0000950170-24-094836 | 10-Q | XBRL Viewer

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Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2024
Trading Arrangements, by Individual
Material Terms of Trading Arrangement	Rule 10b5-1 Plans. Our policy governing transactions in our securities by directors, officers and employees permits our officers, directors and certain other persons to enter into trading plans complying with Rule 10b5-1 under the Exchange Act. Generally, under these trading plans, the individual relinquishes control over the transactions once the trading plan is put into place. Accordingly, sales under these plans may occur at any time, including possibly before, simultaneously with, or immediately after significant events involving our company. During the three-month period ended June 30, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K). We anticipate that, as permitted by Rule 10b5-1 and our policy governing transactions in our securities, some or all of our officers, directors and employees may establish trading plans in the future. We intend to disclose the names of executive officers and directors who establish a trading plan in compliance with Rule 10b5-1 and Regulation S-K, Item 408(a) and the requirements of our policy governing transactions in our securities in our future quarterly and annual reports on Form 10-Q and 10-K filed with the SEC. However, we undertake no obligation to update or revise the information provided herein, including for revision or termination of an established trading plan, other than in such quarterly and annual reports.
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Accrued Expenses and Other Liabilities

9 Months Ended

Jun. 30, 2024

Accrued Liabilities and Other Liabilities [Abstract]

Accrued Expenses and Other Liabilities

Note 9. Accrued Expenses and Other Liabilities

Accrued expenses and other current liabilities consisted of the following (dollars in thousands):


	June 30, 2024		September 30, 2023

Compensation	$	16,253	$	24,997
Professional fees		4,581		3,386
Sales and other taxes payable		4,518		7,384
Cost of revenue related liabilities		3,204		4,326
Interest payable		1,869		1,781
Other		7,138		6,844
Total	$	37,563	$	48,718

Leases - Summary of Lease Term and Incremental Borrowing Rates for Leases (Details)	Jun. 30, 2024	Sep. 30, 2023
Weighted-average remaining lease term (in months):
Operating leases	43 months 12 days	37 months 6 days
Finance leases	15 months 27 days	24 months 15 days
Weighted-average discount rate:
Operating leases	6.20%	5.30%
Finance leases	4.40%	4.40%

Revenue Recognition - Summary of Significant Changes in Contract Assets (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2024 USD ($)
Revenue from Contract with Customer [Abstract]
Balance	$ 56,708
Revenues recognized but not billed	23,766
Amounts reclassified to Accounts receivable, net	(50,176)
Write-off of contract assets	(5,995)
Effect of foreign currency translation	(517)
Balance	$ 23,786

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenues:
Total revenues	$ 70,539	$ 61,660	$ 276,699	$ 213,711
Cost of revenues:
Amortization of intangible assets	0	103	103	310
Total cost of revenues	20,105	20,938	67,322	72,135
Gross profit	50,434	40,722	209,377	141,576
Operating expenses:
Research and development	31,184	30,202	96,336	88,190
Sales and marketing	5,208	4,277	16,898	21,656
General and administrative	9,831	13,019	39,283	46,453
Amortization of intangible assets	550	553	1,650	5,297
Restructuring and other costs, net	1,490	1,172	6,746	11,075
Goodwill impairment	357,076	0	609,172	0
Total operating expenses	405,339	49,223	770,085	172,671
Loss from operations	(354,905)	(8,501)	(560,708)	(31,095)
Interest income	1,287	1,207	3,909	3,240
Interest expense	(3,104)	(4,120)	(9,451)	(11,637)
Other income (expense), net	626	(2,030)	2,023	2,757
Loss before income taxes	(356,096)	(13,444)	(564,227)	(36,735)
(Benefit from) provision for income taxes	(42,553)	3,011	3,435	7,967
Net loss	$ (313,543)	$ (16,455)	$ (567,662)	$ (44,702)
Net loss per share:
Basic	$ (7.5)	$ (0.41)	$ (13.66)	$ (1.11)
Diluted	$ (7.5)	$ (0.41)	$ (13.66)	$ (1.11)
Weighted-average common share outstanding:
Basic	41,795	40,324	41,566	40,167
Diluted	41,795	40,324	41,566	40,167
License
Revenues:
Total revenues	$ 43,055	$ 25,837	$ 99,405	$ 102,054
Cost of revenues:
Total cost of revenues	1,795	2,343	4,803	6,166
Connected Services
Revenues:
Total revenues	10,939	18,583	121,356	55,903
Cost of revenues:
Total cost of revenues	5,718	5,562	18,380	18,218
Professional Services
Revenues:
Total revenues	16,545	17,240	55,938	55,754
Cost of revenues:
Total cost of revenues	$ 12,592	$ 12,930	$ 44,036	$ 47,441

Long-Term Debt - Summary of Maturities of Borrowing Obligations (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Debt Instrument [Line Items]
2025	$ 87,500
2028	210,000
Total before unamortized discount and issuance costs and current portion	297,500
Less: unamortized discount and issuance costs	(17,120)
Less: current portion of long-term debt	(86,945)
Total long-term debt	193,435	$ 275,951
2028 Notes
Debt Instrument [Line Items]
2028	122,500
Total before unamortized discount and issuance costs and current portion	122,500
Less: unamortized discount and issuance costs	(1,926)
Total long-term debt	120,574
2025 Modified Notes
Debt Instrument [Line Items]
2025	87,500
2028	87,500
Total before unamortized discount and issuance costs and current portion	175,000
Less: unamortized discount and issuance costs	(15,194)
Less: current portion of long-term debt	(86,945)
Total long-term debt	$ 72,861

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

Accrued Expenses and Other Liabilities - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Accrued Liabilities and Other Liabilities [Abstract]
Compensation	$ 16,253	$ 24,997
Professional fees	4,581	3,386
Sales and other taxes payable	4,518	7,384
Cost of revenue related liabilities	3,204	4,326
Interest payable	1,869	1,781
Other	7,138	6,844
Total	$ 37,563	$ 48,718

Stockholders' Equity

9 Months Ended

Jun. 30, 2024

Equity [Abstract]

Stockholders' Equity

Note 11. Stockholders’ Equity

On October 2, 2019, we registered the issuance of 6,350,000 shares of Common Stock, par value $0.01 per share (“Common Stock”), consisting of 5,300,000 shares of Common Stock reserved for issuance upon the exercise of options granted, or in respect of awards granted, under the Cerence 2019 Equity Incentive Plan (“Equity Incentive Plan”), and 1,050,000 shares of Common Stock that are reserved for issuance under the Cerence 2019 Employee Stock Purchase Plan. The Equity Incentive Plan provides for the grant of incentive stock options, stock awards, stock units, stock appreciation rights, and certain other stock-based awards. The shares available for issuance will automatically increase on January 1st of each year, by the lesser of (A) 3% of the number of shares of Common Stock outstanding as of the close of business on the immediately preceding December 31st; and (B) the number of shares of Common

Stock determined by our board of directors on or prior to such date for such year. On March 4, 2024, we registered the issuance of 600,000 shares of Common Stock, reserved for issuance under the Cerence Inc. 2024 Inducement Plan.

Restricted Units

Information with respect to our non-vested restricted stock units for the nine months ended June 30, 2024 was as follows:


	Non-Vested Restricted Stock Units
	Time-Based Shares			Performance- Based Shares			Total Shares			Weighted- Average Grant-Date Fair Value		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Non-vested at September 30, 2023		2,372,145			1,145,550			3,517,695		$	32.52
Granted		2,097,746			408,424			2,506,170		$	17.34
Vested		(1,259,105	)		(63,998	)		(1,323,103	)	$	35.79
Forfeited		(519,590	)		(256,559	)		(776,149	)	$	28.07
Non-vested at June 30, 2024		2,691,196			1,233,417			3,924,613		$	23.53
Expected to vest								3,924,613		$	23.53		1.09	$	11,067

Stock-based Compensation

Stock-based compensation was included in the following captions in our Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,					Nine Months Ended June 30,
	2024		2023			2024		2023
Cost of connected services	$	73	$	(42	)	$	218	$	329
Cost of professional services		569		205			1,730		2,370
Research and development		3,314		3,477			9,693		12,019
Sales and marketing		556		(438	)		1,646		2,744
General and administrative		1,654		3,772			6,004		14,339
	$	6,166	$	6,974		$	19,291	$	31,801

Stockholders' Equity - Schedule of Stock-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	$ 6,166	$ 6,974	$ 19,291	$ 31,801
Cost of Connected Services
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	73	(42)	218	329
Cost of Professional Services
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	569	205	1,730	2,370
Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	3,314	3,477	9,693	12,019
Sales and Marketing
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	556	(438)	1,646	2,744
General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	$ 1,654	$ 3,772	$ 6,004	$ 14,339

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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Reference 23: http://www.xbrl.org/2003/role/disclosureRef
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Reference 24: http://www.xbrl.org/2003/role/disclosureRef
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Reference 25: http://www.xbrl.org/2003/role/disclosureRef
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Reference 26: http://www.xbrl.org/2003/role/disclosureRef
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
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Reference 28: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Business Overview

9 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Overview

Note 1. Business Overview

Business

Cerence Inc. (referred to in this Quarterly Report on Form 10-Q as “we,” “our,” “us,” “ourselves,” the “Company” or “Cerence”) is a global, premier provider of AI-powered assistants and innovations for connected and autonomous vehicles. Our customers include nearly all major automobile original equipment manufacturers (“OEMs”), or their tier 1 suppliers worldwide. We deliver our solutions on a white-label basis, enabling our customers to deliver customized virtual assistants with unique, branded personalities and ultimately strengthening the bond between automobile brands and end users. We generate revenue primarily by selling software licenses and cloud-connected services. In addition, we generate professional services revenue from our work with OEMs and suppliers during the design, development and deployment phases of the vehicle model lifecycle and through maintenance and enhancement projects.

Income Taxes

9 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 13. Income Taxes

The components of loss before income taxes are as follows (dollars in thousands):


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024			2023

Domestic	$	(305,748	)	$	(9,497	)	$	(510,459	)	$	(19,363	)
Foreign		(50,348	)		(3,947	)		(53,768	)		(17,372	)
Loss before income taxes	$	(356,096	)	$	(13,444	)	$	(564,227	)	$	(36,735	)

The components of the (benefit from) provision for income taxes are as follows (dollars in thousands):


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024			2023

Domestic	$	(34,655	)	$	699		$	(2,583	)	$	1,068
Foreign		(7,898	)		2,312			6,018			6,899
(Benefit from) provision for income taxes	$	(42,553	)	$	3,011		$	3,435		$	7,967
Effective income tax rate		11.9	%		(22.4	)%		(0.6	)%		(21.7	)%

The effective tax rates for the periods presented are based upon estimated income for the fiscal year and the statutory tax rates enacted in the jurisdictions in which we operate. For all periods presented, the effective tax rate differs from the 21.0% statutory U.S. tax rate due to the impact of the nondeductible stock-based compensation and our mix of jurisdictional earnings and related differences in foreign statutory tax rates.

Our effective tax rate for the three months ended June 30, 2024 was 11.9% compared to negative 22.4% for the three months ended June 30, 2023. Consequently, our benefit from income taxes for the three months ended June 30, 2024 was $42.6 million, a net change of $45.6 million from a provision for income taxes of $3.0 million for the three months ended June 30, 2023. This difference was attributable to the impairment of book goodwill and a change from estimating interim period taxes on the annual method to the year-to-date method. Our provision for income taxes during interim reporting periods has historically been calculated by applying an estimate of the annual effective tax rate for the full year to ordinary pre-tax income (loss), excluding unusual or infrequently occurring discrete items, for the reporting period. As small changes in the estimated ordinary income (loss) may result in a significant change in the estimated annual effective tax rate, we computed our provision based on the actual effective tax rate for the three and nine months ended June 30, 2024.

Our effective tax rate for the nine months ended June 30, 2024 was negative 0.6% compared to negative 21.7% for the nine months ended June 30, 2023. Consequently, our provision for income taxes for the nine months ended June 30, 2024 was $3.4 million, a net change of $4.6 million from a provision for income taxes of $8.0 million for the nine months ended June 30, 2023. This difference was attributable to the impairment of book goodwill and the change in income tax expense related to foreign valuation allowance.

Starting with fiscal year 2023, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenditures in the current year. It requires us to amortize U.S. R&D expenses over five years and foreign R&D expenses over 15 years. The change in deductibility of the foreign research and development expenditures increases our tested income included in the Global Intangible Low Tax Income (“GILTI”). This led to an increase in our overall effective tax rate for the three and nine months ended June 30, 2024 and 2023.

Deferred tax assets and liabilities are measured using the statutory tax rates and laws expected to apply to taxable income in the years in which the temporary differences are expected to reverse. Valuation allowances are provided against net deferred tax assets if, based upon all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the timing of the temporary differences becoming deductible. Management considers, among other available information, scheduled reversals of deferred tax liabilities, projected future taxable income, limitations of availability of net operating loss carryforwards, and other matters in making this assessment.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (SAB TOPIC 6.I.5.Q1)
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-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
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-Paragraph 2
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Stockholders' Equity - Schedule of Non-vested Restricted Stock Units (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Jun. 30, 2024 USD ($) $ / shares shares
Time-Based Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Non-vested, Shares, Beginning balance	2,372,145
Non-vested, Shares, Granted	2,097,746
Non-vested, Shares, Vested	(1,259,105)
Non-vested, Shares, Forfeited	(519,590)
Non-vested, Shares, Ending balance	2,691,196
Performance-Based Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Non-vested, Shares, Beginning balance	1,145,550
Non-vested, Shares, Granted	408,424
Non-vested, Shares, Vested	(63,998)
Non-vested, Shares, Forfeited	(256,559)
Non-vested, Shares, Ending balance	1,233,417
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Non-vested, Shares, Beginning balance	3,517,695
Non-vested, Shares, Granted	2,506,170
Non-vested, Shares, Vested	(1,323,103)
Non-vested, Shares, Forfeited	(776,149)
Non-vested, Shares, Ending balance	3,924,613
Non-vested, Shares, Expected to vest	3,924,613
Non-vested, Weighted-Average Grant-Date Fair Value, Beginning balance \| $ / shares	$ 32.52
Non-vested, Weighted-Average Grant-Date Fair Value, Granted \| $ / shares	17.34
Non-vested, Weighted-Average Grant-Date Fair Value, Vested \| $ / shares	35.79
Non-vested, Weighted-Average Grant-Date Fair Value, Forfeited \| $ / shares	28.07
Non-vested, Weighted-Average Grant-Date Fair Value, Ending balance \| $ / shares	23.53
Non-vested, Weighted-Average Grant-Date Fair Value, Expected to vest \| $ / shares	$ 23.53
Non-vested, Weighted-Average Remaining Contractual Term (years), Expected to vest	1 year 1 month 2 days
Non-vested, Aggregate Intrinsic Value, Expected to vest \| $	$ 11,067

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities:
Net loss	$ (567,662)	$ (44,702)
Adjustments to reconcile net loss to net cash provided by (used in) operations:
Depreciation and amortization	8,049	13,151
Provision for credit loss reserve	3,624	3,626
Stock-based compensation	19,291	31,801
Non-cash interest expense	4,481	1,450
Loss on debt extinguishment		1,333
Deferred tax (benefit) provision	(2,877)	1,536
Goodwill impairment	609,172	0
Unrealized foreign currency transaction losses (gains)	507	(5,441)
Other	(37)	(4,004)
Changes in operating assets and liabilities:
Accounts receivable	(3,762)	(10,951)
Prepaid expenses and other assets	16,800	19,902
Deferred costs	3,589	2,511
Accounts payable	(6,233)	4,799
Accrued expenses and other liabilities	(3,236)	(334)
Deferred revenue	(70,625)	(18,437)
Net cash provided by (used in) operating activities	11,081	(3,760)
Cash flows from investing activities:
Capital expenditures	(3,550)	(3,597)
Purchases of marketable securities		(18,025)
Sale and maturities of marketable securities	9,207	20,200
Other investing activities	(1,332)	(1,024)
Net cash provided by (used in) investing activities	4,325	(2,446)
Cash flows from financing activities:
Proceeds from revolving credit facility		24,700
Proceeds from long-term debt, net of discount		190,000
Payments for long-term debt issuance costs	(419)	(16,786)
Principal payments of long-term debt		(198,438)
Common stock repurchases for tax withholdings for net settlement of equity awards	(9,857)	(4,834)
Principal payment of lease liabilities arising from a finance lease	(303)	(355)
Proceeds from the issuance of common stock	10,637	4,687
Net cash provided by (used in) financing activities	58	(1,026)
Effects of exchange rate changes on cash and cash equivalents	(1,096)	(1,515)
Net change in cash and cash equivalents	14,368	(8,747)
Cash and cash equivalents at beginning of period	101,154	94,847
Cash and cash equivalents at end of period	115,522	86,100
Supplemental information:
Cash paid for income taxes	8,050	5,752
Cash paid for interest	$ 4,389	$ 11,468

Goodwill and Other Intangible Assets - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Balance as of September 30, 2023			$ 900,342
Goodwill impairment	$ (357,076)	$ 0	(609,172)	$ 0
Effect of foreign currency translation			1,106
Balance as of June 30, 2024	$ 292,276		$ 292,276

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Revenue Recognition

9 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Note 3. Revenue Recognition

We primarily derive revenue from the following sources: (1) royalty-based software license arrangements, (2) connected services, and (3) professional services. Revenue is reported net of applicable sales and use tax, value-added tax and other transaction taxes imposed on the related transaction including mandatory government charges that are passed through to our customers. We account for a contract when both parties have approved and committed to the contract, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

(a) Disaggregated Revenue

Revenues, classified by the major geographic region in which our customers are located, for the three and nine months ended June 30, 2024 and 2023 (dollars in thousands):


	Three Months Ended June 30,				Nine Months Ended June 30,
	2024		2023		2024		2023
Revenues:
United States	$	12,729	$	22,500	$	128,216	$	65,598
Other Americas		314		106		450		160
Germany		17,518		19,861		72,075		62,652
Other Europe, Middle East and Africa		4,838		3,968		13,070		11,152
Japan		25,010		3,798		35,181		35,377
Other Asia-Pacific		10,130		11,427		27,707		38,772
Total net revenues	$	70,539	$	61,660	$	276,699	$	213,711

For the nine months ended June 30, 2023, revenues within China were $22.0 million, which were over 10% of revenues.

Revenues relating to one customer accounted for $20.6 million, or 29.2% of revenues for the three months ended June 30, 2024. Revenues relating to one customer accounted for $81.5 million, or 29.5%, of revenues for the nine months ended June 30, 2024. On October 31, 2023, we entered into an early termination agreement relating to a legacy contract acquired by Nuance Communications Inc. (“Nuance”) through a 2013 acquisition. Previously, the term of the contract ended on December 31, 2025, whereas the agreement signed on October 31, 2023 updated the termination date to December 31, 2023. There is no cash flow associated with this legacy contract. The effect of this change was to accelerate $67.8 million of deferred revenue into the first quarter of fiscal year 2024.

Revenues relating to two customers accounted for $10.8 million, or 17.6%, and $6.3 million, or 10.1%, of revenues for the three months ended June 30, 2023. Revenues relating to two customers accounted for $31.7 million, or 14.8%, and $23.1 million, or 10.8%, of revenues for the nine months ended June 30, 2023.

(b) Contract Acquisition Costs

We are required to capitalize certain contract acquisition costs. The capitalized costs primarily relate to paid commissions. The current and noncurrent portions of contract acquisition costs are included in Prepaid expenses and other current assets and in Other assets, respectively. As of June 30, 2024 and September 30, 2023, we had $7.0 million and $8.0 million of contract acquisition costs, respectively. We had amortization expense of $1.0 million and $0.8 million related to these costs during the three months ended June 30, 2024 and 2023, respectively, and $2.7 million and $2.4 million for the nine months ended June 30, 2024 and 2023, respectively. There was no impairment related to contract acquisition costs.

We capitalize incremental costs incurred to fulfill our contracts that (i) relate directly to the contract, (ii) are expected to generate resources that will be used to satisfy our performance obligation under the contract, and (iii) are expected to be recovered through revenue generated under the contract. The current and noncurrent portions of capitalized contract fulfillment costs are presented as Deferred costs.

We had amortization expense of $1.3 million and $2.2 million related to these costs during the three months ended June 30, 2024 and 2023, respectively, and $7.1 million and $7.4 million for the nine months ended June 30, 2024 and 2023, respectively. There was no impairment related to contract costs capitalized.

(d) Trade Accounts Receivable and Contract Balances

We classify our right to consideration in exchange for deliverables as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional (i.e., only the passage of time is required before payment is due). We present such receivables in Accounts receivable, net at their net estimated realizable value. Accounts receivable, net as of September 30, 2023 and 2022 was $61.3 million and $45.1 million, respectively. We maintain an allowance for credit losses to provide for the estimated amount of receivables and contract assets that may not be collected.

Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period.

Contract assets include unbilled amounts from long-term contracts when revenue recognized exceeds the amount billed to the customer, and the right to payment is not solely subject to the passage of time. The current and noncurrent portions of contract assets are included in Prepaid expenses and other current assets and Other assets, respectively. The table below shows significant changes in contract assets (dollars in thousands):


	Contract assets
Balance as of September 30, 2023	$	56,708
Revenues recognized but not billed		23,766
Amounts reclassified to Accounts receivable, net		(50,176	)
Write-off of contract assets		(5,995	)
Effect of foreign currency translation		(517	)
Balance as of June 30, 2024	$	23,786

Our contract liabilities, which we present as deferred revenue, consist of advance payments and billings in excess of revenues recognized. We classify deferred revenue as current or noncurrent based on when we expect to recognize the revenues. The table below shows significant changes in deferred revenue (dollars in thousands):


	Deferred revenue
Balance as of September 30, 2023	$	222,599
Amounts billed but not recognized		82,043
Revenue recognized		(152,652	)
Effect of foreign currency translation		1,057
Balance as of June 30, 2024	$	153,047

(e) Remaining Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at June 30, 2024 (dollars in thousands):


	Within One Year		Two to Five Years		Greater than Five Years		Total
Total revenue	$	88,520	$	89,980	$	30,690	$	209,190

The table above includes fixed remaining performance obligations and does not include contingent usage-based activities, such as royalties and usage-based connected services. On October 31, 2023, we entered into an early termination agreement relating to a legacy contract acquired by Nuance through a 2013 acquisition. Previously, the term of the contract ended on December 31, 2025, whereas the agreement signed on October 31, 2023 updated the termination date to December 31, 2023. There is no cash flow associated with this legacy contract. The effect of this change was to accelerate $67.8 million of deferred revenue into the first quarter of fiscal year 2024. We provided services to a separate customer, who in turn provided services to our legacy customer. Our customer terminated services on October 31, 2023. There is no cash flow associated with this contract. The effect of this termination was to accelerate $9.9 million of deferred revenue into the first quarter of fiscal year 2024.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
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-URI https://asc.fasb.org//606/tableOfContent

+ Details

Leases - Summary of Undiscounted Future Minimum Lease Payments Under Non-cancelable Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Operating Leases
2024	$ 1,600
2025	4,662
2026	2,568
2027	2,157
2028	1,519
Thereafter	1,270
Total future minimum lease payments	13,776
Less effects of discounting	(1,553)
Total lease liabilities	12,223
Short-term lease liabilities	4,646	$ 5,434
Long-term lease liabilities	7,577	$ 7,947
Financing Leases
2024	160
2025	362
2026	53
Total future minimum lease payments	575
Less effects of discounting	(11)
Total lease liabilities	564
Short-term lease liabilities	463
Long-term lease liabilities	101
Total
2024	1,760
2025	5,024
2026	2,621
2027	2,157
2028	1,519
Thereafter	1,270
Total future minimum lease payments	14,351
Less effects of discounting	(1,564)
Total lease liabilities	12,787
Short-term lease liabilities	5,109
Long-term lease liabilities	$ 7,678

Fair Value Measurements - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Sep. 30, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Unrealized (losses) gains to marketable securities	$ 200,000	$ (100,000)	$ 200,000	$ 200,000
Equity investments without readily determinable fair values	2,600,000		2,600,000		$ 2,600,000
Impairment related to investments without readily determinable fair values	0	$ 0	0	$ 0
Estimated Fair Value \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value of notes	$ 223,200,000		$ 223,200,000		$ 257,400,000

Restructuring and Other Costs, Net - Schedule of Accrual Activity Relating to Restructuring Reserves (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Restructuring Cost And Reserve [Line Items]
Balance as of September 30, 2023			$ 1,582
Restructuring and other costs, net	$ 1,490	$ 1,172	6,746	$ 11,075
Non-cash adjustments			(834)
Cash payments			(5,493)
Effect of foreign currency translation			(23)
Balance at March 31, 2024	1,978		1,978
Personnel
Restructuring Cost And Reserve [Line Items]
Balance as of September 30, 2023			549
Restructuring and other costs, net	399	1,003	4,918	7,423
Cash payments			(4,871)
Effect of foreign currency translation			(20)
Balance at March 31, 2024	576		576
Facilities
Restructuring Cost And Reserve [Line Items]
Balance as of September 30, 2023			1,033
Restructuring and other costs, net	(266)	(33)	26	310
Non-cash adjustments			(534)
Cash payments			(477)
Effect of foreign currency translation			(3)
Balance at March 31, 2024	45		45
Restructuring Subtotal
Restructuring Cost And Reserve [Line Items]
Balance as of September 30, 2023			1,582
Restructuring and other costs, net	133	970	4,944	7,733
Non-cash adjustments			(534)
Cash payments			(5,348)
Effect of foreign currency translation			(23)
Balance at March 31, 2024	621		621
Other
Restructuring Cost And Reserve [Line Items]
Restructuring and other costs, net	1,357	$ 202	1,802	$ 3,342
Non-cash adjustments			(300)
Cash payments			(145)
Balance at March 31, 2024	$ 1,357		$ 1,357

Fair Value Measurements

9 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 5. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques must maximize the use of observable inputs and minimize the use of unobservable inputs. When determining fair value measurements for assets and liabilities recorded at fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use in pricing the asset or liability.

The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement as of the measurement date as follows:

•

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

•

Level 2 - Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the assets or liabilities.

•

Level 3 - Unobservable inputs that are supported by little or no market activity.

The following table presents information about our financial assets that are measured at fair value and indicates the fair value hierarchy of the valuation inputs used (dollars in thousands) as of:


	June 30, 2024
	Fair Value		Cash and Cash Equivalents		Marketable Securities
Level 1:
Money market funds, $66,661 at cost (a)	$	66,661	$	66,661	$	-
Government securities, $397 at cost (b)		392		-		392
Level 2:
Government securities, $4,052 at cost (b)		4,037		-		4,037
Time deposits, $8,874 at cost (a)		8,876		8,876		-
Corporate bonds, $6,381 at cost (b)		6,355		-		6,355
Debt securities, $2,000 at cost (c)		3,034		-		-
Total assets	$	89,355	$	75,537	$	10,784


	September 30, 2023
	Fair Value		Cash and Cash Equivalents		Marketable Securities
Level 1:
Money market funds, $66,349 at cost (a)	$	66,349	$	66,349	$	-
Government securities, $4,421 at cost (b)		4,375		-		4,375
Level 2:
Government securities, $5,046 at cost (b)		5,000		-		5,000
Time deposits, $8,536 at cost (a)		8,536		8,536		-
Commercial paper, $496 at cost (b)		496		-		496
Corporate bonds, $10,073 at cost (b)		9,947		-		9,947
Debt securities, $2,000 at cost (c)		2,847		-		-
Total assets	$	97,550	$	74,885	$	19,818

(a)

Money market funds and other highly liquid investments with original maturities of 90 days or less are included within Cash and cash equivalents in the Condensed Consolidated Balance Sheets.

(b)

Government securities, commercial paper and corporate bonds with original maturities greater than 90 days are included within Marketable securities in the Condensed Consolidated Balance Sheets and classified as current or noncurrent based upon whether the maturity of the financial asset is less than or greater than 12 months.

(c)

Debt securities within the Condensed Consolidated Balance Sheets are classified as current or noncurrent based upon whether the maturity of the financial asset is less than or greater than 12 months.

During the three and nine months ended June 30, 2024, unrealized gains related to our marketable securities were immaterial and $0.2 million, respectively, within Accumulated other comprehensive loss. During the three and nine months ended June 30, 2023, unrealized (losses) gains related to our marketable securities were ($0.1) million and $0.2 million, respectively, within Accumulated other comprehensive loss.

The carrying amounts of certain financial instruments, including cash held in banks, accounts receivable, and accounts payable, approximate fair value due to their short-term maturities and are excluded from the fair value tables above.

Derivative financial instruments are recognized at fair value using quoted forward rates and prices and classified within Level 2 of the fair value hierarchy. See Note 6 – Derivative Financial Instruments for additional details.

Long-term debt

The estimated fair value of our Long-term debt is determined by Level 2 inputs and is based on observable market data including prices for similar instruments. As of June 30, 2024 and September 30, 2023, the estimated fair value of our Notes was $223.2 million and $257.4 million, respectively. The Notes are recorded at face value less transaction costs on our Condensed Consolidated Balance Sheets.

Equity securities

We have equity securities in a privately held company obtained as part of a non-cash transaction. These equity securities are recognized at fair value and are classified within Level 2 of the fair value hierarchy.

We have non-controlling equity investments in privately held companies. We evaluated the equity investments under the voting model and concluded consolidation was not applicable. We accounted for the investments by electing the measurement alternative for investments without readily determinable fair values and for which we do not have the ability to exercise significant influence. The non-marketable equity securities are carried at cost less any impairment, plus or minus adjustments resulting from

observable price changes in orderly transactions for the identical or a similar investment of the same issuer, which is recorded within the Condensed Consolidated Statements of Operations.

Investments without readily determinable fair values were $2.6 million as of June 30, 2024 and September 30, 2023. The investments are included within Other assets on the Condensed Consolidated Balance Sheets. No impairment was recorded for the three and nine months ended June 30, 2024 and 2023.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Jun. 30, 2024	Aug. 01, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--09-30
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-39030
Entity Registrant Name	CERENCE INC.
Entity Central Index Key	0001768267
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	83-4177087
Entity Address Address Line1	25 Mall Road
Entity Address Address Line2	Suite 416
Entity Address City Or Town	Burlington
Entity Address State Or Province	MA
Entity Address Postal Zip Code	01803
City Area Code	857
Local Phone Number	362-7300
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	CRNC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		41,804,112

Earnings Per Share - Schedule of Potential Shares Considered Antidilutive (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Restricted Stock Unit Awards
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares		669		126
Contingently Issuable Stock Awards
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares		32	264	71
Conversion Option of our Notes
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares	7,495	4,780	7,495	4,711

Derivative Financial Instruments - Summary of (Loss) Income Related to Foreign Forward Currency Contracts (Details) - Foreign Exchange Forward Contracts - Not Designated - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Derivative Instruments Gain Loss [Line Items]
Income (loss) recognized in earnings	$ 33	$ (798)	$ (467)	$ (2,564)
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other Nonoperating Income (Expense)	Other Nonoperating Income (Expense)	Other Nonoperating Income (Expense)	Other Nonoperating Income (Expense)

Income Taxes - Components of Loss Before Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Domestic	$ (305,748)	$ (9,497)	$ (510,459)	$ (19,363)
Foreign	(50,348)	(3,947)	(53,768)	(17,372)
Loss before income taxes	$ (356,096)	$ (13,444)	$ (564,227)	$ (36,735)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

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+ Details

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Statement of Financial Position [Abstract]
Accounts receivable allowances	$ 1,607	$ 4,044
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	560,000,000	560,000,000
Common stock, shares issued	41,804,000	40,423,000
Common stock, shares outstanding	41,804,000	40,423,000

Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Oct. 02, 2019	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Mar. 04, 2024	Sep. 30, 2023
Class Of Stock [Line Items]
Common stock reserved for issuance	6,350,000					600,000
Common stock, par value	$ 0.01	$ 0.01		$ 0.01			$ 0.01
Increase in shares available for issuance, description	The shares available for issuance will automatically increase on January 1st of each year, by the lesser of (A) 3% of the number of shares of Common Stock outstanding as of the close of business on the immediately preceding December 31st; and (B) the number of shares of Common Stock determined by our board of directors on or prior to such date for such year.
Increase in shares available for issuance expressed as percentage of number of shares of common stock outstanding	3.00%
Stock-based compensation		$ 6,166	$ 6,974	$ 19,291	$ 31,801
2019 Equity Incentive Plan
Class Of Stock [Line Items]
Common stock reserved for issuance	5,300,000
2019 Employee Stock Purchase Plan
Class Of Stock [Line Items]
Common stock reserved for issuance	1,050,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

Revenue Recognition (Tables)

9 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Summary of Revenues Classified by Major Geographic Region

Revenues, classified by the major geographic region in which our customers are located, for the three and nine months ended June 30, 2024 and 2023 (dollars in thousands):


	Three Months Ended June 30,				Nine Months Ended June 30,
	2024		2023		2024		2023
Revenues:
United States	$	12,729	$	22,500	$	128,216	$	65,598
Other Americas		314		106		450		160
Germany		17,518		19,861		72,075		62,652
Other Europe, Middle East and Africa		4,838		3,968		13,070		11,152
Japan		25,010		3,798		35,181		35,377
Other Asia-Pacific		10,130		11,427		27,707		38,772
Total net revenues	$	70,539	$	61,660	$	276,699	$	213,711

Summary of Significant Changes in Contract Assets and Deferred Revenue

The table below shows significant changes in contract assets (dollars in thousands):


	Contract assets
Balance as of September 30, 2023	$	56,708
Revenues recognized but not billed		23,766
Amounts reclassified to Accounts receivable, net		(50,176	)
Write-off of contract assets		(5,995	)
Effect of foreign currency translation		(517	)
Balance as of June 30, 2024	$	23,786

The table below shows significant changes in deferred revenue (dollars in thousands):


	Deferred revenue
Balance as of September 30, 2023	$	222,599
Amounts billed but not recognized		82,043
Revenue recognized		(152,652	)
Effect of foreign currency translation		1,057
Balance as of June 30, 2024	$	153,047

Summary of Estimated Revenue Expected to be Recognized in Future Related to Performance Obligations Unsatisfied or Partially Unsatisfied


	Within One Year		Two to Five Years		Greater than Five Years		Total
Total revenue	$	88,520	$	89,980	$	30,690	$	209,190

Restructuring and Other Costs, Net

9 Months Ended

Jun. 30, 2024

Restructuring and Related Activities [Abstract]

Restructuring and Other Costs, Net

Note 10. Restructuring and Other Costs, Net

Restructuring and other costs, net includes restructuring expenses as well as other charges that are unusual in nature, are the result of unplanned events, and arise outside of the ordinary course of our business. The following table sets forth accrual activity relating to restructuring reserves for the nine months ended June 30, 2024 (dollars in thousands):


	Personnel			Facilities			Restructuring Subtotal			Other			Total
Balance as of September 30, 2023	$	549		$	1,033		$	1,582		$	—		$	1,582
Restructuring and other costs, net		4,918			26			4,944			1,802			6,746
Non-cash adjustments		—			(534	)		(534	)		(300	)		(834	)
Cash payments		(4,871	)		(477	)		(5,348	)		(145	)		(5,493	)
Effect of foreign currency translation		(20	)		(3	)		(23	)		—			(23	)
Balance at June 30, 2024	$	576		$	45		$	621		$	1,357		$	1,978

The following table sets forth restructuring and other costs, net recognized for the three and nine months ended June 30, 2024 and 2023 (dollars in thousands):


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024		2023

Personnel	$	399		$	1,003		$	4,918	$	7,423
Facilities		(266	)		(33	)		26		310
Restructuring subtotal		133			970			4,944		7,733
Other		1,357			202			1,802		3,342
Restructuring and other costs, net	$	1,490		$	1,172		$	6,746	$	11,075

Fiscal Year 2024

For the three months ended June 30, 2024, we recorded restructuring and other costs, net of $1.5 million, which included $1.4 million of consulting costs relating to our transformation initiatives. We are focused on pursuing actions intended to position the Company to deliver on our generative AI and large language model product roadmap and also deliver improved financial results which include process optimization efforts and cost reductions. We also incurred a $0.4 million severance charge related to the elimination of personnel and a $0.3 million credit resulting from the closure of facilities that will no longer be utilized.

For the nine months ended June 30, 2024, we recorded restructuring and other costs, net of $6.7 million, which included a $4.9 million severance charge related to the elimination of personnel and $1.8 million other one-time charges, which included $1.4 million of consulting costs relating to our transformation initiatives. We are focused on pursuing actions intended to position the Company to deliver on our generative AI and large language model product roadmap and also deliver improved financial results which include process optimization efforts and cost reductions.

Fiscal Year 2023

For the three months ended June 30, 2023, we recorded restructuring and other costs, net of $1.2 million, which included a $1.0 million severance charge related to the elimination of personnel, and $3.5 million of third-party fees relating to the modification of the 2025 Notes, offset by a $3.3 million other one-time gain.

For the nine months ended June 30, 2023, we recorded restructuring and other costs, net of $11.1 million, which included a $7.4 million severance charge related to the elimination of personnel, $3.5 million of third-party fees relating to the modification of the 2025 Notes, and a $0.3 million charge resulting from the closure of facilities that will no longer be utilized, offset by a $3.3 million other one-time gain.

Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill for the nine months ended June 30, 2024 are as follows (dollars in thousands):


	Total
Balance as of September 30, 2023	$	900,342
Goodwill impairment		(609,172	)
Effect of foreign currency translation		1,106
Balance as of June 30, 2024	$	292,276

Summary of Gross Carrying Amounts and Accumulated Amortization of Intangible Assets by Major Class

The following tables summarizes the gross carrying amounts and accumulated amortization of intangible assets by major class (dollars in thousands):


	June 30, 2024
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (Years)
Customer relationships	$	107,139	$	(104,955	)	$	2,184		0.7
Technology and patents		89,544		(89,544	)		-		-
Total	$	196,683	$	(194,499	)	$	2,184


	September 30, 2023
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (Years)
Customer relationships	$	106,713	$	(102,942	)	$	3,771		1.5
Technology and patents		89,431		(89,327	)		104		0.2
Total	$	196,144	$	(192,269	)	$	3,875

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 24
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482548/350-20-55-24

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Name Accounting Standards Codification
-Section 50
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1A

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-2

+ Details

Commitments and Contingencies - Additional Information (Details) - USD ($)		9 Months Ended
	Mar. 24, 2023	Jun. 30, 2024
Loss Contingencies [Line Items]
Loss contingency, lawsuit filing date	March 24, 2023
Loss contingency, statutory damages	$ 5,000
Indemnification period for former officers and members of the boards of directors		6 years
Bellevue, Washington Office Space
Loss Contingencies [Line Items]
Letter of credit as security deposit		$ 900,000
Other Facility
Loss Contingencies [Line Items]
Letter of credit as security deposit		$ 600,000
Negligent Violation
Loss Contingencies [Line Items]
Loss contingency, statutory damages	$ 1,000

Earnings Per Share (Tables)

9 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Schedule of Reconciliation of Basic Shares to Diluted Shares

The following table presents the reconciliation of the numerator and denominator for calculating net loss per share:


	Three Months Ended June 30,						Nine Months Ended June 30,
in thousands, except per share data	2024			2023			2024			2023

Numerator:
Net loss - basic and diluted	$	(313,543	)	$	(16,455	)	$	(567,662	)	$	(44,702	)

Denominator:
Weighted average common shares outstanding - basic and diluted		41,795			40,324			41,566			40,167

Net loss per common share:
Basic and diluted	$	(7.50	)	$	(0.41	)	$	(13.66	)	$	(1.11	)

Schedule of Potential Shares Considered Antidilutive

The following table sets forth potential shares that were considered anti-dilutive during the three and nine months ended June 30, 2024 and 2023.


	Three Months Ended June 30,				Nine Months Ended June 30,
in thousands	2024		2023		2024		2023
Restricted stock unit awards		-		669		-		126
Contingently issuable stock awards		-		32		264		71
Conversion option of our Notes		7,495		4,780		7,495		4,711

Significant Accounting Policies - Additional Information (Details) $ in Millions	3 Months Ended		9 Months Ended	12 Months Ended
	Jun. 30, 2024 USD ($)	Mar. 31, 2024 USD ($)	Jun. 30, 2024 USD ($) Customer	Sep. 30, 2023 USD ($) Customer
Significant Accounting Policies [Line Items]
Inventories	$ 1.0		$ 1.0	$ 0.5
Provision relating to bankruptcy		$ 6.1
Credit loss recovery related to an international electric vehicle maker	$ 2.4
Trade Receivable
Significant Accounting Policies [Line Items]
Provision relating to bankruptcy		0.1
Contract Asset
Significant Accounting Policies [Line Items]
Provision relating to bankruptcy		$ 6.0
Concentration of Credit Risk \| Accounts Receivable, Net
Significant Accounting Policies [Line Items]
Number of major customers \| Customer			2	2
Concentration of Credit Risk \| Accounts Receivable, Net \| Customer One
Significant Accounting Policies [Line Items]
Concentration risk, percentage			16.90%	10.80%
Concentration of Credit Risk \| Accounts Receivable, Net \| Customer Two
Significant Accounting Policies [Line Items]
Concentration risk, percentage			14.00%	10.10%

Revenue Recognition - Additional Information (Details)	3 Months Ended				9 Months Ended		12 Months Ended
Revenue Recognition - Additional Information (Details)	Jun. 30, 2024 USD ($) Customer	Mar. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 USD ($) Customer	Jun. 30, 2024 USD ($) Customer	Jun. 30, 2023 USD ($) Customer	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
Disaggregation Of Revenue [Line Items]
Revenues	$ 70,539,000			$ 61,660,000	$ 276,699,000	$ 213,711,000
Acceleration of deferred revenue			$ 67,800,000
Provision relating to bankruptcy		$ 6,100,000
Accounts receivable, net	72,799,000				72,799,000		$ 61,270,000	$ 45,100,000
Contract acquisition costs					7,000,000		$ 8,000,000
Contract acquisition cost, amortization	1,000,000			800,000	2,700,000	2,400,000
Contract acquisition cost, impairment					0
Capitalized contract cost, amortization	1,300,000			2,200,000	7,100,000	7,400,000
Capitalized contract cost, impairment					0
Trade Receivable
Disaggregation Of Revenue [Line Items]
Provision relating to bankruptcy		100,000
Contract Asset
Disaggregation Of Revenue [Line Items]
Provision relating to bankruptcy		$ 6,000,000
Customer One
Disaggregation Of Revenue [Line Items]
Revenues	$ 20,600,000			10,800,000	$ 81,500,000	31,700,000
Customer Two
Disaggregation Of Revenue [Line Items]
Revenues				$ 6,300,000		23,100,000
Separate Customer
Disaggregation Of Revenue [Line Items]
Acceleration of deferred revenue			$ 9,900,000
China
Disaggregation Of Revenue [Line Items]
Revenues						$ 22,000,000
Revenues \| Customer Concentration Risk
Disaggregation Of Revenue [Line Items]
Number of customers accounted for revenues \| Customer	1			2	1	2
Revenues \| Customer Concentration Risk \| Customer One
Disaggregation Of Revenue [Line Items]
Percentage of revenue	29.20%			17.60%	29.50%	14.80%
Revenues \| Customer Concentration Risk \| Customer Two
Disaggregation Of Revenue [Line Items]
Percentage of revenue				10.10%		10.80%
Minimum \| Revenues \| Geographic Concentration Risk
Disaggregation Of Revenue [Line Items]
Percentage of revenue						10.00%

Accrued Expenses and Other Liabilities (Tables)

9 Months Ended

Jun. 30, 2024

Accrued Liabilities and Other Liabilities [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (dollars in thousands):


	June 30, 2024		September 30, 2023

Compensation	$	16,253	$	24,997
Professional fees		4,581		3,386
Sales and other taxes payable		4,518		7,384
Cost of revenue related liabilities		3,204		4,326
Interest payable		1,869		1,781
Other		7,138		6,844
Total	$	37,563	$	48,718

Income Taxes - Components of the (Benefit From) Provision for Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Domestic	$ (34,655)	$ 699	$ (2,583)	$ 1,068
Foreign	(7,898)	2,312	6,018	6,899
(Benefit from) provision for income taxes	$ (42,553)	$ 3,011	$ 3,435	$ 7,967
Effective income tax rate	11.90%	(22.40%)	(0.60%)	(21.70%)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Goodwill and Other Intangible Assets

9 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Note 7. Goodwill and Other Intangible Assets

(a) Goodwill

We consider our Chief Executive Officer (“CEO”) to be our CODM. Our CEO approves all major decisions, including reorganizations and new business initiatives. Our CODM reviews routine consolidated operating information and makes decisions on the allocation of resources at this level, as such, we have concluded that we have one operating segment.

All goodwill is assigned to one or more reporting units. A reporting unit represents an operating segment or a component within an operating segment for which discrete financial information is available and is regularly reviewed by segment management for performance assessment and resource allocation. Upon consideration of our components, we have concluded that our goodwill is associated with one reporting unit.

At June 30, 2024, we performed a quantitative impairment test. We concluded indicators of impairment were present due to the current macroeconomic conditions, including declines in our stock price. The fair value of our reporting unit was determined using a combination of the income approach and the market approach. For the income approach, fair value was determined based on the present value of estimated future after-tax cash flows estimates of projected future revenues, operating margins, and growth rates, discounted at an appropriate risk-adjusted rate. For the market approach, we used a valuation technique in which values were derived based on valuation multiples of comparable publicly traded companies.

We weighted the methodologies appropriately to estimate a fair value of approximately $154.2 million as of June 30, 2024. The carrying value of our reporting unit exceeded the estimated fair value. Based upon the results of the impairment test, we recorded a goodwill impairment charge of $357.1 million for the three months ended June 30, 2024 within the Condensed Consolidated Statement of Operations.

The changes in the carrying amount of goodwill for the nine months ended June 30, 2024 are as follows (dollars in thousands):


	Total
Balance as of September 30, 2023	$	900,342
Goodwill impairment		(609,172	)
Effect of foreign currency translation		1,106
Balance as of June 30, 2024	$	292,276

(b) Intangible Assets, Net

On June 30, 2024, we concluded that indicators of impairment were present and performed a test for recoverability of our long-lived asset group as of June 30, 2024. Based upon the results of the recoverability test, we determined that the carrying amounts of the long-lived asset group were considered recoverable, concluding the test and resulting in no impairment of our long-lived asset group as of June 30, 2024.

The following tables summarizes the gross carrying amounts and accumulated amortization of intangible assets by major class (dollars in thousands):


	June 30, 2024
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (Years)
Customer relationships	$	107,139	$	(104,955	)	$	2,184		0.7
Technology and patents		89,544		(89,544	)		-		-
Total	$	196,683	$	(194,499	)	$	2,184


	September 30, 2023
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (Years)
Customer relationships	$	106,713	$	(102,942	)	$	3,771		1.5
Technology and patents		89,431		(89,327	)		104		0.2
Total	$	196,144	$	(192,269	)	$	3,875

Amortization expense related to intangible assets in the aggregate was $0.6 million and $0.7 million for the three months ended June 30, 2024 and 2023, respectively, and $1.8 million and 5.6 million for the nine months ended June 30, 2024 and 2023, respectively. We expect amortization of intangible assets to be approximately $0.5 million for the remainder of fiscal year 2024.

Goodwill and Other Intangible Assets - Intangible Assets, Net - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Impairment of long-lived asset			$ 0
Amortization expense related to intangible assets	$ 600,000	$ 700,000	1,800,000	$ 5,600,000
Expected amortization of intangible assets for remainder of 2024	$ 500,000		$ 500,000

Long-Term Debt

9 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Long-Term Debt

Note 14. Long-Term Debt

Long-term debt consisted of the following (in thousands):


June 30, 2024
Description	Maturity Date	Convertible Debt Coupon Rate	Effective Interest Rate	Principal		Unamortized Discount			Deferred Issuance Costs			Carrying Value
2025 Modified Notes	6/1/2025	3.00%	3.70%	$	87,500	$	-		$	(555	)	$	86,945
2025 Modified Notes	7/1/2028	1.50%	8.60%		87,500		(3,039	)		(11,600	)		72,861
2028 Notes	7/1/2028	1.50%	1.91%		122,500		-			(1,926	)		120,574
Total debt				$	297,500	$	(3,039	)	$	(14,081	)		280,380
Less: current portion of long-term debt													(86,945	)
Total long-term debt												$	193,435


September 30, 2023
Description	Maturity Date	Convertible Debt Coupon Rate	Effective Interest Rate	Principal		Unamortized Discount			Deferred Issuance Costs			Carrying Value
2025 Modified Notes	6/1/2025	3.00%	3.70%	$	87,500	$	-		$	(992	)	$	86,508
2025 Modified Notes	7/1/2028	1.50%	8.75%		87,500		(3,796	)		(14,490	)		69,214
2028 Notes	7/1/2028	1.50%	1.91%		122,500		-			(2,271	)		120,229
Total debt				$	297,500	$	(3,796	)	$	(17,753	)		275,951
Less: current portion of long-term debt													—
Total long-term debt												$	275,951

The following table summarizes the maturities of our borrowing obligations as of June 30, 2024 (in thousands):


Fiscal Year	2028 Notes			2025 Modified Notes			Total
2024	$	—		$	—		$	—
2025		—			87,500			87,500
2026		—			—			—
2027		—			—			—
2028		122,500			87,500			210,000
Thereafter		—			—			—
Total before unamortized discount and issuance costs and current portion	$	122,500		$	175,000		$	297,500
Less: unamortized discount and issuance costs		(1,926	)		(15,194	)		(17,120	)
Less: current portion of long-term debt		—			(86,945	)		(86,945	)
Total long-term debt	$	120,574		$	72,861		$	193,435

1.50% Senior Convertible Notes due 2028

On June 26, 2023, we issued $190.0 million in aggregate principal amount of 1.50% Convertible Senior Notes due 2028 (the “2028 Notes”), which are governed by an indenture (the “2028 Indenture”), between us and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). On July 3, 2023, we issued an additional $20.0 million in aggregate principal amount of 2028 Notes. The initial net proceeds from the issuance of the 2028 Notes were $193.2 million after deducting transaction costs.

The 2028 Notes are senior, unsecured obligations and accrue interest payable semiannually in arrears on January 1 and July 1 of each year at a rate of 1.50% per year. The 2028 Notes will mature on July 1, 2028, unless earlier converted, redeemed, or repurchased. The 2028 Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.

A holder of 2028 Notes may convert all or any portion of its 2028 Notes at its option at any time prior to the close of business on the business day immediately preceding April 3, 2028 only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending on September 30, 2023 (and only during such fiscal quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the 2028 Indenture) per $1,000 principal amount of 2028 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (3) if we call such 2028 Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after April 3, 2028 until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2028 Notes at any time, regardless of the foregoing circumstances.

The conversion rate is 24.5586 shares of our common stock per $1,000 principal amount of 2028 Notes (equivalent to an initial conversion price of approximately $40.72 per share of our common stock). The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2028 Notes in connection with such a corporate event or convert its 2028 Notes called for redemption in connection with such notice of redemption, as the case may be.

We may not redeem the 2028 Notes prior to July 6, 2026. We may redeem for cash all or any portion of the 2028 Notes (subject to certain limitations), at our option, on a redemption date occurring on or after July 6, 2026 and on or before the 31st scheduled trading day immediately before the maturity date, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2028 Notes.

If we undergo a “fundamental change”, subject to certain conditions, holders may require us to repurchase for cash all or any portion of their 2028 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2028 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The 2028 Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the 2028 Notes then outstanding may declare the entire principal amount of all the 2028 Notes plus accrued special interest, if any, to be immediately due and payable.

In connection with the offering of the 2028 Notes, we repurchased $87.5 million in aggregate principal amount of the 2025 Notes in a privately negotiated transaction. We specifically negotiated the repurchase of the 2025 Notes with investors who concurrently purchased the 2028 Notes. We evaluated the transaction to determine whether the exchange should be accounted for as a modification or extinguishment under the provisions of ASC 470-50, which allows for an exchange of debt instruments between the same debtor and creditor to be accounted for as a modification so long as the instruments do not have substantially different terms. Because the concurrent redemption of the 2025 Notes and a portion of issuance of the 2028 Notes were executed with the same investors, we evaluated the transaction as a debt modification, on a creditor by creditor basis. The repurchase of the 2025 Notes and issuance of the 2028 Notes were deemed to not have substantially different terms on the basis that (1) the present value of the cash flows under the terms of the new debt instrument were less than 10% different from the present value of the remaining cash flows under the terms of the original instrument and (2) the fair value of the conversion feature did not change by more than 10% of the carrying value of the 2025 Notes, and therefore, the repurchase of the 2025 Notes was accounted for as a debt modification.

As a result, $87.5 million of the 2028 Notes are considered a modification of the 2025 Notes and are included in the balances of the 2025 Notes along with the remaining $87.5 million of the 2025 Notes (together the “2025 Modified Notes” and together with the 2028 Notes, the “Notes”) that were not repurchased as part of the transaction. We recorded $14.3 million of fees paid directly to the lenders as deferred debt issuance costs, and $3.8 million of fees paid to third-parties were expensed in the period. As of June 30, 2024, the carrying amount of the 2025 Modified Notes was $159.8 million, net of unamortized costs of $15.2 million.

If a convertible debt instrument is modified or exchanged in a transaction that is not accounted for as an extinguishment, an increase in the fair value of the embedded conversion option shall reduce the carrying amount of the debt instrument with a corresponding increase in Additional paid-in capital. We recognized the increase in the fair value of the embedded conversion feature of $4.1 million as Additional paid-in capital and an equivalent discount that reduced the carrying value of the 2025 Modified Notes.

We accounted for $122.5 million of the 2028 Notes, that were not negotiated with the investors of the 2025 Notes, as a single liability. We incurred transaction costs of $2.4 million relating to the issuance of the 2028 Notes, which were recorded as a direct deduction from the face amount of the 2028 Notes and are being amortized as interest expense over the term of the 2028 Notes using the interest method. As of June 30, 2024, the carrying amount of the 2028 Notes was $120.6 million and unamortized issuance costs of $1.9 million. As of June 30, 2024, the 2028 Notes were not convertible. As of June 30, 2024 and September 30, 2023, the if-converted value of the 2028 Notes was $114.0 million and $61.2 million, respectively, less than its principal amount.

3.00% Senior Convertible Notes due 2025

On June 2, 2020, we issued $175.0 million in aggregate principal amount of 3.00% Convertible Senior Notes due 2025 (the “2025 Notes”), including the initial purchasers’ exercise in full of their option to purchase $25.0 million principal amount of the 2025 Notes, which are governed by an indenture (the “2025 Indenture”), between us and the Trustee, in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The net proceeds from the issuance of the 2025 Notes were $169.8 million after deducting transaction costs.

The 2025 Notes are senior, unsecured obligations and accrue interest payable semiannually in arrears on June 1 and December 1 of each year at a rate of 3.00% per year. The 2025 Notes will mature on June 1, 2025, unless earlier converted, redeemed, or repurchased. The 2025 Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. As of June 30, 2024 and September 30, 2023, the if-converted value of the 2025 Modified Notes was $162.3 million and $83.6 million, respectively, less than its principal amount.

A holder of 2025 Notes may convert all or any portion of its 2025 Notes at its option at any time prior to the close of business on the business day immediately preceding March 1, 2025 only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending on September 30, 2020 (and only during such fiscal quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the 2025 Indenture) per $1,000 principal amount of 2025 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (3) if we call such 2025 Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after March 1, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2025 Notes at any time, regardless of the foregoing circumstances.

The conversion rate is 26.7271 shares of our common stock per $1,000 principal amount of 2025 Notes (equivalent to an initial conversion price of approximately $37.42 per share of our common stock). The conversion rate is subject to adjustment in some

events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2025 Notes in connection with such a corporate event or convert its 2025 Notes called for redemption in connection with such notice of redemption, as the case may be.

The 2025 Notes did not by their terms permit repayment prior to June 5, 2023. We may redeem for cash all or any portion of the 2025 Notes, at our option, on a redemption date occurring on or after June 5, 2023 and on or before the 31st scheduled trading day immediately before the maturity date, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2025 Notes.

See “1.50% Senior Convertible Notes due 2028” section above for discussion on the modification of the 2025 Notes as part of the offering of the 2028 Notes.

The interest expense recognized related to the Notes for the three and nine months ended June 30, 2024 and 2023 was as follows (dollars in thousands):


	Three Months Ended June 30,				Nine Months Ended June 30,
	2024		2023		2024		2023
Contractual interest expense	$	1,436	$	1,315	$	4,317	$	3,931
Amortization of debt discount		255		11		757		11
Amortization of issuance costs		1,235		346		3,671		902
Total interest expense related to the Notes	$	2,926	$	1,672	$	8,745	$	4,844

The conditional conversion feature of the Notes was not triggered during the three and nine months ended June 30, 2024. As of June 30, 2024, the Notes were not convertible. As of this Quarterly Report, no Notes have been converted by the holders. Whether any of the Notes will be converted in future quarters will depend on the satisfaction of one or more of the conversion conditions in the future. If one or more holders elect to convert their Notes at a time when any such Notes are convertible, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional shares), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.

Senior Credit Facilities

On June 12, 2020 (the “Financing Closing Date”), we entered into a Credit Agreement, by and among the Borrower, the lenders and issuing banks party thereto and Wells Fargo Bank, N.A., as administrative agent (the “Credit Agreement”), consisting of a four-year senior secured term loan facility in the aggregate principal amount of $125.0 million (the “Term Loan Facility”). The net proceeds from the issuance of the Term Loan Facility were $123.0 million. We also entered into a senior secured first-lien revolving credit facility in an aggregate principal amount of $50.0 million (the “Revolving Facility” and, together with the Term Loan Facility, the “Senior Credit Facilities”), which may be drawn on in the event that our working capital and other cash needs are not supported by our operating cash flow. In connection with the issuance of the 2028 Notes, in the third quarter of fiscal year 2023, we borrowed $24.7 million under our Revolving Facility and paid $106.3 million towards our Term Loan Facility. As a result, we recorded $104.9 million extinguishment of debt and $1.3 million loss on the extinguishment of debt. All principal and interest on the Term Loan Facility have been paid in full. As of June 30, 2024 and September 30, 2023, there were no amounts outstanding under the Revolver Facility.

The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit our and our subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to designate subsidiaries as unrestricted, to make certain investments, to prepay certain indebtedness and to pay dividends, or to make other distributions or redemptions/repurchases, in respect of our and our subsidiaries’ equity interests. In addition, the Credit Agreement contains financial covenants, each tested quarterly, (1) a net secured leverage ratio of not greater than 3.25 to 1.00; (2) a net total leverage ratio of not greater than 4.25 to 1.00; and (3) minimum liquidity of at least $75 million. The Credit Agreement also contains events of default customary for financings of this type, including certain customary change of control events.

On November 22, 2022 (the “Amendment No. 2 Effective Date”), we entered into Amendment No. 2 to the Credit Agreement (“Amendment No. 2”). Amendment No. 2 modified certain financial covenants between the fiscal quarter ended March 31, 2023 to the fiscal quarter ended December 31, 2023 (the “covenant adjustment period”). During the covenant adjustment period, each tested quarterly, we were required to maintain (1) a net secured leveraged ratio of not greater than 4.25 to 1.00; (2) minimum liquidity of at least $125 million; and (3) aggregate capital expenditures less than $7.5 million. The net total leverage ratio was waived during the covenant adjustment period. At the conclusion of the covenant adjustment period, the original financial covenants resumed. As of June 30, 2024, there were no loan amounts outstanding under the Credit Agreement, and we were in compliance with all Credit Agreement covenants.

On April 12, 2024 (the “Amendment No. 3 Effective Date”), we entered into Amendment No. 3 to the Credit Agreement (“Amendment No. 3”). Amendment No. 3 modified certain financial covenants. Tested quarterly, we will be required to maintain (i) a net secured leveraged ratio of not greater than 3.00 to 1.00; (ii) a minimum level of EBITDA (as defined in the Credit Agreement) of not less than (A) negative $5 million for the six month period ending June 30, 2024, (B) $7.5 million for the nine month period ending September 30, 2024, (C) $20 million for the four consecutive fiscal quarters ending December 31, 2024, (D) $30 million for the four consecutive fiscal quarters ending March 31, 2025, (E) $35 million for the four consecutive fiscal quarters ending June 30, 2025 and for the four consecutive fiscal quarters ending September 30, 2025, (F) $40 million for the four consecutive fiscal quarters ending December 31, 2025, and (G) $40 million for the four consecutive fiscal quarters ending March 31, 2026; (iii) minimum liquidity of at least $50 million; and (iv) aggregate capital expenditures of not more than $10 million.

Amendment No. 3 revised certain interest rates in the Credit Agreement. The applicable margin is SOFR plus 3.00% for SOFR loans and the highest of (i) the federal funds effective rate, (ii) the prime rate, and (iii) one-month SOFR plus 1.00% (the highest of clauses (i) through (iii), the “ABR”) plus 2.00% for ABR loans.

Amendment No. 3 also modified the maturity date for the Revolving Facility. The Revolving Facility matures on April 1, 2026, provided that if on any date during the period commencing on the date which is 91 days prior to the maturity date of our 2025 Notes and any indebtedness incurred to refinance such notes that matures on or prior to July 1, 2026 (such debt, the “Early Maturity Debt”), and ending on July 1, 2026, the maturity date of such Early Maturity Debt has not been extended to a date after July 1, 2026 and we do not hold in a segregated deposit account an amount of cash sufficient to repay and discharge the principal amount of the Early Maturity Debt at maturity, then the Revolving Facility shall mature on the date that is 91 days prior to the maturity date of the Early Maturity Debt.

Total interest expense relating to the Senior Credit Facilities for the three months ended June 30, 2024 and 2023 was $0.1 million and $2.4 million, respectively, and $0.3 million and $6.6 million for the nine months ended June 30, 2024 and 2023, respectively. Amounts reflect the coupon and accretion of the discount.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Revenue Recognition - Summary of Estimated Revenue Expected to be Recognized in Future Related to Performance Obligations Unsatisfied or Partially Unsatisfied (Details 1) $ in Thousands	Jun. 30, 2024 USD ($)
Remaining Performance Obligations
Total revenue	$ 209,190

Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($)			9 Months Ended	12 Months Ended
	Jun. 26, 2023	Jun. 02, 2020	Jun. 30, 2024	Sep. 30, 2023	Jun. 30, 2023
Debt Instrument [Line Items]
Principal			$ 297,500,000	$ 297,500,000
Unamortized discount			(3,039,000)	(3,796,000)
Deferred issuance costs			(14,081,000)	(17,753,000)
Total debt			280,380,000	275,951,000
Less: current portion of long-term debt			(86,945,000)
Total long-term debt			$ 193,435,000	$ 275,951,000
3.00% Convertible Senior Notes Due 2025
Debt Instrument [Line Items]
Maturity date		Jun. 01, 2025	Jun. 01, 2025	Jun. 01, 2025
Convertible debt coupon rate		3.00%	3.00%	3.00%
Effective interest rate			3.70%	3.70%
Principal		$ 175,000,000.0	$ 87,500,000	$ 87,500,000
Deferred issuance costs			(555,000)	(992,000)
Total debt			86,945,000	$ 86,508,000
Less: current portion of long-term debt			(86,945,000)
Total long-term debt			$ 72,861,000
1.50% Convertible Senior Notes Due 2025
Debt Instrument [Line Items]
Maturity date			Jul. 01, 2028	Jul. 01, 2028
Convertible debt coupon rate			1.50%	1.50%
Effective interest rate			8.60%	8.75%
Principal			$ 87,500,000	$ 87,500,000
Unamortized discount			(3,039,000)	(3,796,000)
Deferred issuance costs			(11,600,000)	(14,490,000)
Total debt			$ 72,861,000	$ 69,214,000
1.50% Convertible Senior Notes Due 2028
Debt Instrument [Line Items]
Maturity date	Jul. 01, 2028		Jul. 01, 2028	Jul. 01, 2028
Convertible debt coupon rate	1.50%		1.50%	1.50%
Effective interest rate			1.91%	1.91%
Principal	$ 190,000,000		$ 122,500,000	$ 122,500,000
Deferred issuance costs			(1,926,000)	(2,271,000)
Total debt			120,574,000	$ 120,229,000	$ 120,600,000
Total long-term debt			$ 120,574,000

Significant Accounting Policies (Policies)

9 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, as well as those of our wholly owned subsidiaries. All significant intercompany transactions and balances are eliminated in consolidation.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnote disclosures required by GAAP for complete financial statements.

The condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation of the consolidated results of operations and financial position for the interim periods presented. All such adjustments are of a normal recurring nature. The results of operations for the three and nine months ended June 30, 2024 are not necessarily indicative of the results to be expected for any other interim period or for the fiscal year ending September 30, 2024. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

Use of Estimates

The financial statements are prepared in accordance with GAAP, which requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions can affect the reported amounts in the financial statements and the footnotes thereto. Actual results could differ materially from these estimates.

On an ongoing basis, we evaluate our estimates, assumptions and judgments. Significant estimates inherent to the preparation of financial statements include: revenue recognition; allowance for credit losses; accounting for deferred costs; accounting for internally developed software; the valuation of goodwill and intangible assets; accounting for business combinations; accounting for stock-based compensation; accounting for income taxes; accounting for leases; accounting for convertible debt; and loss contingencies. We base our estimates on historical experience, market participant fair value considerations, projected future cash flows, and various other factors that are believed to be reasonable under the circumstances. Actual amounts could differ significantly from these estimates.

Concentration of Risk

Financial instruments that potentially subject us to significant concentrations of credit risk primarily consist of trade accounts receivable. We perform ongoing credit evaluations of our customers’ financial condition and limit the amount of credit extended when deemed appropriate. Two customers accounted for 16.9% and 14.0% of our Accounts receivable, net balance at June 30, 2024. Two customers accounted for 10.8% and 10.1% of our Accounts receivable, net balance at September 30, 2023.

Allowance for Credit Losses

We are exposed to credit losses primarily through our sales of software licenses and services to customers. We determine credit ratings for each customer in our portfolio based upon public information and information obtained directly from our customers. A credit limit for each customer is established and in certain cases we may require collateral or prepayment to mitigate credit risk. Our expected loss methodology is developed using historical collection experience, current customer credit information, current and future economic and market conditions and a review of the current status of the customer's account balances. We monitor our ongoing credit

exposure through reviews of customer balances against contract terms and due dates, current economic conditions, and dispute resolution. Estimated credit losses are written off in the period in which the financial asset is no longer collectible.

The change in the allowance for credit losses for the nine months ended June 30, 2024 is as follows (dollars in thousands):


	Allowance for Credit Losses
Balance as of September 30, 2023	$	4,131
Credit loss provision		3,624
Write-offs, net of recoveries		(6,063	)
Effect of foreign currency translation		3
Balance as of June 30, 2024	$	1,695

During the three months ended March 31, 2024, we recorded a $6.1 million provision relating to the bankruptcy of one fitness equipment manufacturer, of which $6.0 million relates to a contract asset and $0.1 million relates to a trade receivable. During the three months ended June 30, 2024, we recorded a $2.4 million credit loss recovery related to an international electric vehicle maker.

Inventory

Inventory, consisting primarily of finished goods related to our Cerence Link product, is accounted for using the first in, first out method, and is valued at the lower of cost and net realizable value. Inventory is included within Prepaid expenses and other current assets. As of June 30, 2024 and September 30, 2023, inventory was $1.0 million and $0.5 million, respectively.

Recently Adopted Accounting Standards

None.

Issued Accounting Standards Not Yet Adopted

In November 2023, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), to expand reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to an entity's chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. ASU 2023-07 applies to entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. A public entity should apply ASU 2023-07 retrospectively to all prior periods presented in the financial statements, with early adoption permitted. We are currently in the process of evaluating the effects of this pronouncement on our condensed consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid and is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued. The amendments should be applied on a prospective basis although retrospective application is permitted. We are currently in the process of evaluating the effects of this pronouncement on our condensed consolidated financial statements and disclosures.

- Definition

Disclosure of accounting policy for credit loss on financial instrument measured at amortized cost basis, net investment in lease, off-balance sheet credit exposure, and available-for-sale debt security. Includes, but is not limited to, methodology used to estimate allowance for credit loss, how writeoff of uncollectible amount is recognized, and determination of past due status and nonaccrual status.

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+ Details

- Definition

Disclosure of inventory accounting policy for inventory classes, including, but not limited to, basis for determining inventory amounts, methods by which amounts are added and removed from inventory classes, loss recognition on impairment of inventories, and situations in which inventories are stated above cost.

+ References + Details

Goodwill and Other Intangible Assets - Summary of Gross Carrying Amounts and Accumulated Amortization of Intangible Assets by Major Class (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 196,683	$ 196,144
Accumulated Amortization	(194,499)	(192,269)
Net Carrying Amount	2,184	3,875
Customer Relationships
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	107,139	106,713
Accumulated Amortization	(104,955)	(102,942)
Net Carrying Amount	$ 2,184	$ 3,771
Weighted Average Remaining Life (Years)	0 years	1 year 6 months
Technology and Patents
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 89,544	$ 89,431
Accumulated Amortization	(89,544)	(89,327)
Net Carrying Amount	$ 0	$ 104
Weighted Average Remaining Life (Years)	0 years	2 months 12 days

Summary of Significant Accounting Policies - Summary of Change in Allowance for Credit Losses (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2024 USD ($)
Receivables [Abstract]
Beginning balance	$ 4,131
Credit loss provision	3,624
Write-offs, net of recoveries	(6,063)
Effect of foreign currency translation	3
Ending balance	$ 1,695

Earnings Per Share

9 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Earnings Per Share

Note 4. Earnings Per Share

Basic earnings per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period, increased to include the number of shares of common stock that would have been outstanding had potential dilutive shares of common stock been issued. The dilutive effect of restricted stock units is reflected in diluted net loss per share by applying the treasury stock method.

The dilutive effect of the Notes (as defined in Note 14) is reflected in net loss per share by application of the “if-converted” method. The “if-converted” method is only assumed in periods where such application would be dilutive. In applying the “if-converted” method for diluted net loss per share, we would assume conversion of the Notes at the respective conversion ratio as further described in Note 14. Assumed converted shares of our common stock are weighted for the period the Notes were outstanding.

The following table presents the reconciliation of the numerator and denominator for calculating net loss per share:


	Three Months Ended June 30,						Nine Months Ended June 30,
in thousands, except per share data	2024			2023			2024			2023

Numerator:
Net loss - basic and diluted	$	(313,543	)	$	(16,455	)	$	(567,662	)	$	(44,702	)

Denominator:
Weighted average common shares outstanding - basic and diluted		41,795			40,324			41,566			40,167

Net loss per common share:
Basic and diluted	$	(7.50	)	$	(0.41	)	$	(13.66	)	$	(1.11	)

We exclude weighted-average potential shares from the calculations of diluted net loss per share during the applicable periods when their inclusion is anti-dilutive. The following table sets forth potential shares that were considered anti-dilutive during the three and nine months ended June 30, 2024 and 2023.


	Three Months Ended June 30,				Nine Months Ended June 30,
in thousands	2024		2023		2024		2023
Restricted stock unit awards		-		669		-		126
Contingently issuable stock awards		-		32		264		71
Conversion option of our Notes		7,495		4,780		7,495		4,711

Long-Term Debt (Tables)

9 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Schedule of Long-Term Debt

Long-term debt consisted of the following (in thousands):


June 30, 2024
Description	Maturity Date	Convertible Debt Coupon Rate	Effective Interest Rate	Principal		Unamortized Discount			Deferred Issuance Costs			Carrying Value
2025 Modified Notes	6/1/2025	3.00%	3.70%	$	87,500	$	-		$	(555	)	$	86,945
2025 Modified Notes	7/1/2028	1.50%	8.60%		87,500		(3,039	)		(11,600	)		72,861
2028 Notes	7/1/2028	1.50%	1.91%		122,500		-			(1,926	)		120,574
Total debt				$	297,500	$	(3,039	)	$	(14,081	)		280,380
Less: current portion of long-term debt													(86,945	)
Total long-term debt												$	193,435


September 30, 2023
Description	Maturity Date	Convertible Debt Coupon Rate	Effective Interest Rate	Principal		Unamortized Discount			Deferred Issuance Costs			Carrying Value
2025 Modified Notes	6/1/2025	3.00%	3.70%	$	87,500	$	-		$	(992	)	$	86,508
2025 Modified Notes	7/1/2028	1.50%	8.75%		87,500		(3,796	)		(14,490	)		69,214
2028 Notes	7/1/2028	1.50%	1.91%		122,500		-			(2,271	)		120,229
Total debt				$	297,500	$	(3,796	)	$	(17,753	)		275,951
Less: current portion of long-term debt													—
Total long-term debt												$	275,951

Summary of Maturities of Borrowing Obligations

The following table summarizes the maturities of our borrowing obligations as of June 30, 2024 (in thousands):


Fiscal Year	2028 Notes			2025 Modified Notes			Total
2024	$	—		$	—		$	—
2025		—			87,500			87,500
2026		—			—			—
2027		—			—			—
2028		122,500			87,500			210,000
Thereafter		—			—			—
Total before unamortized discount and issuance costs and current portion	$	122,500		$	175,000		$	297,500
Less: unamortized discount and issuance costs		(1,926	)		(15,194	)		(17,120	)
Less: current portion of long-term debt		—			(86,945	)		(86,945	)
Total long-term debt	$	120,574		$	72,861		$	193,435

Schedule of Interest Expense Related to Notes

The interest expense recognized related to the Notes for the three and nine months ended June 30, 2024 and 2023 was as follows (dollars in thousands):


	Three Months Ended June 30,				Nine Months Ended June 30,
	2024		2023		2024		2023
Contractual interest expense	$	1,436	$	1,315	$	4,317	$	3,931
Amortization of debt discount		255		11		757		11
Amortization of issuance costs		1,235		346		3,671		902
Total interest expense related to the Notes	$	2,926	$	1,672	$	8,745	$	4,844

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Line Items]
U.S. federal statutory rates	21.00%	21.00%	21.00%	21.00%
Effective income tax rate	11.90%	(22.40%)	(0.60%)	(21.70%)
Provision for income taxes	$ (42,553)	$ 3,011	$ 3,435	$ 7,967
Net change in provision for income taxes	$ 45,600		$ 4,600
U.S.
Income Tax Disclosure [Line Items]
Research and development expenditure, maximum amortize period			5 years
Foreign
Income Tax Disclosure [Line Items]
Research and development expenditure, maximum amortize period			15 years

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income Taxes (Tables)

9 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Components of Loss Before Income Taxes

The components of loss before income taxes are as follows (dollars in thousands):


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024			2023

Domestic	$	(305,748	)	$	(9,497	)	$	(510,459	)	$	(19,363	)
Foreign		(50,348	)		(3,947	)		(53,768	)		(17,372	)
Loss before income taxes	$	(356,096	)	$	(13,444	)	$	(564,227	)	$	(36,735	)

Components of the (Benefit From) Provision for Income Taxes

The components of the (benefit from) provision for income taxes are as follows (dollars in thousands):


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024			2023

Domestic	$	(34,655	)	$	699		$	(2,583	)	$	1,068
Foreign		(7,898	)		2,312			6,018			6,899
(Benefit from) provision for income taxes	$	(42,553	)	$	3,011		$	3,435		$	7,967
Effective income tax rate		11.9	%		(22.4	)%		(0.6	)%		(21.7	)%

Fair Value Measurements - Summary of Financial Assets that are Measured at Fair Value and Indicates the Fair Value Hierarchy of the Valuation Inputs (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value	$ 89,355	$ 97,550
Cash and Cash Equivalents	75,537	74,885
Marketable Securities	10,784	19,818
Money Market Funds \| Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value	66,661	66,349
Cash and Cash Equivalents	66,661	66,349
Government Securities \| Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value	392	4,375
Marketable Securities	392	4,375
Government Securities \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value	4,037	5,000
Marketable Securities	4,037	5,000
Time Deposits \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value	8,876	8,536
Cash and Cash Equivalents	8,876	8,536
Commercial Paper \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value		496
Marketable Securities		496
Corporate Debt Securities \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value	6,355	9,947
Marketable Securities	6,355	9,947
Debt Securities \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair Value	$ 3,034	$ 2,847

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Comprehensive Income [Abstract]
Net loss	$ (313,543)	$ (16,455)	$ (567,662)	$ (44,702)
Other comprehensive (loss) income:
Foreign currency translation adjustments	(1,823)	(1,152)	(768)	8,949
Pension adjustments, net	(14)	(21)	(26)	(50)
Net unrealized gains (losses) on available-for-sale securities	13	(106)	173	186
Total other comprehensive (loss) income	(1,824)	(1,279)	(621)	9,085
Comprehensive loss	$ (315,367)	$ (17,734)	$ (568,283)	$ (35,617)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Common Stock	Additional Paid-in-Capital	Additional Paid-in-Capital Cumulative Effect, Period of Adoption, Adjustment	Accumulated Deficit	Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Income (Loss)
Balance at Sep. 30, 2022	$ 712,950	$ (8,530)	$ 394	$ 1,029,542	$ (14,371)	$ (283,249)	$ 5,841	$ (33,737)
Balance (in shares) at Sep. 30, 2022			39,430
Accounting Standards Update [Extensible Enumeration]	us-gaap:AccountingStandardsUpdate202006CumulativeEffectPeriodOfAdoptionMember
Net loss	$ (44,702)					(44,702)
Other comprehensive income (loss)	9,085							9,085
Issuance of common stock	4,687		$ 10	4,677
Issuance of common stock, (in shares)			965
Increase in fair value of conversion option	4,054			4,054
Stock withheld to cover tax withholdings requirements upon stock vesting	(4,834)		$ (1)	(4,833)
Stock withheld to cover tax withholdings requirements upon stock vesting, (in shares)			(62)
Stock-based compensation	30,104			30,104
Balance at Jun. 30, 2023	702,814		$ 403	1,049,173		(322,110)		(24,652)
Balance (in shares) at Jun. 30, 2023			40,333
Balance at Mar. 31, 2023	709,423		$ 403	1,038,048		(305,655)		(23,373)
Balance (in shares) at Mar. 31, 2023			40,292
Net loss	(16,455)					(16,455)
Other comprehensive income (loss)	(1,279)							(1,279)
Issuance of common stock	293			293
Issuance of common stock, (in shares)			45
Increase in fair value of conversion option	4,054			4,054
Stock withheld to cover tax withholdings requirements upon stock vesting	(404)			(404)
Stock withheld to cover tax withholdings requirements upon stock vesting, (in shares)			(4)
Stock-based compensation	7,182			7,182
Balance at Jun. 30, 2023	702,814		$ 403	1,049,173		(322,110)		(24,652)
Balance (in shares) at Jun. 30, 2023			40,333
Balance at Sep. 30, 2023	694,875		$ 404	1,056,099		(333,662)		(27,966)
Balance (in shares) at Sep. 30, 2023			40,423
Net loss	(567,662)					(567,662)
Other comprehensive income (loss)	(621)							(621)
Issuance of common stock	10,637		$ 14	10,623
Issuance of common stock, (in shares)			1,382
Stock withheld to cover tax withholdings requirements upon stock vesting	(9,857)			(9,857)
Stock withheld to cover tax withholdings requirements upon stock vesting, (in shares)			(1)
Stock-based compensation	26,828			26,828
Balance at Jun. 30, 2024	154,200		$ 418	1,083,693		(901,324)		(28,587)
Balance (in shares) at Jun. 30, 2024			41,804
Balance at Mar. 31, 2024	463,400		$ 417	1,077,527		(587,781)		(26,763)
Balance (in shares) at Mar. 31, 2024			41,777
Net loss	(313,543)					(313,543)
Other comprehensive income (loss)	(1,824)							(1,824)
Issuance of common stock	114		$ 1	113
Issuance of common stock, (in shares)			27
Stock withheld to cover tax withholdings requirements upon stock vesting	(113)			(113)
Stock-based compensation	6,166			6,166
Balance at Jun. 30, 2024	$ 154,200		$ 418	$ 1,083,693		$ (901,324)		$ (28,587)
Balance (in shares) at Jun. 30, 2024			41,804

Significant Accounting Policies

9 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Significant Accounting Policies

Note 2. Significant Accounting Policies

Principles of Consolidation

Basis of Presentation

Use of Estimates

Concentration of Risk

Allowance for Credit Losses

The change in the allowance for credit losses for the nine months ended June 30, 2024 is as follows (dollars in thousands):


	Allowance for Credit Losses
Balance as of September 30, 2023	$	4,131
Credit loss provision		3,624
Write-offs, net of recoveries		(6,063	)
Effect of foreign currency translation		3
Balance as of June 30, 2024	$	1,695

Inventory

Recently Adopted Accounting Standards

None.

Issued Accounting Standards Not Yet Adopted

Significant Accounting Policies (Tables)

9 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Summary of Change in Allowance for Credit Losses

The change in the allowance for credit losses for the nine months ended June 30, 2024 is as follows (dollars in thousands):


	Allowance for Credit Losses
Balance as of September 30, 2023	$	4,131
Credit loss provision		3,624
Write-offs, net of recoveries		(6,063	)
Effect of foreign currency translation		3
Balance as of June 30, 2024	$	1,695

Restructuring and Other Costs, Net (Tables)

9 Months Ended

Jun. 30, 2024

Restructuring and Related Activities [Abstract]

Schedule of Accrual Activity Relating to Restructuring Reserves

The following table sets forth accrual activity relating to restructuring reserves for the nine months ended June 30, 2024 (dollars in thousands):


	Personnel			Facilities			Restructuring Subtotal			Other			Total
Balance as of September 30, 2023	$	549		$	1,033		$	1,582		$	—		$	1,582
Restructuring and other costs, net		4,918			26			4,944			1,802			6,746
Non-cash adjustments		—			(534	)		(534	)		(300	)		(834	)
Cash payments		(4,871	)		(477	)		(5,348	)		(145	)		(5,493	)
Effect of foreign currency translation		(20	)		(3	)		(23	)		—			(23	)
Balance at June 30, 2024	$	576		$	45		$	621		$	1,357		$	1,978

Schedule of Restructuring and Other Costs, Net

The following table sets forth restructuring and other costs, net recognized for the three and nine months ended June 30, 2024 and 2023 (dollars in thousands):


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024		2023

Personnel	$	399		$	1,003		$	4,918	$	7,423
Facilities		(266	)		(33	)		26		310
Restructuring subtotal		133			970			4,944		7,733
Other		1,357			202			1,802		3,342
Restructuring and other costs, net	$	1,490		$	1,172		$	6,746	$	11,075

Revenue Recognition - Summary of Significant Changes in Deferred Revenue (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2024 USD ($)
Revenue from Contract with Customer [Abstract]
Balance	$ 222,599
Amounts billed but not recognized	82,043
Revenue recognized	(152,652)
Effect of foreign currency translation	1,057
Balance	$ 153,047

Derivative Financial Instruments

9 Months Ended

Jun. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Note 6. Derivative Financial Instruments

We operate internationally and, in the normal course of business, are exposed to fluctuations in foreign currency exchange rates related to third-party vendor and intercompany payments for goods and services within our non-U.S. subsidiaries. We use foreign exchange forward contracts that are not designated as hedges to manage currency risk. The contracts can have maturities up to three years. As of June 30, 2024 and September 30, 2023, the total notional amount of forward contracts was $72.1 million and $98.0 million, respectively. As of June 30, 2024 and September 30, 2023, the weighted-average remaining maturity of these instruments was approximately 11.0 and 11.6 months, respectively.

The following table summarizes the fair value and presentation in the Condensed Consolidated Balance Sheet for derivative instruments as of June 30, 2024 and September 30, 2023 (dollars in thousands):


		Fair Value
Derivatives not designated as hedges	Classification	June 30, 2024		September 30, 2023
Foreign currency forward contracts	Prepaid expenses and other current assets	$	440	$	477
Foreign currency forward contracts	Other assets		298		256
Foreign currency forward contracts	Accrued expenses and other current liabilities		1,061		1,613
Foreign currency forward contracts	Other liabilities		257		460

The following tables display a summary of the loss related to foreign currency forward contracts for the three and nine months ended June 30, 2024 and 2023 (dollars in thousands):


		Income (loss) recognized in earnings
		Three Months Ended June 30,					Nine Months Ended June 30,
Derivatives not designated as hedges	Classification	2024		2023			2024			2023
Foreign currency forward contracts	Other income (expense), net	$	33	$	(798	)	$	(467	)	$	(2,564	)

Leases - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Lessee Lease Description [Line Items]
Cash payments related to operating leases	$ 1.6	$ 1.7	$ 4.9	$ 5.1
Cash payments related to financing leases	0.1		0.3	0.3
Right of use assets obtained in exchange for lease obligations	$ 2.0	$ (0.2)	$ 3.6	$ 2.7

Commitments and Contingencies

9 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 12. Commitments and Contingencies

Litigation and Other Claims

Similar to many companies in the software industry, we are involved in a variety of claims, demands, suits, investigations and proceedings that arise from time to time relating to matters incidental to the ordinary course of our business, including at times actions with respect to contracts, intellectual property, employment, benefits and securities matters. At each balance sheet date, we evaluate contingent liabilities associated with these matters in accordance with ASC 450 “Contingencies.” If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. Significant judgments are required for the determination of probability and the range of the outcomes, and estimates are based only on the best information available at the time. Due to the inherent uncertainties involved in claims and legal proceedings and in estimating losses that may arise, actual outcomes may differ from our estimates. Contingencies deemed not probable or for which losses were not estimable in one period may become probable, or losses may become estimable in later periods, which may have a material impact on our results of operations and financial position. As of June 30, 2024, accrued losses were not material to our condensed consolidated financial statements, and we do not expect any pending matter to have a material impact on our condensed consolidated financial statements.

City of Miami Fire Fighters’ and Police Officers' Retirement Trust Action

On February 25, 2022, a purported shareholder class action captioned as City Of Miami Fire Fighters’ and Police Officers’ Retirement Trust v. Cerence Inc., et al. (the “Securities Action”) was filed in the United States District Court for the District of Massachusetts, naming the Company and two of its former officers as defendants. Following the court’s selection of a lead plaintiff and lead counsel, an amended complaint was filed on July 26, 2022. The plaintiff claims to be suing on behalf of anyone who purchased the Company’s common stock between November 16, 2020 and February 4, 2022. The lawsuit alleges that material

misrepresentations and/or omissions of material fact regarding the Company’s operations, financial performance and prospects were made in the Company’s public disclosures during the period from November 16, 2020 to February 4, 2022, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The plaintiff seeks unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including attorney’s fees. On September 9, 2022, the defendants in the Securities Action moved to dismiss the action in its entirety. On March 25, 2024, the court granted in part and denied in part the motion to dismiss, dismissing certain of the alleged misrepresentations and omissions while allowing claims challenging certain other alleged misrepresentations and omissions to proceed. On April 15, 2024, the defendants filed their answer to the amended complaint. The case is currently in discovery, with trial scheduled to commence on January 12, 2026. We intend to defend the claims vigorously.

Given the uncertainty of litigation, the preliminary stage of the case, and the legal standards that must be met for, among other things, class certification and success on the merits, we cannot estimate the reasonably possible loss or range of loss that may result from this action.

Derivative Actions

On May 10 and 12, 2022, respectively, plaintiffs William Shafer and Peter Morse filed shareholder derivative complaints in the United States District Court for the District of Massachusetts on behalf of Cerence Inc. against defendants (and former officers) Sanjay Dwahan and Mark J. Gallenberger as well as board members Arun Sarin, Thomas Beaudoin, Marianne Budnik, Sanjay Jha, Kristi Ann Matus, Alfred Nietzel and current CEO and board member Stefan Ortmanns. These actions are premised on factual contentions substantially similar to those made in the Securities Action and contain substantially similar legal contentions. As such, on June 13, 2022, at the parties’ request, the court consolidated these derivative actions into a single action and appointed co-lead counsel for plaintiffs in that consolidated action. On May 24, 2024, defendants filed a motion to dismiss under the forum selection clause in the Company’s charter, and on June 7, 2024, plaintiffs opposed the motion to dismiss. The parties are awaiting the court’s decision on the motion to dismiss.

Three shareholder derivative complaints making factual and legal contentions substantially similar to those raised in the consolidated federal derivative action have been also filed in the Delaware Court of Chancery: the first filed on October 19, 2022 by plaintiff Melinda Hipp against the defendants named in the consolidated federal derivative action and board member Douglas Davis, the second filed on August 17, 2023 by plaintiff Catherine Fleming against the defendants named in the consolidated federal derivative action, and the third filed on July 10, 2024 by plaintiff Alberto Goncalves against the defendants named in the consolidated federal derivative action. On October 20, 2023, Ms. Hipp voluntarily dismissed her action with prejudice. On June 26, 2024, the court stayed the Fleming action pending the outcome of a mediation scheduled for August 14, 2024.

Given the uncertainty of litigation, the preliminary stage of the cases, and the legal standards that must be met for, among other things, derivative standing and success on the merits, we cannot estimate the reasonably possible loss or range of loss that may result from these derivative actions.

A.P., a minor, by and through her guardian, Carlos Pena and Carlos Pena Action

On March 24, 2023, plaintiffs A.P., a minor, by and through her guardian, Carlos Pena, and Carlos Pena, each individually and on behalf of similarly situated individuals filed a purported class action lawsuit in the Circuit Court of Cook County, Illinois, Chancery Division (Case. No. 2023CH02866 (Cir. Ct. Cook Cnty. 2023)). The case was removed to Federal Court (Case No. 1:23CV2667 (N.D. Ill.)), and then severed and remanded back in part, so there are two pending cases. Plaintiffs subsequently amended the federal complaint twice, with the latest second amended complaint, filed on July 13, 2023, adding plaintiffs Randolph Freshour and Vincenzo Allan, each also filing individually and on behalf of similarly situated individuals. Plaintiffs allege that Cerence violated the Illinois Biometric Information Privacy Act (“BIPA”), 740 ILCS 14/1 et seq. through Cerence’s Drive Platform technology, which is integrated in various automobiles. The named plaintiffs allegedly drove or rode in a vehicle with Cerence’s Drive Platform technology. Across both cases, plaintiffs allege that Cerence violated: (1) BIPA Section 15(a) by possessing biometrics without any public written policy for their retention or destruction; (2) BIPA Section 15(b) by collecting, capturing, or obtaining biometrics without written notice or consent; (3) BIPA Section 15(c) by profiting from biometrics obtained from Plaintiffs and putative class members; and (4) BIPA Section 15(d) by disclosing biometrics to third party companies without consent. Cerence has filed motions to dismiss both cases. On February 27, 2024, the Circuit Court issued an order denying Cerence's motion to dismiss. On April 16, 2024, Cerence filed its answer and affirmative defenses, a motion to certify the Court’s order on Cerence’s motion to dismiss, and a motion to stay. Thereafter, in exchange for Cerence withdrawing its motions to certify and stay, plaintiffs filed amended complaints in both the Circuit Court and Federal Court. Cerence’s answers in the Federal Court and Circuit Court are due on July 15 and July 18, 2024, respectively, which the Company filed on such dates. Plaintiffs are seeking statutory damages of $5,000 for each willful and/or reckless violation of BIPA and, alternatively, damages of $1,000 for each negligent violation of BIPA. Given the uncertainty of litigation, the preliminary stage of the case, and the legal standards that must be met for, among other things, class certification and success on the merits, we cannot estimate the reasonably possible loss or range of loss that may result from this action.

Guarantees and Other

We include indemnification provisions in the contracts we enter with customers and business partners. Generally, these provisions require us to defend claims arising out of our products’ infringement of third-party intellectual property rights, breach of contractual obligations and/or unlawful or otherwise culpable conduct. The indemnity obligations generally cover damages, costs and attorneys’ fees arising out of such claims. In most, but not all cases, our total liability under such provisions is limited to either the value of the contract or a specified, agreed-upon amount. In some cases, our total liability under such provisions is unlimited. In many, but not all cases, the term of the indemnity provision is perpetual. While the maximum potential amount of future payments we could be required to make under all the indemnification provisions is unlimited, we believe the estimated fair value of these provisions is minimal due to the low frequency with which these provisions have been triggered.

We indemnify our directors and officers to the fullest extent permitted by Delaware law, which provides among other things, indemnification to directors and officers for expenses, judgments, fines, penalties and settlement amounts incurred by such persons in their capacity as a director or officer of the Company, regardless of whether the individual is serving in any such capacity at the time the liability or expense is incurred. Additionally, in connection with certain acquisitions, we agreed to indemnify the former officers and members of the boards of directors of those companies, on similar terms as described above, for a period of six years from the acquisition date. In certain cases, we purchase director and officer insurance policies related to these obligations, which fully cover the six-year period. To the extent that we do not purchase a director and officer insurance policy for the full period of any contractual indemnification, and such directors and officers do not have coverage under separate insurance policies, we would be required to pay for costs incurred, if any, as described above.

As of June 30, 2024, we have a $0.9 million letter of credit that is used as a security deposit in connection with our leased Bellevue, Washington office space. In the event of default on the underlying lease, the landlord would be eligible to draw against the letter of credit. The letter of credit is subject to aggregate reductions, provided that we are not in default under the underlying lease. We also have letters of credit in connection with security deposits for other facility leases totaling $0.6 million in the aggregate. These letters of credit have various terms and expire during fiscal year 2024 and beyond, while some of the letters of credit may automatically renew based on the terms of the underlying agreements.

Derivative Financial Instruments - Summary of Fair Value and Presentation in Condensed Consolidated Balance Sheet for Derivative Instruments (Details) - Foreign Currency Forward Contracts - Not Designated - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Prepaid Expenses and Other Current Assets
Derivatives Fair Value [Line Items]
Derivative instrument assets at fair value	$ 440	$ 477
Other Assets
Derivatives Fair Value [Line Items]
Derivative instrument assets at fair value	298	256
Accrued Expenses and Other Current Liabilities
Derivatives Fair Value [Line Items]
Derivative instrument liabilities at fair value	1,061	1,613
Other Liabilities
Derivatives Fair Value [Line Items]
Derivative instrument liabilities at fair value	$ 257	$ 460

Long-Term Debt - Schedule of Interest Expense Related to Notes (Details) - 2028 and 2025 Notes - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Debt Instrument [Line Items]
Contractual interest expense	$ 1,436	$ 1,315	$ 4,317	$ 3,931
Amortization of debt discount	255	11	757	11
Amortization of issuance costs	1,235	346	3,671	902
Total interest expense related to the Notes	$ 2,926	$ 1,672	$ 8,745	$ 4,844

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Leases (Tables)

9 Months Ended

Jun. 30, 2024

Leases [Abstract]

Summary of Lease Term and Incremental Borrowing Rates for Leases

The following table presents certain information related to lease term and incremental borrowing rates for leases as of June 30, 2024 and September 30, 2023:


	June 30, 2024			September 30, 2023
Weighted-average remaining lease term (in months):
Operating leases		43.4			37.2
Finance leases		15.9			24.5
Weighted-average discount rate:
Operating leases		6.2	%		5.3	%
Finance leases		4.4	%		4.4	%

Summary of Lease Expense

The following table presents lease expense for the three and nine months ended June 30, 2024 and 2023 (dollars in thousands):


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024			2023
Finance lease costs:
Amortization of right of use asset	$	104		$	108		$	320		$	324
Interest on lease liability		5			9			18			29
Operating lease cost		1,554			1,594			4,763			4,925
Variable lease cost		259			749			1,830			2,248
Sublease income		(50	)		(48	)		(161	)		(141	)
Total lease cost	$	1,872		$	2,412		$	6,770		$	7,385

Summary of Undiscounted Future Minimum Lease Payments Under Non-cancelable Leases

The table below reconciles the undiscounted future minimum lease payments under non-cancelable leases to the total lease liabilities recognized on the Condensed Consolidated Balance Sheet as of June 30, 2024 (dollars in thousands):


Year Ending September 30,	Operating Leases			Financing Leases			Total
2024	$	1,600		$	160		$	1,760
2025		4,662			362			5,024
2026		2,568			53			2,621
2027		2,157			—			2,157
2028		1,519			—			1,519
Thereafter		1,270			—			1,270
Total future minimum lease payments	$	13,776		$	575		$	14,351
Less effects of discounting		(1,553	)		(11	)		(1,564	)
Total lease liabilities	$	12,223		$	564		$	12,787
Reported as of June 30, 2024
Short-term lease liabilities	$	4,646		$	463		$	5,109
Long-term lease liabilities		7,577			101			7,678
Total lease liabilities	$	12,223		$	564		$	12,787

Revenue Recognition - Summary of Estimated Revenue Expected to be Recognized in Future Related to Performance Obligations Unsatisfied or Partially Unsatisfied (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Remaining Performance Obligations
Total revenue	$ 209,190
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-07-01
Remaining Performance Obligations
Total revenue	$ 88,520
Remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01
Remaining Performance Obligations
Total revenue	$ 89,980
Remaining performance obligation, expected timing of satisfaction, period	4 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2029-01-01
Remaining Performance Obligations
Total revenue	$ 30,690
Remaining performance obligation, expected timing of satisfaction, period

Derivative Financial Instruments (Tables)

9 Months Ended

Jun. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Fair Value and Presentation in Condensed Consolidated Balance Sheet for Derivative Instruments


		Fair Value
Derivatives not designated as hedges	Classification	June 30, 2024		September 30, 2023
Foreign currency forward contracts	Prepaid expenses and other current assets	$	440	$	477
Foreign currency forward contracts	Other assets		298		256
Foreign currency forward contracts	Accrued expenses and other current liabilities		1,061		1,613
Foreign currency forward contracts	Other liabilities		257		460

Summary of (Loss) Income Related to Foreign Currency Forward Contracts

The following tables display a summary of the loss related to foreign currency forward contracts for the three and nine months ended June 30, 2024 and 2023 (dollars in thousands):


		Income (loss) recognized in earnings
		Three Months Ended June 30,					Nine Months Ended June 30,
Derivatives not designated as hedges	Classification	2024		2023			2024			2023
Foreign currency forward contracts	Other income (expense), net	$	33	$	(798	)	$	(467	)	$	(2,564	)

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (313,543)	$ (16,455)	$ (567,662)	$ (44,702)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Stockholders' Equity (Tables)

9 Months Ended

Jun. 30, 2024

Equity [Abstract]

Schedule of Non-vested Restricted Stock Units

Information with respect to our non-vested restricted stock units for the nine months ended June 30, 2024 was as follows:


	Non-Vested Restricted Stock Units
	Time-Based Shares			Performance- Based Shares			Total Shares			Weighted- Average Grant-Date Fair Value		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Non-vested at September 30, 2023		2,372,145			1,145,550			3,517,695		$	32.52
Granted		2,097,746			408,424			2,506,170		$	17.34
Vested		(1,259,105	)		(63,998	)		(1,323,103	)	$	35.79
Forfeited		(519,590	)		(256,559	)		(776,149	)	$	28.07
Non-vested at June 30, 2024		2,691,196			1,233,417			3,924,613		$	23.53
Expected to vest								3,924,613		$	23.53		1.09	$	11,067

Schedule of Stock-based Compensation

Stock-based compensation was included in the following captions in our Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,					Nine Months Ended June 30,
	2024		2023			2024		2023
Cost of connected services	$	73	$	(42	)	$	218	$	329
Cost of professional services		569		205			1,730		2,370
Research and development		3,314		3,477			9,693		12,019
Sales and marketing		556		(438	)		1,646		2,744
General and administrative		1,654		3,772			6,004		14,339
	$	6,166	$	6,974		$	19,291	$	31,801

Leases

9 Months Ended

Jun. 30, 2024

Leases [Abstract]

Leases

Note 8. Leases

We have entered into a number of facility and equipment leases which qualify as operating leases under GAAP. We also have a limited number of equipment leases that qualify as finance leases.

The following table presents certain information related to lease term and incremental borrowing rates for leases as of June 30, 2024 and September 30, 2023:


	June 30, 2024			September 30, 2023
Weighted-average remaining lease term (in months):
Operating leases		43.4			37.2
Finance leases		15.9			24.5
Weighted-average discount rate:
Operating leases		6.2	%		5.3	%
Finance leases		4.4	%		4.4	%

The following table presents lease expense for the three and nine months ended June 30, 2024 and 2023 (dollars in thousands):


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024			2023			2024			2023
Finance lease costs:
Amortization of right of use asset	$	104		$	108		$	320		$	324
Interest on lease liability		5			9			18			29
Operating lease cost		1,554			1,594			4,763			4,925
Variable lease cost		259			749			1,830			2,248
Sublease income		(50	)		(48	)		(161	)		(141	)
Total lease cost	$	1,872		$	2,412		$	6,770		$	7,385

For the three months ended June 30, 2024 and 2023, cash payments related to operating leases were $1.6 million and $1.7 million, respectively, and $4.9 million and $5.1 million for the nine months ended June 30, 2024 and 2023, respectively. For the three months ended June 30, 2024 and 2023, cash payments related to finance leases were $0.1 million and immaterial, respectively, of which an immaterial amount related to the interest portion of the lease liability. For the nine months ended June 30, 2024 and 2023, cash payments related to financing leases were $0.3 million and $0.3 million, respectively, of which an immaterial amount related to the interest portion of the lease liability. For the three months ended June 30, 2024 and 2023, right of use assets obtained in exchange for lease obligations were $2.0 million and $(0.2) million, respectively, and $3.6 million and $2.7 million for the nine months ended June 30, 2024 and 2023, respectively.


Year Ending September 30,	Operating Leases			Financing Leases			Total
2024	$	1,600		$	160		$	1,760
2025		4,662			362			5,024
2026		2,568			53			2,621
2027		2,157			—			2,157
2028		1,519			—			1,519
Thereafter		1,270			—			1,270
Total future minimum lease payments	$	13,776		$	575		$	14,351
Less effects of discounting		(1,553	)		(11	)		(1,564	)
Total lease liabilities	$	12,223		$	564		$	12,787
Reported as of June 30, 2024
Short-term lease liabilities	$	4,646		$	463		$	5,109
Long-term lease liabilities		7,577			101			7,678
Total lease liabilities	$	12,223		$	564		$	12,787

Restructuring and Other Costs, Net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Restructuring Cost And Reserve [Line Items]
Restructuring and other costs, net	$ (1,490)	$ (1,172)	$ (6,746)	$ (11,075)
Severance Charge
Restructuring Cost And Reserve [Line Items]
Restructuring and other costs, net	(399)	(1,003)	(4,918)	(7,423)
Facilities Closure
Restructuring Cost And Reserve [Line Items]
Restructuring and other costs, net	266	33	(26)	(310)
Third Party Fees
Restructuring Cost And Reserve [Line Items]
Restructuring and other costs, net		(3,500)		(3,500)
Other One-Time Gains
Restructuring Cost And Reserve [Line Items]
Restructuring and other costs, net		$ (3,300)		$ (3,300)
Other One-Time Charges
Restructuring Cost And Reserve [Line Items]
Restructuring and other costs, net			(1,800)
Consulting Costs
Restructuring Cost And Reserve [Line Items]
Restructuring and other costs, net	$ (1,400)		$ (1,400)

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Leases - Summary of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Finance lease costs:
Amortization of right of use asset	$ 104	$ 108	$ 320	$ 324
Interest on lease liability	5	9	18	29
Operating lease cost	1,554	1,594	4,763	4,925
Variable lease cost	259	749	1,830	2,248
Sublease income	(50)	(48)	(161)	(141)
Total lease cost	$ 1,872	$ 2,412	$ 6,770	$ 7,385

Fair Value Measurements - Summary of Financial Assets that are Measured at Fair Value and Indicates the Fair Value Hierarchy of the Valuation Inputs (Parenthetical) (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Money Market Funds \| Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities, cost	$ 66,661	$ 66,349
Government Securities \| Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities, cost	397	4,421
Government Securities \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities, cost	4,052	5,046
Time Deposits \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities, cost	8,874	8,536
Commercial Paper \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities, cost		496
Corporate Debt Securities \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities, cost	6,381	10,073
Debt Securities \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities, cost	$ 2,000	$ 2,000

Revenue Recognition - Summary of Revenues Classified by Major Geographic Region (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenues:
Total net revenues	$ 70,539	$ 61,660	$ 276,699	$ 213,711
United States
Revenues:
Total net revenues	12,729	22,500	128,216	65,598
Other Americas
Revenues:
Total net revenues	314	106	450	160
Germany
Revenues:
Total net revenues	17,518	19,861	72,075	62,652
Other Europe, Middle East and Africa
Revenues:
Total net revenues	4,838	3,968	13,070	11,152
Japan
Revenues:
Total net revenues	25,010	3,798	35,181	35,377
Other Asia-Pacific
Revenues:
Total net revenues	$ 10,130	$ 11,427	$ 27,707	$ 38,772

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
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+ Details

Fair Value Measurements (Tables)

9 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Summary of Financial Assets that are Measured at Fair Value and Indicates the Fair Value Hierarchy of the Valuation Inputs

The following table presents information about our financial assets that are measured at fair value and indicates the fair value hierarchy of the valuation inputs used (dollars in thousands) as of:


	June 30, 2024
	Fair Value		Cash and Cash Equivalents		Marketable Securities
Level 1:
Money market funds, $66,661 at cost (a)	$	66,661	$	66,661	$	-
Government securities, $397 at cost (b)		392		-		392
Level 2:
Government securities, $4,052 at cost (b)		4,037		-		4,037
Time deposits, $8,874 at cost (a)		8,876		8,876		-
Corporate bonds, $6,381 at cost (b)		6,355		-		6,355
Debt securities, $2,000 at cost (c)		3,034		-		-
Total assets	$	89,355	$	75,537	$	10,784


	September 30, 2023
	Fair Value		Cash and Cash Equivalents		Marketable Securities
Level 1:
Money market funds, $66,349 at cost (a)	$	66,349	$	66,349	$	-
Government securities, $4,421 at cost (b)		4,375		-		4,375
Level 2:
Government securities, $5,046 at cost (b)		5,000		-		5,000
Time deposits, $8,536 at cost (a)		8,536		8,536		-
Commercial paper, $496 at cost (b)		496		-		496
Corporate bonds, $10,073 at cost (b)		9,947		-		9,947
Debt securities, $2,000 at cost (c)		2,847		-		-
Total assets	$	97,550	$	74,885	$	19,818

(a)

Money market funds and other highly liquid investments with original maturities of 90 days or less are included within Cash and cash equivalents in the Condensed Consolidated Balance Sheets.

(b)

(c)

Debt securities within the Condensed Consolidated Balance Sheets are classified as current or noncurrent based upon whether the maturity of the financial asset is less than or greater than 12 months.

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2024	Sep. 30, 2023
Current assets:
Cash and cash equivalents	$ 115,522	$ 101,154
Marketable securities	5,441	9,211
Accounts receivable, net of allowances of $1,607 and $4,044	72,799	61,270
Deferred costs	5,563	6,935
Prepaid expenses and other current assets	40,230	47,157
Total current assets	239,555	225,727
Long-term marketable securities	5,343	10,607
Property and equipment, net	30,731	34,013
Deferred costs	18,267	20,299
Operating lease right of use assets	11,553	11,961
Goodwill	292,276	900,342
Intangible assets, net	2,184	3,875
Deferred tax assets	50,102	46,601
Other assets	23,970	44,165
Total assets	673,981	1,297,590
Current liabilities:
Accounts payable	10,303	16,873
Deferred revenue	43,785	77,068
Short-term operating lease liabilities	4,646	5,434
Short-term debt	86,945
Accrued expenses and other current liabilities	37,563	48,718
Total current liabilities	183,242	148,093
Long-term debt	193,435	275,951
Deferred revenue, net of current portion	109,262	145,531
Long-term operating lease liabilities	7,577	7,947
Other liabilities	26,265	25,193
Total liabilities	519,781	602,715
Commitments and contingencies (Note 12)
Stockholders' Equity:
Common stock, $0.01 par value, 560,000 shares authorized; 41,804 and 40,423 shares issued and outstanding, respectively	418	404
Accumulated other comprehensive loss	(28,587)	(27,966)
Additional paid-in capital	1,083,693	1,056,099
Accumulated deficit	(901,324)	(333,662)
Total stockholders' equity	154,200	694,875
Total liabilities and stockholders' equity	$ 673,981	$ 1,297,590

Earnings Per Share - Schedule of Reconciliation of Basic Shares to Diluted Shares (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Numerator:
Net loss - basic	$ (313,543)	$ (16,455)	$ (567,662)	$ (44,702)
Net loss - diluted	$ (313,543)	$ (16,455)	$ (567,662)	$ (44,702)
Denominator:
Weighted average common shares outstanding - basic	41,795	40,324	41,566	40,167
Weighted average common shares outstanding - diluted	41,795	40,324	41,566	40,167
Net income per common share:
Basic	$ (7.5)	$ (0.41)	$ (13.66)	$ (1.11)
Diluted	$ (7.5)	$ (0.41)	$ (13.66)	$ (1.11)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482662/260-10-50-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-10

Reference 11: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 11
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-11

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 60B
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-60B

+ Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities, and addition from assumption of issuance of common shares for dilutive potential common shares; of income (loss) available to common shareholders.

+ References + Details

Restructuring and Other Costs, Net - Schedule of Restructuring and Other Costs, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Restructuring Cost And Reserve [Line Items]
Restructuring and other costs, net	$ 1,490	$ 1,172	$ 6,746	$ 11,075
Personnel
Restructuring Cost And Reserve [Line Items]
Restructuring and other costs, net	399	1,003	4,918	7,423
Facilities
Restructuring Cost And Reserve [Line Items]
Restructuring and other costs, net	(266)	(33)	26	310
Restructuring Subtotal
Restructuring Cost And Reserve [Line Items]
Restructuring and other costs, net	133	970	4,944	7,733
Other
Restructuring Cost And Reserve [Line Items]
Restructuring and other costs, net	$ 1,357	$ 202	$ 1,802	$ 3,342

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Goodwill and Other Intangible Assets - Goodwill - Additional Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) Segment	Jun. 30, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Number of reportable segments \| Segment			1
Number of Operating Segment \| Segment			1
Estimate fair value \| $	$ 154,200		$ 154,200
Goodwill impairment \| $	$ 357,076	$ 0	$ 609,172	$ 0

Derivative Financial Instruments - Additional Information (Details) - Foreign Exchange Forward Contracts - Not Designated - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Jun. 30, 2024	Sep. 30, 2023
Derivative [Line Items]
Derivative, notional amount	$ 72.1	$ 98.0
Derivative, weighted-average remaining maturity	11 months	11 months 18 days
Maximum
Derivative [Line Items]
Derivative, contract maturity	3 years

Long-Term Debt - Additional Information (Details)					3 Months Ended		9 Months Ended			12 Months Ended
Long-Term Debt - Additional Information (Details)	Apr. 12, 2024 USD ($)	Jun. 26, 2023 USD ($) Days $ / shares shares	Jun. 12, 2020 USD ($)	Jun. 02, 2020 USD ($) Days $ / shares shares	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)	Jun. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)	Jul. 03, 2023 USD ($)	Mar. 31, 2023 USD ($)
Debt Instrument [Line Items]
Aggregate principal amount					$ 297,500,000		$ 297,500,000			$ 297,500,000
Debt, principal amount, net					297,500,000		297,500,000
Proceeds from issuance of notes									$ 190,000,000
Long-Term Debt					280,380,000		280,380,000			275,951,000
Debt unamortized issuance costs, net					14,081,000		14,081,000			17,753,000
Payment on debt issuance costs							419,000		16,786,000
Loss on extinguishment of debt									(1,333,000)
Senior Credit Facilities
Debt Instrument [Line Items]
Minimum liquidity					75,000,000		$ 75,000,000
Debt instrument, covenant description							The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit our and our subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to designate subsidiaries as unrestricted, to make certain investments, to prepay certain indebtedness and to pay dividends, or to make other distributions or redemptions/repurchases, in respect of our and our subsidiaries’ equity interests. In addition, the Credit Agreement contains financial covenants, each tested quarterly, (1) a net secured leverage ratio of not greater than 3.25 to 1.00; (2) a net total leverage ratio of not greater than 4.25 to 1.00; and (3) minimum liquidity of at least $75 million. The Credit Agreement also contains events of default customary for financings of this type, including certain customary change of control events.
Credit Agreement Amendment Two
Debt Instrument [Line Items]
Outstanding amount under credit facility					0		$ 0
Debt Instrument, interest rate description							Total interest expense relating to the Senior Credit Facilities for the three months ended June 30, 2024 and 2023 was $0.1 million and $2.4 million, respectively, and $0.3 million and $6.6 million for the nine months ended June 30, 2024 and 2023, respectively. Amounts reflect the coupon and accretion of the discount.
Maximum capital expenditures amount								$ 7,500,000
Interest expense					$ 100,000	$ 2,400,000	$ 300,000		6,600,000
Minimum liquidity												$ 125,000,000
Credit Agreement Amendment Three
Debt Instrument [Line Items]
Maximum capital expenditures amount	$ 10,000,000
Minimum liquidity	$ 50,000,000
Debt instrument maturity date description							Amendment No. 3 also modified the maturity date for the Revolving Facility. The Revolving Facility matures on April 1, 2026, provided that if on any date during the period commencing on the date which is 91 days prior to the maturity date of our 2025 Notes and any indebtedness incurred to refinance such notes that matures on or prior to July 1, 2026 (such debt, the “Early Maturity Debt”), and ending on July 1, 2026, the maturity date of such Early Maturity Debt has not been extended to a date after July 1, 2026 and we do not hold in a segregated deposit account an amount of cash sufficient to repay and discharge the principal amount of the Early Maturity Debt at maturity, then the Revolving Facility shall mature on the date that is 91 days prior to the maturity date of the Early Maturity Debt.
Credit Agreement Amendment Three \| SOFR
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	3.00%
Credit Agreement Amendment Three \| One month SOFR
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	1.00%
Credit Agreement Amendment Three \| Base Rate
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	2.00%
Maximum
Debt Instrument [Line Items]
Percentage of the remaining cash flow of original instrument							10.00%
Maximum \| Senior Credit Facilities
Debt Instrument [Line Items]
Net leverage ratio					4.25		4.25
Net secured leverage ratio							3.25%
Maximum \| Credit Agreement Amendment Two
Debt Instrument [Line Items]
Net secured leverage ratio								4.25%
Maximum \| Credit Agreement Amendment Three
Debt Instrument [Line Items]
Net secured leverage ratio	3.00%
3.00% Convertible Senior Notes Due 2025
Debt Instrument [Line Items]
Aggregate principal amount				$ 175,000,000.0	$ 87,500,000		$ 87,500,000			$ 87,500,000
Debt instrument, interest rate				3.00%	3.00%		3.00%			3.00%
Debt Instrument, option to purchase additional principal amount				$ 25,000,000.0
Debt, principal amount, net					$ 175,000,000		$ 175,000,000
Proceeds from issuance of notes				$ 169,800,000
Debt instrument, maturity date				Jun. 01, 2025			Jun. 01, 2025			Jun. 01, 2025
Debt instrument repurchase amount					87,500,000		$ 87,500,000
Debt instrument, conversion initial rate \| shares				26.7271
Debt instrument, convertible principal amount				$ 1,000
Debt instrument, conversion price \| $ / shares				$ 37.42
Debt instrument convertible, if-converted value of the Notes less than its principal amount							162,300,000			$ 83,600,000
Debt instrument, convertible trading days \| Days				20
Debt instrument, convertible consecutive trading days \| Days				30
Debt instrument, convertible conversion price percentage				130.00%
Debt instrument, convertible maximum conversion price percentage				98.00%
Debt instrument, redemption price percentage of principal amount				100.00%
Debt instrument, sinking fund				$ 0
Long-Term Debt					86,945,000		86,945,000			86,508,000
Debt unamortized issuance costs, net					555,000		$ 555,000			992,000
3.00% Convertible Senior Notes Due 2025 \| Minimum
Debt Instrument [Line Items]
Conversion feature percentage							10.00%
Debt instrument, convertible trading days \| Days				20
Debt instrument, convertible conversion price percentage				130.00%
2025 Modified Notes
Debt Instrument [Line Items]
Aggregate principal amount					$ 87,500,000		$ 87,500,000			$ 87,500,000
Debt instrument, interest rate					1.50%		1.50%			1.50%
Debt instrument, maturity date							Jul. 01, 2028			Jul. 01, 2028
Long-Term Debt					$ 72,861,000		$ 72,861,000			$ 69,214,000
Debt unamortized issuance costs, net					11,600,000		11,600,000			14,490,000
Payment on debt issuance costs							14,300,000
Payment of refinancing fees to lender					3,800,000		3,800,000
1.50% Convertible Senior Notes Due 2028
Debt Instrument [Line Items]
Aggregate principal amount		$ 190,000,000			$ 122,500,000		$ 122,500,000			$ 122,500,000
Debt instrument, interest rate		1.50%			1.50%		1.50%			1.50%
Debt Instrument, option to purchase additional principal amount											$ 20,000,000
Debt, principal amount, net					$ 122,500,000		$ 122,500,000
Proceeds from issuance of notes		$ 193,200,000
Debt instrument, maturity date		Jul. 01, 2028					Jul. 01, 2028			Jul. 01, 2028
Debt instrument, conversion initial rate \| shares		24.5586
Debt instrument, convertible principal amount		$ 1,000
Debt instrument, conversion price \| $ / shares		$ 40.72
Debt instrument convertible, if-converted value of the Notes less than its principal amount							$ 114,000,000			$ 61,200,000
Debt instrument, convertible trading days \| Days		20
Debt instrument, convertible consecutive trading days \| Days		30
Debt instrument, convertible conversion price percentage		130.00%
Debt instrument, convertible maximum conversion price percentage		98.00%
Debt instrument, redemption price percentage of principal amount		100.00%
Debt instrument, sinking fund		$ 0
Long-Term Debt					120,574,000	120,600,000	120,574,000		120,600,000	120,229,000
Debt unamortized issuance costs, net					1,926,000		1,926,000			2,271,000
Payment on debt issuance costs							2,400,000
Unamortized issuance costs					1,900,000		1,900,000
Debt instrument, percentage of repurchase principal amount		100.00%
1.50% Convertible Senior Notes Due 2028 \| Maximum
Debt Instrument [Line Items]
Debt instrument covenants, percentage of aggregate principal amount payable.		25.00%
1.50% Convertible Senior Notes Due 2028 \| Minimum
Debt Instrument [Line Items]
Debt instrument, convertible trading days \| Days		20
Debt instrument, convertible conversion price percentage		130.00%
1.50% Convertible Senior Notes Due 2028 \| Additional Paid-in-Capital
Debt Instrument [Line Items]
Fair value of the embedded conversion feature							4,100,000
Modified Notes
Debt Instrument [Line Items]
Long-Term Debt					159,800,000		159,800,000
Debt unamortized issuance costs, net					$ 15,200,000		15,200,000
Four Year Senior Secured Term Loan Facility \| Senior Credit Facilities
Debt Instrument [Line Items]
Debt instrument term			4 years
Credit facility maximum borrowing capacity			$ 125,000,000.0
Net proceeds from issuance of credit facility			123,000,000.0
Senior Secured First-lien Revolving Credit Facility \| Senior Credit Facilities
Debt Instrument [Line Items]
Aggregate principal amount						24,700,000			$ 24,700,000
Credit facility maximum borrowing capacity			$ 50,000,000.0
Credit facility borrowed							$ 0			$ 0
Extinguishment of debt						104,900,000
Loss on extinguishment of debt						1,300,000
Debt repayment cost						$ 106,300,000
Period One June 30, 2024 \| Credit Agreement Amendment Three
Debt Instrument [Line Items]
Minimum earnings before interest taxes depreciation and amortization	$ 5,000,000
Period Two September 30, 2024 \| Credit Agreement Amendment Three
Debt Instrument [Line Items]
Minimum earnings before interest taxes depreciation and amortization	7,500,000
Period Three December 31, 2024 \| Credit Agreement Amendment Three
Debt Instrument [Line Items]
Minimum earnings before interest taxes depreciation and amortization	20,000,000
Period Four March 31, 2025 \| Credit Agreement Amendment Three
Debt Instrument [Line Items]
Minimum earnings before interest taxes depreciation and amortization	30,000,000
Period Five June 30, 2025 \| Credit Agreement Amendment Three
Debt Instrument [Line Items]
Minimum earnings before interest taxes depreciation and amortization	35,000,000
Period Five September 30, 2025 \| Credit Agreement Amendment Three
Debt Instrument [Line Items]
Minimum earnings before interest taxes depreciation and amortization	35,000,000
Period Six December 31, 2025 \| Credit Agreement Amendment Three
Debt Instrument [Line Items]
Minimum earnings before interest taxes depreciation and amortization	40,000,000
Period Seven March 31, 2026 \| Credit Agreement Amendment Three
Debt Instrument [Line Items]
Minimum earnings before interest taxes depreciation and amortization	$ 40,000,000