Cerence Inc. key statistics and ratios

In fiscal 2025, Cerence Inc. had return on equity of -12.8%, an operating margin of -0.9%, debt equal to 139.4% of equity and a current ratio of 1.89. Each ratio below is calculated from the figures on its income statement, balance sheet and cash flow pages.

Financial ratios

US$ thousands unless shown otherwise. Fiscal years, plus the last twelve months (LTM) when newer.

Cerence Inc.: financial ratios, annual
Fiscal year	2018Sept 2018	2019Sept 2019	2020Sept 2020	2021Sept 2021	2022Sept 2022	2023Sept 2023	2024Sept 2024	2025Sept 2025	LTMJun 2026
Gross margin	70.0%	67.2%	67.4%	73.9%	70.4%	67.7%	73.7%	72.7%	78.7%
Operating margin	13.3%	3.6%	6.8%	15.7%	−56.2%	−9.2%	−174.9%	−0.9%	8.7%
Net margin	2.1%	33.1%	−5.5%	11.9%	−94.8%	−19.1%	−177.4%	−7.4%	−5.0%
Free-cash-flow margin	39.3%	27.5%	7.8%	16.1%	−6.0%	0.8%	3.7%	18.6%	25.4%
Return on equity	0.6%	9.7%	−1.8%	4.6%	−35.6%	−8.0%	−140.7%	−12.8%	−9.7%
Return on assets	—	6.8%	−1.2%	2.7%	−20.6%	−4.3%	−58.8%	−2.8%	−2.5%
Asset turnover	—	0.20	0.21	0.23	0.22	0.23	0.33	0.38	0.49
Current ratio	—	0.72	1.26	1.74	1.55	1.52	1.22	1.89	2.08
Debt to equity	—	0.0%	31.1%	28.3%	40.1%	42.8%	210.8%	139.4%	108.2%
Interest cover (operating income ÷ interest)	—	—	1.0x	4.3x	n/m	n/m	n/m	n/m	4.3x
Effective tax rate	84.0%	—	—	4.9%	—	—	—	—	—
R&D as % of revenue	29.2%	30.7%	26.9%	28.9%	32.7%	41.9%	36.7%	38.8%	35.7%
Capital spending as % of revenue	2.4%	1.5%	5.7%	3.1%	5.3%	1.7%	1.5%	5.7%	2.0%
Free cash flow ÷ net income	>999%	83.3%	—	135.8%	—	—	—	—	—
Dividends and buybacks ÷ free cash flow	—	—	36.3%	73.4%	—	206.2%	80.9%	5.1%	9.9%

US$ thousands unless shown otherwise. Fiscal quarters.

Cerence Inc.: financial ratios, quarterly
Quarter	2024 Q4Sept 2024	2025 Q1Dec 2024	2025 Q2Mar 2025	2025 Q3Jun 2025	2025 Q4Sept 2025	2026 Q1Dec 2025	2026 Q2Mar 2026	2026 Q3Jun 2026
Gross margin	63.7%	65.0%	77.1%	73.7%	72.6%	86.3%	73.7%	76.0%
Operating margin	−35.1%	−33.3%	22.2%	−1.5%	−2.9%	25.5%	−3.8%	2.7%
Net margin	−37.3%	−47.7%	27.8%	−4.4%	−22.0%	−4.6%	2.6%	2.2%
Free-cash-flow margin	8.5%	15.5%	16.8%	25.8%	16.1%	31.0%	21.2%	28.2%
Current ratio	1.22	1.32	1.47	1.77	1.89	1.88	1.90	2.08
Debt to equity	199.8%	212.2%	203.4%	127.7%	132.5%	114.3%	108.9%	104.3%
R&D as % of revenue	46.0%	41.0%	29.9%	43.6%	43.5%	21.5%	47.2%	42.0%

Returns use average equity or assets over the year. Return on equity is left blank when equity is negative or so small that the ratio says nothing (above ±200%); interest cover is left blank above 200 times. Price-based ratios such as P/E are on the valuation page.

Financial health

2 of 6 checks passed · June 30, 2026

What it owns · $621m

Short-term assets $212mLonger-term assets $409m

What it owes, and who funded it · $621m

Short-term liabilities $102mLonger-term liabilities $353mShareholders' equity $166m

Short-term assets cover short-term liabilities $212m of assets due within a year against $102m of liabilities due within a year.
Short-term assets cover long-term liabilities $212m short-term assets against $353m of longer-dated liabilities.
More cash than debt Cash or debt not separately reported. Not assessable.
Debt below 40% of shareholders' equity Debt is 104% of equity.
Debt burden no higher than five years ago Debt to equity moved from 25% to 104% over five years.
A year's operating cash flow covers at least 20% of debt $85m of operating cash flow against $173m of debt.
Operating profit covers interest at least five times over Operating income of $27m against $6m of interest.

From Cerence Inc.'s latest balance sheet as filed. Checks are fixed, documented rules (methodology), counted only where the company reports the figures — a dot means the filing doesn't break the item out. Descriptions of reported data, not advice.

Moat

34 /100

Weak moat

How hard Cerence's competitive advantage looks for rivals to wear away, judged from 7 years of its own filings: returns on capital, pricing power, profit durability, cash conversion and discipline.

Returns on capital 16 / 20

Cash operating profit has been a median 12.6% of total assets over 6 years.
Pricing power 17 / 20

Gross margin has been a median 73.0%, moving by 4.6 percentage points (standard deviation) across 7 years.
Durability 0 / 20

Operating margin has been a median 3.3%; its worst year was -155.8%.
Cash conversion 12 / 20

Free cash flow was positive in 6 of 7 years, at a median 6.3% of revenue.
Discipline 4 / 20

The diluted share count rose 8.5% over five years; stock-based pay has been a median 11.3% of revenue.

AI disruption exposure: High. In this industry, the core product is information work that AI systems increasingly perform. The score above includes a 15-point deduction for that exposure (49 before it).

A rules-based reading of reported figures, not a forecast and not investment advice. How the score is built: methodology.

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Figures from Cerence Inc.'s SEC filings (10-K and 10-Q), retrieved October 29, 2026. How we read and check them: methodology and data sources. Not investment advice. Back to Cerence Inc.