Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures (cont.)(unaudited - in thousands, except per share data) Three Months Ended Twelve Months Ended September 30, September 30, 2024 2023 2024 2023 GAAP net loss $(20,416) $(11,552) $(588,078) $(56,254)Stock-based compensation 4,382 8,965 23,673 40,766 Amortization of intangible assets 553 661 2,306 6,268 Restructuring and other costs, net 10,331 842 17,077 11,917 Loss on debt extinguishment - - - 1,333 Goodwill impairment - - 609,172 - Non-cash interest expense 1,579 1,464 6,060 2,914 Other (31) 500 (117) (344)Adjustments to income tax expense 574 2,870 (14,030) 7,976 Non-GAAP net (loss) income $(3,028) $3,750 $56,063 $14,576 Adjusted EPS: GAAP Numerator: Net loss attributed to common shareholders - basic and diluted $(20,416) $(11,552) $(588,078) $(56,254) Non-GAAP Numerator: Net (loss) income attributed to common shareholders - basic $(3,028) $3,750 $56,063 $14,576 Interest on the Notes, net of tax - - 4,473 - Net (loss) income attributed to common shareholders - diluted $(3,028) $3,750 $60,536 $14,576 GAAP Denominator: Weighted-average common shares outstanding - basic and diluted 41,866 40,357 41,642 40,215 Non-GAAP Denominator: Weighted-average common shares outstanding- basic 41,866 40,357 41,642 40,215 Adjustment for diluted shares - 1,101 7,727 423 Weighted-average common shares outstanding - diluted 41,866 41,458 49,369 40,638 GAAP net loss per share - diluted $(0.49) $(0.29) $(14.12) $(1.40)Non-GAAP net (loss) income per share - diluted $(0.07) $0.09 $1.23 $0.36 GAAP net cash provided by operating activities $6,115 $11,258 $17,196 $7,498 Capital expenditures (1,446) (1,527) (4,996) (5,124)Free Cash Flow $4,669 $9,731 $12,200 $2,374 CERENCE INC.
Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures(unaudited - in thousands) Three Months Ended Twelve Months Ended September 30, September 30, 2024 2023 2024 2023 GAAP revenue $54,805 $80,764 $331,504 $294,475 GAAP gross profit $34,895 $57,736 $244,272 $199,312 Stock-based compensation 685 1,004 2,633 3,703 Amortization of intangible assets - 104 103 414 Non-GAAP gross profit $35,580 $58,844 $247,008 $203,429 GAAP gross margin 63.7% 71.5% 73.7% 67.7%Non-GAAP gross margin 64.9% 72.9% 74.5% 69.1% GAAP operating (loss) income $(19,228) $3,896 $(579,936) $(27,199)Stock-based compensation 4,382 8,965 23,673 40,766 Amortization of intangible assets 553 661 2,306 6,268 Restructuring and other costs, net 10,331 842 17,077 11,917 Goodwill impairment - - 609,172 - Non-GAAP operating (loss) income $(3,962) $14,364 $72,292 $31,752 GAAP operating margin -35.1% 4.8% -174.9% -9.2%Non-GAAP operating margin -7.2% 17.8% 21.8% 10.8% GAAP net loss $(20,416) $(11,552) $(588,078) $(56,254)Stock-based compensation 4,382 8,965 23,673 40,766 Amortization of intangible assets 553 661 2,306 6,268 Restructuring and other costs, net 10,331 842 17,077 11,917 Goodwill impairment - - 609,172 - Depreciation 2,028 2,226 8,324 9,770 Total other expense, net (1,155) (3,550) (4,674) (9,190)Provision for income taxes 33 11,898 3,468 19,865 Adjusted EBITDA $(1,934) $16,590 $80,616 $41,522 GAAP net loss margin -37.3% -14.3% -177.4% -19.1%Adjusted EBITDA margin -3.5% 20.5% 24.3% 14.1% CERENCE INC.
Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risk, uncertainties and other factors, which may cause actual results or performance of the company to be materially different from any future results or performance expressed or implied by such forward-looking statements including but not limited to: the highly competitive and rapidly changing market in which we operate; adverse conditions in the automotive industry, the related supply chain and semiconductor shortage, or the global economy more generally; automotive production delays; changes in customer forecasts; the impacts of the COVID-19 pandemic on our and our customers’ businesses; the ongoing conflicts in Ukraine and the Middle East; our inability to control and successfully manage our expenses and cash position; our inability to deliver improved financial results from process optimization efforts and cost reduction actions; escalating pricing pressures from our customers; the impact on our business of the transition to a lower level of fixed contracts, including the failure to achieve such a transition; our failure to win, renew or implement service contracts; the cancellation or postponement of existing contracts; the loss of business from any of our largest customers; effects of customer defaults; our inability to successfully introduce new products, applications and services; our strategies to increase cloud offerings and deploy generative AI and large language models (LLMs); the inability to expand into adjacent markets; the inability to recruit and retain qualified personnel; disruptions arising from transitions in management personnel, including the transition to our new Chief Executive Officer; cybersecurity and data privacy incidents; fluctuating currency rates and interest rates; inflation; restrictions on our current and future operations under the terms of our debt, the use of cash to service our debt; and our inability to generate sufficient cash from our operations; and the other factors discussed in our most recent Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the Securities and Exchange Commission.
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