Although we believe forward-looking statements are based upon reasonable assumptions as of the date of this press release, such statements involve known and unknown risk, uncertainties and other factors, which may cause actual results or performance of the company to be materially different from any future results or performance expressed or implied by such forward-looking statements including but not limited to: the highly competitive and rapidly changing market in which we operate; adverse conditions in the automotive industry or the global economy more generally; volatility in the political, legal and regulatory environment in which we operate, including trade, tariffs and other policies implemented by the new administration in the United States or actions taken by other countries in response; automotive production curtailment or delays; changes in customer forecasts; the impacts of the COVID-19 pandemic on our and our customers’ businesses; the ongoing conflicts in Ukraine and the Middle East; our inability to control and successfully manage our expenses and cash position; our inability to deliver improved financial results from process optimization efforts and cost reduction actions; escalating pricing pressures from our customers; the impact on our business of the transition to a lower level of fixed contracts, including the failure to achieve such a transition; our failure to win, renew or implement service contracts; the cancellation or postponement of existing contracts; the loss of business from any of our largest customers; effects of customer defaults; a decrease in the level of professional service projects; our inability to successfully introduce new products, applications and services; our strategies to increase cloud offerings and deploy generative AI and large language models (LLMs); the inability to expand into adjacent markets; the inability to recruit and retain qualified personnel; disruptions arising from transitions in management personnel; cybersecurity and data privacy incidents; failure to protect our intellectual property; adverse developments related to our intellectual property enforcement litigation, the outcome of such litigation, or remedies that could be awarded in connection with such litigation; defects or interruptions in service with respect to our products; fluctuating currency rates and interest rates; inflation; financial and credit market volatility; restrictions on our current and future operations under the terms of our debt, the use of cash to service or repay our debt; and our inability to generate sufficient cash from our operations; and the other factors discussed in our most recent Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the Securities and Exchange Commission.
Condensed Consolidated Statements of Cash Flows(in thousands)(unaudited) Six Months Ended March 31, 2025 2024 Cash flows from operating activities: Net loss$(2,632) $(254,119)Adjustments to reconcile net loss to net cash provided by (used in) operations: Depreciation and amortization 5,793 5,384 Provision for credit loss reserve 208 6,065 Stock-based compensation 13,702 13,125 Non-cash interest expense 3,348 2,939 Loss on debt extinguishment (327) - Deferred tax (benefit) provision (4,271) 40,949 Goodwill impairment - 252,096 Unrealized foreign currency transaction losses (gains) 345 (262)Other, net (33) 474 Changes in operating assets and liabilities: Accounts receivable (8,029) (75)Prepaid expenses and other assets 25,250 5,854 Deferred costs 2,041 3,423 Accounts payable 2,492 (292)Accrued expenses and other liabilities (23,532) (1,673)Deferred revenue 10,365 (75,659)Net cash provided by (used in) operating activities 24,720 (1,771)Cash flows from investing activities: Capital expenditures (3,703) (2,776)Purchases of marketable securities - - Sale and maturities of marketable securities 3,493 3,912 Other investing activities (716) (891)Net cash (used in) provided by investing activities (926) 245 Cash flows from financing activities: Proceeds from revolving credit facility - - Proceeds from long-term debt, net of discount - - Payments for long-term debt issuance costs - - Principal payments of short-term debt (26,964) - Common stock repurchases for tax withholdings for net settlement of equity awards (2,171) (9,744)Principal payment of lease liabilities arising from a finance lease (229) (202)Proceeds from the issuance of common stock 2,175 10,461 Net cash (used in) provided by financing activities (27,189) 515 Effects of exchange rate changes on cash and cash equivalents (722) (967)Net change in cash and cash equivalents (4,117) (1,978)Cash and cash equivalents at beginning of period 121,485 101,154 Cash and cash equivalents at end of period$117,368 $99,176 CERENCE INC.
Condensed Consolidated Statements of Operations(in thousands, except per share data)(unaudited) Three Months Ended Six Months Ended March 31, March 31, 2025 2024 2025 2024 Revenues: License$51,460 $35,527 $74,185 $56,350 Connected services 12,648 13,597 26,355 110,417 Professional services 13,902 18,701 28,366 39,393 Total revenues 78,010 67,825 128,906 206,160 Cost of revenues: License 2,432 1,404 4,214 3,008 Connected services 4,979 5,359 11,290 12,662 Professional services 10,418 14,119 20,149 31,444 Amortization of intangible assets — — — 103 Total cost of revenues 17,829 20,882 35,653 47,217 Gross profit 60,181 46,943 93,253 158,943 Operating expenses: Research and development 23,332 31,846 44,201 65,152 Sales and marketing 4,930 5,619 9,696 11,690 General and administrative 11,199 16,659 23,953 29,452 Amortization of intangible assets 536 555 1,090 1,100 Restructuring and other costs, net 2,832 4,551 13,894 5,256 Goodwill impairment — 252,096 — 252,096 Total operating expenses 42,829 311,326 92,834 364,746 Income (loss) from operations 17,352 (264,383) 419 (205,803)Interest income 918 1,190 2,355 2,622 Interest expense (2,716) (3,111) (6,109) (6,347)Other income (expense), net 499 (25) 771 1,397 Income (loss) before income taxes 16,053 (266,329) (2,564) (208,131)(Benefit from) provision for income taxes (5,603) 11,647 68 45,988 Net income (loss)$21,656 $(277,976) $(2,632) $(254,119)Net income (loss) per share: Basic$0.50 $(6.66) $(0.06) $(6.13)Diluted$0.46 $(6.66) $(0.06) $(6.13)Weighted-average common share outstanding: Basic 43,223 41,724 43,059 41,452 Diluted 51,530 41,724 43,059 41,452 CERENCE INC.
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