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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Jun. 30, 2020	Jul. 30, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
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	15 Wayside Road
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	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		36,722,585

CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues:
Total revenues	$ 74,810	$ 77,569	$ 238,764	$ 220,357
Cost of revenues:
Amortization of intangible assets	2,063	1,979	6,408	6,175
Total cost of revenues	27,603	23,675	82,267	72,326
Gross profit	47,207	53,894	156,497	148,031
Operating expenses:
Research and development	22,041	22,975	66,898	69,344
Sales and marketing	9,180	8,232	24,829	27,476
General and administrative	14,261	6,237	36,456	17,647
Amortization of intangible assets	3,120	3,132	9,376	9,396
Restructuring and other costs, net	3,301	9,691	13,725	17,147
Acquisition-related costs		366		783
Total operating expenses	51,903	50,633	151,284	141,793
(Loss) income from operations	(4,696)	3,261	5,213	6,238
Interest income	38		563
Interest expense	(5,546)		(19,043)
Other income (expense), net	(20,446)	(150)	(20,366)	100
(Loss) income before income taxes	(30,650)	3,111	(33,633)	6,338
(Benefit from) provision for income taxes	(2,469)	1,341	(6,185)	1,859
Net (loss) income	$ (28,181)	$ 1,770	$ (27,448)	$ 4,479
Net (loss) income per share:
Basic	$ (0.77)	$ 0.05	$ (0.76)	$ 0.12
Diluted	$ (0.77)	$ 0.05	$ (0.76)	$ 0.12
Weighted-average common share outstanding:
Basic	36,509	36,391	36,315	36,391
Diluted	36,509	36,391	36,315	36,391
License
Revenues:
Total revenues	$ 32,454	$ 43,961	$ 117,843	$ 127,287
Cost of revenues:
Total cost of revenues	820	521	2,344	1,428
Connected Services
Revenues:
Total revenues	24,996	19,717	71,148	55,830
Cost of revenues:
Total cost of revenues	7,191	8,232	24,742	28,591
Professional Services
Revenues:
Total revenues	17,360	13,891	49,773	37,240
Cost of revenues:
Total cost of revenues	$ 17,529	$ 12,943	$ 48,773	$ 36,132

CONSOLIDATED AND COMBINED STATEMENT OF COMPREHENSIVE (LOSS) INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement Of Income And Comprehensive Income [Abstract]
Net (loss) income	$ (28,181)	$ 1,770	$ (27,448)	$ 4,479
Other comprehensive income (loss):
Foreign currency translation adjustments	6,382	1,768	4,002	(1,412)
Pension adjustments	16	(138)	1,032	229
Total other comprehensive income (loss)	6,398	1,630	5,034	(1,183)
Comprehensive (loss) income	$ (21,783)	$ 3,400	$ (22,414)	$ 3,296

- Definition

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

+ References + Details

CONSOLIDATED AND COMBINED BALANCE SHEET - USD ($) $ in Thousands	Jun. 30, 2020	Sep. 30, 2019
Current assets:
Cash and cash equivalents	$ 132,844
Accounts receivable, net of allowances of $1,406 and $865 at June 30, 2020 and September 30, 2019, respectively	62,566	$ 65,787
Deferred costs	6,679	9,195
Prepaid expenses and other current assets	34,389	17,343
Total current assets	236,478	92,325
Property and equipment, net	28,366	20,113
Deferred costs	36,913	32,428
Operating lease right of use assets	19,547
Goodwill	1,121,616	1,119,329
Intangible assets, net	50,152	65,561
Deferred tax assets	160,140	150,629
Other assets	15,863	3,444
Total assets	1,669,075	1,483,829
Current liabilities:
Accounts payable	11,637	16,687
Deferred revenue	116,894	88,233
Short-term operating lease liabilities	5,727
Short-term debt	6,250
Accrued expenses and other current liabilities	54,672	24,194
Total current liabilities	195,180	129,114
Long-term debt	267,172
Deferred revenue, net of current portion	219,197	265,051
Long-term operating lease liabilities	16,305
Other liabilities	32,528	21,536
Total liabilities	730,382	415,701
Commitments and contingencies (Note 10)
Stockholders' Equity:
Common stock, $0.01 par value, 600,000 shares authorized as of June 30, 2020; 36,520 shares issued and outstanding as of June 30, 2020	366
Net parent investment		1,097,127
Accumulated other comprehensive loss	(8,237)	(28,999)
Additional paid-in capital	974,012
Accumulated deficit	(27,448)
Total stockholders' equity	938,693	1,068,128
Total liabilities and stockholders' equity	$ 1,669,075	$ 1,483,829

CONSOLIDATED AND COMBINED BALANCE SHEET (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Sep. 30, 2019
Statement Of Financial Position [Abstract]
Accounts receivable allowances	$ 1,406	$ 865
Common stock, par value	$ 0.01
Common stock, shares authorized	600,000,000
Common stock, shares issued	36,520,000
Common stock, shares outstanding	36,520,000

CONSOLIDATED AND COMBINED STATEMENT OF EQUITY AND CHANGES IN PARENT COMPANY EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in-Capital	Accumulated (Deficit) Earnings	Net Parent Investment	Accumulated Other Comprehensive Loss
Balance at Sep. 30, 2018	$ 993,319				$ 1,017,276	$ (23,957)
Accumulated adjustment related to the adoption \| ASC 606	6,974				6,974
Net (loss) income	4,479				4,479
Other comprehensive income (loss)	(1,183)					(1,183)
Net transfer to Parent	(38,713)				(38,713)
Balance at Jun. 30, 2019	964,876				990,016	(25,140)
Balance at Mar. 31, 2019	983,186				1,009,956	(26,770)
Net (loss) income	1,770				1,770
Other comprehensive income (loss)	1,630					1,630
Net transfer to Parent	(21,710)				(21,710)
Balance at Jun. 30, 2019	964,876				990,016	(25,140)
Balance at Sep. 30, 2019	1,068,128				1,097,127	(28,999)
Net (loss) income	(27,448)			$ (27,448)
Other comprehensive income (loss)	5,034					5,034
Distribution to Parent	(152,978)				(152,978)
Net (decrease) increase in net parent investment	11,453				(4,275)	15,728
Reclassification of net parent investment in Cerence			$ 939,874		$ (939,874)
Issuance of common stock at separation		$ 364	(364)
Issuance of common stock at separation, (in shares)		36,391
Stock issued pursuant to employee stock plans	(1,613)	$ 2	(1,615)
Stock issued pursuant to employee stock plans, (in shares)		129
Convertible Senior Notes conversion feature	14,369		14,369
Stock-based compensation	21,748		21,748
Balance at Jun. 30, 2020	938,693	$ 366	974,012	(27,448)		(8,237)
Balance (in shares) at Jun. 30, 2020		36,520
Balance at Mar. 31, 2020	936,379	$ 365	949,916	733		(14,635)
Balance (in shares) at Mar. 31, 2020		36,458
Net (loss) income	(28,181)			(28,181)
Other comprehensive income (loss)	6,398					6,398
Stock issued pursuant to employee stock plans	(695)	$ 1	(696)
Stock issued pursuant to employee stock plans, (in shares)		62
Convertible Senior Notes conversion feature	14,369		14,369
Stock-based compensation	10,423		10,423
Balance at Jun. 30, 2020	$ 938,693	$ 366	$ 974,012	$ (27,448)		$ (8,237)
Balance (in shares) at Jun. 30, 2020		36,520

CONSOLIDATED AND COMBINED STATEMENT OF EQUITY AND CHANGES IN PARENT COMPANY EQUITY (Unaudited) (Parenthetical) $ in Thousands	3 Months Ended	9 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)
Statement Of Stockholders Equity [Abstract]
Convertible senior notes, net of taxes	$ 4,678	$ 4,678
Convertible senior notes, issuance costs	$ 629	$ 629

CONSOLIDATED AND COMBINED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net (loss) income	$ (27,448)	$ 4,479
Adjustments to reconcile net (loss) income to net cash provided by operations:
Depreciation and amortization	22,704	21,522
Provision for doubtful accounts	525
Stock-based compensation	32,954	21,195
Non-cash interest expense	4,025
Loss on debt extinguishment	19,279
Deferred tax benefit	(12,572)	(469)
Changes in operating assets and liabilities:
Accounts receivable	3,853	(7,368)
Prepaid expenses and other assets	(21,328)	(5,513)
Deferred costs	(749)	1,876
Accounts payable	(170)	6,674
Accrued expenses and other liabilities	19,283	4,441
Deferred revenue	(21,779)	21,822
Net cash provided by operating activities	18,577	68,659
Cash flows from investing activities:
Capital expenditures	(16,075)	(2,868)
Net cash used in investing activities	(16,075)	(2,868)
Cash flows from financing activities:
Net transaction with Parent	12,964	(65,791)
Distribution to Parent	(152,978)
Proceeds from long-term debt, net of discount	547,719
Payments for long-term debt issuance costs	(5,765)
Principal payments of long-term debt	(270,000)
Common stock repurchases for tax withholdings for net settlement of equity awards	(1,613)
Principal payment of lease liabilities arising from a finance lease	(96)
Net cash provided by (used in) financing activities	130,231	(65,791)
Effects of exchange rate changes on cash and cash equivalents	111
Net change in cash and cash equivalents	132,844
Cash and cash equivalents at end of period	132,844
Supplemental information:
Cash paid for income taxes	931	$ 2,329
Cash paid for interest	$ 14,344

Business Overview

9 Months Ended

Jun. 30, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Business Overview

Note 1. Business Overview

History

On October 1, 2019, (the “Distribution Date”), Nuance Communications (“Nuance”), a leading provider of speech and language solutions for businesses and consumers around the world, completed the complete legal and structural separation and distribution to its stockholders of all of the outstanding shares of our common stock, and its consolidated subsidiaries, in a tax free spin-off (which we refer to as the “Spin-Off”). The distribution was made in the amount of one share of our common stock for every eight shares of Nuance common stock (which we refer to as the “Distribution”) owned by Nuance’s stockholders as of 5:00 p.m. Eastern Time on September 17, 2019, the record date of the Distribution.

In connection with the Distribution, on September 30, 2019, we filed an Amended and Restated Certificate of Incorporation (the “Charter”) with the Secretary of State of the State of Delaware, which became effective on October 1, 2019. Our Amended and Restated By-laws also became effective on October 1, 2019. On October 2, 2019, our common stock began regular-way trading on the Nasdaq Global Select Market under the ticker symbol CRNC.

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 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.

COVID-19 Update

In December 2019, a novel strain of coronavirus, now known as COVID-19 (“COVID-19”), was reported in Wuhan, China and has since extensively impacted the global health and economic environment. In January 2020, the World Health Organization (“WHO”) declared it a Public Health Emergency of International Concern. On February 28, 2020, the WHO raised its assessment of the COVID-19 threat from high to very high at a global level due to the continued increase in the number of cases and affected countries, and on March 11, 2020, the WHO characterized COVID-19 as a pandemic.

As a result of the COVID-19 pandemic, local, state, and national governments responded to the spread of COVID-19 by implementing various forms of social distancing and shelter-in-place orders to citizens, which has limited economic activity. These extreme measures to slow the spread of COVID-19 have negatively impacted businesses of all sizes, including the automotive industry and its suppliers. Automotive production and shipments ceased or were not operating at full capacity in order to ensure the safety of workers. During the three months ended June 30, 2020, local, state, and national governments began a phased reopening of their respective economies. As a result, automotive production and shipments began to resume with the implementation of robust safety measures, including health assessment measures, personal protective equipment, and facility modifications to increase social distancing. Given the declines in automotive production and shipments, the COVID-19 pandemic has had a material impact on our billings and revenue recognized from licenses and billings from connected services, which may also continue beyond fiscal 2020.

We have taken numerous steps in our approach to addressing the COVID-19 pandemic. We have shifted a portion of our R&D and engineering workforces to support our professional service teams and their successful completion of customer project milestones to help mitigate the decline in revenues. We reduced expenses by limiting discretionary spending, reducing third-party contractors, deferring the hiring of new employees and implementing a reduction in our workforce. In order to further conserve cash outflows, we implemented temporary reductions in salaries for our current named executive officers and other senior executives.

We implemented our business continuity plans and our crisis response team is in place to respond to changes in our environment. At the onset of the COVID-19 pandemic, we instructed employees across 18 different countries and 24 office locations to work from home on a temporary basis. In accordance with local, state, and national guidelines, we have started reopening our offices to allow employees to return to work at their option. Given our investment in web-based applications and tools, we have experienced minimal declines in workforce efficiency to date as a result of employees working remotely. In addition, we have instituted strict restrictions on travel for all employees.

The full extent to which the ongoing COVID-19 pandemic adversely affects our financial performance will depend on future developments, many of which are outside of our control, are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the pandemic, its severity, the effectiveness of actions to contain the virus or treat its impact and how quickly and to what extent normal economic and operating conditions can resume. The COVID-19 pandemic could also result in additional governmental restrictions and regulations, which could adversely affect our business and financial results. In addition, a recession, depression or other sustained adverse market impact resulting from COVID-19 could materially and adversely affect our business, our access to needed capital and liquidity, and the value of our common stock. Even after the COVID-19 pandemic has lessened or subsided, we may continue to experience adverse impacts on our business and financial performance as a result of its global economic impact.

Significant Accounting Policies

9 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Significant Accounting Policies

Note 2. Significant Accounting Policies

Principles of Consolidation

Fiscal 2020

The accompanying unaudited 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.

Fiscal 2019

All prior period information is presented on a combined basis. The combined financial statements have been derived from Nuance’s historical accounting records and are presented on a “carve-out” basis to include the historical financial position, results of operations and cash flows applicable to the Cerence business. As a direct ownership relationship did not exist among all the various business units comprising the Cerence business, Nuance’s investment in the Cerence business is shown in lieu of stockholder’s equity in the combined financial statements.

The Combined Statements of Operations include all revenues and costs directly attributable to Cerence as well as an allocation of expenses related to functions and services performed by centralized parent organizations. These corporate expenses have been allocated to the Cerence business based on direct usage or benefit, where identifiable, with the remainder allocated on a pro rata basis of revenues, headcount, number of transactions or other measures as determined appropriate. The Combined Statements of Cash Flows present these corporate expenses that are cash in nature as cash flows from operating activities, as this is the nature of these costs for Nuance. Non-cash expenses allocated from Nuance include corporate depreciation and amortization and stock-based compensation included as add-back adjustments to reconcile net income to net cash provided by operations. Current and deferred income taxes and related tax expense have been determined based on the standalone results of the Cerence business by applying Accounting Standards Codification No. 740, Income Taxes (“ASC 740”), to the Cerence business’s operations in each country as if it were a separate taxpayer (i.e. following the Separate Return Methodology).

The combined financial statements include the allocation of certain assets and liabilities that have historically been held at the Nuance corporate level or by shared entities but which are specifically identifiable or allocable to the Cerence business. These shared assets and liabilities have been allocated to the Cerence business on the basis of direct usage when identifiable, or allocated on a pro rata basis of revenue, headcount or other systematic measures that reflect utilization of the services provided to or benefits received by Cerence. Nuance uses a centralized approach to cash management and financing its operations. Accordingly, none of the cash, cash equivalents, marketable securities, foreign currency hedges or debt and related interest expense has been allocated to the Cerence business in the combined financial statements. Nuance’s short and long-term debt has not been pushed down to the Cerence business’s combined financial statements because the Cerence business is not the legal obligor of the debt and Nuance’s borrowings were not directly attributable to the Cerence business.

Transactions between Nuance and the Cerence business are considered to be effectively settled in the combined financial statements at the time the transaction is recorded. The total net effect of the settlement of these intercompany transactions is reflected in the Combined Statements of Cash Flows as a financing activity and in the Combined Balance Sheets as net parent investment. All of the allocations and estimates in the combined financial statements are based on assumptions that management believes are reasonable.

Basis of Presentation

The accompanying unaudited 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 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, 2020 are not necessarily indicative of the results to be expected for any other interim period or for the year ending September 30, 2020. These unaudited interim consolidated financial statements should be read in conjunction with the audited combined financial statements and notes contained in our Annual Report on Form 10-K for the year ended September 30, 2019.

Use of Estimates

The financial statements are prepared in accordance with GAAP, which requires management to make estimates 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; the allowances for doubtful accounts; 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, deferred tax assets, and related valuation allowances; 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.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand, including money-market funds with original maturities of 90 days or less. As of June 30, 2020, the estimated fair value of our money-market funds was $107.5 million. We estimated the fair value of our money-market funds from quoted prices for identical assets in active markets on the last trading day of the reporting period (Level 1).

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. One customer accounted for 18.2% of our accounts receivable, net balance at June 30, 2020. Two customers accounted for 12.9% and 10.0% of our accounts receivable, net balance at September 30, 2019.

Convertible Debt

We bifurcate the debt and equity (the contingently convertible feature) components of our convertible debt instruments in a manner that reflects our nonconvertible debt borrowing rate at the time of issuance. The equity components of our convertible debt instruments are recorded within stockholders’ equity with an allocated issuance premium or discount. The debt issuance premium or discount is amortized to interest expense in our consolidated statement of operations using the effective interest method over the expected term of the convertible debt.

We assess the short-term and long-term classification of our convertible debt on each balance sheet date. Whenever the holders have a contractual right to convert, the carrying amount of the convertible debt is reclassified to current liabilities, with the corresponding equity component classified from additional paid-in capital to mezzanine equity.

Recently Adopted Accounting Standards

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases” (“ASU 2016-02”), and codified as ASC 842, which became effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. The guidance requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases.

In July 2018, the FASB issued ASU 2018-10, “Codification Improvements to “Topic 842, Leases” and ASU 2018-11, “Leases Topic Targeted Improvements”, which provides an additional and optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. Additionally, in March 2019, the FASB issued ASU 2019-01, “Codification Improvements to Topic 842”, which provides guidance in the following areas: (1) determining the fair value of the underlying asset by lessors that are not manufacturers or dealers and (2) clarification of interim disclosure requirements during transition.

We adopted the new standard effective October 1, 2019 under the modified retrospective transition approach. Results for reporting periods beginning after October 1, 2019 are presented under ASC 842, while prior periods have not been adjusted and continue to be reported in accordance with our historic accounting under previous GAAP. We elected the package of practical expedients permitted under the transition guidance. The new standard does not have a material impact on our consolidated statement of operations and cash flows. Approximately $2.2 million of deferred rent balances were reclassified against the costs of the right of use assets. The effects of applying ASC 842 as a cumulative-effect adjustment to retained earnings as of October 1, 2019 is immaterial.

The following tables summarize the impact of adopting ASC 842 on the consolidated balance sheet as of October 1, 2019 (dollars in thousands):

	As of October 1, 2019
	As Previously Reported		Impact of Adoption of Topic ASC 842			As Adjusted
Assets:
Operating lease right of use assets	$	—	$	19,594		$	19,594

Liabilities:
Current liabilities:
Short-term operating lease liabilities	$	—	$	4,863		$	4,863
Accrued expenses and other current liabilities		24,194		(1,465	)		22,729
Long-term operating lease liabilities		-		16,883			16,883
Other liabilities	$	21,536	$	(687	)	$	20,849

Equity:
Net parent investment	$	1,097,127	$	-		$	1,097,127

Other Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”), which is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The guidance requires that implementation costs related to a hosting arrangement that is a service contract be capitalized and amortized over the term of the hosting arrangement, starting when the module or component of the hosting arrangement is ready for its intended use. The adoption of ASU 2018-15 did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements to be Adopted

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, including trade receivables. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model that requires the use of forward-looking information to calculate credit loss estimates. This standard is effective for interim and annual reporting periods beginning after December 15, 2019. This standard is required to be adopted using the modified retrospective basis, with a cumulative-effect adjustment to Accumulated earnings (deficit) as of the beginning of the first reporting period in which the guidance of this standard is effective. We plan to adopt this new standard in the first quarter of our fiscal 2021. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements.

As of June 30, 2020, implementation efforts related to ASU 2016-13 are underway, including model development, identification of additional data needs for new reporting requirements, and drafting of accounting policies and internal controls. We believe our accounts receivable and contact assets balances fall within the scope of ASU 2016-13 and will be impacted upon adoption. We plan to use models and other estimation techniques that are sensitive to changes in economic conditions in order to estimate a reserve for financial assets. We also plan to apply qualitative factors that could be related to distinctive risk factors, changes in current economic conditions that may not be reflected in quantitatively derived results, or other relevant factors to ensure the reserve reflects our best estimate of current expected credit losses.

In March 2020, the FASB issued ASU No. 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” (“ASU 2020-04”). The update provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) contract modifications on financial reporting, caused by reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements.

Revenue Recognition

9 Months Ended

Jun. 30, 2020

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.

Our arrangements with customers may contain multiple products and services. We account for individual products and services separately if they are distinct—that is, if a product or service is separately identifiable from other items in the contract and if a customer can benefit from it on its own or with other resources that are readily available to the customer.

We currently recognize revenue after applying the following five steps:

•

identification of the contract, or contracts, with a customer;

•

identification of the performance obligations in the contract, including whether they are distinct within the context of the contract;

•

determination of the transaction price, including the constraint on variable consideration;

•

allocation of the transaction price to the performance obligations in the contract;

•

recognition of revenue when, or as, performance obligations are satisfied.

We allocate the transaction price of the arrangement based on the relative estimated standalone selling price (“SSP”) of each distinct performance obligation. In determining SSP, we maximize observable inputs and consider a number of data points, including:

•

the pricing of standalone sales (in the instances where available);

•

the pricing established by management when setting prices for deliverables that are intended to be sold on a standalone basis;

•

contractually stated prices for deliverables that are intended to be sold on a standalone basis; and

•

other pricing factors, such as the geographical region in which the products are sold and expected discounts based on the customer size and type.

We only include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. We reduce transaction prices for estimated returns and other allowances that represent variable consideration under ASC 606, which we estimate based on historical return experience and other relevant factors, and record a corresponding refund liability as a component of accrued expenses and other current liabilities. Other forms of contingent revenue or variable consideration are infrequent.

Revenue is recognized when control of these services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

We assess the timing of the transfer of products or services to the customer as compared to the timing of payments to determine whether a significant financing component exists. In accordance with the practical expedient in ASC 606-10-32-18, we do not assess the existence of a significant financing component when the difference between payment and transfer of deliverables is a year or less. If the difference in timing arises for reasons other than the provision of finance to either the customer or us, no financing component is deemed to exist. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our services, not to receive or provide financing from or to customers. We do not consider set-up fees nor other upfront fees paid by our customers to represent a financing component.

Reimbursements for out-of-pocket costs generally include, but are not limited to, costs related to transportation, lodging and meals. Revenue from reimbursed out-of-pocket costs is accounted for as variable consideration.

(a) Performance Obligations

Licenses

Software and technology licenses sold with non-distinct professional services to customize and/or integrate the underlying software and technology are accounted for as a combined performance obligation. Revenue from the combined performance obligation is recognized over time based upon the progress towards completion of the project, which is measured based on the labor hours already incurred to date as compared to the total estimated labor hours. For income statement presentation purposes, we separate license revenue from professional services revenue based on their SSPs.

Revenue from distinct software and technology licenses, which do not require professional service to customize and/or integrate the software license, is recognized at the point in time when the software and technology is made available to the customer and control is transferred.

Revenue from software and technology licenses sold on a royalty basis, where the license of non-exclusive intellectual property is the predominant item to which the royalty relates, is recognized in the period the usage occurs in accordance ASC 606-10-55-65(A).

Connected Services

Connected services, which allow our customers to use the hosted software over the contract period without taking possession of the software, are provided on a usage basis as consumed or on a fixed fee subscription basis. Subscription basis revenue represents a single promise to stand-ready to provide access to our connected services. Our connected services contract terms generally range from one to five years.

As each day of providing services is substantially the same and the customer simultaneously receives and consumes the benefits as access is provided, we have determined that our connected services arrangements are a single performance obligation comprised of a series of distinct services. These services include variable consideration, typically a function of usage. We recognize revenue as each distinct service period is performed (i.e., recognized as incurred).

Our connected service arrangements generally include services to develop, customize, and stand-up applications for each customer. In determining whether these services are distinct, we consider dependence of the Cloud service on the up-front development and stand-up, as well as availability of the services from other vendors. We have concluded that the up-front development, stand-up and customization services are not distinct performance obligations, and as such, revenue for these activities is recognized over the period during which the cloud-connected services are provided, and is included within connected services revenue.

Professional Services

Revenue from distinct professional services, including training, is recognized over time based upon the progress towards completion of the project, which is measured based on the labor hours already incurred to date as compared to the total estimated labor hours.

(b) Significant Judgments

Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Our license contracts often include professional services to customize and/or integrate the licenses into the customer’s environment. Judgment is required to determine whether the license is considered distinct and accounted for separately, or not distinct and accounted for together with professional services.

Judgments are required to determine the SSP for each distinct performance obligation. When the SSP is directly observable, we estimate the SSP based upon the historical transaction prices, adjusted for geographic considerations, customer classes, and customer relationship profiles. In instances where the SSP is not directly observable, we determine the SSP using information that may include market conditions and other observable inputs. We may have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we may use information such as the size of the customer and geographic region in determining the SSP. Determining the SSP for performance obligations which we never sell separately also requires significant judgment. In estimating the SSP, we consider the likely price that would have resulted from established pricing practices had the deliverable been offered separately and the prices a customer would likely be willing to pay.

Revenues, classified by the major geographic region in which our customers are located, for the three and nine months ended June 30, 2020 and 2019 (dollars in thousands):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2020		2019		2020		2019
Revenues:
United States	$	27,674	$	29,303	$	99,220	$	96,997
Other Americas		8		334		16		966
Germany		21,082		22,287		61,401		51,117
Other Europe, Middle East and Africa		6,868		5,773		20,093		15,917
Japan		11,727		15,840		38,656		33,578
Other Asia-Pacific		7,451		4,032		19,378		21,782
Total net revenues	$	74,810	$	77,569	$	238,764	$	220,357

Revenues within the United States, Germany, and Japan accounted for more than 10% of revenue for all periods presented.

Revenues relating to three customers accounted for $19.2 million, or 25.7%, $8.0 million, or 10.7%, and $7.8 million, or 10.5%, of revenues for the three months ended June 30, 2020. Revenues relating to one customer accounted for $56.4 million, or 23.6%, of revenues for the nine months ended June 30, 2020. Two customers accounted for $17.0 million, or 21.9%, and $8.5 million, or 11.0%, for the three months ended June 30, 2019. Two customers accounted for $44.9 million, or 20.4%, and $24.3 million, or 11.0%, of revenues for the nine months ended June 30, 2019.

(d) Contract Acquisition Costs

In conjunction with the adoption of ASC 606, we are required to capitalize certain contract acquisition costs. The capitalized costs primarily relate to paid commissions. In accordance with the practical expedient in ASC 606-10-10-4, we apply a portfolio approach to estimate contract acquisition costs for groups of customer contracts. We elect to apply the practical expedient in ASC 340-40-25-4 and will expense contract acquisition costs as incurred where the expected period of benefit is one year or less. Contract acquisition costs are deferred and amortized on a straight-line basis over the period of benefit, which we have estimated to be, on average, between one and eight years. The period of benefit was determined based on an average customer contract term, expected contract renewals, changes in technology and our ability to retain customers, including canceled contracts. We assess the amortization term for all major transactions based on specific facts and circumstances. Contract acquisition costs are classified as current or noncurrent assets based on when the expense will be recognized. 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, 2020, we had $4.7 million of contract acquisition costs. We had amortization expense of $0.3 million and $0.9 million related to these costs during the three and nine months ended June 30, 2020, respectively. There was no impairment related to contract acquisition costs.

(e) Capitalized Contract 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. Our capitalized costs consist primarily of setup costs, such as costs to standup, customize and develop applications for each customer, which are incurred to satisfy our stand-ready obligation to provide access to our connected offerings. These contract costs are expensed to cost of revenue as we satisfy our stand-ready obligation over the contract term which we estimate to be between one and eight years, on average. The contract term was determined based on an average customer contract term, expected contract renewals, changes in technology, and our ability to retain customers, including canceled contracts. We classify these costs as current or noncurrent based on the timing of when we expect to recognize the expense. The current and noncurrent portions of capitalized contract fulfillment costs are presented as deferred costs. As of June 30, 2020, we had $43.6 million of capitalized contract costs.

We had amortization expense of $4.0 million and $9.3 million related to these costs during the three and nine months ended June 30, 2020, respectively. There was no impairment related to contract costs capitalized.

(f) 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. We maintain an allowance for doubtful accounts to provide for the estimated amount of receivables that may not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and other applicable factors.

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 right to payment is not solely subject to the passage of time. Contract assets are included in prepaid expenses and other current assets. The table below shows significant changes in contract assets (dollars in thousands):

	Contract assets
Balance as of October 1, 2019	$	9,219
Revenues recognized but not billed		40,962
Amounts reclassified to accounts receivable, net		(24,980	)
Balance as of June 30, 2020	$	25,201

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 October 1, 2019	$	353,284
Amounts billed but not recognized		76,100
Revenue recognized		(93,293	)
Balance as of June 30, 2020	$	336,091

(g) 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, 2020 (dollars in thousands):

Within One

Year

Two to Five

Years

Greater

than

Five Years

Total

Total revenue

154,390

189,095

60,020

403,505

The table above includes fixed backlogs and does not include variable backlogs derived from contingent usage-based activities, such as royalties and usage-based connected services.

Earnings Per Share

9 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Share

Note 4. Earnings Per Share

Basic earnings per share is computed by dividing net (loss) income by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net (loss) income 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 are reflected in diluted net (loss) income per share by applying the treasury stock method. Due to the net loss recognized for the three and nine months ended June 30, 2020, there were no dilutive shares.

The dilutive effect of the Notes (as defined in Note 12) is reflected in net (loss) income 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 income per share, we would assume conversion of the Notes at a ratio of 26.7271 shares of our common stock per $1,000 principal amount of the Notes. Assumed converted shares of our common stock are weighted for the period the Notes were outstanding. The shares of common stock underlying the conversion option of our Notes were not included in the calculation of diluted loss per share for the three and nine month ended June 30, 2020 due to their anti-dilutive impact as a result of our net loss position for the periods presented.

There were no Cerence equity awards outstanding prior to the Spin-Off, thus the computation of basic and diluted earnings per common share (“EPS”) for all prior periods disclosed was calculated using the shares issued in connection with the Spin-Off totaling 36.4 million shares.

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

	Three Months Ended June 30,					Nine Months Ended June 30,
in thousands, except per share data	2020			2019		2020			2019
Numerator:
Net (loss) income - basic and diluted		(28,181	)		1,770		(27,448	)		4,479

Denominator:
Weighted average common shares outstanding - basic		36,509			36,391		36,315			36,391
Dilutive effect of restricted stock awards		-			-		-			-
Dilutive effect of contingently issuable stock awards		-			-		-			-
Dilutive effect of the Notes		-			-		-			-
Weighted average common shares outstanding - diluted		36,509			36,391		36,315			36,391

Net (loss) income per common share:
Basic		(0.77	)		0.05		(0.76	)		0.12
Diluted		(0.77	)		0.05		(0.76	)		0.12

We exclude weighted-average potential shares from the calculations of diluted net (loss) income per share during the applicable periods because their inclusion would have been anti-dilutive. The following table set forth potential shares that were considered anti-dilutive at June 30, 2020 and for the three and nine months ended June 30, 2019:

	June 30,		Three Months Ended June 30,		Nine Months Ended June 30,
in thousands	2020		2019		2019
Restricted stock awards		2,533		-		-
Contingently issuable stock awards		522		-		-
Conversion option of our Notes		4,677		-		-

Goodwill and Other Intangible Assets

9 Months Ended

Jun. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Note 5. Goodwill and Other Intangible Assets

(a) Goodwill

The determination of operating segments is the first step in determining reportable segments. To be an operating segment, the operating results of the component are regularly reviewed by the chief operating decision maker (“CODM”) in order to assess the performance of the individual segment and make decisions about resources to be allocated to the segment. The function of the CODM is to allocate resources to and assess the operating results of the operating segments of an entity. We believe our Chief Executive Officer (“CEO”) is our CODM. Our CEO approves all major decisions, including reorganizations and new business initiatives. Our CEO assesses performance on a routine basis and make decisions on resource allocations.

The CODM must have discrete financial information available in order to assess performance and make resource allocation decisions. This financial information must be sufficiently detailed to allow the CODM to make decisions. 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 and one reportable segment.

Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill has been allocated to Cerence based upon its relative fair value as of March 31, 2018, when Cerence became a reporting unit of Nuance. Goodwill is reported at the reporting unit level. A reporting unit is an operating segment, or one level below the operating segment, referred to as a component. The determination of whether the reporting unit should be identified at the operating segment or component level is based upon whether the component constitutes a business for which discrete financial information is available and regularly reviewed by segment management. Upon consideration of the discrete financial information reviewed by our CODM, we have concluded that our goodwill is associated with one reporting unit.

Goodwill is not amortized but tested annually for impairment or when interim indicators of impairment are present. Upon our adoption of ASU 2017-04, "Simplifying the Test for Goodwill Impairment”, the test for goodwill impairment involves an assessment of impairment indicators. If indicators are present, a quantitative test of impairment is performed. During the quantitative test, the fair value of the reporting unit is compared to its carrying value. If the fair value of the reporting unit is less than the carrying value, the difference represents an impairment. If the fair value of the reporting unit is greater than the carrying value, no impairment is recognized.

On July 1, 2019, our goodwill was assessed for impairment as a reporting unit of Nuance. On July 1, 2019, the fair value of our reporting unit was determined using a combination of the income approach and the market approach. We assessed each valuation methodology based upon the relevance and availability of the data at the time and weighted the methodologies appropriately to calculate a fair value which exceeded the carrying value of our reporting unit by more than 50%.

On March 31, 2020, we concluded that goodwill impairment indicators were present due to the macroeconomic conditions driven by the COVID-19 pandemic and the anticipated negative impact on our license revenue and connected services billings, therefore we performed an interim quantitative impairment test. 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, discounted at an appropriate risk-adjusted rate. We used our internal forecasts, which were revised to reflect the anticipated impact of the COVID-19 pandemic, to estimate future after-tax cash flows and estimate the long-term growth rates based on our most recent views of the long-term outlook for our reporting unit. 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 $951 million as of March 31, 2020. The estimated fair value exceeded the $936 million carrying value of our reporting unit by approximately $15 million, or 2% of the carrying value. Based upon the results of the impairment test, no goodwill impairment was recorded as of March 31, 2020.

On June 30, 2020, we concluded that no goodwill impairment indicators were present. We will continue to monitor the impacts of the COVID-19 pandemic on our reporting unit fair value. The full extent to which the ongoing COVID-19 pandemic could adversely affect our financial performance will depend on future developments, many of which are outside of our control.

The changes in the carrying amount of goodwill for the nine months ended June 30, 2020 are as follows (dollars in thousands):

	Total
Balance as of October 1, 2019	$	1,119,329
Effect of foreign currency translation		2,287
Balance as of June 30, 2020	$	1,121,616

(b) Intangible Assets, Net

Due to the macroeconomic conditions driven by the COVID-19 pandemic and the anticipated negative impact on our license revenue and connected services billings, we concluded that indicators of impairment were present and performed an interim test for recoverability of our long-lived asset group as of March 31, 2020. 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 March 31, 2020. As of June 30, 2020, there were no indicators of impairment present related to our long-lived asset group.

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

	June 30, 2020
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (Years)
Customer relationships	$	108,805	$	(71,551	)	$	37,254		3.2
Technology and patents		90,022		(77,124	)		12,898		1.8
Total	$	198,827	$	(148,675	)	$	50,152

	September 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (Years)
Customer relationships	$	104,783	$	(58,568	)	$	46,215		4.0
Technology and patents		116,757		(97,411	)		19,346		2.5
Total	$	221,540	$	(155,979	)	$	65,561

Amortization expense related to intangible assets in the aggregate was $5.2 million and $5.1 million for the three months ended June 30, 2020 and 2019, respectively, and $15.8 million and $15.6 million for the nine months ended June 30, 2020 and 2019, respectively. We expect amortization of intangible assets to be approximately $5.0 million for the remainder of 2020.

Leases

9 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

Note 6. Leases

We have entered into a number of facility leases to support our research and development activities, sales operations, and other corporate and administrative functions in North America, Europe, and Asia, which qualify as operating leases under GAAP. We also have a limited number of equipment leases that also qualify as operating leases. We determine if contracts with vendors represent a lease or have a lease component under GAAP at contract inception. As part of our acquisition of Voicebox Technologies Corporation (“Voicebox”), we assumed certain leases for various equipment, which we have accounted for as finance leases. Our leases have remaining terms ranging from less than one year to eight years. Some of our leases include options to extend or terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such options.

Operating lease right of use assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the lease commencement date. As our leases generally do not provide an implicit rate, we use an estimated incremental borrowing rate in determining the present value of future payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular location and currency environment.

The following table presents certain information related to lease term and incremental borrowing rates for leases as of June 30, 2020:

	June 30, 2020
Weighted-average remaining lease term (in months):
Operating leases		54.2
Finance leases		5.0
Weighted-average discount rate:
Operating leases		8.0	%
Finance leases		8.4	%

The following table presents the lease-related assets and liabilities reported in the consolidated balance sheet as of June 30, 2020 (dollars in thousands):

	Classification	June 30, 2020
Assets
Operating lease assets	Operating lease right of use assets	$	19,547
Finance lease assets	Property and equipment, net		187
Total lease assets		$	19,734

Liabilities
Current
Operating	Short-term operating lease liabilities	$	5,727
Finance	Accrued expenses and other current liabilities		49
Noncurrent
Operating	Long-term operating lease liabilities	$	16,305
Finance	Other liabilities		—
Total lease liability		$	22,081

Lease costs for minimum lease payments is recognized on a straight-line basis over the lease term. For operating leases, costs are included within cost of revenues, research and development, marketing and selling, and general and administrative lines on the consolidated statements of operations. For financing leases, amortization of the finance right-of-use assets is included within research and development, marketing and selling, and general and administrative lines on the consolidated statements of operations, and interest expense is included within the other income (expense), net.

The following table presents lease expense for the three and nine months ended June 30, 2020 (dollars in thousands):

	Three months ended June 30, 2020			Nine months ended June 30, 2020
Finance lease costs:
Amortization of right-of-use asset	$	33		$	102
Interest on lease liability		1			3
Operating lease cost		2,209			6,059
Short-term lease cost		-			-
Variable lease cost		347			1,021
Sublease income		(47	)		(157	)
Total lease cost	$	2,543		$	7,028

For operating leases, the related cash payments are included in the operating cash flows on the consolidated statements of cash flows. For the three and nine months ended June 30, 2020, cash payments related to operating leases were $2.1 million and $5.7 million, respectively. For financing leases, the related cash payments for the principal portion of the lease liability are included in the financing cash flows on the consolidated statement of cash flows and the related cash payments for the interest portion of the lease liability are included within the operating section of the consolidated statement of cash flows. For the three months ended June 30, 2020, cash payments related to financing leases were immaterial. For the nine months ended June 30, 2020, cash payments related to financing leases were $0.1 million, of which an immaterial amount related to the interest portion of the lease liability.

The table below reconciles the undiscounted future minimum lease payments under non-cancelable leases with terms of more than one year to the total lease liabilities recognized on the consolidated balance sheet as of June 30, 2020 (dollars in thousands):

Year Ending September 30,	Operating Leases			Financing Leases
2020 (excluding nine months ended June 30, 2020)	$	2,089		$	30
2021		6,757			20
2022		5,628			—
2023		4,178			—
2024		3,735			—
Thereafter		4,060			—
Total future minimum lease payments	$	26,447		$	50
Less effects of discounting		(4,415	)		(1	)
Total lease liabilities	$	22,032		$	49
Reported as of June 30, 2020
Short-term lease liabilities	$	5,727		$	49
Long-term lease liabilities		16,305			—
Total lease liabilities	$	22,032		$	49

The future minimum lease commitments under non-cancelable leases at September 30, 2019 were as follows (dollars in thousands):

Year Ending September 30,
2020	$	6,323
2021		5,421
2022		4,493
2023		3,237
2024		2,922
Thereafter		4,039
Total	$	26,435

Accrued Expenses and Other Liabilities

9 Months Ended

Jun. 30, 2020

Accrued Liabilities And Other Liabilities [Abstract]

Accrued Expenses and Other Liabilities

Note 7. Accrued Expenses and Other Liabilities

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

	June 30, 2020		September 30, 2019
Compensation	$	31,499	$	13,031
Cost of revenue related liabilities		4,283		1,668
Sales and other taxes payable		12,055		219
Professional fees		3,160		3,863
Facilities related liabilities		194		273
Other		3,481		5,140
Total	$	54,672	$	24,194

Restructuring and Other Costs, Net

9 Months Ended

Jun. 30, 2020

Restructuring And Related Activities [Abstract]

Restructuring and Other Costs, Net

Note 8. Restructuring and Other Costs, Net

Restructuring and other costs, net include 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 such as employee severance costs, costs for consolidating duplicate facilities, and separation costs directly attributable to the Cerence business becoming a standalone public company. The following table sets forth accrual activity relating to restructuring reserves for the nine months ended June 30, 2020 (dollars in thousands):

	Personnel			Facilities			Separation			Total
Balance at October 1, 2019	$	489		$	26		$	3,876		$	4,391
Restructuring and other costs, net		3,133			—			10,592			13,725
Cash payments		(2,429	)		(15	)		(12,267	)		(14,711	)
Foreign exchange impact on ending balance		(3	)		—			—			(3	)
Balance at June 30, 2020	$	1,190		$	11		$	2,201		$	3,402

The following table sets forth restructuring and other costs recognized for the three and nine months ended June 30, 2020 and 2019 (dollars in thousands):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2020		2019		2020		2019
Personnel	$	2,452	$	490	$	3,133	$	47
Facilities		—		31		—		1,705
Separation		849		9,170		10,592		15,395
Restructuring and other costs, net	$	3,301	$	9,691	$	13,725	$	17,147

Fiscal Year 2020

For the three months ended June 30, 2020, we recorded restructuring charges of $3.3 million, which included a $2.5 million severance charge related to the elimination of personnel, and $0.8 million related to the costs incurred to establish the Cerence business as a standalone public company.

For the nine months ended June 30, 2020, we recorded restructuring charges of $13.7 million, which included a $3.1 million severance charge related to the elimination of personnel, and $10.6 million related to costs incurred to establish the Cerence business as a standalone public company.

Fiscal Year 2019

For the three months ended June 30, 2019, we recorded restructuring charges of $9.7 million, which included a $0.5 million severance charge related to the elimination of personnel across multiple functions, and $9.2 million related to professional services fees incurred to establish the Cerence business as a standalone public company.

For the nine months ended June 30, 2019, we recorded restructuring charges of $17.1 million, which included a $1.7 million charge resulting from the restructuring of facilities that will no longer be utilized, and $15.4 million related to professional services fees incurred to establish the Cerence business as a standalone public company.

Stockholder's Equity

9 Months Ended

Jun. 30, 2020

Equity [Abstract]

Stockholder's Equity

Note 9. Stockholder’s Equity

Per the Amended and Restated Certificate of Incorporation, which was adopted on October 1, 2019, 600,000,000 shares of capital stock have been authorized, consisting of 40,000,000 shares of Preferred Stock, par value $0.01 per share, or Preferred Stock, and 560,000,000 shares of Common Stock, par value $0.01 per share (“Common Stock”).

On October 2, 2019, we registered the issuance of 6,350,000 shares of 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. Awards issued under the Plan may not have a term greater than ten years from the date of grant.

In connection with the Spin-Off from Nuance, all outstanding Nuance restricted stock units and performance stock units held by Cerence employees were cancelled, and Cerence regranted such employees economically equivalent restricted stock units of Cerence. 1,208,931 restricted stock units were issued by Cerence in connection with the Spin-Off.

Restricted Units

Information with respect to our non-vested restricted stock units for the nine months ended June 30, 2020 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 October 1, 2019		—			—			—		$	—
Granted		2,733,884			776,096			3,509,980		$	17.59
Vested		(207,939	)		—			(207,939	)	$	16.88
Forfeited		(45,633	)		(5,506	)		(51,139	)	$	17.30
Non-vested at June 30, 2020		2,480,312			770,590			3,250,902		$	17.63		1.06	$	132,756
Expected to vest								3,250,902		$	17.63		1.06	$	132,756

Stock-based Compensation

In May 2020, we modified the performance targets for certain of the restricted stock units issued pursuant to our 2019 Equity Incentive Plan at the beginning of fiscal 2020. Stock-based compensation for the anticipated restricted stock units has been adjusted to reflect our estimated achievement under the modified targets and is recorded prospectively over the requisite service period.

Stock-based compensation was included in the following captions in our consolidated statements of operations for the three and nine months ended June 30, 2020 and combined statement of operations for the three and nine months ended June 30, 2019 (in thousands):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2020		2019		2020		2019
Cost of licensing	$	—	$	6	$	—	$	14
Cost of connected services		423		96		963		713
Cost of professional services		1,718		225		3,022		733
Research and development		5,001		4,600		9,924		11,344
Sales and marketing		3,223		1,319		6,589		4,353
General and administrative		7,060		1,582		12,456		4,038
	$	17,425	$	7,828	$	32,954	$	21,195

Commitments and Contingencies

9 Months Ended

Jun. 30, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 10. 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, 2020, accrued losses were not material to our consolidated financial statements, and we do not expect any pending matter to have a material impact on our consolidated financial statements.

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, 2020, we have a $2.2 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 $0.3 million in the aggregate. These letters of credit have various terms and expire during fiscal 2021 and beyond, while some of the letters of credit may automatically renew based on the terms of the underlying agreements.

Income Taxes

9 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Note 11. Income Taxes

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

	Three Months Ended June 30,						Nine Months Ended June 30,
	2020			2019			2020			2019
Domestic	$	(37,807	)	$	6,434		$	(42,875	)	$	85
Foreign		7,157			(3,323	)		9,242			6,253
(Loss) income before income taxes	$	(30,650	)	$	3,111		$	(33,633	)	$	6,338

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

	Three Months Ended June 30,						Nine Months Ended June 30,
	2020			2019			2020			2019
Domestic	$	(6,076	)	$	1,819		$	(6,867	)	$	5
Foreign		3,607			(478	)		682			1,854
(Benefit from) provision for income taxes	$	(2,469	)	$	1,341		$	(6,185	)	$	1,859
Effective income tax rate		8.1	%		43.1	%		18.4	%		29.3	%

The Coronavirus Aid, Relief, and Economic Security Act (“CARES ACT”) became law on March 27, 2020. The CARES ACT was in response to the market volatility and instability resulting from the COVID-19 pandemic and includes provisions to support individuals and businesses in the form of loans, grants, and tax changes, among other types of relief. The CARES ACT did not have a material impact on our (benefit from) provision for income taxes during the period.

The effective tax rates were estimated based upon estimated income for the year, and the composition of the income in different countries. Our aggregate income tax rate in foreign jurisdictions is lower than our income tax rate in the United States. Our effective tax rate may be adversely affected by earnings being lower than anticipated in countries where we have lower statutory tax rates and higher than anticipated in countries where we have higher statutory tax rates.

Our effective income tax rate was 8.1% for the three months ended June 30, 2020, compared to 43.1% for the three months ended June 30, 2019. The effective rate for the three months ended June 30, 2020 differed from the U.S. federal statutory rate of 21.0%, primarily due to our composition of jurisdiction earnings and U.S. inclusions of foreign taxable income as a result of 2017 tax laws changes. The effective tax rate for the three months ended June 30, 2019 differed from the U.S. federal statutory rate of 21.0% primarily due to our earnings in foreign jurisdictions.

Our effective income tax rate was 18.4% for the nine months ended June 30, 2020, compared to 29.3% for the nine months ended June 30, 2019. The effective tax rate for the nine months ended June 30, 2020 differed from the U.S. federal statutory rate of 21.0%, primarily due to our composition of jurisdictional earnings, U.S. inclusions of foreign taxable income as a result of 2017 tax laws changes, and an income tax benefit of approximately $5.0 million related to an increase in tax rates in the Netherlands enacted in the first quarter. The effective tax rate for the nine months ended June 30, 2019 differed from the U.S. federal statutory rate of 21.0% primarily due to our earnings in foreign jurisdictions.

Long Term Debt

9 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Long Term Debt

Note 12. Long-Term Debt

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

	June 30, 2020			September 30, 2019
3.00% Convertible Senior Notes due 2025, net of unamortized discount of $19,400 and deferred issuance costs of $4,898 at June 30, 2020. Effective interest rate 6.29%.	$	150,702		$	—
Senior Credit Facilities, net of unamortized discount of $1,942 and deferred issuance costs of $337 at June 30, 2020. Effective interest rate 4.03%.		122,720			—
Total debt	$	273,422		$	—
Less: current portion		(6,250	)		—
Total long-term debt	$	267,172		$	—

The following table summarizes the maturities of our borrowing obligations as of June 30, 2020 (in thousands):

Fiscal Year	Convertible Senior Notes			Senior Facilities			Total
2020	$	—		$	1,562		$	1,562
2021		—			6,250			6,250
2022		—			7,813			7,813
2023		—			12,500			12,500
2024		—			96,875			96,875
Thereafter		175,000			—			175,000
Total before unamortized discount and issuance costs and current portion	$	175,000		$	125,000		$	300,000
Less: unamortized discount and issuance costs		(24,298	)		(2,280	)		(26,578	)
Less: current portion of long-term debt		—			(6,250	)		(6,250	)
Total long-term debt	$	150,702		$	116,470		$	267,172

3.00% Senior Convertible Notes due 2025

On June 2, 2020, in an effort to refinance our debt structure, we issued $175.0 million in aggregate principal amount of 3.00% Convertible Senior Notes due 2025 (the “Notes”), including the initial purchasers’ exercise in full of their option to purchase an additional $25.0 million principal amount of the Notes, between the Company and U.S. Bank 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 net proceeds from the issuance of the Notes were $169.8 million after deducting transaction costs. We used net proceeds from the issuance of the Notes to repay a portion of our indebtedness under the Credit Agreement, dated October 1, 2019, by and among the Company, the lenders and issuing banks party thereto and Barclays Bank PLC, as administrative agent (the “Existing Facility”).

The Notes are senior, unsecured obligations and will accrue interest payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2020, at a rate of 3.00% per year. The Notes will mature on June 1, 2025, unless earlier converted, redeemed, or repurchased. The Notes are convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election.

A holder of Notes may convert all or any portion of its 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” per $1,000 principal amount of 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 calls such 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 Notes at any time, regardless of the foregoing.

The conversion rate will initially be 26.7271 shares of our common stock per $1,000 principal amount of 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 delivers a notice of redemption, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event or convert its Notes called for redemption in connection with such notice of redemption, as the case may be.

We may not redeem the Notes prior to June 5, 2023. We may redeem for cash all or any portion of the 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 provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provides 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 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 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The Notes contain 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 Notes then outstanding may declare the entire principal amount of all the Notes plus accrued special interest, if any, to be immediately due and payable.

At issuance, we accounted for the Notes by allocating proceeds from the Notes into debt and equity components according to the accounting standards for convertible debt instruments that may be fully or partially settled in cash upon conversion. The initial carrying amount of the debt component, which approximates its fair value, was estimated by using an interest rate for nonconvertible debt, with terms similar to the Notes. The excess of the principal amount of the Notes over the fair value of the debt component was recorded as a debt discount and a corresponding increase in additional paid-in capital. The debt discount is accreted to the carrying value of the Notes over their expected term as interest expense using the interest method. Upon issuance of the Notes, we recorded $155.3 million as debt and $19.7 million as additional paid-in capital in stockholders’ equity.

We incurred transaction costs of $5.6 million relating to the issuance of the Notes. In accounting for these costs, we allocated the costs of the offering between debt and equity in proportion to the fair value of the debt and equity recognized. The transaction costs allocated to the debt component of approximately $5.0 million were recorded as a direct deduction from the face amount of the Notes and are being amortized as interest expense over the term of the Notes using the interest method. The transaction costs allocated to the equity component of approximately $0.6 million were recorded as a decrease in additional paid-in capital.

The interest expense recognized related to the Notes for the three and nine months ended June 30, 2020 was as follows (dollars in thousands):

	Three and Nine Months Ended June 30, 2020
Contractual interest expense	$	431
Amortization of debt discount		276
Amortization of issuance costs		70
Total interest expense related to the Notes	$	777

As of June 30, 2020, the conditions allowing holders of the Notes to convert have not been met and therefore the Notes are not yet convertible.

As of June 30, 2020, the estimated fair value of our Notes was $233.7 million. We estimated the fair value based on the quoted market prices in an inactive market on the last trading day of the reporting period (Level 2). The Notes are recorded at face value less unamortized debt discount and transaction costs on our consolidated balance sheet.

Senior Credit Facilities

On June 12, 2020 (the “Financing Closing Date”), in connection with our effort to refinance our existing indebtedness, 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, which together with proceeds from the Convertible Senior Notes was intended to pay in full all indebtedness under the Existing Facility, and paid fees and expenses in connection with the Senior Credit Facilities. 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 shall be drawn on in the event that our working capital and other cash needs are not supported by our operating cash flow. As of June 30, 2020, there were no amounts outstanding under the Revolving Facility.

Our obligations under the Credit Agreement are jointly and severally guaranteed by certain of our existing and future direct and indirect wholly owned domestic subsidiaries, subject to certain exceptions customary for financings of this type. All obligations are secured by substantially all of our tangible and intangible personal property and material real property, including a perfected first-priority pledge of all (or, in the case of foreign subsidiaries or subsidiaries (“FSHCO”) that own no material assets other than equity interests in foreign subsidiaries that are “controlled foreign corporations” or other FSHCOs, 65%) of the equity securities of our subsidiaries held by any loan party, subject to certain customary exceptions and limitations.

We are obligated to make quarterly principal payments on the last day of each quarter in an aggregate annual amount equal to 5.0% of the original principal amount of the Term Loan Facility during the first two years of the Term Loan Facility, and 10% of the original principal amount of the Term Loan Facility thereafter, with the balance payable at the maturity date. Quarterly principal payments will commence on September 30, 2020.

Interest accrues on outstanding borrowings under the Senior Facilities at a rate, at the option of the Borrower, of either (a) base rate determined by reference to the highest of (1) the rate of interest last quoted by The Wall Street Journal as the “prime rate” in the United States, (2) the federal funds effective rate, plus 0.5% and (3) the one month adjusted LIBOR rate, plus 1% per annum (“ABR”) or (b) an adjusted LIBOR rate (“LIBOR”) (which shall not be less than 0.50% per annum), in each case, plus an applicable margin. Initially, the applicable margin is LIBOR plus 3.00% or ABR plus 2.00%. Following delivery of a compliance certificate for the first full fiscal quarter after the Financing Closing Date, the applicable margins for the Senior Credit Facilities is subject to a pricing grid based upon the net total leverage ratio as follows (i) if the net total leverage ratio is greater than 3.00 to 1.00, the applicable margin is LIBOR plus 3.50% or ABR plus 2.50%; (ii) if the net total leverage ratio is less than or equal to 3.00 to 1.00 but greater than 2.50 to 1.00, the applicable margin is LIBOR plus 3.25% or ABR plus 2.25%; (iii) if the net total leverage ratio is less than or equal to 2.50 to 1.00 but greater than 2.00 to 1.00, the applicable margin is LIBOR plus 3.00% or ABR plus 2.00%; (iv) if the net total leverage ratio is less than or equal to 2.00 to 1.00 but greater than 1.50 to 1.00, the applicable margin is LIBOR plus 2.75% or ABR plus 1.75%; and (v) if the net total leverage ratio is less than or equal to 1.50 to 1.00, the applicable margin is LIBOR plus 2.50% or ABR plus 1.50%. Total interest expense relating to the Senior Credit Facilities for the three and nine months ended June 30, 2020 was $0.3 million, reflecting the coupon and accretion of the discount.

Borrowings under the Credit Agreement are prepayable at our option without premium or penalty. We may request, and each lender may agree in its sole discretion, to extend the maturity date of all or a portion of the Senior Credit Facilities subject to certain conditions customary for financings of this type. The Credit Agreement also contains certain mandatory prepayment provisions in the event that we incur certain types of indebtedness or receives net cash proceeds from certain non-ordinary course asset sales or other dispositions of property, in each case subject to terms and conditions customary for financings of this type.

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 commencing with the quarter ended September 30, 2020, (1) a net secured leveraged 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.

Existing Facilities

On October 1, 2019, in connection with the Spin-Off, we entered into an Existing Facility consisting of a five-year senior secured term loan facility in the aggregate principal amount of $270.0 million. The net proceeds from the issuance of the Existing Facility were $249.7 million, which was primarily intended to finance a cash distribution of approximately $153.0 million to Nuance and provide approximately $110.0 million initial support for the cash flow needs of the Cerence business. We also entered into a 54-month senior secured first-lien revolving credit facility in an aggregate principal amount of $75.0 million, which shall be drawn on in the event that our working capital and other cash needs are not supported by our operating cash flow (the “Existing Revolving Facility” and collectively with the Existing Facility, the “Existing Facilities”).

During June 2020, in connection with the issuance of the Notes and Senior Credit Facilities, we initiated prepayments towards our Existing Facilities in the amount of $267.6 million in cash. As a result, we recorded $267.6 million extinguishment of debt and $19.3 million loss on the extinguishment of debt. As of June 30, 2020, our obligations related to the Existing Facilities have been settled. Total interest expense relating to the Existing Facilities for the three and nine months ended June 30, 2020 was $4.4 million and $18.0 million, respectively, reflecting the coupon and accretion of the discount.

Significant Accounting Policies (Policies)

9 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Principles of Consolidation

Fiscal 2020

Fiscal 2019

Basis of Presentation

Use of Estimates

Cash and Cash Equivalents

Concentration of Risk

Convertible Debt

Recently Adopted Accounting Standards

Leases

The following tables summarize the impact of adopting ASC 842 on the consolidated balance sheet as of October 1, 2019 (dollars in thousands):

	As of October 1, 2019
	As Previously Reported		Impact of Adoption of Topic ASC 842			As Adjusted
Assets:
Operating lease right of use assets	$	—	$	19,594		$	19,594

Liabilities:
Current liabilities:
Short-term operating lease liabilities	$	—	$	4,863		$	4,863
Accrued expenses and other current liabilities		24,194		(1,465	)		22,729
Long-term operating lease liabilities		-		16,883			16,883
Other liabilities	$	21,536	$	(687	)	$	20,849

Equity:
Net parent investment	$	1,097,127	$	-		$	1,097,127

Other Accounting Pronouncements

Recently Issued Accounting Pronouncements to be Adopted

Significant Accounting Policies (Tables)

9 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Summary of Adopting ASC 842 on Consolidated Balance Sheet

The following tables summarize the impact of adopting ASC 842 on the consolidated balance sheet as of October 1, 2019 (dollars in thousands):

	As of October 1, 2019
	As Previously Reported		Impact of Adoption of Topic ASC 842			As Adjusted
Assets:
Operating lease right of use assets	$	—	$	19,594		$	19,594

Liabilities:
Current liabilities:
Short-term operating lease liabilities	$	—	$	4,863		$	4,863
Accrued expenses and other current liabilities		24,194		(1,465	)		22,729
Long-term operating lease liabilities		-		16,883			16,883
Other liabilities	$	21,536	$	(687	)	$	20,849

Equity:
Net parent investment	$	1,097,127	$	-		$	1,097,127

Revenue Recognition (Tables)

9 Months Ended

Jun. 30, 2020

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, 2020 and 2019 (dollars in thousands):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2020		2019		2020		2019
Revenues:
United States	$	27,674	$	29,303	$	99,220	$	96,997
Other Americas		8		334		16		966
Germany		21,082		22,287		61,401		51,117
Other Europe, Middle East and Africa		6,868		5,773		20,093		15,917
Japan		11,727		15,840		38,656		33,578
Other Asia-Pacific		7,451		4,032		19,378		21,782
Total net revenues	$	74,810	$	77,569	$	238,764	$	220,357

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 October 1, 2019	$	9,219
Revenues recognized but not billed		40,962
Amounts reclassified to accounts receivable, net		(24,980	)
Balance as of June 30, 2020	$	25,201

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

	Deferred revenue
Balance as of October 1, 2019	$	353,284
Amounts billed but not recognized		76,100
Revenue recognized		(93,293	)
Balance as of June 30, 2020	$	336,091

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

154,390

189,095

60,020

403,505

Earnings Per Share (Tables)

9 Months Ended

Jun. 30, 2020

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) income per share:

	Three Months Ended June 30,					Nine Months Ended June 30,
in thousands, except per share data	2020			2019		2020			2019
Numerator:
Net (loss) income - basic and diluted		(28,181	)		1,770		(27,448	)		4,479

Denominator:
Weighted average common shares outstanding - basic		36,509			36,391		36,315			36,391
Dilutive effect of restricted stock awards		-			-		-			-
Dilutive effect of contingently issuable stock awards		-			-		-			-
Dilutive effect of the Notes		-			-		-			-
Weighted average common shares outstanding - diluted		36,509			36,391		36,315			36,391

Net (loss) income per common share:
Basic		(0.77	)		0.05		(0.76	)		0.12
Diluted		(0.77	)		0.05		(0.76	)		0.12

Schedule of Potential Shares Considered Antidilutive

The following table set forth potential shares that were considered anti-dilutive at June 30, 2020 and for the three and nine months ended June 30, 2019:

	June 30,		Three Months Ended June 30,		Nine Months Ended June 30,
in thousands	2020		2019		2019
Restricted stock awards		2,533		-		-
Contingently issuable stock awards		522		-		-
Conversion option of our Notes		4,677		-		-

Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Jun. 30, 2020

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, 2020 are as follows (dollars in thousands):

	Total
Balance as of October 1, 2019	$	1,119,329
Effect of foreign currency translation		2,287
Balance as of June 30, 2020	$	1,121,616

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, 2020
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (Years)
Customer relationships	$	108,805	$	(71,551	)	$	37,254		3.2
Technology and patents		90,022		(77,124	)		12,898		1.8
Total	$	198,827	$	(148,675	)	$	50,152

	September 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (Years)
Customer relationships	$	104,783	$	(58,568	)	$	46,215		4.0
Technology and patents		116,757		(97,411	)		19,346		2.5
Total	$	221,540	$	(155,979	)	$	65,561

Leases (Tables)

9 Months Ended

Jun. 30, 2020

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, 2020:

	June 30, 2020
Weighted-average remaining lease term (in months):
Operating leases		54.2
Finance leases		5.0
Weighted-average discount rate:
Operating leases		8.0	%
Finance leases		8.4	%

Summary of lease-related Assets and Liabilities Reported in the Consolidated Balance Sheet

The following table presents the lease-related assets and liabilities reported in the consolidated balance sheet as of June 30, 2020 (dollars in thousands):

	Classification	June 30, 2020
Assets
Operating lease assets	Operating lease right of use assets	$	19,547
Finance lease assets	Property and equipment, net		187
Total lease assets		$	19,734

Liabilities
Current
Operating	Short-term operating lease liabilities	$	5,727
Finance	Accrued expenses and other current liabilities		49
Noncurrent
Operating	Long-term operating lease liabilities	$	16,305
Finance	Other liabilities		—
Total lease liability		$	22,081

Summary of Lease Expense

The following table presents lease expense for the three and nine months ended June 30, 2020 (dollars in thousands):

	Three months ended June 30, 2020			Nine months ended June 30, 2020
Finance lease costs:
Amortization of right-of-use asset	$	33		$	102
Interest on lease liability		1			3
Operating lease cost		2,209			6,059
Short-term lease cost		-			-
Variable lease cost		347			1,021
Sublease income		(47	)		(157	)
Total lease cost	$	2,543		$	7,028

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

Year Ending September 30,	Operating Leases			Financing Leases
2020 (excluding nine months ended June 30, 2020)	$	2,089		$	30
2021		6,757			20
2022		5,628			—
2023		4,178			—
2024		3,735			—
Thereafter		4,060			—
Total future minimum lease payments	$	26,447		$	50
Less effects of discounting		(4,415	)		(1	)
Total lease liabilities	$	22,032		$	49
Reported as of June 30, 2020
Short-term lease liabilities	$	5,727		$	49
Long-term lease liabilities		16,305			—
Total lease liabilities	$	22,032		$	49

Summary of Future Minimum Lease Commitments Under Non-cancelable Leases

The future minimum lease commitments under non-cancelable leases at September 30, 2019 were as follows (dollars in thousands):

Year Ending September 30,
2020	$	6,323
2021		5,421
2022		4,493
2023		3,237
2024		2,922
Thereafter		4,039
Total	$	26,435

Accrued Expenses and Other Liabilities (Tables)

9 Months Ended

Jun. 30, 2020

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, 2020		September 30, 2019
Compensation	$	31,499	$	13,031
Cost of revenue related liabilities		4,283		1,668
Sales and other taxes payable		12,055		219
Professional fees		3,160		3,863
Facilities related liabilities		194		273
Other		3,481		5,140
Total	$	54,672	$	24,194

Restructuring and Other Costs, Net (Tables)

9 Months Ended

Jun. 30, 2020

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, 2020 (dollars in thousands):

	Personnel			Facilities			Separation			Total
Balance at October 1, 2019	$	489		$	26		$	3,876		$	4,391
Restructuring and other costs, net		3,133			—			10,592			13,725
Cash payments		(2,429	)		(15	)		(12,267	)		(14,711	)
Foreign exchange impact on ending balance		(3	)		—			—			(3	)
Balance at June 30, 2020	$	1,190		$	11		$	2,201		$	3,402

Schedule of Restructuring and Other Costs

The following table sets forth restructuring and other costs recognized for the three and nine months ended June 30, 2020 and 2019 (dollars in thousands):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2020		2019		2020		2019
Personnel	$	2,452	$	490	$	3,133	$	47
Facilities		—		31		—		1,705
Separation		849		9,170		10,592		15,395
Restructuring and other costs, net	$	3,301	$	9,691	$	13,725	$	17,147

Stockholder's Equity (Tables)

9 Months Ended

Jun. 30, 2020

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, 2020 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 October 1, 2019		—			—			—		$	—
Granted		2,733,884			776,096			3,509,980		$	17.59
Vested		(207,939	)		—			(207,939	)	$	16.88
Forfeited		(45,633	)		(5,506	)		(51,139	)	$	17.30
Non-vested at June 30, 2020		2,480,312			770,590			3,250,902		$	17.63		1.06	$	132,756
Expected to vest								3,250,902		$	17.63		1.06	$	132,756

Schedule of Stock-based Compensation

	Three Months Ended June 30,				Nine Months Ended June 30,
	2020		2019		2020		2019
Cost of licensing	$	—	$	6	$	—	$	14
Cost of connected services		423		96		963		713
Cost of professional services		1,718		225		3,022		733
Research and development		5,001		4,600		9,924		11,344
Sales and marketing		3,223		1,319		6,589		4,353
General and administrative		7,060		1,582		12,456		4,038
	$	17,425	$	7,828	$	32,954	$	21,195

Income Taxes (Tables)

9 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Components of (Loss) Income Before Income Taxes

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

	Three Months Ended June 30,						Nine Months Ended June 30,
	2020			2019			2020			2019
Domestic	$	(37,807	)	$	6,434		$	(42,875	)	$	85
Foreign		7,157			(3,323	)		9,242			6,253
(Loss) income before income taxes	$	(30,650	)	$	3,111		$	(33,633	)	$	6,338

Components of (Benefit from) Provision for Income Taxes

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

	Three Months Ended June 30,						Nine Months Ended June 30,
	2020			2019			2020			2019
Domestic	$	(6,076	)	$	1,819		$	(6,867	)	$	5
Foreign		3,607			(478	)		682			1,854
(Benefit from) provision for income taxes	$	(2,469	)	$	1,341		$	(6,185	)	$	1,859
Effective income tax rate		8.1	%		43.1	%		18.4	%		29.3	%

Long Term Debt (Tables)

9 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Schedule of Long-term Debt

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

	June 30, 2020			September 30, 2019
3.00% Convertible Senior Notes due 2025, net of unamortized discount of $19,400 and deferred issuance costs of $4,898 at June 30, 2020. Effective interest rate 6.29%.	$	150,702		$	—
Senior Credit Facilities, net of unamortized discount of $1,942 and deferred issuance costs of $337 at June 30, 2020. Effective interest rate 4.03%.		122,720			—
Total debt	$	273,422		$	—
Less: current portion		(6,250	)		—
Total long-term debt	$	267,172		$	—

Summary of Maturities of Borrowing Obligations

The following table summarizes the maturities of our borrowing obligations as of June 30, 2020 (in thousands):

Fiscal Year	Convertible Senior Notes			Senior Facilities			Total
2020	$	—		$	1,562		$	1,562
2021		—			6,250			6,250
2022		—			7,813			7,813
2023		—			12,500			12,500
2024		—			96,875			96,875
Thereafter		175,000			—			175,000
Total before unamortized discount and issuance costs and current portion	$	175,000		$	125,000		$	300,000
Less: unamortized discount and issuance costs		(24,298	)		(2,280	)		(26,578	)
Less: current portion of long-term debt		—			(6,250	)		(6,250	)
Total long-term debt	$	150,702		$	116,470		$	267,172

Schedule of Interest Expense Related to Notes

The interest expense recognized related to the Notes for the three and nine months ended June 30, 2020 was as follows (dollars in thousands):

	Three and Nine Months Ended June 30, 2020
Contractual interest expense	$	431
Amortization of debt discount		276
Amortization of issuance costs		70
Total interest expense related to the Notes	$	777

Business Overview - Additional Information (Details)		9 Months Ended
Business Overview - Additional Information (Details)	Oct. 01, 2019	Jun. 30, 2020 Country OfficeLocation
Business Overview [Line Items]
Entity incorporation state country code		DE
Entity incorporation, date of incorporation		Oct. 01, 2019
Number of countries where employees instructed to work from home \| Country		18
Number of office locations instructed employees work from home \| OfficeLocation		24
Nuance Communications \| Spin-Off
Business Overview [Line Items]
Distribution date	Oct. 01, 2019
Conversion ratio, description		The distribution was made in the amount of one share of our common stock for every eight shares of Nuance common stock (which we refer to as the “Distribution”) owned by Nuance’s stockholders as of 5:00 p.m. Eastern Time on September 17, 2019, the record date of the Distribution.
Conversion ratio	0.125

Significant Accounting Policies - Additional Information (Details) $ in Millions	9 Months Ended	12 Months Ended
	Jun. 30, 2020 USD ($) Customer	Sep. 30, 2019 Customer
Significant Accounting Policies [Line Items]
Deferred rent reclassified as right of use assets	$ 2.2
Concentration of Credit Risk \| Accounts Receivable, Net
Significant Accounting Policies [Line Items]
Number of major customers \| Customer	1	2
Concentration risk, percentage	18.20%
Concentration of Credit Risk \| Accounts Receivable, Net \| Customer One
Significant Accounting Policies [Line Items]
Concentration risk, percentage		12.90%
Concentration of Credit Risk \| Accounts Receivable, Net \| Customer Two
Significant Accounting Policies [Line Items]
Concentration risk, percentage		10.00%
Money-Market Funds \| Level 1
Significant Accounting Policies [Line Items]
Estimated fair value of cash and cash equivalents	$ 107.5

Significant Accounting Policies - Summary of Adopting ASC 842 on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Oct. 01, 2019	Sep. 30, 2019
ASSETS
Operating lease right of use assets	$ 19,547
Current liabilities:
Short-term operating lease liabilities	5,727
Accrued expenses and other current liabilities	54,672		$ 24,194
Long-term operating lease liabilities	16,305
Other liabilities	$ 32,528		21,536
Stockholders' Equity:
Net parent investment			$ 1,097,127
Topic ASC 842
ASSETS
Operating lease right of use assets		$ 19,594
Current liabilities:
Short-term operating lease liabilities		4,863
Accrued expenses and other current liabilities		22,729
Long-term operating lease liabilities		16,883
Other liabilities		20,849
Stockholders' Equity:
Net parent investment		1,097,127
As Previously Reported
Current liabilities:
Accrued expenses and other current liabilities		24,194
Other liabilities		21,536
Stockholders' Equity:
Net parent investment		1,097,127
Restatement Adjustment \| Topic ASC 842
ASSETS
Operating lease right of use assets		19,594
Current liabilities:
Short-term operating lease liabilities		4,863
Accrued expenses and other current liabilities		(1,465)
Long-term operating lease liabilities		16,883
Other liabilities		$ (687)

Revenue Recognition - Additional Information (Details)	3 Months Ended		9 Months Ended
Revenue Recognition - Additional Information (Details)	Jun. 30, 2020 USD ($) Customer	Jun. 30, 2019 USD ($) Customer	Jun. 30, 2020 USD ($) Customer	Jun. 30, 2019 USD ($) Customer
Disaggregation Of Revenue [Line Items]
Revenues	$ 74,810,000	$ 77,569,000	$ 238,764,000	$ 220,357,000
Contract acquisition costs			4,700,000
Contract acquisition cost, amortization	300,000		900,000
Contract acquisition cost, impairment			0
Capitalized contract cost, net	43,600,000		43,600,000
Capitalized contract cost, amortization	4,000,000		9,300,000
Capitalized contract cost, impairment			0
Customer One
Disaggregation Of Revenue [Line Items]
Revenues	19,200,000	17,000,000	56,400,000	44,900,000
Customer Two
Disaggregation Of Revenue [Line Items]
Revenues	8,000,000	8,500,000		24,300,000
Customer Three
Disaggregation Of Revenue [Line Items]
Revenues	7,800,000
United States
Disaggregation Of Revenue [Line Items]
Revenues	27,674,000	29,303,000	99,220,000	96,997,000
Germany
Disaggregation Of Revenue [Line Items]
Revenues	21,082,000	22,287,000	61,401,000	51,117,000
Japan
Disaggregation Of Revenue [Line Items]
Revenues	$ 11,727,000	$ 15,840,000	$ 38,656,000	$ 33,578,000
Revenues \| Customer Concentration Risk
Disaggregation Of Revenue [Line Items]
Number of customers accounted for revenues \| Customer	3	2	1	2
Revenues \| Customer Concentration Risk \| Customer One
Disaggregation Of Revenue [Line Items]
Percentage of revenue	25.70%	21.90%	23.60%	20.40%
Revenues \| Customer Concentration Risk \| Customer Two
Disaggregation Of Revenue [Line Items]
Percentage of revenue	10.70%	11.00%		11.00%
Revenues \| Customer Concentration Risk \| Customer Three
Disaggregation Of Revenue [Line Items]
Percentage of revenue	10.50%
Minimum
Disaggregation Of Revenue [Line Items]
Connected services contract term			1 year
Contract acquisition cost, deferred and amortized over benefit period			1 year
Contract term	1 year		1 year
Minimum \| Revenues \| United States \| Geographic Concentration Risk
Disaggregation Of Revenue [Line Items]
Percentage of revenue	10.00%	10.00%	10.00%	10.00%
Minimum \| Revenues \| Germany \| Geographic Concentration Risk
Disaggregation Of Revenue [Line Items]
Percentage of revenue	10.00%	10.00%	10.00%	10.00%
Minimum \| Revenues \| Japan \| Geographic Concentration Risk
Disaggregation Of Revenue [Line Items]
Percentage of revenue	10.00%	10.00%	10.00%	10.00%
Maximum
Disaggregation Of Revenue [Line Items]
Connected services contract term			5 years
Contract acquisition costs, expected benefit period			1 year
Contract acquisition cost, deferred and amortized over benefit period			8 years
Contract term	8 years		8 years

Revenue Recognition - Summary of Revenues Classified by Major Geographic Region (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues:
Total net revenues	$ 74,810	$ 77,569	$ 238,764	$ 220,357
United States
Revenues:
Total net revenues	27,674	29,303	99,220	96,997
Other Americas
Revenues:
Total net revenues	8	334	16	966
Germany
Revenues:
Total net revenues	21,082	22,287	61,401	51,117
Other Europe, Middle East and Africa
Revenues:
Total net revenues	6,868	5,773	20,093	15,917
Japan
Revenues:
Total net revenues	11,727	15,840	38,656	33,578
Other Asia-Pacific
Revenues:
Total net revenues	$ 7,451	$ 4,032	$ 19,378	$ 21,782

Revenue Recognition - Summary of Significant Changes in Contract Assets (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2020 USD ($)
Revenue From Contract With Customer [Abstract]
Balance	$ 9,219
Revenues recognized but not billed	40,962
Amounts reclassified to accounts receivable, net	(24,980)
Balance	$ 25,201

Revenue Recognition - Summary of Significant Changes in Deferred Revenue (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2020 USD ($)
Revenue From Contract With Customer [Abstract]
Balance	$ 353,284
Amounts billed but not recognized	76,100
Revenue recognized	(93,293)
Balance	$ 336,091

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, 2020 USD ($)
Remaining Performance Obligations
Total revenue	$ 403,505
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-07-01
Remaining Performance Obligations
Total revenue	$ 154,390
Remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-01-01
Remaining Performance Obligations
Total revenue	$ 189,095
Remaining performance obligation, expected timing of satisfaction, period	4 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01
Remaining Performance Obligations
Total revenue	$ 60,020
Remaining performance obligation, expected timing of satisfaction, period

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, 2020 USD ($)
Revenue Performance Obligation [Abstract]
Total revenue	$ 403,505

Earnings Per Share - Additional Information (Details)	3 Months Ended	9 Months Ended
Earnings Per Share - Additional Information (Details)	Jun. 30, 2020 USD ($) shares	Jun. 30, 2020 USD ($) shares
Earnings Per Share [Line Items]
Dilutive shares \| $	$ 0	$ 0
Common stock, shares issued \| shares	36,520,000	36,520,000
Spin-Off
Earnings Per Share [Line Items]
Common stock, shares issued \| shares	36,400,000	36,400,000
3.00% Convertible Senior Notes Due 2025
Earnings Per Share [Line Items]
Debt instrument conversion ratio		26.7271
Conversion of notes to common stock per principal amount \| $		$ 1,000

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, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Numerator:
Net (loss) income - basic and diluted	$ (28,181)	$ 1,770	$ (27,448)	$ 4,479
Weighted average common shares outstanding - basic	36,509	36,391	36,315	36,391
Weighted average common shares outstanding - diluted	36,509	36,391	36,315	36,391
Net (loss) income per common share:
Basic	$ (0.77)	$ 0.05	$ (0.76)	$ 0.12
Diluted	$ (0.77)	$ 0.05	$ (0.76)	$ 0.12

- 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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+ Details

- 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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+ Details

- Definition

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

+ References + Details

Earnings Per Share - Schedule of Potential Shares Considered Antidilutive (Details) shares in Thousands	3 Months Ended
	Jun. 30, 2020 shares
Restricted Stock Awards
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares	2,533
Contingently Issuable Stock Awards
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares	522
Conversion Option of our Notes
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares	4,677

Goodwill and Other Intangible Assets - Goodwill - Additional Information (Details)	6 Months Ended	9 Months Ended
	Mar. 31, 2020 USD ($)	Jun. 30, 2020 USD ($) Segment
Goodwill [Line Items]
Number of reportable segments \| Segment		1
Number of Operating Segment \| Segment		1
Reporting unit percentage of fair value in excess of carrying value	2.00%
Reporting unit, estimate fair value of goodwill	$ 951,000,000
Reporting unit, amount of fair value in excess of carrying amount	936,000,000
Goodwill impairment	0	$ 0
Minimum
Goodwill [Line Items]
Reporting unit percentage of fair value in excess of carrying value		50.00%
Reporting unit, amount of fair value in excess of carrying amount	$ 15,000,000

Goodwill and Other Intangible Assets - Changes in Carrying Amount of Goodwill (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2020 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Balance as of October 1, 2019	$ 1,119,329
Effect of foreign currency translation	2,287
Balance as of June 30, 2020	$ 1,121,616

Goodwill and Other Intangible Assets - Intangible Assets, Net - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended	9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Goodwill And Intangible Assets Disclosure [Abstract]
Impairment of long-lived asset			$ 0	$ 0
Amortization expense related to intangible assets	$ 5,200,000	$ 5,100,000		15,800,000	$ 15,600,000
Expected amortization of intangible assets for remainder of 2020	$ 5,000,000			$ 5,000,000

Goodwill and Other Intangible Assets - Summary of Gross Carrying Amounts and Accumulated Amortization of Intangible Assets by Major Class (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Jun. 30, 2020	Sep. 30, 2019
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 198,827	$ 221,540
Accumulated Amortization	(148,675)	(155,979)
Net Carrying Amount	50,152	65,561
Customer Relationships
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	108,805	104,783
Accumulated Amortization	(71,551)	(58,568)
Net Carrying Amount	$ 37,254	$ 46,215
Weighted Average Remaining Life (Years)	3 years 2 months 12 days	4 years
Technology and Patents
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 90,022	$ 116,757
Accumulated Amortization	(77,124)	(97,411)
Net Carrying Amount	$ 12,898	$ 19,346
Weighted Average Remaining Life (Years)	1 year 9 months 18 days	2 years 6 months

Leases - Additional Information (Details) $ in Thousands	3 Months Ended	9 Months Ended
Leases - Additional Information (Details) $ in Thousands	Jun. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)
Lessee Lease Description [Line Items]
Operating lease, existence of option to extend		true
Operating lease, option to extend		Some of our leases include options to extend or terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such options.
Operating lease, existence of option to terminate		true
Operating lease, option to terminate		Some of our leases include options to extend or terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such options.
Undiscounted future minimum lease payments under non-cancelable, term		1 year
Cash payments related to operating leases	$ 2,100	$ 5,700
Cash payments related to financing leases		$ 96
Minimum
Lessee Lease Description [Line Items]
Operating lease remaining term	1 year	1 year
Maximum
Lessee Lease Description [Line Items]
Operating lease remaining term	8 years	8 years

Leases - Summary of Lease Term and Incremental Borrowing Rates for Leases (Details)	Jun. 30, 2020
Weighted-average remaining lease term (in months):
Operating leases	54 months 6 days
Finance leases	5 months
Weighted-average discount rate:
Operating leases	8.00%
Finance leases	8.40%

Leases - Summary of Lease-related Assets and Liabilities Reported in the Consolidated Balance Sheet (Details) $ in Thousands	Jun. 30, 2020 USD ($)
ASSETS
Operating lease right of use assets	$ 19,547
Finance lease assets	$ 187
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:PropertyPlantAndEquipmentNet
Total lease assets	$ 19,734
Current liabilities:
Short-term operating lease liabilities	5,727
Finance	$ 49
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:AccruedLiabilitiesAndOtherLiabilities
Noncurrent
Long-term operating lease liabilities	$ 16,305
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesNoncurrent
Total lease liability	$ 22,081

Leases - Summary of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Jun. 30, 2020	Jun. 30, 2020
Finance lease costs:
Amortization of right-of-use asset	$ 33	$ 102
Interest on lease liability	1	3
Operating lease cost	2,209	6,059
Variable lease cost	347	1,021
Sublease income	(47)	(157)
Total lease cost	$ 2,543	$ 7,028

Leases - Summary of Undiscounted Future Minimum Lease Payments Under Non-cancelable Leases (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Operating Leases
2020 (excluding nine months ended June 30, 2020)	$ 2,089
2021	6,757
2022	5,628
2023	4,178
2024	3,735
Thereafter	4,060
Total future minimum lease payments	26,447
Less effects of discounting	(4,415)
Total lease liabilities	22,032
Short-term lease liabilities	5,727
Long-term lease liabilities	16,305
Financing Leases
2020 (excluding nine months ended June 30, 2020)	30
2021	20
Total future minimum lease payments	50
Less effects of discounting	(1)
Total lease liabilities	49
Short-term lease liabilities	$ 49

Leases - Summary of Future Minimum Lease Commitments Under Non-cancelable Leases (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Leases [Abstract]
2020	$ 6,323
2021	5,421
2022	4,493
2023	3,237
2024	2,922
Thereafter	4,039
Total	$ 26,435

Accrued Expenses and Other Liabilities -Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Sep. 30, 2019
Accrued Liabilities And Other Liabilities [Abstract]
Compensation	$ 31,499	$ 13,031
Cost of revenue related liabilities	4,283	1,668
Sales and other taxes payable	12,055	219
Professional fees	3,160	3,863
Facilities related liabilities	194	273
Other	3,481	5,140
Total	$ 54,672	$ 24,194

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, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Restructuring Cost and Reserve [Line Items]
Balance at October 1, 2019			$ 4,391
Restructuring and other costs, net	$ 3,301	$ 9,691	13,725	$ 17,147
Cash payments			(14,711)
Foreign exchange impact on ending balance			(3)
Balance at June 30, 2020	3,402		3,402
Personnel
Restructuring Cost and Reserve [Line Items]
Balance at October 1, 2019			489
Restructuring and other costs, net	2,452	490	3,133	47
Cash payments			(2,429)
Foreign exchange impact on ending balance			(3)
Balance at June 30, 2020	1,190		1,190
Facilities
Restructuring Cost and Reserve [Line Items]
Balance at October 1, 2019			26
Restructuring and other costs, net		31		1,705
Cash payments			(15)
Balance at June 30, 2020	11		11
Spin-Off
Restructuring Cost and Reserve [Line Items]
Balance at October 1, 2019			3,876
Restructuring and other costs, net	849	$ 9,170	10,592	$ 15,395
Cash payments			(12,267)
Balance at June 30, 2020	$ 2,201		$ 2,201

Restructuring and Other Costs, Net - Schedule of Restructuring and Other Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Restructuring Cost and Reserve [Line Items]
Restructuring and other costs, net	$ 3,301	$ 9,691	$ 13,725	$ 17,147
Personnel
Restructuring Cost and Reserve [Line Items]
Restructuring and other costs, net	2,452	490	3,133	47
Facilities
Restructuring Cost and Reserve [Line Items]
Restructuring and other costs, net		31		1,705
Spin-Off
Restructuring Cost and Reserve [Line Items]
Restructuring and other costs, net	$ 849	$ 9,170	$ 10,592	$ 15,395

Restructuring and Other Costs, Net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Restructuring Cost and Reserve [Line Items]
Restructuring charges (reversal)	$ 3,301	$ 9,691	$ 13,725	$ 17,147
Severance Charge
Restructuring Cost and Reserve [Line Items]
Restructuring charges (reversal)	2,452	490	3,133	47
Professional Services Fees
Restructuring Cost and Reserve [Line Items]
Restructuring charges (reversal)	$ 849	9,170	$ 10,592	15,395
Facilities Restructuring
Restructuring Cost and Reserve [Line Items]
Restructuring charges (reversal)		$ 31		$ 1,705

Stockholder's Equity - Additional Information (Details) - $ / shares	9 Months Ended
	Jun. 30, 2020	Oct. 02, 2019	Oct. 01, 2019
Class Of Stock [Line Items]
Capital stock, shares authorized			600,000,000
Preferred stock, shares authorized			40,000,000
Preferred stock, par value per share			$ 0.01
Common stock, shares authorized	600,000,000		560,000,000
Common stock, par value per share	$ 0.01		$ 0.01
Common stock reserved for issuance		6,350,000
Restricted Stock Units
Class Of Stock [Line Items]
Stock issued in connection with the Spin-Off	1,208,931
2019 Equity Incentive Plan
Class Of Stock [Line Items]
Common stock reserved for issuance		5,300,000
Share-based compensation arrangement by share-based payment award, terms of award	Awards issued under the Plan may not have a term greater than ten years from the date of grant.
2019 Equity Incentive Plan \| Maximum
Class Of Stock [Line Items]
Share-based compensation arrangement by share-based payment award, expected term	10 years
2019 Employee Stock Purchase Plan
Class Of Stock [Line Items]
Common stock reserved for issuance		1,050,000

Stockholder's Equity - Schedule of Non-vested Restricted Stock Units (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Jun. 30, 2020 USD ($) $ / shares shares
Time-Based Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Non-vested, Shares, Granted	2,733,884
Non-vested, Shares, Vested	(207,939)
Non-vested, Shares, Forfeited	(45,633)
Non-vested, Shares, Ending balance	2,480,312
Performance-Based Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Non-vested, Shares, Granted	776,096
Non-vested, Shares, Forfeited	(5,506)
Non-vested, Shares, Ending balance	770,590
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Non-vested, Shares, Granted	3,509,980
Non-vested, Shares, Vested	(207,939)
Non-vested, Shares, Forfeited	(51,139)
Non-vested, Shares, Ending balance	3,250,902
Non-vested, Shares, Expected to vest	3,250,902
Non-vested, Weighted-Average Grant-Date Fair Value, Granted \| $ / shares	$ 17.59
Non-vested, Weighted-Average Grant-Date Fair Value, Vested \| $ / shares	16.88
Non-vested, Weighted-Average Grant-Date Fair Value, Forfeited \| $ / shares	17.30
Non-vested, Weighted-Average Grant-Date Fair Value, Ending balance \| $ / shares	17.63
Non-vested, Weighted-Average Grant-Date Fair Value, Expected to vest \| $ / shares	$ 17.63
Non-vested, Weighted-Average Remaining Contractual Term (years), Balance	1 year 21 days
Non-vested, Weighted-Average Remaining Contractual Term (years), Expected to vest	1 year 21 days
Non-vested, Aggregate Intrinsic Value, Balance \| $	$ 132,756
Non-vested, Aggregate Intrinsic Value, Expected to vest \| $	$ 132,756

Stockholder's Equity - Schedule of Stock-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	$ 17,425	$ 7,828	$ 32,954	$ 21,195
Cost of Licensing
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation		6		14
Cost of Connected Services
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	423	96	963	713
Cost of Professional Services
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	1,718	225	3,022	733
Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	5,001	4,600	9,924	11,344
Sales and Marketing
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	3,223	1,319	6,589	4,353
General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	$ 7,060	$ 1,582	$ 12,456	$ 4,038

Commitments and Contingencies - Additional Information (Details) $ in Millions	9 Months Ended
	Jun. 30, 2020 USD ($)
Loss Contingencies [Line Items]
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	$ 2.2
Other Facility
Loss Contingencies [Line Items]
Letter of credit as security deposit	$ 0.3

Income Taxes - Components of (Loss) Income Before Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Domestic	$ (37,807)	$ 6,434	$ (42,875)	$ 85
Foreign	7,157	(3,323)	9,242	6,253
(Loss) income before income taxes	$ (30,650)	$ 3,111	$ (33,633)	$ 6,338

Income Taxes - Components of (Benefit from) Provision for Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Domestic	$ (6,076)	$ 1,819	$ (6,867)	$ 5
Foreign	3,607	(478)	682	1,854
(Benefit from) provision for income taxes	$ (2,469)	$ 1,341	$ (6,185)	$ 1,859
Effective income tax rate	8.10%	43.10%	18.40%	29.30%

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Line Items]
Effective income tax rate	8.10%	43.10%	18.40%	29.30%
U.S. federal statutory rates	21.00%	21.00%	21.00%	21.00%
Income tax expense (benefit)	$ (2,469)	$ 1,341	$ (6,185)	$ 1,859
Netherlands
Income Tax Disclosure [Line Items]
Income tax expense (benefit)			$ (5,000)

Long Term Debt - Schedule of Long-term Debt (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Debt Instrument [Line Items]
Total debt	$ 273,422
Less: current portion	(6,250)
Total long-term debt	267,172
3.00% Convertible Senior Notes Due 2025
Debt Instrument [Line Items]
Total debt	150,702
Total long-term debt	150,702
Senior Credit Facilities
Debt Instrument [Line Items]
Total debt	122,720
Less: current portion	(6,250)
Total long-term debt	$ 116,470

Long Term Debt - Schedule of Long-term Debt (Parenthetical) (Details) - USD ($) $ in Thousands		9 Months Ended
	Jun. 02, 2020	Jun. 30, 2020
Debt Instrument [Line Items]
Debt instrument, deferred issuance costs		$ 629
Senior Credit Facilities
Debt Instrument [Line Items]
Debt Instrument, unamortized discount		1,942
Debt instrument, deferred issuance costs		$ 337
Debt instrument, effective interest rate		4.03%
3.00% Convertible Senior Notes Due 2025
Debt Instrument [Line Items]
Debt instrument, interest rate	3.00%	3.00%
Debt instrument, maturity date	Jun. 01, 2025	Jun. 01, 2025
Debt Instrument, unamortized discount		$ 19,400
Debt instrument, deferred issuance costs		$ 4,898
Debt instrument, effective interest rate		6.29%

Long Term Debt - Summary of Maturities of Borrowing Obligations (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Debt Instrument [Line Items]
2020	$ 1,562
2021	6,250
2022	7,813
2023	12,500
2024	96,875
Thereafter	175,000
Total before unamortized discount and issuance costs and current portion	300,000
Less: unamortized discount and issuance costs	(26,578)
Less: current portion of long-term debt	(6,250)
Total long-term debt	267,172
Senior Facilities
Debt Instrument [Line Items]
2020	1,562
2021	6,250
2022	7,813
2023	12,500
2024	96,875
Total before unamortized discount and issuance costs and current portion	125,000
Less: unamortized discount and issuance costs	(2,280)
Less: current portion of long-term debt	(6,250)
Total long-term debt	116,470
Convertible Senior Notes
Debt Instrument [Line Items]
Thereafter	175,000
Total before unamortized discount and issuance costs and current portion	175,000
Less: unamortized discount and issuance costs	(24,298)
Total long-term debt	$ 150,702

Long Term Debt - Additional Information (Details)				1 Months Ended	3 Months Ended		9 Months Ended
Long Term Debt - Additional Information (Details)	Jun. 12, 2020 USD ($)	Jun. 02, 2020 USD ($) d $ / shares shares	Oct. 01, 2019 USD ($)	Jun. 30, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)
Debt Instrument [Line Items]
Proceeds from issuance of notes							$ 547,719,000
Loss on debt extinguishment							$ 19,279,000
Senior Credit Facilities
Debt Instrument [Line Items]
Pledge equity interests in foreign subsidiaries	65.00%
Principal payments commencement date	Sep. 30, 2020
Debt Instrument, interest rate description							Interest accrues on outstanding borrowings under the Senior Facilities at a rate, at the option of the Borrower, of either (a) base rate determined by reference to the highest of (1) the rate of interest last quoted by The Wall Street Journal as the “prime rate” in the United States, (2) the federal funds effective rate, plus 0.5% and (3) the one month adjusted LIBOR rate, plus 1% per annum (“ABR”) or (b) an adjusted LIBOR rate (“LIBOR”) (which shall not be less than 0.50% per annum), in each case, plus an applicable margin. Initially, the applicable margin is LIBOR plus 3.00% or ABR plus 2.00%. Following delivery of a compliance certificate for the first full fiscal quarter after the Financing Closing Date, the applicable margins for the Senior Credit Facilities is subject to a pricing grid based upon the net total leverage ratio as follows (i) if the net total leverage ratio is greater than 3.00 to 1.00, the applicable margin is LIBOR plus 3.50% or ABR plus 2.50%; (ii) if the net total leverage ratio is less than or equal to 3.00 to 1.00 but greater than 2.50 to 1.00, the applicable margin is LIBOR plus 3.25% or ABR plus 2.25%; (iii) if the net total leverage ratio is less than or equal to 2.50 to 1.00 but greater than 2.00 to 1.00, the applicable margin is LIBOR plus 3.00% or ABR plus 2.00%; (iv) if the net total leverage ratio is less than or equal to 2.00 to 1.00 but greater than 1.50 to 1.00, the applicable margin is LIBOR plus 2.75% or ABR plus 1.75%; and (v) if the net total leverage ratio is less than or equal to 1.50 to 1.00, the applicable margin is LIBOR plus 2.50% or ABR plus 1.50%.
Interest expense						$ 300,000	$ 300,000
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 commencing with the quarter ended September 30, 2020, (1) a net secured leveraged 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.
Senior Credit Facilities \| Scenario Forecast
Debt Instrument [Line Items]
Minimum liquidity					$ 75,000,000
Senior Credit Facilities \| Federal Funds Effective Rate
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	0.50%
Senior Credit Facilities \| One Month Adjusted LIBOR
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	1.00%
Senior Credit Facilities \| LIBOR
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	3.00%
Senior Credit Facilities \| Base Rate
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	2.00%
Existing Facility
Debt Instrument [Line Items]
Interest expense						$ 4,400,000	$ 18,000,000
Prepayments of debt				$ 267,600,000
Extinguishment of debt, amount				267,600,000
Loss on debt extinguishment				$ 19,300,000
Maximum \| Senior Credit Facilities \| Scenario Forecast
Debt Instrument [Line Items]
Net leverage ratio					4.25
Net secured leverage ratio					3.25%
Maximum \| Senior Credit Facilities \| LIBOR
Debt Instrument [Line Items]
Debt Instrument, adjusted LIBOR rate	0.50%
3.00% Convertible Senior Notes Due 2025
Debt Instrument [Line Items]
Aggregate principal amount		$ 175,000,000
Debt instrument, interest rate		3.00%		3.00%		3.00%	3.00%
Debt Instrument, option to purchase additional principal amount		$ 25,000,000
Proceeds from issuance of notes		$ 169,800,000
Debt instrument, maturity date		Jun. 01, 2025					Jun. 01, 2025
Debt instrument, convertible consecutive trading days \| d		30
Debt instrument, convertible principal amount		$ 1,000
Debt instrument, convertible maximum conversion price percentage		98.00%
Debt instrument, conversion initial rate \| shares		26.7271
Debt instrument, conversion price \| $ / shares		$ 37.42
Debt instrument, redemption price percentage of principal amount		100.00%
Debt instrument, sinking fund		$ 0
Debt instrument, percentage of repurchase principal amount		100.00%
Carrying value of debt		$ 155,300,000
Additional paid-in capital in stockholder's equity		19,700,000
Transaction costs		5,600,000
Transaction costs amortized as interest expense		5,000,000
Transaction costs allocated to equity component recorded as decrease in additional paid-in capital		$ 600,000
Convertible debt, estimated fair value				$ 233,700,000		$ 233,700,000	$ 233,700,000
Convertible Debt, Fair Value by Fair Value Hierarchy Level [Extensible List]				us-gaap:FairValueInputsLevel2Member		us-gaap:FairValueInputsLevel2Member	us-gaap:FairValueInputsLevel2Member
Interest expense						$ 777,000	$ 777,000
3.00% Convertible Senior Notes Due 2025 \| Minimum
Debt Instrument [Line Items]
Debt instrument, convertible trading days \| d		20
Debt instrument, convertible conversion price percentage		130.00%
3.00% Convertible Senior Notes Due 2025 \| Maximum
Debt Instrument [Line Items]
Debt instrument covenants, percentage of aggregate principal amount payable.		25.00%
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
Net proceeds from issuance of credit facility	$ 123,000,000
Debt instrument, frequency of periodic principal payments							quarterly
Debt instrument periodic payments equivalent percentage of annual amount on original principal amount during first two years	5.00%
Debt instrument periodic payments equivalent percentage of annual amount on original principal amount after two years	10.00%
Senior Secured First-lien Revolving Credit Facility \| Senior Credit Facilities
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity	$ 50,000,000
Outstanding amount under credit facility				$ 0		$ 0	$ 0
Net Leverage Ratio Greater Than 3.00 \| Senior Credit Facilities
Debt Instrument [Line Items]
Net leverage ratio	3.00
Net Leverage Ratio Greater Than 3.00 \| Senior Credit Facilities \| LIBOR
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	3.50%
Net Leverage Ratio Greater Than 3.00 \| Senior Credit Facilities \| Base Rate
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	2.50%
Net Leverage Ratio Less Than or Equal to 3.00 but Greater Than 2.50 \| Senior Credit Facilities \| LIBOR
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	3.25%
Net Leverage Ratio Less Than or Equal to 3.00 but Greater Than 2.50 \| Senior Credit Facilities \| Base Rate
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	2.25%
Net Leverage Ratio Less Than or Equal to 3.00 but Greater Than 2.50 \| Minimum \| Senior Credit Facilities
Debt Instrument [Line Items]
Net leverage ratio	2.50
Net Leverage Ratio Less Than or Equal to 3.00 but Greater Than 2.50 \| Maximum \| Senior Credit Facilities
Debt Instrument [Line Items]
Net leverage ratio	3.00
Net Leverage Ratio Less Than or Equal to 2.50 but Greater Than 2.00 \| Senior Credit Facilities \| LIBOR
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	3.00%
Net Leverage Ratio Less Than or Equal to 2.50 but Greater Than 2.00 \| Senior Credit Facilities \| Base Rate
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	2.00%
Net Leverage Ratio Less Than or Equal to 2.50 but Greater Than 2.00 \| Minimum \| Senior Credit Facilities
Debt Instrument [Line Items]
Net leverage ratio	2.00
Net Leverage Ratio Less Than or Equal to 2.50 but Greater Than 2.00 \| Maximum \| Senior Credit Facilities
Debt Instrument [Line Items]
Net leverage ratio	2.50
Net Leverage Ratio Less Than or Equal to 2.00 but Greater Than 1.50 \| Senior Credit Facilities \| LIBOR
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	2.75%
Net Leverage Ratio Less Than or Equal to 2.00 but Greater Than 1.50 \| Senior Credit Facilities \| Base Rate
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	1.75%
Net Leverage Ratio Less Than or Equal to 2.00 but Greater Than 1.50 \| Minimum \| Senior Credit Facilities
Debt Instrument [Line Items]
Net leverage ratio	1.50
Net Leverage Ratio Less Than or Equal to 2.00 but Greater Than 1.50 \| Maximum \| Senior Credit Facilities
Debt Instrument [Line Items]
Net leverage ratio	2.00
Net Leverage Ratio Less Than or Equal to 1.50 \| Senior Credit Facilities
Debt Instrument [Line Items]
Net leverage ratio	1.50
Net Leverage Ratio Less Than or Equal to 1.50 \| Senior Credit Facilities \| LIBOR
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	2.50%
Net Leverage Ratio Less Than or Equal to 1.50 \| Senior Credit Facilities \| Base Rate
Debt Instrument [Line Items]
Debt Instrument, basis spread on variable rate	1.50%
Five-year Senior Secured Term Loan Facility \| Existing Facility
Debt Instrument [Line Items]
Debt instrument term			5 years
Credit facility maximum borrowing capacity			$ 270,000,000
Net proceeds from issuance of credit facility			249,700,000
Credit facility maximum borrowing capacity for cash distribution/cash flow needs			110,000,000
Five-year Senior Secured Term Loan Facility \| Existing Facility \| Nuance Communications
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity for cash distribution/cash flow needs			$ 153,000,000
54-month Senior Secured First-lien Revolving Credit Facility \| Existing Facility
Debt Instrument [Line Items]
Debt instrument term			54 months
Credit facility maximum borrowing capacity			$ 75,000,000

Long Term Debt - Schedule of Interest Expense Related to Notes (Details) - 3.00% Convertible Senior Notes Due 2025 - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Jun. 30, 2020	Jun. 30, 2020
Debt Instrument [Line Items]
Contractual interest expense	$ 431	$ 431
Amortization of debt discount	276	276
Amortization of issuance costs	70	70
Total interest expense related to the Notes	$ 777	$ 777