseRateMember2022-11-222022-11-220001768267country:DE2022-10-012023-06-300001768267crnc:ThreePointZeroZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMemberus-gaap:AccountingStandardsUpdate202006Member2023-06-300001768267us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2021-10-012022-06-300001768267crnc:ThreePointZeroZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2023-06-300001768267crnc:PerformanceBasedRestrictedStockUnitsMember2022-10-012023-06-300001768267crnc:SeniorSecuredFirstLienRevolvingCreditFacilityMembercrnc:CreditAgreementMember2020-06-120001768267country:US2023-04-012023-06-300001768267crnc:ThreePointZeroZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2021-10-012022-09-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:LIBORMembercrnc:NetLeverageRatioScenarioThreeMember2020-12-172020-12-170001768267crnc:OtherAmericasMember2022-10-012023-06-300001768267us-gaap:RestrictedStockUnitsRSUMember2023-04-012023-06-300001768267crnc:OnePointFiveZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyEightAndThreePointZeroZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2022-10-012023-06-300001768267us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2023-06-300001768267crnc:CostOfConnectedServicesMember2021-10-012022-06-300001768267crnc:OtherEuropeMiddleEastAndAfricaMember2022-10-012023-06-300001768267us-gaap:SellingAndMarketingExpenseMember2021-10-012022-06-300001768267crnc:OtherAsiaPacificMember2023-04-012023-06-300001768267us-gaap:FacilityClosingMember2023-04-012023-06-300001768267us-gaap:CommonStockMember2021-09-300001768267crnc:OtherAmericasMember2021-10-012022-06-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:NetLeverageRatioScenarioFiveMember2020-12-170001768267us-gaap:RetainedEarningsMember2023-06-300001768267us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMember2022-09-300001768267crnc:CustomerTwoMember2022-10-012023-06-300001768267srt:MinimumMembercrnc:OnePointFiveZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyEightMember2023-06-262023-06-260001768267us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2023-06-300001768267crnc:RestructuringAndOtherCostsNetMember2022-04-012022-06-300001768267us-gaap:OtherRestructuringMember2021-10-012022-06-300001768267us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001768267crnc:CreditAgreementAmendmentTwoMember2021-10-012022-06-300001768267us-gaap:FacilityClosingMember2021-10-012022-06-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:NetLeverageRatioScenarioTwoMemberus-gaap:BaseRateMember2020-12-172020-12-170001768267us-gaap:EmployeeSeveranceMember2022-09-300001768267us-gaap:EmployeeSeveranceMember2022-04-012022-06-300001768267us-gaap:OtherAssetsMemberus-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2023-06-300001768267crnc:ContingentlyIssuableStockAwardsMember2022-10-012023-06-300001768267crnc:ProfessionalServicesMember2022-10-012023-06-300001768267srt:MinimumMembercrnc:ThreePointZeroZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2020-06-022020-06-020001768267us-gaap:FairValueInputsLevel2Memberus-gaap:BankTimeDepositsMember2022-09-300001768267srt:MaximumMembercrnc:CreditAgreementMember2022-10-012023-06-300001768267country:DE2023-04-012023-06-3000017682672022-10-012023-06-300001768267us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2022-09-300001768267us-gaap:RetainedEarningsMember2022-04-012022-06-300001768267us-gaap:LicenseMember2021-10-012022-06-300001768267crnc:ModifiedNotesMember2023-06-300001768267crnc:SeniorSecuredFirstLienRevolvingCreditFacilityMembercrnc:CreditAgreementMember2023-06-300001768267us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001768267crnc:ConversionOptionOfNotesMember2021-10-012022-06-300001768267crnc:CreditAgreementAmendmentTwoMembercrnc:NetLeverageRatioScenarioFiveMemberus-gaap:BaseRateMember2022-11-222022-11-220001768267srt:MaximumMembercrnc:CreditAgreementMember2023-03-310001768267us-gaap:OtherRestructuringMember2023-04-012023-06-300001768267crnc:RestructuringMember2022-04-012022-06-300001768267country:JP2022-10-012023-06-300001768267us-gaap:AdditionalPaidInCapitalMember2021-09-300001768267us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2022-04-012022-06-300001768267crnc:TimeBasedRestrictedStockUnitsMember2022-10-012023-06-300001768267crnc:CreditAgreementMembercrnc:FourYearSeniorSecuredTermLoanFacilityMember2020-06-122020-06-120001768267country:JP2023-04-012023-06-300001768267us-gaap:RetainedEarningsMember2023-04-012023-06-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:LIBORMembercrnc:NetLeverageRatioScenarioFourMember2020-12-172020-12-170001768267crnc:CustomerOneMember2023-04-012023-06-300001768267us-gaap:LicenseMember2022-10-012023-06-300001768267us-gaap:OtherAssetsMemberus-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2022-09-300001768267crnc:CreditAgreementAmendmentTwoMembersrt:MaximumMembercrnc:NetLeverageRatioScenarioFourMember2022-11-220001768267us-gaap:RetainedEarningsMember2023-03-310001768267crnc:CreditAgreementAmendmentTwoMembercrnc:NetLeverageRatioScenarioFourMemberus-gaap:BaseRateMember2022-11-222022-11-220001768267us-gaap:DebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2022-09-300001768267crnc:CreditAgreementAmendmentOneMembersrt:MinimumMembercrnc:NetLeverageRatioScenarioThreeMember2020-12-1700017682672022-06-300001768267crnc:CreditAgreementAmendmentTwoMembercrnc:NetLeverageRatioScenarioFiveMember2022-11-220001768267us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001768267us-gaap:EmployeeSeveranceMember2023-04-012023-06-300001768267crnc:OtherAsiaPacificMember2022-04-012022-06-300001768267us-gaap:CustomerRelationshipsMember2022-09-300001768267us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001768267us-gaap:RetainedEarningsMember2022-06-300001768267crnc:CreditAgreementAmendmentTwoMembercrnc:NetLeverageRatioScenarioTwoMembercrnc:SecuredOvernightFinancingRateMember2022-11-222022-11-220001768267crnc:ConnectedServicesMember2022-10-012023-06-300001768267us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001768267us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMemberus-gaap:OtherLiabilitiesMember2022-09-300001768267us-gaap:AccountingStandardsUpdate202006Member2023-06-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:LIBORMember2020-06-122020-06-120001768267us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2022-04-012022-06-300001768267crnc:ConversionOptionOfNotesMember2022-10-012023-06-300001768267us-gaap:AdditionalPaidInCapitalMember2023-03-310001768267srt:MinimumMembercrnc:ThreePointZeroZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2022-10-012023-06-300001768267crnc:DueToResignationOfFormerCEOMember2021-10-012022-06-300001768267us-gaap:RestrictedStockUnitsRSUMember2022-10-012023-06-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:NetLeverageRatioScenarioTwoMember2020-12-172020-12-170001768267crnc:ThirdPartyFeesMember2022-10-012023-06-300001768267srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2022-09-300001768267us-gaap:FacilityClosingMember2022-10-012023-06-300001768267crnc:NetOfForfeituresDueToResignationOfFormerCEOMember2021-10-012022-06-300001768267us-gaap:CustomerRelationshipsMember2023-06-300001768267crnc:CreditAgreementAmendmentTwoMember2022-11-220001768267us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2022-09-300001768267us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001768267us-gaap:AdditionalPaidInCapitalMember2021-10-012022-06-300001768267us-gaap:GeneralAndAdministrativeExpenseMember2022-10-012023-06-3000017682672028-01-012023-06-300001768267us-gaap:SellingAndMarketingExpenseMember2022-10-012023-06-300001768267us-gaap:ResearchAndDevelopmentExpenseMember2022-10-012023-06-300001768267crnc:TimeBasedRestrictedStockUnitsMember2023-06-300001768267crnc:DueToResignationOfFormerCFOAndGeneralCounselMember2021-10-012022-06-300001768267us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2023-04-012023-06-300001768267crnc:CreditAgreementAmendmentTwoMembercrnc:NetLeverageRatioScenarioTwoMemberus-gaap:BaseRateMember2022-11-222022-11-220001768267crnc:OnePointFiveZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyEightMember2022-10-012023-06-300001768267us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2022-09-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:NetLeverageRatioScenarioFourMember2020-12-172020-12-170001768267us-gaap:DomesticCountryMember2022-10-012023-06-300001768267crnc:SeniorSecuredFirstLienRevolvingCreditFacilityMembercrnc:CreditAgreementMember2022-10-012023-06-300001768267us-gaap:CommonStockMember2021-10-012022-06-300001768267crnc:OnePointFiveZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyEightMember2023-07-030001768267us-gaap:RestrictedStockUnitsRSUMember2021-10-012022-06-300001768267crnc:CustomerOneMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2022-04-012022-06-300001768267crnc:CreditAgreementAmendmentTwoMember2023-03-310001768267crnc:CostOfConnectedServicesMember2023-04-012023-06-300001768267us-gaap:CreditConcentrationRiskMemberus-gaap:AccountsReceivableMember2021-10-012022-09-300001768267us-gaap:SellingAndMarketingExpenseMember2023-04-012023-06-300001768267us-gaap:AdditionalPaidInCapitalMember2022-06-3000017682672022-10-010001768267crnc:CreditAgreementAmendmentTwoMembercrnc:SofrPlusTenBasisPointCreditSpreadMembercrnc:NetLeverageRatioScenarioFourMember2022-11-222022-11-220001768267us-gaap:FacilityClosingMember2022-09-300001768267srt:MaximumMember2023-06-300001768267crnc:CustomerOneMember2022-04-012022-06-300001768267country:US2021-10-012022-06-300001768267country:DE2021-10-012022-06-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:NetLeverageRatioScenarioThreeMemberus-gaap:BaseRateMember2020-12-172020-12-170001768267us-gaap:CommonStockMember2022-06-300001768267crnc:CostOfConnectedServicesMember2022-10-012023-06-300001768267crnc:OtherAmericasMember2023-04-012023-06-300001768267crnc:CreditAgreementAmendmentTwoMembercrnc:SofrPlusTenBasisPointCreditSpreadMembercrnc:NetLeverageRatioScenarioFiveMember2022-11-222022-11-220001768267crnc:OnePointFiveZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyEightAndThreePointZeroZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2023-04-012023-06-300001768267crnc:CreditAgreementAmendmentTwoMembersrt:MaximumMembersrt:ScenarioForecastMember2023-01-012023-12-310001768267crnc:ProfessionalServicesMember2021-10-012022-06-300001768267crnc:CustomerOneMember2021-10-012022-06-300001768267crnc:ConnectedServicesMember2022-04-012022-06-300001768267us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasuryAndGovernmentMember2022-09-300001768267crnc:CreditAgreementAmendmentOneMembersrt:MaximumMembercrnc:NetLeverageRatioScenarioThreeMember2020-12-170001768267us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-09-300001768267crnc:CreditAgreementMember2022-09-300001768267us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-10-012023-06-300001768267crnc:ConnectedServicesMember2023-04-012023-06-300001768267crnc:CreditAgreementAmendmentTwoMembersrt:MinimumMembercrnc:NetLeverageRatioScenarioFourMember2022-11-220001768267us-gaap:GeneralAndAdministrativeExpenseMember2021-10-012022-06-300001768267crnc:ConnectedServicesMember2021-10-012022-06-300001768267us-gaap:OtherRestructuringMember2022-04-012022-06-300001768267country:US2022-10-012023-06-300001768267crnc:CreditAgreementAmendmentTwoMembersrt:MinimumMembercrnc:NetLeverageRatioScenarioThreeMember2022-11-220001768267crnc:RestructuringMember2021-10-012022-06-300001768267country:NL2022-06-300001768267crnc:OnePointFiveZeroPercentageConvertibleSeniorNotesDueTwoThousandTwentyFiveMember2022-10-012023-06-300001768267us-gaap:TechnologyBasedIntangibleAssetsMember2022-09-300001768267srt:MaximumMemberus-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2022-10-012023-06-3000017682672021-10-012022-09-300001768267crnc:ProfessionalServicesMember2022-04-012022-06-300001768267us-gaap:RestrictedStockUnitsRSUMember2023-06-300001768267crnc:CreditAgreementAmendmentTwoMembercrnc:SecuredOvernightFinancingRateMembercrnc:NetLeverageRatioScenarioOneMember2022-11-222022-11-220001768267us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembersrt:MinimumMembercountry:CN2022-10-012023-06-300001768267us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasuryAndGovernmentMember2022-09-300001768267us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001768267crnc:CreditAgreementAmendmentTwoMembersrt:MinimumMembercrnc:NetLeverageRatioScenarioTwoMember2022-11-220001768267us-gaap:CommonStockMember2022-09-300001768267crnc:CreditAgreementAmendmentOneMembercrnc:NetLeverageRatioScenarioFourMemberus-gaap:BaseRateMember2020-12-172020-12-1700017682672019-10-020001768267us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasuryAndGovernmentMember2023-06-300001768267crnc:CreditAgreementMember2022-10-012023-06-300001768267crnc:CreditAgreementAmendmentTwoMembercrnc:SofrPlusTenBasisPointCreditSpreadMembercrnc:NetLeverageRatioScenarioThreeMember2022-11-222022-11-220001768267us-gaap:RestrictedStockUnitsRSUMember2022-10-012023-06-300001768267country:CN2022-10-012023-06-30xbrli:purecrnc:Daysxbrli:sharescrnc:Customercrnc:Segmentiso4217:USDiso4217:USDxbrli:shares

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-39030

 

CERENCE INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

83-4177087

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

1 Burlington Woods Drive, Suite 301A

Burlington, Massachusetts

01803

(Address of principal executive offices)

(Zip Code)

(857) 362-7300

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.01 per share

 

CRNC

 

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of August 2, 2023, the registrant had 40,333,242 shares of common stock, $0.01 par value per share, outstanding.

 

 

 


 

Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

3

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

3

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2023 and 2022

3

Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended June 30, 2023 and 2022

4

 

Condensed Consolidated Balance Sheets as of June 30, 2023 and September 30, 2022

5

 

Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended June 30, 2023 and 2022

6

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2023 and 2022

8

Notes to Condensed Consolidated Financial Statements

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

30

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

51

Item 4.

Controls and Procedures

52

PART II.

OTHER INFORMATION

53

Item 1.

Legal Proceedings

53

Item 1A.

Risk Factors

54

Item 5

Other Information

55

Item 6.

Exhibits

56

Signatures

57

 

 

i


 

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”), filed by Cerence Inc. together with its consolidated subsidiaries, “Cerence,” the “Company,” “we,” “us” or “our” unless the context indicates otherwise, contains “forward-looking statements” that involve risks and uncertainties. These statements can be identified by the fact that they do not relate strictly to historical or current facts, but rather are based on current expectations, estimates, assumptions, plans and projections about our business, operations, industry, financial results, financial condition, strategy, goals or prospects. Forward-looking statements often include words such as “anticipates,” “estimates,” “expects,” “projects,” “forecasts,” “intends,” “plans,” “continues,” “believes,” “may,” “will,” “goals” and words and terms of similar substance in connection with discussions of our business and future operating or financial performance. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. Our actual results may vary materially from those expressed or implied in our forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statement made by us or on our behalf. Although we believe that the forward-looking statements contained in this Form 10-Q are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in such forward-looking statements, including but not limited to:

adverse conditions in the automotive industry or the global economy more generally, including as a result of the COVID-19 pandemic, the conflict between Russia and Ukraine, inflation and rising interest rates;
the continuation of the semiconductor shortage being experienced by, and shipping or production issues in, the automotive industry;
the duration and severity of the COVID-19 pandemic and its impact on our business and financial performance, including the impact of new variants;
the highly competitive and rapidly changing market in which we operate;
our employees are represented by workers councils or unions or are subject to local laws that are less favorable to employers than the laws of the U.S.;
the transition in our senior management positions;
fluctuations in our financial and operating results;
our inability to control and successfully manage our expense and cash positions;
escalating pricing pressures from our customers;
the impact on our business of the transition to a lower level of fixed contracts, including, but not limited to, the failure to achieve the expected predictability and growth in our reported revenue following a transition year of fiscal 2023;
our failure to win, renew or implement service contracts;
the cancellation or postponement of service contracts after a design win;
the loss of business from any of our largest customers;
inability to recruit and retain qualified personnel;
cybersecurity and data privacy incidents that damage client relations;
interruptions or delays in our services or services from data center hosting facilities or public clouds;
economic, political, regulatory, foreign exchange and other risks of international operations;
unforeseen U.S. and foreign tax liabilities;
increases or decreases to valuation allowances recorded against deferred tax assets;
impairment of our goodwill and other intangible assets;
the failure to protect our intellectual property or allegations that we have infringed the intellectual property of others;
defects in our software products that result in lost revenue, expensive corrections or claims against us;
our inability to quickly respond to changes in technology and to develop our intellectual property into commercially viable products;
our strategy to increase cloud services and ability to successfully introduce new products, applications or services;

1


 

a significant interruption in the supply or maintenance of our third-party hardware, software, services or data;
restrictions on our current and future operations under the terms of our debt and the use of cash to service our debt; and
certain factors discussed elsewhere in this Form 10-Q.

These and other factors are more fully discussed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2022 and elsewhere in this Form 10-Q, including Part II, “Item 1A, Risk Factors." These risks could cause actual results to differ materially from those implied by forward-looking statements in this Form 10-Q. Even if our results of operations, financial condition and liquidity and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods.

Any forward-looking statements made by us in this Form 10-Q speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, subsequent events or otherwise, except as required by law.

2


 

PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements.

CERENCE INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended June 30,

 

 

Nine Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

License

 

$

25,837

 

 

$

46,452

 

 

$

102,054

 

 

$

139,610

 

Connected services

 

 

18,583

 

 

 

19,990

 

 

 

55,903

 

 

 

67,475

 

Professional services

 

 

17,240

 

 

 

22,599

 

 

 

55,754

 

 

 

62,662

 

Total revenues

 

 

61,660

 

 

 

89,041

 

 

 

213,711

 

 

 

269,747

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

License

 

 

2,343

 

 

 

585

 

 

 

6,166

 

 

 

1,692

 

Connected services

 

 

5,562

 

 

 

5,391

 

 

 

18,218

 

 

 

16,766

 

Professional services

 

 

12,930

 

 

 

18,173

 

 

 

47,441

 

 

 

51,448

 

Amortization of intangible assets

 

 

103

 

 

 

103

 

 

 

310

 

 

 

2,879

 

Total cost of revenues

 

 

20,938

 

 

 

24,252

 

 

 

72,135

 

 

 

72,785

 

Gross profit

 

 

40,722

 

 

 

64,789

 

 

 

141,576

 

 

 

196,962

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

30,202

 

 

 

26,040

 

 

 

88,190

 

 

 

81,808

 

Sales and marketing

 

 

4,277

 

 

 

8,299

 

 

 

21,656

 

 

 

22,487

 

General and administrative

 

 

13,019

 

 

 

10,614

 

 

 

46,453

 

 

 

31,941

 

Amortization of intangible assets

 

 

553

 

 

 

2,862

 

 

 

5,297

 

 

 

9,151

 

Restructuring and other costs, net

 

 

1,172

 

 

 

1,197

 

 

 

11,075

 

 

 

6,586

 

Total operating expenses

 

 

49,223

 

 

 

49,012

 

 

 

172,671

 

 

 

151,973

 

(Loss) income from operations

 

 

(8,501

)

 

 

15,777

 

 

 

(31,095

)

 

 

44,989

 

Interest income

 

 

1,207

 

 

 

243

 

 

 

3,240

 

 

 

416

 

Interest expense

 

 

(4,120

)

 

 

(3,815

)

 

 

(11,637

)

 

 

(10,602

)

Other income (expense), net

 

 

(2,030

)

 

 

(478

)

 

 

2,757

 

 

 

(764

)

(Loss) income before income taxes

 

 

(13,444

)

 

 

11,727

 

 

 

(36,735

)

 

 

34,039

 

Provision for income taxes

 

 

3,011

 

 

 

110,994

 

 

 

7,967

 

 

 

114,738

 

Net loss

 

$

(16,455

)

 

$

(99,267

)

 

$

(44,702

)

 

$

(80,699

)

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.41

)

 

$

(2.53

)

 

$

(1.11

)

 

$

(2.06

)

Diluted

 

$

(0.41

)

 

$

(2.53

)

 

$

(1.11

)

 

$

(2.06

)

Weighted-average common share outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

40,324

 

 

 

39,313

 

 

 

40,167

 

 

 

39,113

 

Diluted

 

 

40,324

 

 

 

39,313

 

 

 

40,167

 

 

 

39,113

 

 

Refer to accompanying Notes to the unaudited condensed consolidated financial statements.

3


 

CERENCE INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(unaudited)

 

 

 

Three Months Ended June 30,

 

 

Nine Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(16,455

)

 

$

(99,267

)

 

$

(44,702

)

 

$

(80,699

)

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(1,152

)

 

 

(12,013

)

 

 

8,949

 

 

 

(22,697

)

Pension adjustments, net

 

 

(21

)

 

 

122

 

 

 

(50

)

 

 

256

 

Net unrealized (loss) gains on available-for-sale securities

 

 

(106

)

 

 

(81

)

 

 

186

 

 

 

(248

)

Total other comprehensive (loss) income

 

 

(1,279

)

 

 

(11,972

)

 

 

9,085

 

 

 

(22,689

)

Comprehensive loss

 

$

(17,734

)

 

$

(111,239

)

 

$

(35,617

)

 

$

(103,388

)

 

Refer to accompanying Notes to the unaudited condensed consolidated financial statements.

4


 

CERENCE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

 

 

June 30, 2023

 

 

September 30, 2022

 

 

(Unaudited)

 

 

 

 

ASSETS

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

86,100

 

 

$

94,847

 

Marketable securities

 

 

16,717

 

 

 

20,317

 

Accounts receivable, net of allowances of $4,048 and $157

 

 

56,984

 

 

 

45,073

 

Deferred costs

 

 

7,585

 

 

 

7,098

 

Prepaid expenses and other current assets

 

 

51,748

 

 

 

60,184

 

Total current assets

 

 

219,134

 

 

 

227,519

 

Long-term marketable securities

 

 

13,194

 

 

 

11,584

 

Property and equipment, net

 

 

34,924

 

 

 

37,707

 

Deferred costs

 

 

20,875

 

 

 

22,451

 

Operating lease right of use assets

 

 

13,445

 

 

 

14,702

 

Goodwill

 

 

904,910

 

 

 

890,802

 

Intangible assets, net

 

 

4,644

 

 

 

9,700

 

Deferred tax assets

 

 

52,198

 

 

 

51,989

 

Other assets

 

 

48,854

 

 

 

52,039

 

Total assets

 

$

1,312,178

 

 

$

1,318,493

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

16,118

 

 

$

10,372

 

Deferred revenue

 

 

75,296

 

 

 

72,662

 

Short-term operating lease liabilities

 

 

5,505

 

 

 

5,071

 

Short-term debt

 

 

24,700

 

 

 

10,938

 

Accrued expenses and other current liabilities

 

 

46,802

 

 

 

47,990

 

Total current liabilities

 

 

168,421

 

 

 

147,033

 

Long-term debt

 

 

254,702

 

 

 

259,436

 

Deferred revenue, net of current portion

 

 

153,002

 

 

 

165,972

 

Long-term operating lease liabilities

 

 

9,330

 

 

 

11,375

 

Other liabilities

 

 

23,909

 

 

 

21,727

 

Total liabilities

 

 

609,364

 

 

 

605,543

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

 

Common stock, $0.01 par value, 560,000 shares authorized; 40,333 and 39,430 shares issued and outstanding, respectively

 

 

403

 

 

 

394

 

Accumulated other comprehensive loss

 

 

(24,652

)

 

 

(33,737

)

Additional paid-in capital

 

 

1,049,173

 

 

 

1,029,542

 

Accumulated deficit

 

 

(322,110

)

 

 

(283,249

)

Total stockholders' equity

 

 

702,814

 

 

 

712,950

 

Total liabilities and stockholders' equity

 

$

1,312,178

 

 

$

1,318,493

 

 

Refer to accompanying Notes to the unaudited condensed consolidated financial statements.

5


 

CERENCE INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(unaudited)

 

 

Three Months Ended June 30, 2023

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional
Paid-In
Capital

 

 

Accumulated Deficit

 

 

Accumulated
Other
Comprehensive
Loss

 

 

Total

 

Balance at March 31, 2023

 

 

40,292

 

 

$

403

 

 

$

1,038,048

 

 

$

(305,655

)

 

$

(23,373

)

 

$

709,423

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(16,455

)

 

 

-

 

 

 

(16,455

)

Other comprehensive loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,279

)

 

 

(1,279

)

Issuance of common stock

 

 

45

 

 

 

-

 

 

 

293

 

 

 

-

 

 

 

-

 

 

 

293

 

Increase in fair value of conversion option

 

 

-

 

 

 

-

 

 

 

4,054

 

 

 

-

 

 

 

-

 

 

 

4,054

 

Stock withheld to cover tax withholdings requirements upon stock vesting

 

 

(4

)

 

 

-

 

 

 

(404

)

 

 

-

 

 

 

-

 

 

 

(404

)

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

7,182

 

 

 

-

 

 

 

-

 

 

 

7,182

 

Balance at June 30, 2023

 

 

40,333

 

 

$

403

 

 

$

1,049,173

 

 

$

(322,110

)

 

$

(24,652

)

 

$

702,814

 

 

 

Three Months Ended June 30, 2022

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional
Paid-In
Capital

 

 

Retained Earnings (Accumulated Deficit)

 

 

Accumulated
Other
Comprehensive
Loss

 

 

Total

 

Balance at March 31, 2022

 

 

39,305

 

 

$

393

 

 

$

1,018,731

 

 

$

46,145

 

 

$

(9,083

)

 

$

1,056,186

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(99,267

)

 

 

-

 

 

 

(99,267

)

Other comprehensive loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(11,972

)

 

 

(11,972

)

Issuance of common stock

 

 

12

 

 

 

-

 

 

 

103

 

 

 

-

 

 

 

-

 

 

 

103

 

Stock withheld to cover tax withholdings requirements upon stock vesting

 

 

(1

)