0001564590-20-054595 | 10-K | XBRL Viewer

Print Document View Excel Document

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Sep. 30, 2020	Nov. 12, 2020	Mar. 31, 2020
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--09-30
Document Annual 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 Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Filer Category	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		37,426,832
Entity Public Float			$ 561,451,876
Documents Incorporated by Reference	DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with the Registrant’s 2021 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K. Such Proxy Statement will be filed within 120 days of the Registrant’s fiscal year ended September 30, 2020.

CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Revenues:
Total revenues	$ 329,646	$ 303,315	$ 276,984
Cost of revenues:
Amortization of intangible assets	8,337	8,498	7,766
Total cost of revenues	107,851	99,343	82,964
Gross profit	221,795	203,972	194,020
Operating expenses:
Research and development	88,899	93,061	80,957
Sales and marketing	33,398	36,261	30,553
General and administrative	49,386	25,926	19,873
Amortization of intangible assets	12,544	12,524	8,840
Restructuring and other costs, net	18,237	24,404	12,863
Acquisition-related costs		944	4,082
Total operating expenses	202,464	193,120	157,168
Income from operations	19,331	10,852	36,852
Interest income	585
Interest expense	(22,737)
Other income (expense), net	(23,319)	332	(54)
(Loss) income before income taxes	(26,140)	11,184	36,798
(Benefit from) provision for income taxes	(5,509)	(89,084)	30,917
Net (loss) income	$ (20,631)	$ 100,268	$ 5,881
Net (loss) income per share:
Basic	$ (0.57)	$ 2.76	$ 0.16
Diluted	$ (0.57)	$ 2.76	$ 0.16
Weighted-average common share outstanding:
Basic	36,428	36,391	36,391
Diluted	36,428	36,391	36,391
License
Revenues:
Total revenues	$ 164,268	$ 172,379	$ 171,075
Cost of revenues:
Total cost of revenues	2,783	2,069	1,156
Connected Services
Revenues:
Total revenues	96,148	78,690	60,227
Cost of revenues:
Total cost of revenues	31,768	37,562	32,919
Professional Services
Revenues:
Total revenues	69,230	52,246	45,682
Cost of revenues:
Total cost of revenues	$ 64,963	$ 51,214	$ 41,123

CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net (loss) income	$ (20,631)	$ 100,268	$ 5,881
Other comprehensive income (loss):
Foreign currency translation adjustments	15,805	(3,866)	(1,906)
Pension adjustments, net	1,178	(1,176)	562
Unrealized loss on available-for-sale securities	(1)
Total other comprehensive income (loss)	16,982	(5,042)	(1,344)
Comprehensive (loss) income	$ (3,649)	$ 95,226	$ 4,537

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121641772&loc=SL7669619-108580

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721683-107760

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22595-107794

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121641772&loc=SL7669625-108580

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(18))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(20))
-URI http://asc.fasb.org/extlink&oid=120395209&loc=SL114868664-224227

Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=121586364&loc=d3e3602-108585

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22499-107794

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22663-107794

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=75031198&loc=d3e14064-108612

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22583-107794

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121326447&loc=SL5780133-109256

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22658-107794

+ Details

CONSOLIDATED AND COMBINED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019
Current assets:
Cash and cash equivalents	$ 136,067
Marketable securities	11,662
Accounts receivable, net of allowances of $1,394 and $865 at September 30, 2020 and September 30, 2019, respectively	49,943	$ 65,787
Deferred costs	7,256	9,195
Prepaid expenses and other current assets	44,220	17,343
Total current assets	249,148	92,325
Property and equipment, net	29,529	20,113
Deferred costs	38,161	32,428
Operating lease right-of-use assets	20,096
Goodwill	1,128,198	1,119,329
Intangible assets, net	45,616	65,561
Deferred tax assets	161,759	150,629
Other assets	14,938	3,444
Total assets	1,687,445	1,483,829
Current liabilities:
Accounts payable	8,447	16,687
Deferred revenue	112,520	88,233
Short-term operating lease liabilities	5,700
Short-term debt	6,250
Accrued expenses and other current liabilities	67,857	24,194
Total current liabilities	200,774	129,114
Long-term debt, net of discounts and issuance costs	266,872
Deferred revenue, net of current portion	212,573	265,051
Long-term operating lease liabilities	17,821
Other liabilities	31,649	21,536
Total liabilities	729,689	415,701
Commitments and contingencies (Note 17)
Stockholders' Equity:
Common stock, $0.01 par value, 560,000 shares authorized as of September 30, 2020; 36,842 shares issued and outstanding as of September 30, 2020	369
Net parent investment		1,097,127
Accumulated other comprehensive income (loss)	3,711	(28,999)
Additional paid-in capital	974,307
Accumulated deficit	(20,631)
Total stockholders' equity	957,756	1,068,128
Total liabilities and stockholders' equity	$ 1,687,445	$ 1,483,829

CONSOLIDATED AND COMBINED BALANCE SHEETS (Parenthetical) $ in Thousands	Sep. 30, 2020 USD ($) $ / shares shares
Statement Of Financial Position [Abstract]
Accounts receivable allowances \| $	$ 1,394
Common stock, par value \| $ / shares	$ 0.01
Common stock, shares authorized	560,000,000
Common stock, shares issued	36,842,000
Common stock, shares outstanding	36,842,000

CONSOLIDATED AND COMBINED STATEMENT OF EQUITY AND CHANGES IN PARENT COMPANY EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in-Capital	Accumulated Deficit	Net Parent Investment	Accumulated Other Comprehensive Income (Loss)
Balance at Sep. 30, 2017	$ 997,179				$ 1,019,792	$ (22,613)
Balance (ASU 2016-16) at Sep. 30, 2017	(1,510)				(1,510)
Net (loss) income	5,881				5,881
Other comprehensive income (loss)	(1,344)					(1,344)
Net transfer to Parent	(6,887)				(6,887)
Balance at Sep. 30, 2018	993,319				1,017,276	(23,957)
Balance (ASC 606) at Sep. 30, 2018	6,974				6,974
Net (loss) income	100,268				100,268
Other comprehensive income (loss)	(5,042)					(5,042)
Net transfer to Parent	(27,391)				(27,391)
Balance at Sep. 30, 2019	1,068,128				1,097,127	(28,999)
Net (loss) income	(20,631)			$ (20,631)
Other comprehensive income (loss)	16,982					16,982
Distribution to Parent	(152,978)				(152,978)
Net (decrease) increase in net parent investment	9,630				(6,098)	15,728
Reclassification of net parent investment in Cerence			$ 938,051		$ (938,051)
Issuance of common stock at separation		$ 364	(364)
Issuance of common stock at separation, (in shares)		36,391
Issuance of common stock under employee stock plans	1,318	$ 7	1,311
Issuance of common stock under employee stock plans, (in shares)		706
Stock withheld to cover tax withholdings requirements upon restricted stock vesting	(9,369)	$ (2)	(9,367)
Stock withheld to cover tax withholdings requirements upon restricted stock vesting, (in shares)		(255)
Convertible Senior Notes conversion feature	14,371		14,371
Stock-based compensation	30,305		30,305
Balance at Sep. 30, 2020	$ 957,756	$ 369	$ 974,307	$ (20,631)		$ 3,711
Balance (in shares) at Sep. 30, 2020		36,842

CONSOLIDATED AND COMBINED STATEMENT OF EQUITY AND CHANGES IN PARENT COMPANY EQUITY (Parenthetical) $ in Thousands	12 Months Ended
	Sep. 30, 2020 USD ($)
Statement Of Stockholders Equity [Abstract]
Convertible senior notes, net of taxes	$ 4,678
Convertible senior notes, issuance costs	$ 627

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net (loss) income	$ (20,631)	$ 100,268	$ 5,881
Adjustments to reconcile net (loss) income to net cash provided by operations:
Depreciation and amortization	30,041	28,844	25,765
Provision for doubtful accounts	704	401	366
Stock-based compensation	47,285	29,682	22,043
Non-cash interest expense	5,286
Loss on debt extinguishment	19,279
Deferred tax (benefit) expense	(11,354)	(101,223)	12,473
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	16,112	904	8,472
Prepaid expenses and other assets	(30,311)	(8,836)	(2,960)
Deferred costs	(1,381)	4,339	(12,528)
Accounts payable	(2,430)	10,130	(6,291)
Accrued expenses and other liabilities	27,819	6,289	12,946
Deferred revenue	(35,630)	17,674	49,458
Net cash provided by operating activities	44,789	88,071	115,259
Cash flows from investing activities:
Capital expenditures	(19,012)	(4,517)	(6,510)
Purchases of marketable securities	(11,663)
Payments for business acquisitions, net of cash acquired			(79,802)
Net cash used in investing activities	(30,675)	(4,517)	(86,312)
Cash flows from financing activities:
Net transactions with Parent	12,964	(83,554)	(28,947)
Distributions to Parent	(152,978)
Proceeds from long-term debt, net of discount	547,719
Payments for long-term debt issuance costs	(6,402)
Principal payments of long-term debt	(271,563)
Common stock repurchases for tax withholdings for net settlement of equity awards	(9,369)
Principal payments of lease liabilities arising from a finance lease	(136)
Proceeds from issuance of common stock from employee stock plans	1,318
Net cash provided by (used in) financing activities	121,553	(83,554)	(28,947)
Effects of exchange rate changes on cash and cash equivalents	400
Net change in cash and cash equivalents	136,067
Cash and cash equivalents at end of year	136,067
Supplemental information:
Cash paid for income taxes	2,181	$ 12,139	$ 18,444
Cash paid for interest	$ 14,733

Organization

12 Months Ended

Sep. 30, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization

1. Organization

History

On October 1, 2019, (the “Distribution Date”), Nuance Communications (“Nuance” or “the Parent”), 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 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 Annual Report on Form 10-K 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.

In an effort to contain COVID-19 or slow its spread, governments around the world have enacted various measures, some of which have been subsequently rescinded, modified or reinstated, including orders to close all businesses not deemed “essential,” isolating residents to their homes or places of residence, and practice social distancing. These extreme measures 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. 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 during the second half of fiscal 2020 and may also continue beyond fiscal 2020.

We have taken numerous steps in our approach to addressing the COVID-19 pandemic. We 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 remains 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. Beginning in May 2020, in jurisdictions where local restrictions implemented to prevent the further spread of COVID-19 were lifted, we started reopening our offices to allow employees to return to work at their option. For employees returning to our offices, we have instituted social distancing protocols, increased the level of cleaning and sanitizing, and undertaken other actions to make our offices safer. While most of our employees continue to work remotely, we have experienced minimal declines in workforce efficiency due to our investment in cloud-based applications and tools. We have also instituted strict restrictions on travel for all employees. As of the date of this filing, we do not believe our work from home and return to office protocols have materially adversely impact our internal controls and financial reporting systems.

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.

Basis of Presentation

12 Months Ended

Sep. 30, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation

2. Basis of Presentation

Fiscal 2020

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements reflect all adjustments considered necessary for a fair presentation of the consolidated results of operations and financial position for the fiscal year presented. All such adjustments are of a normal recurring nature.

Fiscal 2019 and 2018

Standalone financial statements had not been historically prepared for the Cerence business. The accompanying combined financial statements have been prepared from the Parent’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 stockholders’ 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 at the Parent. Non-cash expenses allocated from the Parent include corporate depreciation and amortization and stock-based compensation included as add-back adjustments to reconcile net income to net cash provided by operations. As described in Note 3(l) and Note 20, 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 (“ASC”) 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 Cerence business was dependent upon technologies which were owned by various entities within the Parent structure. While these combined financial statements use various methods to allocate the cost of these technologies to the Cerence business, this does not purport to reflect the cost of an arm’s length license arrangement.

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. The Parent used 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. The Parent’s short and long-term debt has not been pushed down to the Cerence business’s combined financial statements because the Cerence business was not the legal obligor of the debt and the Parent’s borrowings were not directly attributable to the Cerence business.

The Parent maintained various stock-based compensation plans at a corporate level. Cerence employees participated in those programs and a portion of the cost of those plans has been included in the Cerence business’s Combined Statements of Operations. However, the stock-based compensation expense has been included within the net parent investment. Refer to Note 16 for further description of the accounting for stock-based compensation.

Transactions between the Parent and the Cerence business are considered to be effectively settled in the combined financial statements at the time the transaction was recorded. The total net effect of the settlement of these intercompany transactions was reflected in the Combined Statements of Cash Flows as a financing activity and in the Combined Balance Sheets as net parent investment. Refer to Note 3(p) for further description.

All of the allocations and estimates in the combined financial statements are based on assumptions that management believes are reasonable. However, the combined financial statements included herein may not be indicative of the financial position, results of operations and cash flows if the Cerence business had been a separate, standalone entity during the periods presented.

Summary of Significant Accounting Policies

12 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

3. Summary of Significant Accounting Policies

(a) Principles of Consolidation

Fiscal year 2020

The accompanying 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 years 2019 and 2018

The combined financial statements present the financial position, statement of operations, Parent company equity and cash flows of the Cerence business. All significant balances and transactions between entities in the Cerence business have been eliminated for these combined financial statements. All significant balances between Parent (excluding the Cerence business) and the Cerence business are included in Parent company equity in the Combined Balance Sheets.

(b) Use of Estimates

The Consolidated and Combined 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; accounting for leases; accounting for convertible debt; and loss contingencies. We base our estimates on historical experience, market participant fair value considerations, projected future cash flows, and various other factors that are believed to be reasonable under the circumstances. Actual amounts could differ significantly from these estimates.

ASC 606 for fiscal years 2020 and 2019

See Note 5 for revenue recognition under ASC 606 for fiscal years 2020 and 2019.

ASC 605 for fiscal year 2018

We recognize revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) the fee is fixed or determinable and (iv) collectability is probable. The revenue recognition policies for these revenue streams are discussed below.

The sale and/or license of software products and technology is deemed to have occurred when a customer either has taken possession of or has access to take immediate possession of the software or technology. In select situations, we sell or license non-exclusive intellectual property in conjunction with, or in place of, embedding our intellectual property in software. We also have non-software arrangements including connected services where the customer does not take possession of the software at the outset of the arrangement either because they have no contractual right to do so or because significant penalties preclude them from doing so.

Revenue from royalties on sales of our software products by OEMs, where no services are included, is recognized in the period earned so long as we have been notified by the OEM that such royalties are due, and provided that all other revenue recognition criteria are met.

For our software and technology-related multiple element arrangements, where customers purchase both software or technology related products and software or technology related services, we use vendor-specific objective evidence (“VSOE”) of fair value for software and software-related services to separate the elements and account for them separately. VSOE exists when a company can support what the fair value of its software and/or software-related services is based on evidence of the prices charged when the same elements are sold separately. VSOE of fair value is required, generally, in order to separate the accounting for various elements in a software and related services arrangement. We have established VSOE of fair value for the majority of our professional services.

When we provide professional services considered essential to the functionality of the software or technology, we recognize revenue from the professional services as well as any related software or technology licenses on a percentage-of-completion basis whereby the arrangement consideration is recognized as the services are performed, as measured by an observable input. In these circumstances, we separate license revenue from professional service revenue for the Combined Statement of Operations by allocating VSOE of fair value of the professional services as professional services and connected services revenue and the residual portion as license revenue. We generally determine the percentage-of-completion by comparing the labor hours incurred to-date to the estimated total labor hours required to complete the project. We generally consider labor hours to be the most reliable, available measure of progress on these projects. Adjustments to estimates to complete are made in the periods in which facts resulting in a change become known. When the estimate indicates that a loss will be incurred, such loss is recorded in the period identified. Significant judgments and estimates are involved in determining the percent complete of each contract. Different assumptions could yield materially different results.

We offer some of our products via a Software-as-a-Service (“SaaS”) model also known as a hosted model. In this type of arrangement, we are compensated in two ways: (1) fees for up-front set-up of the service environment and (2) fees charged for hosted service subscriptions. Our up-front set-up fees are nonrefundable. We recognize the up-front set-up fees ratably over the longer of the contract lives, or the expected lives of the customer relationships. The on-demand service subscription fees are recognized ratably over our estimate of useful life of devices on which the connected service is provided.

We enter into multiple-element arrangements that may include a combination of our various software or technology related and non-software related products and services offerings including software or technology licenses, professional services and our connected services. In such arrangements, we allocate total arrangement consideration to software or technology-related elements and any non-software element separately based on the selling price hierarchy group following the guidance in ASC No. 985, Software, and our policies. We determine the selling price for each deliverable using VSOE of selling price, if it exists, or Third Party Evidence (“TPE”) of selling price. Typically, we are unable to determine TPE of selling price. Therefore, when neither VSOE nor TPE of selling price exist for a deliverable, we use our Estimate of Selling Price (“ESP”) for the purposes of allocating the arrangement consideration. We determine ESP for a product or service by considering multiple factors including, but not limited to, major project groupings, market conditions, competitive landscape, price list and discounting practices. Revenue allocated to each element is then recognized when the basic revenue recognition criteria are met for each element.

We record reimbursements received for out-of-pocket expenses as revenue, with offsetting costs recorded as cost of revenue. Out-of-pocket expenses generally include, but are not limited to, expenses related to transportation, lodging and meals. We record shipping and handling costs billed to customers as revenue with offsetting costs recorded as cost of revenue.

(d) Business Combinations

We determine and allocate the purchase price of an acquired company to the tangible and intangible assets acquired and liabilities assumed as of the date of acquisition. Results of operations and cash flows of acquired companies are included in our operating results from the date of acquisition. The purchase price allocation process requires us to use significant estimates and assumptions, which include:

•

estimated fair values of intangible assets;

•

estimated fair values of legal performance commitments to customers, assumed from the acquiree under existing contractual obligations (classified as deferred revenue);

•

estimated income tax assets and liabilities assumed from the acquiree;

•

estimated fair value of pre-acquisition contingencies assumed from the acquiree; and

•

estimated fair value of any contingent consideration which is established at the acquisition date and included in the total purchase price. The contingent consideration is then adjusted to fair value, with any measurement-period adjustment recorded against goodwill. Adjustments identified subsequent to the measurement period are recorded within acquisition-related costs.

While we use our best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the business combination date, our estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the measurement period, which is generally one year from the acquisition date, any adjustment to the assets acquired and liabilities assumed is recorded against goodwill in the period in which the amount is determined. Any adjustment identified subsequent to the measurement period is included in operating results in the period in which the amount is determined.

(e) 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. 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.

(f) Marketable Securities

Marketable securities consist of commercial paper and corporate bonds. We classify our marketable securities as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date. We may sell these securities at any time for use in current operations even if they have not yet reached maturity. We classify our marketable securities as either short-term or long-term based on the nature of each security. We record marketable securities at fair value, with the unrealized gains or losses included within “Accumulated other comprehensive income (loss)” on the consolidated balance sheet until realized. Interest income earned from our marketable securities is reported within “Interest income” on the consolidated statement of operations. We evaluate our marketable securities to assess whether those with unrealized loss positions are other than temporarily impaired. We consider impairment to be other than temporary if they are related to deterioration in credit risk or if it is likely we will sell the securities before the recovery of their cost basis. Realized gain and losses and declines in value judged to be other than temporary are determined based on the specific identification method and are reported in “Other income (expense), net” on the consolidated statement of operations.

(g) Goodwill

Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill is not amortized but tested annually for impairment or when interim indicators of impairment are present. The test for goodwill impairment involves a qualitative assessment of impairment indicators. If indicators are present, a quantitative test of impairment is performed. Goodwill impairment, if any, is determined by comparing the reporting unit’s fair value to its carrying value. An impairment loss is recognized in an amount equal to the excess of the reporting unit’s carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit. Goodwill is tested for impairment annually on July 1, the first day of the fourth quarter of the fiscal year. There is no goodwill impairment for the years ended September 30, 2020, 2019, and 2018.

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

For the purpose of testing goodwill for impairment, all goodwill acquired in a business combination is assigned to one or more reporting units. A reporting unit represents an operating segment or a component within an operating segment for which discrete financial information is available and is regularly reviewed by segment management for performance assessment and resource allocation. Components of similar economic characteristics are aggregated into one reporting unit for the purpose of goodwill impairment assessment. Reporting units are identified annually and re-assessed periodically for recent acquisitions or any changes in segment reporting structure. Upon consideration of our components, we have concluded that our goodwill is associated with one reporting unit.

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. The fair value of a reporting unit is generally determined using a combination of the income approach and the market approach. For the income approach, fair value is determined based on the present value of estimated future after-tax cash flows, discounted at an appropriate risk-adjusted rate. We use our internal forecasts 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 each reporting unit. Actual results may differ from those assumed in our forecasts. We derive our discount rates using a capital asset pricing model and analyzing published rates for industries relevant to our reporting units to estimate the weighted average cost of capital. We adjust the discount rates for the risks and uncertainty inherent in the respective businesses and in our internally developed forecasts. For the market approach, we use a valuation technique in which values are derived based on valuation multiples of comparable publicly traded companies. We assess each valuation methodology based upon the relevance and availability of the data at the time we perform the valuation and weight the methodologies appropriately.

Due to the macroeconomic conditions driven by the COVID-19 pandemic, we concluded that indicators of impairment were present as of March 31, 2020. We performed an interim assessment of goodwill and concluded that no impairment existed as the fair value of our reporting unit exceeded its carrying value as of March 31, 2020. On July 1, 2020, we completed the annual impairment testing of our goodwill. We elected to rely on a qualitative assessment and as a result we determined it is more likely than not that the fair value of our reporting unit is greater than its carrying amount.

(h) Long-Lived Assets with Definite Lives

Our long-lived assets consist principally of technology and patents, customer relationships, internally developed software, property and equipment. Customer relationships are amortized over their estimated economic lives based on the pattern of economic benefits expected to be generated from the use of the asset. Other definite-lived assets are amortized over their estimated economic lives using the straight-line method. The remaining useful lives of long-lived assets are re-assessed periodically for any events and circumstances that may change the future cash flows expected to be generated from the long-lived asset or asset group.

Internally developed software consists of capitalized costs incurred during the application development stage, which include costs to design the software configuration and interfaces, coding, installation and testing. Costs incurred during the preliminary project stage, along with post-implementation stages of internally developed software, are expensed as incurred. Internally developed software costs that have been capitalized are typically amortized over the estimated useful life, commencing with the date when an asset is ready for its intended use. Equipment is stated at cost and depreciated over the estimated useful life. Leasehold improvements are depreciated over the shorter of the related lease term or the estimated useful life. Depreciation is computed using the straight-line method. Repair and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of sold or retired assets are removed from the accounts and any gain or loss is included in the results of operations for the period.

Long-lived assets with definite lives are tested for impairment whenever events or changes in circumstances indicate the carrying value of a specific asset or asset group may not be recoverable. We assess the recoverability of long-lived assets with definite lives at the asset group level. Asset groups are determined based upon the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. When the asset group is also a reporting unit, goodwill assigned to the reporting unit is also included in the carrying amount of the asset group. For the purpose of the recoverability test, we compare the total undiscounted future cash flows from the use and disposition of the assets with its net carrying amount. When the carrying value of the asset group exceeds the undiscounted future cash flows, the asset group is deemed to be impaired. The amount of the impairment loss represents the excess of the asset or asset group’s carrying value over its estimated fair value, which is generally determined based upon the present value of estimated future pre-tax cash flows that a market participant would expect from use and disposition of the long-lived asset or asset group. During the years ended September 30, 2019 and 2018, there was no indication that the carrying value of our assets or asset groups may not be recoverable.

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 September 30, 2020, there were no indicators of impairment present related to our long-lived asset group.

(i) Accounts Receivable Allowances

We record allowances for doubtful accounts for the estimated probable losses on uncollected accounts receivable. The allowance is based upon the credit worthiness of our customers, our historical experience, the age of the receivable, and current market and economic conditions. Receivables are written off against these allowances in the period they are determined to be uncollectible. For the years ended September 30, 2020, 2019, and 2018, the activity related to the allowance for doubtful accounts was as follows (dollars in thousands):

	Allowance for Doubtful Accounts
Balance at October 1, 2017	$	832
Bad debt provisions		366
Write-offs, net of recoveries		(244	)
Balance at September 30, 2018		954
Bad debt provisions		401
Write-offs, net of recoveries		(490	)
Balance at September 30, 2019		865
Bad debt provisions		704
Write-offs, net of recoveries		(175	)
Balance at September 30, 2020	$	1,394

(j) Research and Development

Research and development (“R&D”) costs related to software that is or will be sold or licensed externally to third-parties, or for which a substantive plan exists to sell or license such software in the future, incurred subsequent to the establishment of technological feasibility, but prior to the general release of the product, are capitalized and amortized to cost of revenue over the estimated useful life of the related products. We have determined that technological feasibility is reached shortly before the general release of the software products. Costs incurred after technological feasibility is established have not been material. R&D costs are otherwise expensed as incurred.

(k) Acquisition-related Costs

Acquisition-related costs include those costs related to potential and realized acquisitions. These costs consist of (i) transition and integration costs, including retention payments, transitional employee costs and earn-out payments, and other costs related to integration activities and (ii) professional service fees, including financial advisory, legal, accounting, and other outside services incurred in connection with acquisition activities and disputes.

The components of acquisition-related costs are as follows (dollars in thousands):

	Year Ended September 30,
	2020		2019		2018
Transition and integration costs	$	—	$	563	$	1,616
Professional service fees		—		381		2,466
Total	$	—	$	944	$	4,082

(l) Income Taxes

Fiscal year 2020

We account for income taxes using the assets and liabilities method, as prescribed by ASC No. 740, Income Taxes, or ASC 740.

Deferred Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carry amount of assets and liabilities and their respective tax bases. The method also requires the recognition of future tax benefits such as net operating loss carryforwards, to the extent that realization of such benefits is more likely than not after consideration of all available evidence. As the income tax returns are not due and filed until after the completion of our annual financial reporting requirements, the amounts recorded for the current period reflect estimates for the tax-based activity for the period. In addition, estimates are often required with respect to, among other things, the appropriate state and foreign income tax rates to use, the potential utilization of operating loss carry-forwards and valuation allowance required, if any, for tax assets that may not be realizable in the future. Tax laws and tax rates vary substantially in these jurisdictions and are subject to change given the political and economic climate. We report and pay income tax based on operational results and applicable law. Our tax provision contemplates tax rates currently in effect to determine both our currency and deferred tax positions.

Any significant fluctuations in rates or changes in tax laws could cause our estimates of taxes we anticipate either paying or recovering in the future to change. Such changes could lead to either increases or decreases in our effective tax rates.

We have historically estimated the future tax consequences of certain items, including bad debts and accruals that cannot be deducted for income tax purposes until such expenses are paid or the related assets are disposed. We believe the procedures and estimates used in our accounting for income taxes are reasonable and in accordance with established tax law. The income tax estimates used have not resulted in material adjustments to income tax expense in subsequent period when the estimates are adjusted to the actual filed tax return amounts.

Deferred tax assets and liabilities are measured used enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. With respect to earnings expected to be indefinitely reinvested offshore, we do not accrue ta for the repatriations of such foreign earnings.

Valuation Allowance

We regularly review our deferred tax assets for recoverability considering historically profitability, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. The weight given to the positive and negative evidence is commensurate with the extend to which the evidence may be objectively verified. If positive evidence regarding projected future taxable income, exclusive of reversing taxable temporary differences, existed it would be difficult for it to outweigh objective negative evidence of recent financial reporting losses.

Uncertain Tax Positions

We operate in multiple jurisdictions through wholly owned subsidiaries and our global structure is complex. The estimates of our uncertain tax positions involve judgements and assessment of the potential tax implications related to legal entity restructuring, intercompany transfer and acquisition or divestures. We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Our tax positions are subject to audit by taxing authorities across multiple global jurisdictions and the resolution of such audits may span multiple years. Tax laws is complex and often subject to varied interpretations, accordingly, the ultimate outcome with respect to taxes we may own may differ from the amounts recognized.

Fiscal years 2019 and 2018

Income taxes as presented herein attribute current and deferred income taxes of the Parent to the Cerence business’s standalone financial statements in a manner that is systematic, rational, and consistent with the asset and liability method prescribed by ASC 740. Accordingly, the Cerence business’s income tax provision was prepared following the “Separate Return Method.” The Separate Return Method applies ASC 740 to the standalone financial statements of each member of the consolidated group as if the group member were a separate taxpayer and a standalone enterprise. As a result, actual tax transactions included in the consolidated financial statements of the Parent may not be included in the combined financial statements of the Cerence business. Similarly, the tax treatment of certain items reflected in the combined financial statements of the Cerence business may not be reflected in the consolidated financial statements and tax returns of the Parent; therefore, such items as net operating losses, credit carryforwards and valuation allowances may exist in the standalone financial statements that may or may not exist in the Parent’s consolidated financial statements.

The breadth of the Cerence business’s operations and the global complexity of tax regulations require assessments of uncertainties and judgments in estimating taxes that the Cerence business would have paid if it had been a separate taxpayer. The final taxes that would have been paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions, outcomes of tax litigation and resolution of disputes arising from federal, state and international tax audits in the normal course of business. The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. This method also requires the recognition of future tax benefits relating to net operating loss carryforwards and tax credits, to the extent that realization of such benefits is more likely than not after consideration of all available evidence. The provision for income taxes represents income taxes paid by the parent or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of the Cerence business’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted.

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. The weights assigned to the positive and negative evidences are commensurate with the extent to which the evidence may be objectively verified. If positive evidence regarding projected future taxable income, exclusive of reversing taxable temporary differences, existed, it would be difficult for it to outweigh objective negative evidence of recent financial reporting losses.

In general, the taxable income (loss) of the various Cerence business entities was included in the Parent’s consolidated tax returns, where applicable in jurisdictions around the world. As such, separate income tax returns were not prepared for any Cerence business entities. Consequently, income taxes currently payable are deemed to have been remitted to the Parent, in cash, in the period the liability arose and income taxes currently receivable are deemed to have been received from the Parent in the period that a refund could have been recognized by the Cerence business had the Cerence business been a separate taxpayer.

(m) Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, reflected in the Consolidated Statement of Equity and Combined Statements of Changes in Parent Company Equity, consists of the following (dollars in thousands):

	September 30,
	2020			2019
Foreign currency translation adjustments	$	5,264		$	(26,216	)
Net unrealized losses on post-retirement benefits		(1,552	)		(2,783	)
Net unrealized losses on available-for-sale securities		(1	)		—
Accumulated other comprehensive income (loss)	$	3,711		$	(28,999	)

No income tax provisions or benefits are recorded for foreign currency translation adjustments as the undistributed earnings in our foreign subsidiaries are expected to be indefinitely reinvested.

(n) Concentration of Risk

Financial instruments that potentially subject us to significant concentrations of credit risk primarily consist of trade accounts receivable. We perform ongoing credit evaluations of our customers’ financial condition and limit the amount of credit extended when deemed appropriate. Two customers accounted for 15.0% and 11.1% of our accounts receivable balance, net at September 30, 2020. Two customers accounted for 12.9% and 10.0% of our accounts receivable balance, net at September 30, 2019. One customer accounted for 23.3% of our revenues for the year ended September 30, 2020. Two customers accounted for 20.7% and 12.3% of our revenues for the year ended September 30, 2019, and one customer accounted for 18.4% of our revenues for the year ended September 30, 2018.

(o) Foreign Currency Translation

The functional currency of a foreign subsidiary is generally the local currency. We translate the financial statements of foreign subsidiaries to U.S. dollars using month-end exchange rates for assets and liabilities, and average rates for the reporting period for revenues, costs, and expenses. We record translation gains and losses in accumulated other comprehensive loss as a component of stockholders’ equity and parent company equity. We record net foreign exchange transaction gains and losses resulting from the conversion of the transaction currency to the functional currency within other income (expense), net. Foreign currency transaction (gains) losses for the years ended September 30, 2020, 2019 and 2018 were $2.4 million, ($0.3) million, and $0.1 million, respectively.

(p) Net Parent Investment

In the Consolidated and Combined Balance Sheets, net parent investment represents the Parent’s historical investment in the Cerence business, accumulated net earnings after taxes and the net effect of transactions with, and allocations from, the Parent.

(q) Stock-Based Compensation

Fiscal year 2020

Stock-based compensation primarily consists of restricted stock units with service or market/performance conditions. Equity awards are measured at the fair market value of the underlying stock at the grant date. We recognize stock compensation expense using the straight-line attribution method over the requisite service period. We record forfeitures as they occur. Shares are issued on the vesting dates net of the applicable statutory tax withholding to be paid by us on behalf of our employees. As a result, fewer shares are issued than the number of awards outstanding. We record a liability for the tax withholding to be paid by us as a reduction to additional paid-in capital. We record any income tax effect related to stock-based awards through the Consolidated Statements of Operations. Excess tax benefits are recognized as deferred tax assets upon settlement and are subject to regular review for valuation allowance.

Fiscal years 2019 and 2018

The Parent maintained certain stock compensation plans for the benefit of certain of its officers, directors and employees, including grants of employee stock options, purchases under employee stock purchase plans and restricted awards. These combined financial statements included certain expenses of the Parent that were allocated to the Cerence business for stock-based compensation. The stock-based compensation expense was recognized over the requisite service period, based on the grant date fair value of the awards and the number of the awards expected to be vested based on service and performance conditions, net of forfeitures. The Cerence business’s Combined Balance Sheets did not include any Parent outstanding equity related to these stock-based compensation programs. Effective the fourth quarter of fiscal year 2017, as a result of the early adoption of Accounting Standards Update (“ASU”) No. 2016-09, Improvements to Employee Share-Based Payment Accounting, (“ASU 2016-09”), we recorded any tax effect related to stock-based awards through the Combined Statements of Operations. Excess tax benefits were recognized as deferred tax assets upon settlement and were subject to regular review for valuation allowance.

(r) Leases

We have entered into a number of facility and equipment leases which qualify as operating leases under GAAP. We also have a limited number of equipment leases that qualify as financing leases. We determine if contracts with vendors represent a lease or have a lease component under GAAP at contract inception. 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.

Operating leases are included in “Operating lease right-of-use assets, “Short-term operating lease liabilities,” and “Long-term operating lease liabilities” on our consolidated balance sheet as of September 30, 2020. Finance leases are included in “Property and equipment, net”, “Accrued expenses and other current liabilities,” and “Other liabilities” on our consolidated balance sheet as of September 30, 2020.

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.

For operating leases, the related cash payments are included in the operating cash flows on the consolidated statements of cash flows. 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.

(s) 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, as needed.

(t) Net (Loss) Income Per Share

Basic net loss or income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of common shares, giving effect to potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of restricted stock units, contingently issuable shares, and potential issuance of stock upon conversion of our Notes, as more fully described in Note 21. The dilutive effect of the Notes 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.

(u) 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 during fiscal year 2020.

(v) Issued Accounting Standards Not Yet Adopted

From time to time, new accounting pronouncements are issued by the FASB and are adopted by us as of the specified effective dates. Unless otherwise discussed, such pronouncements did not have or will not have a significant impact on our combined financial position, results of operations or cash flows, or do not apply to our operations.

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 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. 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. We do not believe the new standard will have a material impact on our consolidated financial statements.

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.

In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for debt with conversion options, revises the criteria for applying the derivatives scope exception for contracts in an entity’s own equity, and improves the consistency for the calculation of earnings per share. The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2021, our fiscal 2023. Early adoption is permitted for annual periods and interim periods within those annual periods beginning after December 15, 2020, our fiscal 2022. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

Business Acquisitions

12 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Business Acquisitions

4. Business Acquisitions

As part of our business strategy, we have acquired, and may acquire in the future, certain businesses and technologies primarily to expand our products and service offerings.

On April 2, 2018, we completed the acquisition of Voicebox Technologies Corporation (“Voicebox”). Voicebox is a provider of conversational artificial intelligence, including voice recognition, natural language understanding, and artificial intelligence services. We expect this acquisition to expand our current automotive solutions with a range of new predictive intelligence, embedded natural language, and hybrid virtual assistant capabilities. We expect to be able to provide an end-to-end automotive intelligence platform that merges automated speech recognition, natural language understanding, and information management to increase customer satisfaction, strengthen customer loyalty and improve business results. The aggregate consideration for this transaction was $94.2 million which included $79.8 million in cash, net of $6.7 million cash acquired, a $12.8 million write-off of deferred revenues related to our pre-existing relationship with Voicebox, and a $1.6 million deferred acquisition payment which would be paid in cash upon the conclusion of an indemnity period. Acquisition costs related to Voicebox were $4.1 million. For further detail, refer to Note 3(k). The results of operations of Voicebox are included within these Consolidated and Combined Financial Statements beginning on the date of acquisition.

A summary of the final allocation of the purchase consideration for the acquisition of Voicebox adjusted for measurement period adjustments is as follows (dollars in thousands):

	Voicebox
Purchase consideration:
Cash	$	79,802
Settlement of pre-existing relationship		12,751
Deferred acquisition payment		1,600
Total purchase consideration	$	94,153
Allocation of purchase consideration:
Accounts receivable	$	6,545
Prepaid expenses and other current assets		620
Property and equipment		4,008
Goodwill		50,508
Intangible assets		49,600
Deferred tax asset		124
Other assets		9
Total assets acquired		111,414
Current liabilities		(7,332	)
Deferred tax liability		(3,762	)
Other liabilities		(6,167	)
Total liabilities assumed		(17,261	)
Net assets acquired	$	94,153

The measurement period adjustments reflect new information obtained about facts and circumstances that existed at the date of the acquisition and primarily related to the recognition of a deferred tax liability.

Goodwill from the Voicebox acquisition is not tax deductible. The following are the identifiable intangible assets acquired and their respective weighted average useful lives, as determined based on final valuations (dollars in thousands):

	Voicebox
	Amount		Weighted Average Life (Years)
Core and completed technology	$	12,700		4.0
Customer relationships		36,900		5.0
Total	$	49,600

The results of Voicebox for the post-acquisition period from April 2, 2018 to September 30, 2018 are as follows:

Total revenue		$	5,631
Net loss		$	(9,238	)

Revenue Recognition

12 Months Ended

Sep. 30, 2020

Revenue From Contract With Customer [Abstract]

Revenue Recognition

5. Revenue Recognition

We primarily derive revenue from the following sources: (1) software license arrangements, primarily royalty 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.

Revenue is recognized when control of these product and services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products and 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 relative 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 with the practical expedient in 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 fiscal years ended September 30, 2020, 2019 and 2018 (dollars in thousands):

	September 30,
	2020		2019		2018
	(ASC 606)		(ASC 606)		(ASC 605)
Revenues:
United States	$	128,381	$	131,877	$	109,564
Other Americas		16		1,044		1,492
Germany		100,674		78,258		64,417
Other Europe, Middle East and Africa		25,394		20,478		16,755
Japan		50,936		44,472		57,303
Other Asia-Pacific		24,245		27,186		27,453
Total net revenues ⁽¹⁾	$	329,646	$	303,315	$	276,984

(1)

As a result of our adoption of ASC 606 effective October 1, 2018 using the modified retrospective method, prior period amounts have not been adjusted to conform with ASC 606 and therefore may not be comparable.

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

Revenues relating to one customer accounted for $76.9 million, or 23.3%, of revenue for the fiscal year ended September 30, 2020. Revenues relating to two customers accounted for $62.7 million, or 20.7%, and $37.4 million, or 12.3% of revenue for the fiscal year ended September 30, 2019. One customer accounted for $51.0 million, or 18.4% of revenue for the fiscal year ended September 30, 2018.

(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 September 30, 2020 and 2019, we had $5.6 million and $2.7 million of contract acquisition costs. We had amortization expense of $1.5 million and $0.7 million related to these costs during the fiscal year ended September 30, 2020 and 2019. 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 September 30, 2020 and 2019, we had $45.4 million and $41.6 million of capitalized contract costs.

We had amortization expense of $12.0 million and $10.6 million related to these costs during the fiscal year ended September 30, 2020 and 2019, 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. As of September 30, 2020, we had $30.3 million of current contract assets. The table below shows significant changes in contract assets (dollars in thousands):

	Contract assets
Balance as of October 1, 2018	$	6,470
Revenues recognized but not billed		42,661
Amounts reclassified to accounts receivable, net		(39,912	)
Balance as of September 30, 2019	$	9,219
Revenues recognized but not billed		52,682
Amounts reclassified to accounts receivable, net		(31,624	)
Balance as of September 30, 2020	$	30,277

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. As of September 30, 2020, we had $325.1 million of deferred revenue. The table below shows significant changes in deferred revenue (dollars in thousands):

	Deferred revenue
Balance as of October 1, 2018	$	335,252
Amounts billed but not recognized		117,201
Revenue recognized		(99,169	)
Balance as of September 30, 2019	$	353,284
Amounts billed but not recognized		96,126
Revenue recognized		(124,317	)
Balance as of September 30, 2020	$	325,093

(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 September 30, 2020 (dollars in thousands):

Within One

Year

Two to Five

Years

Greater

than

Five Years

Total

Total revenue

148,936

189,538

49,010

387,484

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.

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

Earnings Per Share

12 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Share

6. 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 is reflected in diluted net (loss) income per share by applying the treasury stock method. Due to the net loss recognized for the fiscal year ended September 30, 2020, there were no dilutive shares.

The dilutive effect of the Notes (as defined in Note 21) 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 fiscal year ended September 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 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:

	September 30,
in thousands, except per share data	2020			2019		2018
Numerator:
Net (loss) income - basic and diluted	$	(20,631	)	$	100,268	$	5,881

Denominator:
Weighted average common shares outstanding - basic		36,428			36,391		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		36,428			36,391		36,391

Net (loss) income per common share:
Basic	$	(0.57	)	$	2.76	$	0.16
Diluted	$	(0.57	)	$	2.76	$	0.16

We exclude weighted-average potentially issuable 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 sets forth potential shares that were considered anti-dilutive at September 30, 2020 and for the fiscal year ended September 30, 2019 and 2018:

	Fiscal Year Ended September 30,
in thousands	2020		2019		2018
Restricted stock awards		1,058		-		-
Contingently issuable stock awards		151		-		-
Conversion option of our Notes		1,538		-		-

Fair Value Measurements

12 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

7. Fair Value Measurements

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

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

•

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

•

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

•

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

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

	September 30, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents:
Money market funds	$	101,437	$	-	$	-	$	101,437
Marketable securities:
Commercial paper, $9,883 at cost	$	-		9,883	$	-		9,883
Corporate bonds, $1,780 at cost		-		1,779		-		1,779
Total assets	$	101,437	$	11,662	$	-	$	113,099

During fiscal year 2020, we recorded an immaterial amount of unrealized losses related to our marketable securities within Accumulated other comprehensive loss.

As of September 30, 2019, we did not have any cash and cash equivalents or marketable securities.

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

Long-term debt

The estimated fair value of our Long-term debt is determined by Level 2 inputs and is based observable market data including prices for similar instruments. As of September 30, 2020, the estimated fair value of our Notes was $271.0 million. The Notes are recorded at face value less unamortized debt discount and transaction costs on our consolidated balance sheet. The carrying amount of the Senior Credit Facilities (as defined in Note 21) approximates fair value given the underlying interest rate applied to such amounts outstanding is currently set to the prevailing market rate.

- Definition

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

+ References + Details

Goodwill and Intangible Assets

12 Months Ended

Sep. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

8. Goodwill and Intangible Assets

(a) Goodwill

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 July 1, 2020, we completed the annual impairment testing of our goodwill. We elected to rely on a qualitative assessment and as a result we determined it is more likely than not that the fair value of our reporting unit is greater than its carrying amount. 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 years ended September 30, 2020 and 2019 were as follows (dollars in thousands):

	Total
Balance as of October 1, 2018	$	1,119,946
Acquisitions		3,591
Effect of foreign currency translation		(4,208	)
Balance as of September 30, 2019		1,119,329
Effect of foreign currency translation		8,869
Balance as of September 30, 2020	$	1,128,198

(b) Intangible Assets, Net

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

	September 30, 2020
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (Years)
Customer relationships	$	110,512	$	(75,915	)	$	34,597		3.0
Technology and patents		90,658		(79,639	)		11,019		1.6
Total	$	201,170	$	(155,554	)	$	45,616

	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 for acquired technology and patents is included in the cost of revenue in the accompanying statements of operations and amounted to $8.3 million, $8.5 million, and $6.6 million for the years ended September 30, 2020, 2019, and 2018, respectively. Additionally, amortization expense for intangible assets of the Parent utilized by the Cerence business amounted to $22 thousand and $1.2 million in the years ended September 30, 2019 and 2018, respectively, and is included in the cost of revenue as shown in Note 19. Amortization expense for customer relationships is included in operating expenses and amounted to $12.6 million, $12.5 million, and $8.8 million in the years ended September 30, 2020, 2019, and 2018, respectively. Estimated amortization for each of the five succeeding years and thereafter as of September 30, 2020, is as follows (dollars in thousands):

Year Ending September 30,	Cost of Revenues		Operating Expenses		Total
2021	$	7,517	$	12,648	$	20,165
2022		2,984		11,688		14,672
2023		414		6,080		6,494
2024		104		2,390		2,494
2025		—		1,791		1,791
Thereafter		—		—		—
Total	$	11,019	$	34,597	$	45,616

Accounts Receivable, Net

12 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Accounts Receivable, Net

9. Accounts Receivable, Net

Accounts receivable, net consisted of the following (dollars in thousands):

	September 30,
	2020			2019
Trade accounts receivable	$	51,337		$	65,532
Unbilled accounts receivable under long-term contracts		—			1,120
Gross accounts receivable		51,337			66,652
Less: allowance for doubtful accounts		(1,394	)		(865	)
Total	$	49,943		$	65,787

Property and Equipment, Net

12 Months Ended

Sep. 30, 2020

Property Plant And Equipment [Abstract]

Property and Equipment, Net

10. Property and Equipment, Net

Property and equipment, net consisted of the following (dollars in thousands):

	Useful Life	September 30,
	(In years)	2020			2019
Machinery and equipment	3-5	$	7,746		$	8,424
Computers, software and equipment	3-5		42,705			32,894
Leasehold improvements	2-15		10,513			9,147
Furniture and fixtures	5-7		4,691			3,819
Finance leases			2,710			—
Construction in progress			4,547			1,043
Subtotal			72,912			55,327
Less: accumulated depreciation			(43,383	)		(35,214	)
Total		$	29,529		$	20,113

As of September 30, 2020 and 2019, the net book value of capitalized internal-use software costs was $6.9 million and $2.2 million, respectively, which are included within computers, software, and equipment. Depreciation expense for the years ended September 30, 2020, 2019, and 2018 was $9.2 million, $6.2 million, and $7.7 million, respectively, which included amortization expense of $3.1 million, $2.7 million, and $4.2 million, respectively, for internally developed software costs.

The following table presents our property and equipment, net by geography at September 30, 2020 and 2019 (dollars in thousands):

	September 30,
	2020		2019
Long-lived assets:
United States	$	19,898	$	10,333
Canada		3,464		3,889
Germany		2,573		2,390
Other countries		3,594		3,501
Total long-lived assets	$	29,529	$	20,113

Deferred Revenue

12 Months Ended

Sep. 30, 2020

Deferred Revenue [Abstract]

Deferred Revenue

11. Deferred Revenue

Unearned revenue includes fees for upfront setup of the service environment and fees charged for on-demand service.

Deferred revenue consisted of the following (dollars in thousands):

	September 30,
	2020		2019
Current Liabilities:
Unearned revenue	$	112,520	$	88,233
Total	$	112,520	$	88,233
Non-current Liabilities:
Unearned revenue		212,573		265,051
Total	$	212,573	$	265,051

Accrued Expenses and Other Current Liabilities

12 Months Ended

Sep. 30, 2020

Accrued Liabilities And Other Liabilities [Abstract]

Accrued Expenses and Other Current Liabilities

12. Accrued Expenses and Other Current Liabilities

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

	September 30,
	2020		2019
Compensation	$	37,960	$	13,031
Cost of revenue related liabilities		3,683		1,668
Sales and other taxes payable		14,688		219
Professional fees		2,458		3,863
Facilities related liabilities		2,041		273
Other		7,027		5,140
Total	$	67,857	$	24,194

Asset Retirement Obligations

12 Months Ended

Sep. 30, 2020

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

13. Asset Retirement Obligations

Asset retirement obligations consist primarily of costs related to restoring long-lived assets to their original condition. Asset retirement obligations may include disposal costs, maintenance of buildings, and costs to remove leasehold improvements. The balance of the asset retirement obligations for the periods presented are classified as noncurrent liabilities and included in “Other liabilities” in the Consolidated and Combined Balance Sheets. Activity related to asset retirement obligations was as follows (dollars in thousands):

	September 30,
	2020			2019			2018
Balance at the beginning of period	$	1,051		$	1,155		$	784
Additions		205			5			398
Remeasurement/translation		72			(51	)		(8	)
Settlements/payments		(87	)		(58	)		(19	)
Balance at the end of the period	$	1,241		$	1,051		$	1,155

Restructuring and Other Costs, Net

12 Months Ended

Sep. 30, 2020

Restructuring And Related Activities [Abstract]

Restructuring and Other Costs, Net

14. 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.

Restructuring and other costs, net related to personnel and facilities are included in accrued expenses and other current liabilities in the Consolidated and Combined Balance Sheets. Separation costs are included in accounts payable. The following table sets forth the year ended September 30, activity relating to restructuring charges (dollars in thousands):

	Personnel			Facilities			Separation			Total
Balance at October 1, 2017	$	108		$	114		$	—		$	222
Restructuring and other costs, net		4,130			20			8,713			12,863
Cash payments		(1,969	)		(128	)		(7,936	)		(10,033	)
Balance at September 30, 2018		2,269			6			777			3,052
Restructuring and other costs, net		130			1,704			22,570			24,404
Cash payments		(1,910	)		(1,684	)		(19,471	)		(23,065	)
Balance at September 30, 2019		489			26			3,876			4,391
Restructuring and other costs, net		3,694			2,816			11,727			18,237
Non-cash adjustment		—			(1,031	)		—			(1,031	)
Cash payments		(3,420	)		(26	)		(13,675	)		(17,121	)
Foreign exchange impact on ending balance		1			(40	)		—			(39	)
Balance at September 30, 2020	$	764		$	1,745		$	1,928		$	4,437

Fiscal Year 2020

For the year ended September 30, 2020, we recorded restructuring charges of $18.2 million, which included a $3.7 million severance charge related to the elimination of personnel across multiple functions, $2.8 million resulting from the restructuring of facilities that will no longer be utilized, and $11.7 million related to costs incurred to establish the Cerence business as a standalone public company.

Fiscal Year 2019

For the year ended September 30, 2019, we recorded restructuring charges of $24.4 million, which included $0.1 million severance charge related to the elimination of personnel across multiple functions, $1.7 million primarily resulting from the restructuring of facilities that will no longer be utilized, and $22.6 million related to professional service fees incurred to establish Cerence business as a standalone public company.

Fiscal Year 2018

For the year ended September 30, 2018, we recorded restructuring charges of $12.9 million, which included a $4.1 million severance charge related to the elimination of personnel across multiple functions, $20 thousand primarily resulting from the restructuring of facilities that will no longer be utilized, and $8.7 million related to professional services fees incurred to establish the Cerence business as a standalone public company.

Leases

12 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

15. Leases

We have entered into a number of facility and equipment leases which qualify as operating leases under GAAP. We also have a limited number of equipment leases that qualify as finance leases. We determine if contracts with vendors represent a lease or have a lease component under GAAP at contract inception. 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.

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

	September 30, 2020
Weighted-average remaining lease term (in months):
Operating leases		55.9
Finance leases		55.8
Weighted-average discount rate:
Operating leases		7.4	%
Finance leases		4.4	%

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

	Classification	September 30, 2020
Assets
Operating lease assets	Operating lease right-of-use assets	$	20,096
Finance lease assets	Property and equipment, net		1,414
Total lease assets		$	21,510

Liabilities
Current
Operating	Short-term operating lease liabilities	$	5,700
Finance	Accrued expenses and other current liabilities		271
Noncurrent
Operating	Long-term operating lease liabilities	$	17,821
Finance	Other liabilities		1,088
Total lease liability		$	24,880

The following table presents lease expense for the fiscal year ended September 30, 2020 (dollars in thousands):

	Fiscal year ended September 30, 2020
Finance lease costs:
Amortization of right-of-use asset	$	255
Interest on lease liability		22
Operating lease cost		8,245
Variable lease cost		1,060
Sublease income		(206	)
Total lease cost	$	9,376

For operating leases, the related cash payments are included in the operating cash flows on the consolidated statements of cash flows. For the fiscal year ended September 30, 2020, cash payments related to operating leases were $8.0 million. 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 fiscal year ended September 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 September 30, 2020 (dollars in thousands):

Year Ending September 30,	Operating Leases			Financing Leases			Total
2021	$	7,200		$	319		$	7,519
2022		6,116			309			6,425
2023		4,648			309			4,957
2024		4,249			309			4,558
2025		2,583			254			2,837
Thereafter		3,097			10			3,107
Total future minimum lease payments	$	27,893		$	1,510		$	29,403
Less effects of discounting		(4,372	)		(151	)		(4,523	)
Total lease liabilities	$	23,521		$	1,359		$	24,880
Reported as of September 30, 2020
Short-term lease liabilities	$	5,700		$	271		$	5,971
Long-term lease liabilities		17,821			1,088			18,909
Total lease liabilities	$	23,521		$	1,359		$	24,880

In accordance with the transition disclosure requirements under ASC 840, 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

Stockholder's Equity

12 Months Ended

Sep. 30, 2020

Equity [Abstract]

Stockholder's Equity

16. Stockholders’ Equity

Share-based Compensation Plans

Prior to the Spin-Off from Nuance, the Parent maintained a number of stock-based compensation programs at the corporate level in which the Cerence business’s employees participate. All awards granted under the programs relate to the Parent’s common stock.

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 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 (“ESPP”).

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 Awards

The fair value of Restricted Awards, including Restricted Stock Units and Restricted Stock, is measured based upon the market price of the underlying common stock as of the date of grant. Restricted Awards generally vest over a period of two to four years. We also include certain Restricted Awards with vesting solely dependent on the achievement of specified performance targets. The fair value of Restricted Awards is amortized to expense over the awards applicable requisite service period. In the event that the employees’ employment with us terminates, or in the case of awards with only performance targets, if those targets are not met, any unvested shares are forfeited.

In fiscal year 2020, we withheld payroll taxes totaling $9.4 million related to the vesting of Restricted Awards.

Restricted Units are not included in issued and outstanding common stock until the shares are vested and released. The table below summarizes activity related to Restricted Stock Units:

	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		2,758,634			778,968			3,537,602		$	18.87
Vested		(642,404	)		—			(642,404	)	$	20.06
Forfeited		(73,312	)		(7,581	)		(80,893	)	$	17.54
Non-vested at September 30, 2020		2,042,918			771,387			2,814,305		$	18.63		0.98	$	137,529
Expected to vest								2,814,305		$	18.63		0.98	$	137,529

Employee Stock Purchase Plan

On October 2, 2019, we adopted the ESPP and approved 1,050,000 shares for issuance under this plan. The ESPP is administered by our Board of Directors’ Compensation Committee.

The ESPP provides for the issuance of shares of our common stock to participating employees. At the end of each designated offering period, which occurs every six months on February 15 and August 15, employees can elect to purchase shares of our common stock with contributions of up to 12% of their base pay, accumulated via payroll deductions, at an amount equal to 85% of the lower of our stock price on (i) the first day of the offering period, or (ii) the last day of the offering period.

We use the Black-Scholes option pricing model to calculate the fair value of shares issued under the ESPP. The Black-Scholes model relies on a number of key assumptions to calculate estimated fair values. The following table sets forth the weighted-average key assumptions and fair value results for shares issued under the ESPP during the fiscal year ended September 30, 2020:

	Year Ended September 30,
	2020
Expected dividend yield		0.00	%
Risk-free interest rate		1.56	%
Expected volatility		58.18	%
Expected life (in years)		0.50
Weighted-average fair value of shares issued (per share)	$	8.93

The following table sets forth the quantities and average prices of shares issued under the ESPP for the fiscal year ended September 30, 2020:

	Year Ended September 30,
	2020
Shares issued under the ESPP		63,503
Average price of shares issued		20.66

Stock-based Compensation

Prior to the Spin-Off, stock-based compensation expense recorded by the Cerence business includes the expense associated with the employees historically attributable to the Cerence business’s operations and the expense associated with the allocation of stock compensation expense for corporate employees.

During fiscal 2020, we recognize stock-based compensation expenses over the requisite service periods. Our share-based awards are classified within equity. In May 2020, we modified the performance targets for certain of the Restricted Awards issued pursuant to our Equity Incentive Plan at the beginning of fiscal 2020. Stock-based compensation for the anticipated Restricted Awards has been adjusted to reflect our estimated achievement under the modified targets and is recorded prospectively over the requisite service period.

The amounts included in the Consolidated and Combined Statements of Operations related to stock-based compensation are as follows (dollars in thousands):

	Year Ended September 30,
	2020		2019		2018
Cost of licensing	$	—	$	21	$	12
Cost of connected services		1,382		827		495
Cost of professional services		4,191		1,048		1,569
Research and development		13,944		15,946		11,112
Sales and marketing		9,580		6,137		3,985
General and administrative		18,188		5,703		4,870
Total	$	47,285	$	29,682	$	22,043

Commitments and Contingencies

12 Months Ended

Sep. 30, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

17. 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 September 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 September 30, 2020, we have a $1.8 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.

Pension and Other Post-Retirement Benefits

12 Months Ended

Sep. 30, 2020

Compensation And Retirement Disclosure [Abstract]

Pension and Other Post-Retirement Benefits

18. Pension and Other Post-Retirement Benefits

As discussed within Note 19, we entered into an Employee Matters Agreement with Nuance, which provides that we establish certain compensation and benefit plans for the benefit of our employees following the Spin-Off, including a 401(k) savings plan, which accepts direct rollovers of account balances from the Nuance 401(k) savings plan for any of our employees who elect to do so. In addition, we assumed certain assets and liabilities with respect to our current and former employees under certain of Nuance’s U.S. and non-U.S. defined benefit pension plans (with assets and liabilities allocated based on formulas specified in the Employee Matters Agreement for each pension plan).

Defined Contribution Plans

We have established a retirement savings plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). The 401(k) Plan covers substantially all of our U.S. employees who meet minimum age and service requirements, and allows participants to defer a portion of their annual compensation on a pre-tax basis. We match 50% of employee contributions up to 6% of eligible salary. We incurred charges for contributions to these 401(k) defined contribution plans of $0.7 million, $1.0 million, and $0.7 million for the years ended September 30, 2020, 2019, and 2018, respectively.

Defined Benefit Pension Plans

We sponsor certain defined benefit pension plans that are offered primarily by our foreign subsidiaries. Many of these plans were assumed through acquisitions or are required by local regulatory requirements. We may deposit funds for these plans with insurance companies, third party trustees or into government-managed accounts consistent with local regulatory requirements, as applicable.

The total defined benefit plan pension expenses incurred for these plans were $0.5 million, $0.4 million, and $0.4 million for the years ended September 30, 2020, 2019, and 2018, respectively. Our aggregate projected benefit obligation and aggregate net liability for defined benefit plans as of September 30, 2020 was $8.3 million and $7.1 million, as of September 30, 2019 was $7.3 million and $6.8 million, and as of September 30, 2018 was $5.0 million and $4.2 million, respectively.

For the years ended September 30, 2020, 2019 and 2018, charges for contributions to defined benefit pension plans were not material to the Consolidated and Combined Statements of Operations.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 55
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=118257860&loc=d3e4179-114921

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section S99
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=21916913&loc=d3e273930-122802

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (o)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (p)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 70
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-URI http://asc.fasb.org/topic&trid=2235017

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 60
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=6414203&loc=d3e39689-114964

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (q)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(1)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(iii)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (l)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

+ Details

Relationship with Parent and Related Entities

12 Months Ended

Sep. 30, 2020

Relationship With Parent And Related Entities Disclosure [Abstract]

Relationship with Parent and Related Entities

19. Relationship with Parent and Related Entities

Prior to the Spin-Off, the Cerence business had been managed and operated in the normal course of business consistent with other affiliates of the Parent. Accordingly, certain shared costs had been allocated to the Cerence business and reflected as expenses in the standalone combined financial statements. Management considers the allocation methodologies used to be reasonable and appropriate reflections of the historical Parent expenses attributable to the Cerence business for purposes of the standalone financial statements. However, the expenses reflected in the combined financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if the Cerence business historically operated as a separate, standalone entity.

(a)	General Corporate Overhead Allocation

The Parent provided facilities, information services and certain corporate and administrative services to the Cerence business. Expenses relating to these services have been allocated to the Cerence business and are reflected in the combined financial statements. Where direct assignment is not possible or practical, these costs were allocated on a pro rata basis of revenues, headcount or other measures. The following table summarizes the components of general allocated corporate expenses for the years ended September 30, 2019 and 2018 (dollars in thousands):

	Year Ended September 30,
	2019		2018
Facility	$	6,299	$	6,125
Depreciation		1,637		1,467
Amortization		22		1,150
Facility and other usage charges		7,958		8,742
Information services		8,633		7,947
Corporate and administrative services		22,166		18,414
Total	$	38,757	$	35,103

(b) Cash Management and Financing

The Cerence business participated in the Parent’s centralized cash management and financing programs. Disbursements were made through centralized accounts payable systems, which were operated by the Parent.

Cash receipts were transferred to centralized accounts which were also maintained by the Parent. As cash was disbursed and received by the Parent, it was accounted for by the Cerence business through the net parent investment.

Historically, the Cerence business had received funding from the Parent for the Cerence business’s operating and investing cash needs. Parent’s third-party debt and the related interest expense were not allocated to the Cerence business for any of the years presented prior to the Spin-Off, as the Cerence business was not the legal obligor of the debt and the Parent’s borrowings were not directly attributable to the Cerence business.

All significant intercompany transactions between the Cerence business and the Parent and its non-Cerence businesses have been included in these Consolidated and Combined Financial Statements and are considered to be effectively settled for cash at the time the transaction is recorded. The total net effect of the settlement of these intercompany transactions have been accounted for through parent company net investment in the Consolidated and Combined Balance Sheets and is reflected in the Consolidated and Combined Statements of Cash Flows as a financing activity.

The following table summarizes the components of the net transfers to Parent for the years ended September 30, 2020, 2019, and 2018 (dollars in thousands):

	Year Ended September 30,
	2020			2019			2018
Net transactions with Parent	$	(6,098	)	$	(83,554	)	$	(28,947	)
Distribution to Parent		(152,978	)		—			—
Net reclassification of net parent investment in Cerence		(938,051	)		—			—
Stock-based compensation		—			29,682			22,043
Accrued bonus		—			9,478			(2,859	)
Corporate depreciation and amortization		—			1,659			2,617
Fixed asset reclasses from the Parent		—			10,088			259
Voicebox Purchase Accounting Adjustment		—			3,591			—
Intangible asset reclasses from the Parent		—			1,665			—
Net transfer to Parent	$	(1,097,127	)	$	(27,391	)	$	(6,887	)

Agreements with Nuance

In connection with the Spin-Off, Cerence entered into several agreements with Nuance that set forth the principal actions taken or to be taken in connection with the Spin-Off and that govern the relationship of the parties following the Spin-Off, including the following:

•

Separation and Distribution Agreement: We entered into a Separation and Distribution Agreement with Nuance in advance of the Distribution. The Separation and Distribution Agreement sets forth our agreements with Nuance regarding the principal actions to be taken in connection with the Spin-Off. It also sets forth other agreements that govern aspects of our relationship with Nuance following the Spin-Off.

•

Tax Matters Agreement: We entered into a Tax Matters Agreement with Nuance that governs the respective rights, responsibilities and obligations of Nuance and us after the Distribution with respect to all tax matters (including tax liabilities, tax attributes, tax returns and tax contests).

•

Transition Services Agreement: We entered into a Transition Services Agreement pursuant to which Nuance will provide us, and we will provide Nuance, with certain specified services for a limited time to help ensure an orderly transition following the Distribution.

•

Employee Matters Agreement: We entered into an Employee Matters Agreement with Nuance that addresses employment and employee compensation and benefits matters. The Employee Matters Agreement addresses the allocation and treatment of assets and liabilities relating to employees and compensation and benefit plans and programs in which our employees participated prior to the Spin-Off.

•

Intellectual Property Agreement: We entered into an Intellectual Property Agreement with Nuance, pursuant to which we granted to Nuance, and Nuance granted to us, perpetual, non-exclusive, royalty-free licenses to certain patents and technology, as well as certain other intellectual property that have historically been shared between us and Nuance.

•

Transitional Trademark License Agreement: We entered into a Transitional Trademark License Agreement with Nuance, pursuant to which Nuance granted us a non-exclusive, royalty free license to continue using certain of Nuance’s trademarks, trade names and service marks with respect to the “Nuance” and “Dragon” brands in connection with the sale, marketing and other commercialization of our products and services.

•

OEM and Distribution License Agreements: We entered into four OEM and Distribution License Agreements with Nuance. Under three of the four agreements, Cerence licenses to Nuance designated Cerence technologies for Nuance’s internal use and for distribution to Nuance end-users and resellers. Under the final agreement, Nuance licenses to Cerence designated Nuance technologies for Cerence’s internal use and for distribution to Cerence end-users and resellers. All agreements contain customary commercial terms for arrangements of this nature.

Income Taxes

12 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

20. Income Taxes

Prior to the consummation of the Spin-Off, Cerence’s operating results were included in Parent’s various consolidated U.S. federal and state income tax returns, as well as non-U.S. filings. For the purposes of our Consolidated and Combined Financial Statements for periods prior to the Spin-Off, income tax expense and deferred tax balances have been recorded as if we filed tax returns on a standalone basis separate from the Parent. The Separate Return Method applies the accounting guidance for income taxes to the standalone financial statements as if we were a separate taxpayer and a standalone enterprise prior to the separation from Parent.

Recent Tax Legislation

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.

On December 22, 2017, the Tax Cuts and Jobs Act ("TCJA") was signed into law. The TCJA significantly revises the U.S. corporate income tax by, among other things, lowering corporate income tax rates, implementing a hybrid territorial tax system and imposing a one-time repatriation tax on foreign cash and earnings.

We are subject to additional requirements of the TCJA during the year ended September 30, 2020. Those provisions include a tax on global intangible low-taxed income (“GILTI”) and foreign-derived intangible income (“FDII”). We have elected to account for GILTI as a period cost and therefore included GILTI expense in the effective tax rate calculation. Our estimates may be revised in future period as we obtain additional data and as the IRS issues new guidance implementing the law changes.

As a result of the TCJA, in fiscal year 2018 we re-measured certain deferred tax assets and liabilities at the lower rates and recorded approximately $23.1 million of tax expense.

(Benefit from) provision for income taxes

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

	Year Ended September 30,
	2020			2019			2018
Domestic	$	(28,846	)	$	(22,904	)	$	16,371
Foreign		2,706			34,088			20,427
(Loss) income before income taxes	$	(26,140	)	$	11,184		$	36,798

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

	Year Ended September 30,
	2020			2019			2018
Current:
Federal	$	—		$	5,352		$	11,413
State		—			1,059			2,500
Foreign		5,845			5,728			4,531
Total current	$	5,845		$	12,139		$	18,444
Deferred:
Federal		(1,871	)		(6,210	)		14,393
State		(239	)		(1,593	)		(1,284	)
Foreign		(9,244	)		(93,420	)		(636	)
Total deferred		(11,354	)		(101,223	)		12,473
(Benefit from) provision for income taxes	$	(5,509	)	$	(89,084	)	$	30,917
Effective income tax rate		21.1	%		(796.5	)%		84.0	%

The (benefit from) provision for income taxes differed from the amount computed by applying the federal statutory rate to our (loss) income before income taxes as follows (dollars in thousands):

	Year Ended September 30,
	2020			2019			2018
Federal tax provision at statutory rate	$	(5,489	)	$	2,270		$	9,026
State tax, net of federal benefit		(239	)		(490	)		917
Foreign tax rate and other foreign related tax items		(2,463	)		(4,764	)		(104	)
Uncertain tax positions		(887	)		57,631			(95	)
Stock-based compensation		3,456			—			—
Global intangible low-taxed income		336			3,923			—
Foreign-derived intangible income		—			(547	)		—
Capital losses		—			8,187			—
Change in U.S. valuation allowance		—			(8,187	)		—
Non-deductible expenditures		2,728			2,707			514
R&D credits		(2,951	)		(1,675	)		(1,313	)
Domestic Production Activities Deduction		—			—			(1,143	)
TCJA impact		—			—			23,115
Intangible property transfers		—			(148,139	)		—
(Benefit from) provision for income taxes	$	(5,509	)	$	(89,084	)	$	30,917

The effective income tax rate is based upon the income for the year, the composition of the income in different countries, and adjustments, if any, for the potential tax consequences, benefits or resolutions of audits or other tax contingencies. 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. We believe that it is not more likely than not that the tax benefit from the U.S. capital loss will be realized. As a result, we recorded a full valuation allowance against the capital loss.

The effective tax rate for the fiscal year 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 changes in applicable tax laws in 2017, R&D incentives, 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 income tax rate in fiscal year 2019 differs from the U.S. federal statutory rate of 21.0% primarily due to a net tax benefit of $91.7 million related to intangible property transfers, partially offset by an uncertain tax position. The net tax benefit is also partially offset by GILTI tax expense of $3.9 million.

The effective income tax rate in fiscal year 2018 differs from the U.S. federal statutory rate of 24.5% primarily due to the net tax expense resulting from the TCJA re-measurement of deferred tax assets and liabilities at the lower enacted rate, our research and development credits and the domestic production activities deduction.

As of September 30, 2020, we have not provided taxes on undistributed earnings of our foreign subsidiaries, which may be subject to foreign withholding taxes upon repatriation, as we consider these earnings indefinitely reinvested. Our indefinite reinvestment determination is based on the future operational and capital requirements of our domestic and foreign operations. We expect our international cash and cash equivalents and marketable securities will continue to be used for our foreign operations and therefore do not anticipate repatriating these funds. As of September 30, 2020, it is not practical to calculate the unrecognized deferred tax liability on these earnings due to the complexities of the utilization of foreign tax credits and other tax assets.

Deferred tax assets (liabilities) consist of the following as of September 30, 2020 and 2019 (dollars in thousands):

	September 30,
	2020			2019
Deferred tax assets:
Net operating loss carryforwards	$	17,582		$	6,567
Capital loss carryforwards		9,557			8,187
Federal credit carryforwards		3,665			9,367
Accrued expenses and other reserves		5,086			2,830
Difference in timing of revenue related items		51,483			50,677
Acquired intangibles		94,389			90,635
Interest limitations carryforward		9,399			—
Operating lease liabilities		6,568			—
Depreciation		1,682			—
Deferred compensation		1,465			—
Pension obligation		2,522			1,969
Other		1,726			—
Total deferred tax assets	$	205,124		$	170,232
Valuation allowance for deferred tax assets		(13,491	)		(11,064	)
Deferred tax assets	$	191,633		$	159,168
Deferred tax liabilities:
Depreciation	$	(3,381	)	$	(1,360	)
Acquired intangibles		(21,255	)		(7,179	)
Convertible debt		(4,406	)		—
Operating lease right-of-use assets		(5,677	)		—
Other		(2,457	)		—
Total deferred tax liabilities		(37,176	)		(8,539	)
Net deferred tax assets	$	154,457		$	150,629

We have determined that a revision was required to correct the September 30, 2019 disclosure of certain gross deferred tax liabilities and deferred tax assets, of $7.2 million, within the above table. Our disclosure of the related net deferred tax assets and valuation allowance at September 30, 2019 was correctly presented and this revision had no impact on our combined balance sheet, statement of operations or statement of cash flow as previously reported.

Deferred tax assets are reduced by a valuation allowance if, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all the deferred tax assets will not be realized. As of September 30, 2020, we have $9.8 million and $3.7 million in valuation allowance against our net domestic and foreign deferred tax assets, respectively. As of September 30, 2019, we had $11.03 million and $0.03 million in valuation allowance against our net domestic and foreign deferred tax assets, respectively.

We have U.S. federal net operating loss (“NOL”) carryforwards of $21.1 million, state NOL carryforwards of $22.7 million, and foreign NOL carryforwards of $57.4 million. These carryforwards will expire at various dates beginning in 2026 and extending up to an unlimited period.

We have research and development carryforwards of $3.1 million.

Uncertain Tax Positions

ASC 740 prescribes the accounting for uncertainty in income taxes recognized in the financial statements. We regularly assess the outcome of potential examinations in each of the taxing jurisdictions when determining the adequacy of the amount of unrecognized tax benefit recorded. We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit which is more likely than not to be realized upon ultimate settlement. We recognize interest and penalties related to unrecognized tax positions in our (benefit from) provision for income taxes line of our Consolidated and Combined Statements of Operations.

The aggregate changes in the balance of our gross unrecognized tax benefits were as follows (dollars in thousands):

	September 30,
	2020			2019			2018
Balance at the beginning of the year	$	63,369		$	5,738		$	5,833
Beginning balance adjustment		3,392			—			—
Increases related to tax positions taken from prior periods		5,158			1,312			103
Decreases related to tax positions taken from prior periods		—			(120	)		(198	)
Increases related to tax positions taken during current period		328			56,439			—
Decreases for tax settlements and lapse in statutes		(1,215	)		—			—
Balance at the end of the year	$	71,032		$	63,369		$	5,738

For the periods prior to the Spin-Off, the unrecognized tax benefits reflected in the financial statements were determined using the Separate Return Method. As a result of the Spin-Off, we recognized $3.4 million of liabilities for unrecognized tax benefits, determined on an asset and liability method, that stay with the legal entities included in the Spin-Off of the Cerence business from the Parent, which were recorded through Parent company investment, net of corresponding indemnification assets.

As of September 30, 2020, $71.0 million of the unrecognized tax benefits, if recognized, would impact our effective tax rate. We do not expect a significant change in the amount of unrecognized tax benefits within the next 12 months. We recorded $0.4 million and $0.4 million of interest and penalties related to uncertain tax positions as of September 30, 2020 and September 30, 2019, respectively.

We are subject to U.S. federal income tax, various state and local taxes and international income taxes in numerous jurisdictions. The 2017 through 2019 years remain open for all purposes of examination by the IRS and other taxing authorities in material jurisdictions.

- Definition

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

+ References + Details

Long-Term Debt

12 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Long-Term Debt

21. Long-Term Debt

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

	September 30, 2020			September 30, 2019
3.00% Convertible Senior Notes due 2025, net of unamortized discount of $18,546 and deferred issuance costs of $4,664 at September 30, 2020. Effective interest rate 6.29%.	$	151,791		$	—
Senior Credit Facilities, net of unamortized discount of $1,820 and deferred issuance costs of $287 at September 30, 2020. Effective interest rate 4.02%.		121,331			—
Total debt	$	273,122		$	—
Less: current portion		(6,250	)		—
Total long-term debt	$	266,872		$	—

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

Fiscal Year	Convertible Senior Notes			Senior Facilities			Total
2021	$	—		$	6,250		$	6,250
2022		—			7,813			7,813
2023		—			12,500			12,500
2024		—			96,875			96,875
2025		175,000			—			175,000
Thereafter		—			—			—
Total before unamortized discount and issuance costs and current portion	$	175,000		$	123,438		$	298,438
Less: unamortized discount and issuance costs		(23,209	)		(2,107	)		(25,316	)
Less: current portion of long-term debt		—			(6,250	)		(6,250	)
Total long-term debt	$	151,791		$	115,081		$	266,872

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. As of September 30, 2020, the carrying amount of the equity component, net of taxes and transaction costs was $14.4 million.

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 fiscal year ended September 30, 2020 was as follows (dollars in thousands):

	Year Ended September 30, 2020
Contractual interest expense	$	1,753
Amortization of debt discount		1,131
Amortization of issuance costs		285
Total interest expense related to the Notes	$	3,169

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

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 September 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 commenced 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 fiscal year ended September 30, 2020 was $1.5 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. As of September 30, 2020, we were in compliance with all Credit Agreement covenants.

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 September 30, 2020, our obligations related to the Existing Facilities have been settled. Total interest expense relating to the Existing Facilities for the fiscal year ended September 30, 2020 was $18.0 million, reflecting the coupon and accretion of the discount.

Quarterly Data (Unaudited)

12 Months Ended

Sep. 30, 2020

Quarterly Financial Information Disclosure [Abstract]

Quarterly Data (Unaudited)

22. Quarterly Data (Unaudited)

The following information has been derived from unaudited Consolidated and Combined Financial Statements that, in the opinion of management, include all recurring adjustments necessary for a fair statement of such information (in thousands, except per share data).

	First Quarter			Second Quarter		Third Quarter			Fourth Quarter		Fiscal Year
2020
Total revenues	$	77,459		$	86,495	$	74,810		$	90,882	$	329,646
Gross profit	$	51,525		$	57,765	$	47,207		$	65,298	$	221,795
Net (loss) income	$	(11,762	)	$	12,495	$	(28,181	)	$	6,817	$	(20,631	)
Net (loss) income per share:
Basic	$	(0.33	)	$	0.34	$	(0.77	)	$	0.19	$	(0.57	)
Diluted	$	(0.33	)	$	0.33	$	(0.77	)	$	0.17	$	(0.57	)
Weighted-average common share outstanding:
Basic		35,995			36,441		36,509			36,765		36,428
Diluted		35,995			37,392		36,509			39,041		36,428

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Fiscal Year
2019
Total revenues	$	72,484	$	70,304	$	77,569	$	82,958	$	303,315
Gross profit	$	48,277	$	45,860	$	53,894	$	55,941	$	203,972
Net income	$	2,255	$	454	$	1,770	$	95,789	$	100,268
Net income per share:
Basic	$	0.06	$	0.01	$	0.05	$	2.63	$	2.76
Diluted	$	0.06	$	0.01	$	0.05	$	2.63	$	2.76
Weighted-average common share outstanding:
Basic		36,391		36,391		36,391		36,391		36,391
Diluted		36,391		36,391		36,391		36,391		36,391

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Basis of Presentation

Fiscal 2020

Fiscal 2019 and 2018

Principles of Consolidation

(a) Principles of Consolidation

Fiscal year 2020

Fiscal years 2019 and 2018

Use of Estimates

(b) Use of Estimates

Revenue Recognition

ASC 606 for fiscal years 2020 and 2019

See Note 5 for revenue recognition under ASC 606 for fiscal years 2020 and 2019.

ASC 605 for fiscal year 2018

Business Combinations

(d) Business Combinations

•

estimated fair values of intangible assets;

•

estimated fair values of legal performance commitments to customers, assumed from the acquiree under existing contractual obligations (classified as deferred revenue);

•

estimated income tax assets and liabilities assumed from the acquiree;

•

estimated fair value of pre-acquisition contingencies assumed from the acquiree; and

•

Cash and Cash Equivalents

(e) Cash and Cash Equivalents

Marketable Securities

(f) Marketable Securities

Goodwill

(g) Goodwill

Long-Lived Assets with Definite Lives

(h) Long-Lived Assets with Definite Lives

Accounts Receivable Allowances

(i) Accounts Receivable Allowances

	Allowance for Doubtful Accounts
Balance at October 1, 2017	$	832
Bad debt provisions		366
Write-offs, net of recoveries		(244	)
Balance at September 30, 2018		954
Bad debt provisions		401
Write-offs, net of recoveries		(490	)
Balance at September 30, 2019		865
Bad debt provisions		704
Write-offs, net of recoveries		(175	)
Balance at September 30, 2020	$	1,394

Research and Development

(j) Research and Development

Acquisition-related Costs

(k) Acquisition-related Costs

The components of acquisition-related costs are as follows (dollars in thousands):

	Year Ended September 30,
	2020		2019		2018
Transition and integration costs	$	—	$	563	$	1,616
Professional service fees		—		381		2,466
Total	$	—	$	944	$	4,082

Income Taxes

(l) Income Taxes

Fiscal year 2020

We account for income taxes using the assets and liabilities method, as prescribed by ASC No. 740, Income Taxes, or ASC 740.

Deferred Taxes

Valuation Allowance

Uncertain Tax Positions

Fiscal years 2019 and 2018

Accumulated Other Comprehensive Loss

(m) Accumulated Other Comprehensive Loss

	September 30,
	2020			2019
Foreign currency translation adjustments	$	5,264		$	(26,216	)
Net unrealized losses on post-retirement benefits		(1,552	)		(2,783	)
Net unrealized losses on available-for-sale securities		(1	)		—
Accumulated other comprehensive income (loss)	$	3,711		$	(28,999	)

No income tax provisions or benefits are recorded for foreign currency translation adjustments as the undistributed earnings in our foreign subsidiaries are expected to be indefinitely reinvested.

Concentration of Risk

(n) Concentration of Risk

Foreign Currency Translation

(o) Foreign Currency Translation

Net Parent Investment

(p) Net Parent Investment

Stock-Based Compensation

(q) Stock-Based Compensation

Fiscal year 2020

Fiscal years 2019 and 2018

Leases

(r) Leases

Convertible Debt

(s) Convertible Debt

Net (Loss) Income Per Share

(t) Net (Loss) Income Per Share

Recently Adopted Accounting Standards

(u) 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

Issued Accounting Standards Not Yet Adopted

(v) Issued Accounting Standards Not Yet Adopted

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

For the years ended September 30, 2020, 2019, and 2018, the activity related to the allowance for doubtful accounts was as follows (dollars in thousands):

	Allowance for Doubtful Accounts
Balance at October 1, 2017	$	832
Bad debt provisions		366
Write-offs, net of recoveries		(244	)
Balance at September 30, 2018		954
Bad debt provisions		401
Write-offs, net of recoveries		(490	)
Balance at September 30, 2019		865
Bad debt provisions		704
Write-offs, net of recoveries		(175	)
Balance at September 30, 2020	$	1,394

Components of Acquisition-related Costs

The components of acquisition-related costs are as follows (dollars in thousands):

	Year Ended September 30,
	2020		2019		2018
Transition and integration costs	$	—	$	563	$	1,616
Professional service fees		—		381		2,466
Total	$	—	$	944	$	4,082

Components of Accumulated Other Comprehensive Loss

	September 30,
	2020			2019
Foreign currency translation adjustments	$	5,264		$	(26,216	)
Net unrealized losses on post-retirement benefits		(1,552	)		(2,783	)
Net unrealized losses on available-for-sale securities		(1	)		—
Accumulated other comprehensive income (loss)	$	3,711		$	(28,999	)

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

Business Acquisitions (Tables) - Voicebox

12 Months Ended

Sep. 30, 2020

Schedule of Summary of Final Allocation of Purchase Consideration

A summary of the final allocation of the purchase consideration for the acquisition of Voicebox adjusted for measurement period adjustments is as follows (dollars in thousands):

	Voicebox
Purchase consideration:
Cash	$	79,802
Settlement of pre-existing relationship		12,751
Deferred acquisition payment		1,600
Total purchase consideration	$	94,153
Allocation of purchase consideration:
Accounts receivable	$	6,545
Prepaid expenses and other current assets		620
Property and equipment		4,008
Goodwill		50,508
Intangible assets		49,600
Deferred tax asset		124
Other assets		9
Total assets acquired		111,414
Current liabilities		(7,332	)
Deferred tax liability		(3,762	)
Other liabilities		(6,167	)
Total liabilities assumed		(17,261	)
Net assets acquired	$	94,153

Schedule of Identifiable Intangible Assets Acquired and Weighted Average Useful Lives

	Voicebox
	Amount		Weighted Average Life (Years)
Core and completed technology	$	12,700		4.0
Customer relationships		36,900		5.0
Total	$	49,600

Schedule of Results of Voicebox and Unaudited Pro-forma Information

The results of Voicebox for the post-acquisition period from April 2, 2018 to September 30, 2018 are as follows:

Total revenue		$	5,631
Net loss		$	(9,238	)

Revenue Recognition (Tables)

12 Months Ended

Sep. 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 fiscal years ended September 30, 2020, 2019 and 2018 (dollars in thousands):

	September 30,
	2020		2019		2018
	(ASC 606)		(ASC 606)		(ASC 605)
Revenues:
United States	$	128,381	$	131,877	$	109,564
Other Americas		16		1,044		1,492
Germany		100,674		78,258		64,417
Other Europe, Middle East and Africa		25,394		20,478		16,755
Japan		50,936		44,472		57,303
Other Asia-Pacific		24,245		27,186		27,453
Total net revenues ⁽¹⁾	$	329,646	$	303,315	$	276,984

(1)

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, 2018	$	6,470
Revenues recognized but not billed		42,661
Amounts reclassified to accounts receivable, net		(39,912	)
Balance as of September 30, 2019	$	9,219
Revenues recognized but not billed		52,682
Amounts reclassified to accounts receivable, net		(31,624	)
Balance as of September 30, 2020	$	30,277

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

	Deferred revenue
Balance as of October 1, 2018	$	335,252
Amounts billed but not recognized		117,201
Revenue recognized		(99,169	)
Balance as of September 30, 2019	$	353,284
Amounts billed but not recognized		96,126
Revenue recognized		(124,317	)
Balance as of September 30, 2020	$	325,093

Deferred revenue consisted of the following (dollars in thousands):

	September 30,
	2020		2019
Current Liabilities:
Unearned revenue	$	112,520	$	88,233
Total	$	112,520	$	88,233
Non-current Liabilities:
Unearned revenue		212,573		265,051
Total	$	212,573	$	265,051

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

148,936

189,538

49,010

387,484

Earnings Per Share (Tables)

12 Months Ended

Sep. 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:

	September 30,
in thousands, except per share data	2020			2019		2018
Numerator:
Net (loss) income - basic and diluted	$	(20,631	)	$	100,268	$	5,881

Denominator:
Weighted average common shares outstanding - basic		36,428			36,391		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		36,428			36,391		36,391

Net (loss) income per common share:
Basic	$	(0.57	)	$	2.76	$	0.16
Diluted	$	(0.57	)	$	2.76	$	0.16

Schedule of Potential Shares Considered Antidilutive

The following table sets forth potential shares that were considered anti-dilutive at September 30, 2020 and for the fiscal year ended September 30, 2019 and 2018:

	Fiscal Year Ended September 30,
in thousands	2020		2019		2018
Restricted stock awards		1,058		-		-
Contingently issuable stock awards		151		-		-
Conversion option of our Notes		1,538		-		-

Fair Value Measurements (Tables)

12 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

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

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

	September 30, 2020
	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents:
Money market funds	$	101,437	$	-	$	-	$	101,437
Marketable securities:
Commercial paper, $9,883 at cost	$	-		9,883	$	-		9,883
Corporate bonds, $1,780 at cost		-		1,779		-		1,779
Total assets	$	101,437	$	11,662	$	-	$	113,099

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Goodwill and Intangible Assets (Tables)

12 Months Ended

Sep. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill for the years ended September 30, 2020 and 2019 were as follows (dollars in thousands):

	Total
Balance as of October 1, 2018	$	1,119,946
Acquisitions		3,591
Effect of foreign currency translation		(4,208	)
Balance as of September 30, 2019		1,119,329
Effect of foreign currency translation		8,869
Balance as of September 30, 2020	$	1,128,198

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):

	September 30, 2020
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Remaining Life (Years)
Customer relationships	$	110,512	$	(75,915	)	$	34,597		3.0
Technology and patents		90,658		(79,639	)		11,019		1.6
Total	$	201,170	$	(155,554	)	$	45,616

	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

Schedule of Estimated Amortization

Estimated amortization for each of the five succeeding years and thereafter as of September 30, 2020, is as follows (dollars in thousands):

Year Ending September 30,	Cost of Revenues		Operating Expenses		Total
2021	$	7,517	$	12,648	$	20,165
2022		2,984		11,688		14,672
2023		414		6,080		6,494
2024		104		2,390		2,494
2025		—		1,791		1,791
Thereafter		—		—		—
Total	$	11,019	$	34,597	$	45,616

Accounts Receivable, Net (Tables)

12 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Schedule of Accounts Receivable, Net

Accounts receivable, net consisted of the following (dollars in thousands):

	September 30,
	2020			2019
Trade accounts receivable	$	51,337		$	65,532
Unbilled accounts receivable under long-term contracts		—			1,120
Gross accounts receivable		51,337			66,652
Less: allowance for doubtful accounts		(1,394	)		(865	)
Total	$	49,943		$	65,787

Property and Equipment, Net (Tables)

12 Months Ended

Sep. 30, 2020

Property Plant And Equipment [Abstract]

Components of Property and Equipment,Net

Property and equipment, net consisted of the following (dollars in thousands):

	Useful Life	September 30,
	(In years)	2020			2019
Machinery and equipment	3-5	$	7,746		$	8,424
Computers, software and equipment	3-5		42,705			32,894
Leasehold improvements	2-15		10,513			9,147
Furniture and fixtures	5-7		4,691			3,819
Finance leases			2,710			—
Construction in progress			4,547			1,043
Subtotal			72,912			55,327
Less: accumulated depreciation			(43,383	)		(35,214	)
Total		$	29,529		$	20,113

Components of Property and Equipment, Net by Geography

The following table presents our property and equipment, net by geography at September 30, 2020 and 2019 (dollars in thousands):

	September 30,
	2020		2019
Long-lived assets:
United States	$	19,898	$	10,333
Canada		3,464		3,889
Germany		2,573		2,390
Other countries		3,594		3,501
Total long-lived assets	$	29,529	$	20,113

Deferred Revenue (Tables)

12 Months Ended

Sep. 30, 2020

Deferred Revenue [Abstract]

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, 2018	$	6,470
Revenues recognized but not billed		42,661
Amounts reclassified to accounts receivable, net		(39,912	)
Balance as of September 30, 2019	$	9,219
Revenues recognized but not billed		52,682
Amounts reclassified to accounts receivable, net		(31,624	)
Balance as of September 30, 2020	$	30,277

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

	Deferred revenue
Balance as of October 1, 2018	$	335,252
Amounts billed but not recognized		117,201
Revenue recognized		(99,169	)
Balance as of September 30, 2019	$	353,284
Amounts billed but not recognized		96,126
Revenue recognized		(124,317	)
Balance as of September 30, 2020	$	325,093

Deferred revenue consisted of the following (dollars in thousands):

	September 30,
	2020		2019
Current Liabilities:
Unearned revenue	$	112,520	$	88,233
Total	$	112,520	$	88,233
Non-current Liabilities:
Unearned revenue		212,573		265,051
Total	$	212,573	$	265,051

Accrued Expenses and Other Current Liabilities (Tables)

12 Months Ended

Sep. 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):

	September 30,
	2020		2019
Compensation	$	37,960	$	13,031
Cost of revenue related liabilities		3,683		1,668
Sales and other taxes payable		14,688		219
Professional fees		2,458		3,863
Facilities related liabilities		2,041		273
Other		7,027		5,140
Total	$	67,857	$	24,194

Asset Retirement Obligations (Tables)

12 Months Ended

Sep. 30, 2020

Asset Retirement Obligation Disclosure [Abstract]

Schedule of Activity Related to Asset Retirement Obligations

Activity related to asset retirement obligations was as follows (dollars in thousands):

	September 30,
	2020			2019			2018
Balance at the beginning of period	$	1,051		$	1,155		$	784
Additions		205			5			398
Remeasurement/translation		72			(51	)		(8	)
Settlements/payments		(87	)		(58	)		(19	)
Balance at the end of the period	$	1,241		$	1,051		$	1,155

Restructuring and Other Costs, Net (Tables)

12 Months Ended

Sep. 30, 2020

Restructuring And Related Activities [Abstract]

Schedule of Accrual Activity Relating to Restructuring Charges

	Personnel			Facilities			Separation			Total
Balance at October 1, 2017	$	108		$	114		$	—		$	222
Restructuring and other costs, net		4,130			20			8,713			12,863
Cash payments		(1,969	)		(128	)		(7,936	)		(10,033	)
Balance at September 30, 2018		2,269			6			777			3,052
Restructuring and other costs, net		130			1,704			22,570			24,404
Cash payments		(1,910	)		(1,684	)		(19,471	)		(23,065	)
Balance at September 30, 2019		489			26			3,876			4,391
Restructuring and other costs, net		3,694			2,816			11,727			18,237
Non-cash adjustment		—			(1,031	)		—			(1,031	)
Cash payments		(3,420	)		(26	)		(13,675	)		(17,121	)
Foreign exchange impact on ending balance		1			(40	)		—			(39	)
Balance at September 30, 2020	$	764		$	1,745		$	1,928		$	4,437

Leases (Tables)

12 Months Ended

Sep. 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 September 30, 2020:

	September 30, 2020
Weighted-average remaining lease term (in months):
Operating leases		55.9
Finance leases		55.8
Weighted-average discount rate:
Operating leases		7.4	%
Finance leases		4.4	%

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 September 30, 2020 (dollars in thousands):

	Classification	September 30, 2020
Assets
Operating lease assets	Operating lease right-of-use assets	$	20,096
Finance lease assets	Property and equipment, net		1,414
Total lease assets		$	21,510

Liabilities
Current
Operating	Short-term operating lease liabilities	$	5,700
Finance	Accrued expenses and other current liabilities		271
Noncurrent
Operating	Long-term operating lease liabilities	$	17,821
Finance	Other liabilities		1,088
Total lease liability		$	24,880

Summary of Lease Expense

The following table presents lease expense for the fiscal year ended September 30, 2020 (dollars in thousands):

	Fiscal year ended September 30, 2020
Finance lease costs:
Amortization of right-of-use asset	$	255
Interest on lease liability		22
Operating lease cost		8,245
Variable lease cost		1,060
Sublease income		(206	)
Total lease cost	$	9,376

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

Year Ending September 30,	Operating Leases			Financing Leases			Total
2021	$	7,200		$	319		$	7,519
2022		6,116			309			6,425
2023		4,648			309			4,957
2024		4,249			309			4,558
2025		2,583			254			2,837
Thereafter		3,097			10			3,107
Total future minimum lease payments	$	27,893		$	1,510		$	29,403
Less effects of discounting		(4,372	)		(151	)		(4,523	)
Total lease liabilities	$	23,521		$	1,359		$	24,880
Reported as of September 30, 2020
Short-term lease liabilities	$	5,700		$	271		$	5,971
Long-term lease liabilities		17,821			1,088			18,909
Total lease liabilities	$	23,521		$	1,359		$	24,880

Summary of Future Minimum Lease Commitments Under Non-cancelable Leases

In accordance with the transition disclosure requirements under ASC 840, 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

Stockholder's Equity (Tables)

12 Months Ended

Sep. 30, 2020

Equity [Abstract]

Schedule of Non-vested Restricted Stock Units

Restricted Units are not included in issued and outstanding common stock until the shares are vested and released. The table below summarizes activity related to Restricted Stock Units:

	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		2,758,634			778,968			3,537,602		$	18.87
Vested		(642,404	)		—			(642,404	)	$	20.06
Forfeited		(73,312	)		(7,581	)		(80,893	)	$	17.54
Non-vested at September 30, 2020		2,042,918			771,387			2,814,305		$	18.63		0.98	$	137,529
Expected to vest								2,814,305		$	18.63		0.98	$	137,529

Weighted-Average Key Assumptions and Fair Value Results for Shares Issued under ESPP

	Year Ended September 30,
	2020
Expected dividend yield		0.00	%
Risk-free interest rate		1.56	%
Expected volatility		58.18	%
Expected life (in years)		0.50
Weighted-average fair value of shares issued (per share)	$	8.93

Quantities and Average Prices of Shares Issued Under the ESPP

The following table sets forth the quantities and average prices of shares issued under the ESPP for the fiscal year ended September 30, 2020:

	Year Ended September 30,
	2020
Shares issued under the ESPP		63,503
Average price of shares issued		20.66

Schedule of Stock-based Compensation

The amounts included in the Consolidated and Combined Statements of Operations related to stock-based compensation are as follows (dollars in thousands):

	Year Ended September 30,
	2020		2019		2018
Cost of licensing	$	—	$	21	$	12
Cost of connected services		1,382		827		495
Cost of professional services		4,191		1,048		1,569
Research and development		13,944		15,946		11,112
Sales and marketing		9,580		6,137		3,985
General and administrative		18,188		5,703		4,870
Total	$	47,285	$	29,682	$	22,043

Relationship with Parent and Related Entities (Tables)

12 Months Ended

Sep. 30, 2020

Relationship With Parent And Related Entities Disclosure [Abstract]

Summary of Components of General Allocated Corporate Expenses

The following table summarizes the components of general allocated corporate expenses for the years ended September 30, 2019 and 2018 (dollars in thousands):

	Year Ended September 30,
	2019		2018
Facility	$	6,299	$	6,125
Depreciation		1,637		1,467
Amortization		22		1,150
Facility and other usage charges		7,958		8,742
Information services		8,633		7,947
Corporate and administrative services		22,166		18,414
Total	$	38,757	$	35,103

Summary of Components Net Transfers to Parent

The following table summarizes the components of the net transfers to Parent for the years ended September 30, 2020, 2019, and 2018 (dollars in thousands):

	Year Ended September 30,
	2020			2019			2018
Net transactions with Parent	$	(6,098	)	$	(83,554	)	$	(28,947	)
Distribution to Parent		(152,978	)		—			—
Net reclassification of net parent investment in Cerence		(938,051	)		—			—
Stock-based compensation		—			29,682			22,043
Accrued bonus		—			9,478			(2,859	)
Corporate depreciation and amortization		—			1,659			2,617
Fixed asset reclasses from the Parent		—			10,088			259
Voicebox Purchase Accounting Adjustment		—			3,591			—
Intangible asset reclasses from the Parent		—			1,665			—
Net transfer to Parent	$	(1,097,127	)	$	(27,391	)	$	(6,887	)

Income Taxes (Tables)

12 Months Ended

Sep. 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):

	Year Ended September 30,
	2020			2019			2018
Domestic	$	(28,846	)	$	(22,904	)	$	16,371
Foreign		2,706			34,088			20,427
(Loss) income before income taxes	$	(26,140	)	$	11,184		$	36,798

Components of (Benefit) Provision for Income Taxes

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

	Year Ended September 30,
	2020			2019			2018
Current:
Federal	$	—		$	5,352		$	11,413
State		—			1,059			2,500
Foreign		5,845			5,728			4,531
Total current	$	5,845		$	12,139		$	18,444
Deferred:
Federal		(1,871	)		(6,210	)		14,393
State		(239	)		(1,593	)		(1,284	)
Foreign		(9,244	)		(93,420	)		(636	)
Total deferred		(11,354	)		(101,223	)		12,473
(Benefit from) provision for income taxes	$	(5,509	)	$	(89,084	)	$	30,917
Effective income tax rate		21.1	%		(796.5	)%		84.0	%

Schedule of (Benefit from) Provision for Income Taxes Differed from the Amount Computed by Applying Federal Statutory Rate

The (benefit from) provision for income taxes differed from the amount computed by applying the federal statutory rate to our (loss) income before income taxes as follows (dollars in thousands):

	Year Ended September 30,
	2020			2019			2018
Federal tax provision at statutory rate	$	(5,489	)	$	2,270		$	9,026
State tax, net of federal benefit		(239	)		(490	)		917
Foreign tax rate and other foreign related tax items		(2,463	)		(4,764	)		(104	)
Uncertain tax positions		(887	)		57,631			(95	)
Stock-based compensation		3,456			—			—
Global intangible low-taxed income		336			3,923			—
Foreign-derived intangible income		—			(547	)		—
Capital losses		—			8,187			—
Change in U.S. valuation allowance		—			(8,187	)		—
Non-deductible expenditures		2,728			2,707			514
R&D credits		(2,951	)		(1,675	)		(1,313	)
Domestic Production Activities Deduction		—			—			(1,143	)
TCJA impact		—			—			23,115
Intangible property transfers		—			(148,139	)		—
(Benefit from) provision for income taxes	$	(5,509	)	$	(89,084	)	$	30,917

Schedule of Deferred Tax Assets (Liabilities)

Deferred tax assets (liabilities) consist of the following as of September 30, 2020 and 2019 (dollars in thousands):

	September 30,
	2020			2019
Deferred tax assets:
Net operating loss carryforwards	$	17,582		$	6,567
Capital loss carryforwards		9,557			8,187
Federal credit carryforwards		3,665			9,367
Accrued expenses and other reserves		5,086			2,830
Difference in timing of revenue related items		51,483			50,677
Acquired intangibles		94,389			90,635
Interest limitations carryforward		9,399			—
Operating lease liabilities		6,568			—
Depreciation		1,682			—
Deferred compensation		1,465			—
Pension obligation		2,522			1,969
Other		1,726			—
Total deferred tax assets	$	205,124		$	170,232
Valuation allowance for deferred tax assets		(13,491	)		(11,064	)
Deferred tax assets	$	191,633		$	159,168
Deferred tax liabilities:
Depreciation	$	(3,381	)	$	(1,360	)
Acquired intangibles		(21,255	)		(7,179	)
Convertible debt		(4,406	)		—
Operating lease right-of-use assets		(5,677	)		—
Other		(2,457	)		—
Total deferred tax liabilities		(37,176	)		(8,539	)
Net deferred tax assets	$	154,457		$	150,629

Aggregate Changes in Balance of Gross Unrecognized Tax Benefits

The aggregate changes in the balance of our gross unrecognized tax benefits were as follows (dollars in thousands):

	September 30,
	2020			2019			2018
Balance at the beginning of the year	$	63,369		$	5,738		$	5,833
Beginning balance adjustment		3,392			—			—
Increases related to tax positions taken from prior periods		5,158			1,312			103
Decreases related to tax positions taken from prior periods		—			(120	)		(198	)
Increases related to tax positions taken during current period		328			56,439			—
Decreases for tax settlements and lapse in statutes		(1,215	)		—			—
Balance at the end of the year	$	71,032		$	63,369		$	5,738

Long-Term Debt (Tables)

12 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of Long-Term Debt

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

	September 30, 2020			September 30, 2019
3.00% Convertible Senior Notes due 2025, net of unamortized discount of $18,546 and deferred issuance costs of $4,664 at September 30, 2020. Effective interest rate 6.29%.	$	151,791		$	—
Senior Credit Facilities, net of unamortized discount of $1,820 and deferred issuance costs of $287 at September 30, 2020. Effective interest rate 4.02%.		121,331			—
Total debt	$	273,122		$	—
Less: current portion		(6,250	)		—
Total long-term debt	$	266,872		$	—

Summary of Maturities of Borrowing Obligations

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

Fiscal Year	Convertible Senior Notes			Senior Facilities			Total
2021	$	—		$	6,250		$	6,250
2022		—			7,813			7,813
2023		—			12,500			12,500
2024		—			96,875			96,875
2025		175,000			—			175,000
Thereafter		—			—			—
Total before unamortized discount and issuance costs and current portion	$	175,000		$	123,438		$	298,438
Less: unamortized discount and issuance costs		(23,209	)		(2,107	)		(25,316	)
Less: current portion of long-term debt		—			(6,250	)		(6,250	)
Total long-term debt	$	151,791		$	115,081		$	266,872

Schedule of Interest Expense Related to Notes

The interest expense recognized related to the Notes for the fiscal year ended September 30, 2020 was as follows (dollars in thousands):

	Year Ended September 30, 2020
Contractual interest expense	$	1,753
Amortization of debt discount		1,131
Amortization of issuance costs		285
Total interest expense related to the Notes	$	3,169

Quarterly Data (Unaudited) (Tables)

12 Months Ended

Sep. 30, 2020

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Information

	First Quarter			Second Quarter		Third Quarter			Fourth Quarter		Fiscal Year
2020
Total revenues	$	77,459		$	86,495	$	74,810		$	90,882	$	329,646
Gross profit	$	51,525		$	57,765	$	47,207		$	65,298	$	221,795
Net (loss) income	$	(11,762	)	$	12,495	$	(28,181	)	$	6,817	$	(20,631	)
Net (loss) income per share:
Basic	$	(0.33	)	$	0.34	$	(0.77	)	$	0.19	$	(0.57	)
Diluted	$	(0.33	)	$	0.33	$	(0.77	)	$	0.17	$	(0.57	)
Weighted-average common share outstanding:
Basic		35,995			36,441		36,509			36,765		36,428
Diluted		35,995			37,392		36,509			39,041		36,428

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Fiscal Year
2019
Total revenues	$	72,484	$	70,304	$	77,569	$	82,958	$	303,315
Gross profit	$	48,277	$	45,860	$	53,894	$	55,941	$	203,972
Net income	$	2,255	$	454	$	1,770	$	95,789	$	100,268
Net income per share:
Basic	$	0.06	$	0.01	$	0.05	$	2.63	$	2.76
Diluted	$	0.06	$	0.01	$	0.05	$	2.63	$	2.76
Weighted-average common share outstanding:
Basic		36,391		36,391		36,391		36,391		36,391
Diluted		36,391		36,391		36,391		36,391		36,391

Summary of Significant Accounting Policies - Additional Information (Details)	6 Months Ended	12 Months Ended
	Mar. 31, 2020 USD ($)	Sep. 30, 2020 USD ($) Segment Unit Customer	Sep. 30, 2019 USD ($) Customer	Sep. 30, 2018 USD ($) Customer
Summary Of Significant Accounting Policies [Line Items]
Goodwill impairment	$ 0	$ 0	$ 0	$ 0
Number of operating segment \| Segment		1
Number of reporting unit \| Unit		1
Impairment of long-lived asset group, disposition			0	0
Impairment of long-lived asset group	$ 0	$ 0
Undistributed earnings in our foreign subsidiaries are expected		0	0
Foreign currency transaction gain (loss)		$ 2,400,000	$ (300,000)	$ 100,000
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.
Deferred rent reclassified as right of use assets		$ 2,200,000
ASU 2016-02
Summary Of Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, adopted		true
Change in accounting principle, accounting standards update, adoption date		Oct. 01, 2019
Change in accounting principle, accounting standards update, immaterial effect		true
ASU 2018-15
Summary Of Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, immaterial effect		true
Change in accounting principle, accounting standards update, early adoption		true
3.00% Convertible Senior Notes Due 2025
Summary Of Significant Accounting Policies [Line Items]
Debt instrument conversion ratio		26.7271
Conversion of notes to common stock per principal amount		$ 1,000
Minimum
Summary Of Significant Accounting Policies [Line Items]
Operating lease remaining term		1 year
Maximum
Summary Of Significant Accounting Policies [Line Items]
Operating lease remaining term		8 years
Accounts Receivable, Net \| Credit Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Number of major customers \| Customer		2	2
Revenues \| Product Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Number of major customers \| Customer		1	2	1
Customer One \| Accounts Receivable, Net \| Credit Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage		15.00%	12.90%
Customer One \| Revenues \| Product Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage		23.30%	20.70%	18.40%
Customer Two \| Accounts Receivable, Net \| Credit Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage		11.10%	10.00%
Customer Two \| Revenues \| Product Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage			12.30%

Summary of Significant Accounting Policies - Activity Related to Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Accounting Policies [Abstract]
Beginning Balance	$ 865	$ 954	$ 832
Provision for doubtful accounts	704	401	366
Write-offs, net of recoveries	(175)	(490)	(244)
Ending Balance	$ 1,394	$ 865	$ 954

Summary of Significant Accounting Policies - Components of Acquisition-Related Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Accounting Policies [Abstract]
Transition and integration costs	$ 563	$ 1,616
Professional service fees	381	2,466
Total	$ 944	$ 4,082

Summary of Significant Accounting Policies - Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019
Accounting Policies [Abstract]
Foreign currency translation adjustments	$ 5,264	$ (26,216)
Net unrealized losses on post-retirement benefits	(1,552)	(2,783)
Net unrealized losses on available-for-sale securities	(1)
Accumulated other comprehensive income (loss)	$ 3,711	$ (28,999)

- Definition

Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.

+ References + Details

Summary of Significant Accounting Policies - Summary of Adopting ASC 842 on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Oct. 01, 2019	Sep. 30, 2019
ASSETS
Operating lease right of use assets	$ 20,096
Current liabilities:
Short-term operating lease liabilities	5,700
Accrued expenses and other current liabilities	67,857		$ 24,194
Long-term operating lease liabilities	17,821
Other liabilities	$ 31,649		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)

Business Acquisitions - Additional Information (Details) - USD ($) $ in Thousands		12 Months Ended
	Apr. 02, 2018	Sep. 30, 2018
Business Acquisition [Line Items]
Total aggregate consideration, net of cash acquired		$ 79,802
Voicebox
Business Acquisition [Line Items]
Acquisition date	Apr. 02, 2018
Total aggregate consideration	$ 94,153
Total aggregate consideration, net of cash acquired	79,800
Total aggregate consideration, cash acquired	6,700
Write-off deferred revenues	12,751
Deferred acquisition payment	1,600
Acquisition costs	$ 4,100

Business Acquisitions - Schedule of Summary of Final Allocation of Purchase Consideration (Details) - USD ($) $ in Thousands	Apr. 02, 2018	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Allocation of purchase consideration:
Goodwill		$ 1,128,198	$ 1,119,329	$ 1,119,946
Voicebox
Purchase consideration:
Cash	$ 79,802
Settlement of pre-existing relationship	12,751
Deferred acquisition payment	1,600
Total purchase consideration	94,153
Allocation of purchase consideration:
Accounts receivable	6,545
Prepaid expenses and other current assets	620
Property and equipment	4,008
Goodwill	50,508
Intangible assets	49,600
Deferred tax asset	124
Other assets	9
Total assets acquired	111,414
Current liabilities	(7,332)
Deferred tax liability	(3,762)
Other liabilities	(6,167)
Total liabilities assumed	(17,261)
Net assets acquired	$ 94,153

Business Acquisitions - Schedule of Identifiable Intangible Assets Acquired and Weighted Average Useful Lives (Details) - Voicebox $ in Thousands	Apr. 02, 2018 USD ($)
Business Acquisition [Line Items]
Intangible assets acquired	$ 49,600
Core and Completed Technology
Business Acquisition [Line Items]
Intangible assets acquired	$ 12,700
Weighted Average Life	4 years
Customer Relationships
Business Acquisition [Line Items]
Intangible assets acquired	$ 36,900
Weighted Average Life	5 years

Business Acquisitions - Schedule of Results of Voicebox for Post-acquisition Period (Details) - Voicebox	6 Months Ended
	Sep. 30, 2018 USD ($)
Business Acquisition [Line Items]
Total revenue	$ 5,631
Net loss	$ (9,238)

Revenue Recognition - Additional Information (Details)	3 Months Ended								12 Months Ended
Revenue Recognition - Additional Information (Details)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2020 USD ($) Customer	Sep. 30, 2019 USD ($) Customer	Sep. 30, 2018 USD ($) Customer
Disaggregation Of Revenue [Line Items]
Total revenues	$ 90,882,000	$ 74,810,000	$ 86,495,000	$ 77,459,000	$ 82,958,000	$ 77,569,000	$ 70,304,000	$ 72,484,000	$ 329,646,000	$ 303,315,000	$ 276,984,000
Contract acquisition costs									5,600,000	2,700,000
Contract acquisition cost, amortization									1,500,000	700,000
Contract acquisition cost, impairment									0
Capitalized contract cost, net	45,400,000				41,600,000				45,400,000	41,600,000
Capitalized contract cost, amortization									12,000,000	10,600,000
Capitalized contract cost, impairment									0
Current contract assets	30,277,000				9,219,000				30,277,000	9,219,000	6,470,000
Deferred revenue	$ 325,093,000				$ 353,284,000				325,093,000	353,284,000	335,252,000
Customer One
Disaggregation Of Revenue [Line Items]
Total revenues									76,900,000	62,700,000	51,000,000
Customer Two
Disaggregation Of Revenue [Line Items]
Total revenues										37,400,000
United States
Disaggregation Of Revenue [Line Items]
Total revenues									128,381,000	131,877,000	109,564,000
Germany
Disaggregation Of Revenue [Line Items]
Total revenues									100,674,000	78,258,000	64,417,000
Japan
Disaggregation Of Revenue [Line Items]
Total revenues									$ 50,936,000	$ 44,472,000	$ 57,303,000
Revenues \| Customer Concentration Risk
Disaggregation Of Revenue [Line Items]
Number of customers accounted for revenues \| Customer									1	2	1
Revenues \| Customer Concentration Risk \| Customer One
Disaggregation Of Revenue [Line Items]
Concentration risk, percentage									23.30%	20.70%	18.40%
Revenues \| Customer Concentration Risk \| Customer Two
Disaggregation Of Revenue [Line Items]
Concentration risk, percentage										12.30%
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]
Concentration risk, percentage									10.00%	10.00%	10.00%
Minimum \| Revenues \| Germany \| Geographic Concentration Risk
Disaggregation Of Revenue [Line Items]
Concentration risk, percentage									10.00%	10.00%	10.00%
Minimum \| Revenues \| Japan \| Geographic Concentration Risk
Disaggregation Of Revenue [Line Items]
Concentration risk, percentage									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								12 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Revenues:
Total net revenues	$ 90,882	$ 74,810	$ 86,495	$ 77,459	$ 82,958	$ 77,569	$ 70,304	$ 72,484	$ 329,646	$ 303,315	$ 276,984
United States
Revenues:
Total net revenues									128,381	131,877	109,564
Other Americas
Revenues:
Total net revenues									16	1,044	1,492
Germany
Revenues:
Total net revenues									100,674	78,258	64,417
Other Europe Middle East And Africa
Revenues:
Total net revenues									25,394	20,478	16,755
Japan
Revenues:
Total net revenues									50,936	44,472	57,303
Other Asia Pacific
Revenues:
Total net revenues									$ 24,245	$ 27,186	$ 27,453

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Revenue Recognition - Summary of Significant Changes in Contract Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Revenue From Contract With Customer [Abstract]
Balance	$ 9,219	$ 6,470
Revenues recognized but not billed	52,682	42,661
Amounts reclassified to accounts receivable, net	(31,624)	(39,912)
Balance	$ 30,277	$ 9,219

Revenue Recognition - Summary of Significant Changes in Deferred Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Revenue From Contract With Customer [Abstract]
Balance as of October 1, 2018	$ 353,284	$ 335,252
Amounts billed but not recognized	96,126	117,201
Revenue recognized	(124,317)	(99,169)
Balance as of September 30, 2019	$ 325,093	$ 353,284

Revenue Recognition - Summary of Estimated Revenue Expected to be Recognized in Future Related to Performance Obligations Unsatisfied or Partially Unsatisfied (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Remaining Performance Obligations
Total revenue	$ 387,484
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-10-01
Remaining Performance Obligations
Total revenue	$ 148,936
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	$ 189,538
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	$ 49,010
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	Sep. 30, 2020 USD ($)
Revenue Performance Obligation [Abstract]
Total revenue	$ 387,484

Earnings Per Share - Additional Information (Details) shares in Thousands	12 Months Ended
	Sep. 30, 2020 USD ($) shares
Earnings Per Share [Line Items]
Dilutive shares \| $	$ 0
Common stock, shares issued \| shares	36,842
Spin-Off
Earnings Per Share [Line Items]
Common stock, shares issued \| shares	36,400
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								12 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Numerator:
Net (loss) income - basic and diluted	$ 6,817	$ (28,181)	$ 12,495	$ (11,762)	$ 95,789	$ 1,770	$ 454	$ 2,255	$ (20,631)	$ 100,268	$ 5,881
Denominator:
Weighted average common shares outstanding - basic	36,765	36,509	36,441	35,995	36,391	36,391	36,391	36,391	36,428	36,391	36,391
Weighted average common shares outstanding - diluted	39,041	36,509	37,392	35,995	36,391	36,391	36,391	36,391	36,428	36,391	36,391
Net (loss) income per common share:
Basic	$ 0.19	$ (0.77)	$ 0.34	$ (0.33)	$ 2.63	$ 0.05	$ 0.01	$ 0.06	$ (0.57)	$ 2.76	$ 0.16
Diluted	$ 0.17	$ (0.77)	$ 0.33	$ (0.33)	$ 2.63	$ 0.05	$ 0.01	$ 0.06	$ (0.57)	$ 2.76	$ 0.16

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22583-107794

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121326447&loc=d3e1448-109256

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22595-107794

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=121326447&loc=d3e1337-109256

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
-Paragraph 52
-URI http://asc.fasb.org/extlink&oid=120380238&loc=d3e4984-109258

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(23))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=120380238&loc=d3e3842-109258

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 7
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22644-107794

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(25))
-URI http://asc.fasb.org/extlink&oid=120395209&loc=SL114868664-224227

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=121326447&loc=d3e1252-109256

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121326447&loc=SL5780133-109256

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(27))
-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

+ 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
-Paragraph 52
-URI http://asc.fasb.org/extlink&oid=120380238&loc=d3e4984-109258

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 7
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22644-107794

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=120380238&loc=d3e3842-109258

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=121326447&loc=d3e1252-109256

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22595-107794

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22583-107794

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121326447&loc=SL5780133-109256

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(27))
-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(23))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=121326447&loc=d3e1337-109256

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(25))
-URI http://asc.fasb.org/extlink&oid=120395209&loc=SL114868664-224227

+ 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	12 Months Ended
	Sep. 30, 2020 shares
Restricted Stock Awards
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares	1,058
Contingently Issuable Stock Awards
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares	151
Conversion Option of our Notes
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares	1,538

Fair Value Measurements - Summary of Financial Assets that are Measured at Fair Value and Indicates the Fair Value Hierarchy of the Valuation Inputs (Details) - USD ($)	Sep. 30, 2020	Sep. 30, 2019
Assets:
Cash and cash equivalents		$ 0
Marketable securities		$ 0
Total assets	$ 113,099,000
Money Market Funds
Assets:
Cash and cash equivalents	101,437,000
Commercial Paper
Assets:
Marketable securities	9,883,000
Corporate Bonds
Assets:
Marketable securities	1,779,000
Level 1
Assets:
Total assets	101,437,000
Level 1 \| Money Market Funds
Assets:
Cash and cash equivalents	101,437,000
Level 2
Assets:
Total assets	11,662,000
Level 2 \| Commercial Paper
Assets:
Marketable securities	9,883,000
Level 2 \| Corporate Bonds
Assets:
Marketable securities	$ 1,779,000

Fair Value Measurements - Summary of Financial Assets that are Measured at Fair Value and Indicates the Fair Value Hierarchy of the Valuation Inputs (Parenthetical) (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Commercial Paper
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities, cost	$ 9,883
Corporate Bonds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable securities, cost	$ 1,780

Fair Value Measurements - Additional Information (Details) - USD ($)	Sep. 30, 2020	Sep. 30, 2019
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash and cash equivalents		$ 0
Marketable securities		$ 0
Estimated Fair Value \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value of notes	$ 271,000,000

Goodwill and Intangible Assets - Goodwill - Additional Information (Details) - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Goodwill [Line Items]
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	$ 0	$ 0
Technology-Based Intangible Assets \| Cost of Revenues
Goodwill [Line Items]
Amortization expense		8,300,000	8,500,000	6,600,000
Patent \| Cost of Revenues
Goodwill [Line Items]
Amortization expense			22,000,000	1,200,000
Customer Relationships \| Operating Expenses
Goodwill [Line Items]
Amortization expense		$ 12,600,000	$ 12,500,000	$ 8,800,000
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 Intangible Assets - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Goodwill And Intangible Assets Disclosure [Abstract]
Balance	$ 1,119,329	$ 1,119,946
Acquisitions		3,591
Effect of foreign currency translation	8,869	(4,208)
Balance	$ 1,128,198	$ 1,119,329

Goodwill and Intangible Assets - Summary of Gross Carrying Amounts and Accumulated Amortization of Intangible Assets by Major Class (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 201,170	$ 221,540
Accumulated Amortization	(155,554)	(155,979)
Net Carrying Amount	45,616	65,561
Customer Relationships
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	110,512	104,783
Accumulated Amortization	(75,915)	(58,568)
Net Carrying Amount	$ 34,597	$ 46,215
Weighted Average Remaining Life (Years)	3 years	4 years
Technology and Patents
Finite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 90,658	$ 116,757
Accumulated Amortization	(79,639)	(97,411)
Net Carrying Amount	$ 11,019	$ 19,346
Weighted Average Remaining Life (Years)	1 year 7 months 6 days	2 years 6 months

Goodwill and Intangible Assets - Schedule of Estimated Amortization (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019
Finite Lived Intangible Assets [Line Items]
2021	$ 20,165
2022	14,672
2023	6,494
2024	2,494
2025	1,791
Net Carrying Amount	45,616	$ 65,561
Cost of Revenues
Finite Lived Intangible Assets [Line Items]
2021	7,517
2022	2,984
2023	414
2024	104
Net Carrying Amount	11,019
Operating Expenses
Finite Lived Intangible Assets [Line Items]
2021	12,648
2022	11,688
2023	6,080
2024	2,390
2025	1,791
Net Carrying Amount	$ 34,597

Accounts Receivable, Net - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019
Receivables [Abstract]
Trade accounts receivable	$ 51,337	$ 65,532
Unbilled accounts receivable under long-term contracts		1,120
Gross accounts receivable	51,337	66,652
Less: allowance for doubtful accounts	(1,394)	(865)
Total	$ 49,943	$ 65,787

Property and Equipment Net - Components of Property and Equipment,Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Property Plant And Equipment [Line Items]
Finance leases	$ 2,710
Subtotal	72,912	$ 55,327
Less: accumulated depreciation	(43,383)	(35,214)
Total	29,529	20,113
Machinery and equipment
Property Plant And Equipment [Line Items]
Subtotal	$ 7,746	8,424
Machinery and equipment \| Minimum
Property Plant And Equipment [Line Items]
Property and Equipment Useful Life	3 years
Machinery and equipment \| Maximum
Property Plant And Equipment [Line Items]
Property and Equipment Useful Life	5 years
Computers, software and equipment
Property Plant And Equipment [Line Items]
Subtotal	$ 42,705	32,894
Computers, software and equipment \| Minimum
Property Plant And Equipment [Line Items]
Property and Equipment Useful Life	3 years
Computers, software and equipment \| Maximum
Property Plant And Equipment [Line Items]
Property and Equipment Useful Life	5 years
Leasehold improvements
Property Plant And Equipment [Line Items]
Subtotal	$ 10,513	9,147
Leasehold improvements \| Minimum
Property Plant And Equipment [Line Items]
Property and Equipment Useful Life	2 years
Leasehold improvements \| Maximum
Property Plant And Equipment [Line Items]
Property and Equipment Useful Life	15 years
Furniture and fixtures
Property Plant And Equipment [Line Items]
Subtotal	$ 4,691	3,819
Furniture and fixtures \| Minimum
Property Plant And Equipment [Line Items]
Property and Equipment Useful Life	5 years
Furniture and fixtures \| Maximum
Property Plant And Equipment [Line Items]
Property and Equipment Useful Life	7 years
Construction in progress
Property Plant And Equipment [Line Items]
Subtotal	$ 4,547	$ 1,043

Property and Equipment Net - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Property Plant And Equipment [Abstract]
Net Book Value of Capitalized Internal-Use Software	$ 6.9	$ 2.2
Depreciation expense	9.2	6.2	$ 7.7
Amortization expense	$ 3.1	$ 2.7	$ 4.2

Property and Equipment Net - Components of Property and Equipment, Net by Geography (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019
Property Plant And Equipment [Line Items]
Total long-lived assets	$ 29,529	$ 20,113
United States
Property Plant And Equipment [Line Items]
Total long-lived assets	19,898	10,333
Canada
Property Plant And Equipment [Line Items]
Total long-lived assets	3,464	3,889
Germany
Property Plant And Equipment [Line Items]
Total long-lived assets	2,573	2,390
Other countries
Property Plant And Equipment [Line Items]
Total long-lived assets	$ 3,594	$ 3,501

Deferred Revenue - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019
Current Liabilities:
Unearned revenue	$ 112,520	$ 88,233
Total	112,520	88,233
Non-current Liabilities:
Unearned revenue	212,573	265,051
Total	$ 212,573	$ 265,051

Accrued Expenses and Other Current Liabilities - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019
Accrued Liabilities And Other Liabilities [Abstract]
Compensation	$ 37,960	$ 13,031
Cost of revenue related liabilities	3,683	1,668
Sales and other taxes payable	14,688	219
Professional fees	2,458	3,863
Facilities related liabilities	2,041	273
Other	7,027	5,140
Total	$ 67,857	$ 24,194

Asset Retirement Obligations - Schedule of Activity Related to Asset Retirement Obligations (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Asset Retirement Obligation Disclosure [Abstract]
Balance at the beginning of period	$ 1,051	$ 1,155	$ 784
Additions	205	5	398
Remeasurement/translation	72	(51)	(8)
Settlements/payments	(87)	(58)	(19)
Balance at the end of the period	$ 1,241	$ 1,051	$ 1,155

Restructuring and Other Costs, Net - Schedule of Accrual Activity Relating to Restructuring Charges (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Restructuring Cost And Reserve [Line Items]
Balance at October 1, 2017	$ 4,391	$ 3,052	$ 222
Restructuring and other costs, net	18,237	24,404	12,863
Non-cash adjustment	(1,031)
Cash payments	(17,121)	(23,065)	(10,033)
Foreign exchange impact on ending balance	(39)
Balance at September 30, 2018	4,437	4,391	3,052
Personnel
Restructuring Cost And Reserve [Line Items]
Balance at October 1, 2017	489	2,269	108
Restructuring and other costs, net	3,694	130	4,130
Cash payments	(3,420)	(1,910)	(1,969)
Foreign exchange impact on ending balance	1
Balance at September 30, 2018	764	489	2,269
Facilities
Restructuring Cost And Reserve [Line Items]
Balance at October 1, 2017	26	6	114
Restructuring and other costs, net	2,816	1,704	20
Non-cash adjustment	(1,031)
Cash payments	(26)	(1,684)	(128)
Foreign exchange impact on ending balance	(40)
Balance at September 30, 2018	1,745	26	6
Spin-Off
Restructuring Cost And Reserve [Line Items]
Balance at October 1, 2017	3,876	777
Restructuring and other costs, net	11,727	22,570	8,713
Cash payments	(13,675)	(19,471)	(7,936)
Balance at September 30, 2018	$ 1,928	$ 3,876	$ 777

Restructuring and Other Costs, Net - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Restructuring Cost And Reserve [Line Items]
Restructuring charges (reversal)	$ 18,237	$ 24,404	$ 12,863
Severance Charge
Restructuring Cost And Reserve [Line Items]
Restructuring charges (reversal)	3,694	130	4,130
Facilities Restructuring
Restructuring Cost And Reserve [Line Items]
Restructuring charges (reversal)	2,816	1,704	20
Professional Services Fees
Restructuring Cost And Reserve [Line Items]
Restructuring charges (reversal)	$ 11,727	$ 22,570	$ 8,713

Leases - Additional Information (Details) $ in Thousands	12 Months Ended
Leases - Additional Information (Details) $ in Thousands	Sep. 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.
Cash payments related to operating leases	$ 8,000
Cash payments related to financing leases	$ 136
Minimum
Lessee Lease Description [Line Items]
Operating lease remaining term	1 year
Maximum
Lessee Lease Description [Line Items]
Operating lease remaining term	8 years

Leases - Summary of Lease Term and Incremental Borrowing Rates for Leases (Details)	Sep. 30, 2020
Weighted-average remaining lease term (in months):
Operating leases	55 months 27 days
Finance leases	55 months 24 days
Weighted-average discount rate:
Operating leases	7.40%
Finance leases	4.40%

Leases - Summary of Lease-related Assets and Liabilities Reported in the Consolidated Balance Sheet (Details) $ in Thousands	Sep. 30, 2020 USD ($)
ASSETS
Operating lease right-of-use assets	$ 20,096
Finance lease assets	$ 1,414
Finance Lease Right Of Use Asset Statement Of Financial Position [Extensible List]	us-gaap:PropertyPlantAndEquipmentNet
Total lease assets	$ 21,510
Current liabilities:
Short-term operating lease liabilities	5,700
Finance	$ 271
Finance Lease Liability Current Statement Of Financial Position [Extensible List]	us-gaap:AccruedLiabilitiesAndOtherLiabilities
Noncurrent
Long-term operating lease liabilities	$ 17,821
Finance	$ 1,088
Finance Lease Liability Noncurrent Statement Of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesNoncurrent
Total lease liability	$ 24,880

Leases - Summary of Lease Expense (Details) $ in Thousands	12 Months Ended
Leases - Summary of Lease Expense (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Finance lease costs:
Amortization of right-of-use asset	$ 255
Interest on lease liability	22
Operating lease cost	8,245
Variable lease cost	1,060
Sublease income	(206)
Total lease cost	$ 9,376

Leases - Summary of Undiscounted Future Minimum Lease Payments Under Non-cancelable Leases (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Operating Leases
2021	$ 7,200
2022	6,116
2023	4,648
2024	4,249
2025	2,583
Thereafter	3,097
Total future minimum lease payments	27,893
Less effects of discounting	(4,372)
Total lease liabilities	23,521
Short-term operating lease liabilities	5,700
Long-term operating lease liabilities	17,821
Financing Leases
2021	319
2022	309
2023	309
2024	309
2025	254
Thereafter	10
Total future minimum lease payments	1,510
Less effects of discounting	(151)
Total lease liabilities	1,359
Short-term lease liabilities	271
Long-term lease liabilities	1,088
Total
2021	7,519
2022	6,425
2023	4,957
2024	4,558
2025	2,837
Thereafter	3,107
Total future minimum lease payments	29,403
Less effects of discounting	(4,523)
Total lease liabilities	24,880
Short-term lease liabilities	5,971
Long-term lease liabilities	$ 18,909

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

Stockholder's Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions		12 Months Ended
	Oct. 02, 2019	Sep. 30, 2020	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		560,000,000	560,000,000
Common stock, par value		$ 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
Restricted Stock Awards
Class Of Stock [Line Items]
Payroll taxes withheld related to vesting of awards		$ 9.4
Maximum \| Restricted Stock Awards
Class Of Stock [Line Items]
Vesting period		4 years
Minimum \| Restricted Stock Awards
Class Of Stock [Line Items]
Vesting period		2 years
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
Shares approved for issuance under plan	1,050,000
Plan offering description	At the end of each designated offering period, which occurs every six months on February 15 and August 15, employees can elect to purchase shares of our common stock with contributions of up to 12% of their base pay, accumulated via payroll deductions, at an amount equal to 85% of the lower of our stock price on (i) the first day of the offering period, or (ii) the last day of the offering period.
Employee contributions to purchase Shares, percent of base pay accumulated	12.00%
Percentage of stock price under plan	85.00%

Stockholder's Equity - Schedule of Non-vested Restricted Stock Units (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Sep. 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	2,758,634
Non-vested, Shares, Vested	(642,404)
Non-vested, Shares, Forfeited	(73,312)
Non-vested, Shares, Ending balance	2,042,918
Performance-Based Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Non-vested, Shares, Granted	778,968
Non-vested, Shares, Forfeited	(7,581)
Non-vested, Shares, Ending balance	771,387
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Non-vested, Shares, Granted	3,537,602
Non-vested, Shares, Vested	(642,404)
Non-vested, Shares, Forfeited	(80,893)
Non-vested, Shares, Ending balance	2,814,305
Non-vested, Shares, Expected to vest	2,814,305
Granted \| $ / shares	$ 18.87
Vested \| $ / shares	20.06
Forfeited \| $ / shares	17.54
Non-vested at September 30, 2020 \| $ / shares	18.63
Expected to vest \| $ / shares	$ 18.63
Non-vested, Weighted-Average Remaining Contractual Term (years), Balance	11 months 23 days
Non-vested, Weighted-Average Remaining Contractual Term (years), Expected to vest	11 months 23 days
Non-vested, Aggregate Intrinsic Value, Balance \| $	$ 137,529
Non-vested, Aggregate Intrinsic Value, Expected to vest \| $	$ 137,529

Stockholder's Equity - Weighted-Average Key Assumptions and Fair Value Results for Shares Issued under ESPP (Details) - Employee Stock Purchase Plan	12 Months Ended
	Sep. 30, 2020 $ / shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected dividend yield	0.00%
Risk-free interest rate	1.56%
Expected volatility	58.18%
Share-based compensation arrangement by share-based payment award, expected term	6 months
Weighted-average fair value of shares issued (per share)	$ 8.93

Stockholder's Equity - Quantities and Average Prices of Shares Issued Under the ESPP (Details) - Employee Stock Purchase Plan	12 Months Ended
	Sep. 30, 2020 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued under the ESPP \| shares	63,503
Average price of shares issued \| $ / shares	$ 20.66

Stockholder's Equity - Schedule of Stock-based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	$ 47,285	$ 29,682	$ 22,043
Cost of Licensing
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation		21	12
Cost of Connected Services
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	1,382	827	495
Cost of Professional Services
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	4,191	1,048	1,569
Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	13,944	15,946	11,112
Sales and Marketing
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	9,580	6,137	3,985
General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation	$ 18,188	$ 5,703	$ 4,870

Commitments and Contingencies - Additional Information (Details) $ in Millions	12 Months Ended
	Sep. 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	$ 1.8
Other Facility
Loss Contingencies [Line Items]
Letter of credit as security deposit	$ 0.3

Pension and Other Post-Retirement Benefits - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plans, employer matching contribution, percentage	50.00%
Defined contribution plans, employer matching contribution of eligible salary, percentage	6.00%
Defined contribution plans, charges incurred	$ 0.7	$ 1.0	$ 0.7
Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plans, pension expenses	0.5	0.4	0.4
Defined benefit plans, benefit obligation	8.3	7.3	5.0
Defined benefit plans, Net liability	$ 7.1	$ 6.8	$ 4.2

Relationship with Parent and Related Entities - Summary of Components of General Allocated Corporate Expenses (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Relationship With Parent And Related Entities Disclosure [Line Items]
Depreciation	$ 9,200	$ 6,200	$ 7,700
Amortization	$ 3,100	2,700	4,200
Parent
Relationship With Parent And Related Entities Disclosure [Line Items]
Facility		6,299	6,125
Depreciation		1,637	1,467
Amortization		22	1,150
Facility and other usage charges		7,958	8,742
Information services		8,633	7,947
Corporate and administrative services		22,166	18,414
Total		$ 38,757	$ 35,103

Relationship with Parent and Related Entities - Summary of Components Net Transfers to Parent (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Relationship With Parent And Related Entities Disclosure [Line Items]
Stock-based compensation	$ 47,285	$ 29,682	$ 22,043
Parent
Relationship With Parent And Related Entities Disclosure [Line Items]
Net transactions with Parent	(6,098)	(83,554)	(28,947)
Distribution to Parent	(152,978)
Net reclassification of net parent investment in Cerence	(938,051)
Stock-based compensation		29,682	22,043
Accrued bonus		9,478	(2,859)
Corporate depreciation and amortization		1,659	2,617
Fixed asset reclasses from the Parent		10,088	259
Voicebox Purchase Accounting Adjustment		3,591
Intangible asset reclasses from the Parent		1,665
Net transfer to Parent	$ (1,097,127)	$ (27,391)	$ (6,887)

Relationship with Parent and Related Entities - Additional Information (Details)	12 Months Ended
	Sep. 30, 2020 Agreement
OEM and Distribution License Agreements
Relationship With Parent And Related Entities Disclosure [Line Items]
Number of license agreements	4

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2017
Income Taxes [Line Items]
Tax expense due to re-measurement of certain deferred tax assets and liabilities			$ 23,100
U.S. federal statutory rates	21.00%	21.00%	24.50%
Income tax expense (benefit)	$ (5,509)	$ (89,084)	$ 30,917
Net tax benefit offset		3,900
Gross deferred tax liabilities	37,176	8,539
Gross deferred tax assets	205,124	170,232
Valuation allowance	$ 13,491	11,064
Operating loss carryforwards expiration year	2026
Unrecognized tax benefits	$ 71,032	63,369	$ 5,738	$ 5,833
Interest and penalties related to uncertain tax positions	400	400
U.S. Federal
Income Taxes [Line Items]
Net operating loss carryforwards	21,100
State
Income Taxes [Line Items]
Net operating loss carryforwards	22,700
Foreign
Income Taxes [Line Items]
Net operating loss carryforwards	57,400
Asset and Liability Method
Income Taxes [Line Items]
Unrecognized tax benefits		3,400
Domestic
Income Taxes [Line Items]
Valuation allowance	9,800	11,030
Foreign
Income Taxes [Line Items]
Valuation allowance	3,700	30
Revision of Prior Period Error Correction Adjustment
Income Taxes [Line Items]
Gross deferred tax liabilities		7,200
Gross deferred tax assets		7,200
Intangible Property Transfers
Income Taxes [Line Items]
Income tax expense (benefit)		$ (91,700)
Research and Development
Income Taxes [Line Items]
Net operating loss carryforwards	3,100
Netherlands
Income Taxes [Line Items]
Income tax expense (benefit)	$ (5,000)

Income Taxes - Components of (Loss) Income Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Domestic	$ (28,846)	$ (22,904)	$ 16,371
Foreign	2,706	34,088	20,427
(Loss) income before income taxes	$ (26,140)	$ 11,184	$ 36,798

Income Taxes - Components of (Benefit) Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Current:
Federal		$ 5,352	$ 11,413
State		1,059	2,500
Foreign	$ 5,845	5,728	4,531
Total current	5,845	12,139	18,444
Deferred:
Federal	(1,871)	(6,210)	14,393
State	(239)	(1,593)	(1,284)
Foreign	(9,244)	(93,420)	(636)
Total deferred	(11,354)	(101,223)	12,473
(Benefit from) provision for income taxes	$ (5,509)	$ (89,084)	$ 30,917
Effective income tax rate	21.10%	(796.50%)	84.00%

Income Taxes - Schedule of (Benefit from) Provision for Income Taxes Differed from the Amount Computed by Applying Federal Statutory Rate (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Federal tax provision at statutory rate	$ (5,489)	$ 2,270	$ 9,026
State tax, net of federal benefit	(239)	(490)	917
Foreign tax rate and other foreign related tax items	(2,463)	(4,764)	(104)
Uncertain tax positions	(887)	57,631	(95)
Stock-based compensation	3,456
Global intangible low-taxed income	336	3,923
Foreign-derived intangible income		(547)
Capital losses		8,187
Change in U.S. valuation allowance		(8,187)
Non-deductible expenditures	2,728	2,707	514
R&D credits	(2,951)	(1,675)	(1,313)
Domestic Production Activities Deduction			(1,143)
TCJA impact			23,115
Intangible property transfers		(148,139)
(Benefit from) provision for income taxes	$ (5,509)	$ (89,084)	$ 30,917

Income Taxes - Schedule of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019
Deferred tax assets:
Net operating loss carryforwards	$ 17,582	$ 6,567
Capital loss carryforwards	9,557	8,187
Federal credit carryforwards	3,665	9,367
Accrued expenses and other reserves	5,086	2,830
Difference in timing of revenue related items	51,483	50,677
Acquired intangibles	94,389	90,635
Interest limitations carryforward	9,399
Operating lease liabilities	6,568
Depreciation	1,682
Deferred compensation	1,465
Pension obligation	2,522	1,969
Other	1,726
Total deferred tax assets	205,124	170,232
Valuation allowance for deferred tax assets	(13,491)	(11,064)
Deferred tax assets	191,633	159,168
Deferred tax liabilities:
Depreciation	(3,381)	(1,360)
Acquired intangibles	(21,255)	(7,179)
Convertible debt	(4,406)
Operating lease right-of-use assets	(5,677)
Other	(2,457)
Total deferred tax liabilities	(37,176)	(8,539)
Net deferred tax assets	$ 154,457	$ 150,629

Income Taxes - Aggregate Changes in Balance of Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Balance at the beginning of the year	$ 63,369	$ 5,738	$ 5,833
Beginning balance adjustment	3,392
Increases related to tax positions taken from prior periods	5,158	1,312	103
Decreases related to tax positions taken from prior periods		(120)	(198)
Increases related to tax positions taken during current period	328	56,439
Decreases for tax settlements and lapse in statutes	(1,215)
Balance at the end of the year	$ 71,032	$ 63,369	$ 5,738

Long-Term Debt - Schedule of Long-Term Debt (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Debt Instrument [Line Items]
Total debt	$ 273,122
Less: current portion	(6,250)
Total long-term debt	266,872
3.00% Convertible Senior Notes Due 2025
Debt Instrument [Line Items]
Total debt	151,791
Total long-term debt	151,791
Senior Credit Facilities
Debt Instrument [Line Items]
Total debt	121,331
Less: current portion	(6,250)
Total long-term debt	$ 115,081

Long-Term Debt - Schedule of Long-Term Debt (Parenthetical) (Details) - USD ($) $ in Thousands		12 Months Ended
	Jun. 02, 2020	Sep. 30, 2020
Debt Instrument [Line Items]
Debt instrument, deferred issuance costs		$ 627
Senior Credit Facilities
Debt Instrument [Line Items]
Debt Instrument, unamortized discount		1,820
Debt instrument, deferred issuance costs		$ 287
Debt instrument, effective interest rate		4.02%
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		$ 18,546
Debt instrument, deferred issuance costs		$ 4,664
Debt instrument, effective interest rate		6.29%

Long-Term Debt - Summary of Maturities of Borrowing Obligations (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Debt Instrument [Line Items]
2021	$ 6,250
2022	7,813
2023	12,500
2024	96,875
2025	175,000
Total before unamortized discount and issuance costs and current portion	298,438
Less: unamortized discount and issuance costs	(25,316)
Less: current portion of long-term debt	(6,250)
Total long-term debt	266,872
Senior Facilities
Debt Instrument [Line Items]
2021	6,250
2022	7,813
2023	12,500
2024	96,875
Total before unamortized discount and issuance costs and current portion	123,438
Less: unamortized discount and issuance costs	(2,107)
Less: current portion of long-term debt	(6,250)
Total long-term debt	115,081
Convertible Senior Notes
Debt Instrument [Line Items]
2025	175,000
Total before unamortized discount and issuance costs and current portion	175,000
Less: unamortized discount and issuance costs	(23,209)
Total long-term debt	$ 151,791

Long-Term Debt - Additional Information (Details)				1 Months Ended	3 Months Ended	12 Months Ended
Long-Term Debt - Additional Information (Details)	Jun. 12, 2020 USD ($)	Jun. 02, 2020 USD ($) Day $ / shares shares	Oct. 01, 2019 USD ($)	Jun. 30, 2020 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2020 USD ($)
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						$ 1,500,000
Minimum liquidity					$ 75,000,000	$ 75,000,000
Debt instrument, covenant description						The Credit Agreement
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						$ 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
Debt Instrument [Line Items]
Net leverage ratio					4.25	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%
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 trading days \| Day		20
Debt instrument, convertible consecutive trading days \| Day		30
Debt instrument, convertible conversion price percentage		130.00%
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, convertible principal amount		$ 1,000
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
Carrying amount of equity component, net of taxes and transaction costs					$ 14,400,000	$ 14,400,000
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
Interest expense						$ 3,169,000
3.00% Convertible Senior Notes Due 2025 \| Minimum
Debt Instrument [Line Items]
Debt instrument, convertible trading days \| Day		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 periodic payments equivalent percentage of annual amount on original principal amount during first two years	5.00%
Debt instrument, frequency of periodic principal payments						quarterly
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
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 $ in Thousands	12 Months Ended
	Sep. 30, 2020 USD ($)
Debt Instrument [Line Items]
Contractual interest expense	$ 1,753
Amortization of debt discount	1,131
Amortization of issuance costs	285
Total interest expense related to the Notes	$ 3,169

Quarterly Data (Unaudited) - Schedule of Quarterly Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Quarterly Financial Information Disclosure [Abstract]
Total revenues	$ 90,882	$ 74,810	$ 86,495	$ 77,459	$ 82,958	$ 77,569	$ 70,304	$ 72,484	$ 329,646	$ 303,315	$ 276,984
Gross profit	65,298	47,207	57,765	51,525	55,941	53,894	45,860	48,277	221,795	203,972	194,020
Net (loss) income	$ 6,817	$ (28,181)	$ 12,495	$ (11,762)	$ 95,789	$ 1,770	$ 454	$ 2,255	$ (20,631)	$ 100,268	$ 5,881
Net (loss) income per share:
Basic	$ 0.19	$ (0.77)	$ 0.34	$ (0.33)	$ 2.63	$ 0.05	$ 0.01	$ 0.06	$ (0.57)	$ 2.76	$ 0.16
Diluted	$ 0.17	$ (0.77)	$ 0.33	$ (0.33)	$ 2.63	$ 0.05	$ 0.01	$ 0.06	$ (0.57)	$ 2.76	$ 0.16
Weighted-average common share outstanding:
Basic	36,765	36,509	36,441	35,995	36,391	36,391	36,391	36,391	36,428	36,391	36,391
Diluted	39,041	36,509	37,392	35,995	36,391	36,391	36,391	36,391	36,428	36,391	36,391