What the changes say
- Cerence added a Delaware Court of Chancery forum selection clause for internal disputes.
What changed since the prior 10-K
New
- NewRisks Relating to Our Securities and Indebtedness
limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees
The Delaware Court of Chancery is designated as the exclusive forum for internal corporate claims and stockholder lawsuits against Cerence or its directors, officers, and employees.
Dropped
- DroppedRisks Relating to Our Business
general economic trends as they affect the customer bases into which we sell
- DroppedRisks Relating to Our Business
The transition in our Chief Executive Officer and other senior management positions will be critical to our success, and our business could be negatively impacted if we do not successfully manage these transitions
- DroppedRisks Relating to Our Business
other consequences of which we are not currently aware of but will discover through the remediation process
- DroppedRisks Relating to Our Business
burden increase our overall risk exposure. There may be further divergence in the future, including with regard to administrative burdens
- DroppedRisks Relating to Our Securities and Indebtedness
The terms of the Senior Credit Facilities restrict our current and future operations, particularly our ability to incur debt that we may need to fund initiatives in response to changes in our business, the industry in which we operate, the economy and governmental regulations
- DroppedRisks Relating to Our Securities and Indebtedness
significantly change the nature of our business
- DroppedRisks Relating to Our Securities and Indebtedness
make an acquisition of our company less attractive or more difficult
- DroppedRisks Relating to Our Securities and Indebtedness
limit our ability to enter into certain business combination transactions
- DroppedRisks Relating to Our Securities and Indebtedness
changes to assessments of uncertain tax positions
Reworded
- 82% rewrittenRisks Relating to Our Business
Cybersecurity and data privacy incidents or breaches may damage client relations and inhibit our growth
Text updated identically with no material changes to cybersecurity and data privacy incident risks.
- 74% rewrittenRisks Relating to Our Business
Health Events, such as pandemics and disease outbreaks, have disrupted, and may continue to disrupt, our business and that of our customers, which could adversely affect our financial performance
Expanded to specify that health events and semiconductor supply chain issues lead to contract difficulties, revenue declines, and payment delays.
Was: Pandemics or disease outbreaks, such as COVID-19, have disrupted, and may continue to disrupt, our business, which could adversely affect our financial performance
- 55% rewrittenRisks Relating to Our Business
Our process optimization and cost-reduction efforts may not be successful
Added reference to the September 2025 restructuring plan for foreign operations alongside the August 2024 plan.
- 53% rewrittenRisks Relating to our Intellectual Property and Technology
Unauthorized use of our proprietary technology and intellectual property could adversely affect our business and results of operations
Retained core intellectual property protection risks with identical wording.
- 45% rewrittenRisks Relating to Our Securities and Indebtedness
Certain provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated By-Laws and Delaware law may discourage takeovers
Added a bullet point specifying that provisions limit the ability to enter certain business combination transactions.
- 39% rewrittenRisks Relating to Our Business
Our operating results may fluctuate significantly from period to period, and this may cause our stock price to decline
Added customer forecast changes and professional services project levels as factors contributing to operating result fluctuations.
- 39% rewrittenRisks Relating to Our Securities and Indebtedness
We may evaluate whether to pay cash dividends on our common stock in the future
Removed the specific mention that Senior Credit Facilities limit the ability to pay cash dividends.
Was: We may evaluate whether to pay cash dividends on our common stock in the future, and the terms of our Senior Credit Facilities limit our ability to pay dividends on our common stock
- 37% rewrittenRisks Relating to Our Securities and Indebtedness
Low trading volume for our stock would amplify the effect of the above factors on our stock price volatility
Removed the specific reference to Part I - Item 3 Legal Proceedings regarding potential securities class action lawsuits.
- 36% rewrittenRisks Relating to Our Securities and Indebtedness
Tax matters may cause significant variability in our financial results and may impact our overall financial condition
- 35% rewrittenRisks Relating to Our Securities and Indebtedness
The conditional conversion feature of the 2028 Notes, if triggered, may adversely affect our financial condition and results of operations and the value of our common stock
Was: The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and results of operations and the value of our common stock
- 35% rewrittenRisks Relating to Our Business
Adverse conditions in the automotive industry or the global economy more generally could have adverse effects on our results of operations
All 35 risk factors
Headings as the filing states them, in filing order.
Risks Relating to Our Business
- 01The market in which we operate is highly competitive and rapidly changing and we may be unable to compete successfully
- 02Adverse conditions in the automotive industry or the global economy more generally could have adverse effects on our results of operations35% rewritten
- 03Our process optimization and cost-reduction efforts may not be successful55% rewritten
- 04Our strategy to increase cloud connected services may adversely affect our near-term revenue growth and results of operations
- 05Pricing pressures from our customers may adversely affect our business
- 06We invest effort and money seeking OEMs’ validation of our technology, and there can be no assurance that we will win or be able to renew service contracts, which could adversely affect our future business, results of operations and financial condition
- 07Our business could be materially and adversely affected if we lost any of our largest customers
- 08Our operating results may fluctuate significantly from period to period, and this may cause our stock price to decline39% rewritten
- 09We may not be successful with the adoption of new products
- 10If we are unable to attract and retain management and other key personnel, our business could be harmed
- 11We depend on skilled employees and could be impacted by a shortage of critical skills
- 12Some of our employees are represented by workers councils or unions or are subject to local laws that are less favorable to employers than the laws of the U.S
- 13Cybersecurity and data privacy incidents or breaches may damage client relations and inhibit our growth82% rewritten
- 14A significant portion of our revenues are derived, and a significant portion of our research and development activities are based, outside the United States. Our results could be harmed by economic, political, and regulatory risks associated with these international regions and foreign currency fluctuations
- 15Our business in China is subject to aggressive competition and is sensitive to economic, market and political conditions
- 16Interruptions or delays in our services or services from data center hosting facilities or public clouds could impair the delivery of our services and harm our business
- 17If our goodwill or other intangible assets become impaired, our operating results could be negatively impacted
- 18During the fiscal years ended September 30, 2025 and 2023, we did not have goodwill impairment. For the fiscal year ended September 30, 2024, we recorded a goodwill impairment charge of $609.2 million within the Consolidated Statement of Operations
- 19Health Events, such as pandemics and disease outbreaks, have disrupted, and may continue to disrupt, our business and that of our customers, which could adversely affect our financial performance74% rewritten
Risks Relating to our Intellectual Property and Technology
- 20Third parties have claimed and may claim in the future that we are infringing their intellectual property, and we could be exposed to significant litigation or licensing expenses or be prevented from selling our products if such claims are successful
- 21Unauthorized use of our proprietary technology and intellectual property could adversely affect our business and results of operations53% rewritten
- 22Our software products may have bugs, which could result in delayed or lost revenue, expensive correction, liability to our customers and claims against us
- 23We may be unable to respond quickly enough to changes in technology and technological risks and to develop our intellectual property into commercially viable products
- 24We utilize certain key technologies, content and services from, and integrate certain of our solutions with, third parties and may be unable to replace those technologies, content and services if they become obsolete, unavailable or incompatible with our solutions
Risks Relating to Our Securities and Indebtedness
- 25We may evaluate whether to pay cash dividends on our common stock in the future39% rewritten
- 26The conditional conversion feature of the 2028 Notes, if triggered, may adversely affect our financial condition and results of operations and the value of our common stock35% rewritten
- 27The accounting method for convertible debt securities that may be settled in cash, such as the 2028 Notes, could have a material effect on our reported financial results
- 28Certain provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated By-Laws and Delaware law may discourage takeovers45% rewritten
- 29limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employeesNew
- 30Tax matters may cause significant variability in our financial results and may impact our overall financial condition36% rewritten
- 31The commercial and credit environment may adversely affect our access to, and the cost of, capital
- 32Our stock price may fluctuate significantly
- 33Low trading volume for our stock would amplify the effect of the above factors on our stock price volatility37% rewritten
- 34Your percentage ownership in Cerence may be diluted in the future
- 35If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired and investors’ views of us could be harmed
Other Cerence 10-Ks
- FY2024 10-K risk factors43 risks
Automotive voice assistance market competition and pricing pressures from major OEMs dominate Cerence's risk profile. Global economic conditions heavily impact automotive production and the company's financial results. Significant goodwill impairment charges of $609.2 million in fiscal 2024 highlight asset valuation risks. Leadership transitions, including Brian Krzanich becoming CEO in October 2024, introduce operational uncertainty.
Filed Nov 25, 2024
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.