Cerence Inc.
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 6, 2025
CRNC$8.15+1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0000950170-25-065890
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0001628280-25-038378
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 160 previous paragraphs and 159 current paragraphs.
77 unchanged; 65 reworded; 16 added; 17 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 24 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
•Total revenue decreased by $8.3 million, or 11.8%, to $62.2 million from $70.5 million.
Current report
•Cash provided by operating activities was $23.7 million, a net change of $10.8 million from cash provided by operating activities of $12.9 million.
Current report
For the nine months ended June 30, 2025 as compared to the nine months ended June 30, 2024:
Current report
•Total revenue decreased by $85.6 million, or 30.9%, to $191.1 million from $276.7 million.
Current report
•Cash provided by operating activities was $48.4 million, a net change of $37.3 million from cash provided by operating activities of $11.1 million.
Current report
Total revenues for the three months ended June 30, 2025 were $62.2 million, a decrease of $8.3 million, or 11.8%, from $70.5 million for the three months ended June 30, 2024. The decrease in total revenues was primarily driven by a decrease in license revenue. The decrease in license revenue was partially offset by an increase in connected services revenue.
Current report
Total cost of revenues for the three months ended June 30, 2025 were $16.3 million, a decrease of $3.8 million, or 18.7%, from $20.1 million for the three months ended June 30, 2024.
Current report
Cost of license revenue for the three months ended June 30, 2025 was $1.1 million, a decrease of $0.7 million, or 40.2%, from $1.8 million for the three months ended June 30, 2024. Cost of license revenues decreased due to lower hardware costs attributable to decreased volume of our Cerence Link product revenue. As a percentage of total cost of revenues, cost of license revenue decreased by 2.4 percentage points from 8.9% for the three months ended June 30, 2024 to 6.6% for the three months ended June 30, 2025.
Current report
Connected services gross profit increased $2.8 million, or 53.9%, from $5.2 million for the three months ended June 30, 2024 to $8.0 million for the three months ended June 30, 2025, primarily due to the increase in connected services revenues.
Current report
Total cost of revenues for the nine months ended June 30, 2025 were $52.0 million, a decrease of $15.3 million, or 22.8%, from $67.3 million for the nine months ended June 30, 2024.
Current report
Cost of license revenue for the nine months ended June 30, 2025 was $5.3 million, an increase of $0.5 million, or 10.1%, from $4.8 million for the nine months ended June 30, 2024. Cost of license revenue increased primarily due to higher costs attributable to increased volume of our Cerence Link product revenue. As a percentage of total cost of revenues, cost of license revenue increased by 3.0 percentage points from 7.1% for the nine months ended June 30, 2024 to 10.2% for the nine months ended June 30, 2025.
Current report
Sales and marketing expenses for the three months ended June 30, 2025 were $5.9 million, an increase of $0.7 million, or 13.6%, from $5.2 million for the three months ended June 30, 2024. The increase in sales and marketing expenses was primarily attributable to a $0.8 million increase in compensation-related expenses driven by commissions and stock based compensation. As a percentage of total operating expenses, sales and marketing expenses increased by 11.3 percentage points from 1.3% for the three months ended June 30, 2024 to 12.6% for the three months ended June 30, 2025.
Current report
For the three months ended June 30, 2024, we recorded restructuring and other costs, net of $1.5 million which included $1.4 million of consulting costs relating to our transformation initiatives.
Current report
For the nine months ended June 30, 2024, we recorded restructuring and other costs, net of $6.7 million, which included a $4.9 million severance charge related to the elimination of personnel and $1.8 million other one-time charges, which included $1.4 million of consulting costs relating to our transformation initiatives.
Current report
Our effective income tax rate for the three months ended June 30, 2025 was negative 244.9%, compared to positive 11.9% for the three months ended June 30, 2024. Our provision for income taxes for the three months ended June 30, 2025 was $1.9 million, a net change of $44.5 million from a benefit from income taxes of $42.6 million for the three months ended June 30, 2024. This difference was attributable to the impairment of book goodwill and a change from estimating interim period taxes on the annual method to the year-to-date method for the three months ended June 30, 2024. Our provision for income taxes during interim reporting periods had historically been calculated by applying an estimate of the annual effective tax rate for the full year to ordinary pre-tax income (loss), excluding unusual or infrequently occurring discrete items, for the reporting period. As small changes in the estimated ordinary income (loss) may result in a significant change int he estimated annual effective tax rate, we computed our provision based on the actual effective tax rate for the three and nine months ended June 30, 2024.
Current report
The remaining outstanding principal balance on the 2025 Notes and accrued interest of $61.0 million was repaid in its entirety at maturity during the three months ended June 30, 2024.
Removed paragraphs (17)
Previous report
Total revenue increased by $10.2 million, or 15.0%, to $78.0 million from $67.8 million.
Previous report
Cash provided by operating activities was $15.5 million, a net change of $14.4 million from cash provided by operating activities of $1.0 million.
Previous report
For the six months ended March 31, 2025 as compared to the six months ended March 31, 2024:
Previous report
Total revenue decreased by $77.3 million, or 37.5%, to $128.9 million from $206.2 million.
Previous report
Cash provided by operating activities was $24.7 million, a net change of $26.5 million from cash used in operating activities of $1.8 million.
Previous report
Total revenues for the three months ended March 31, 2025 were $78.0 million, an increase of $10.2 million, or 15.0%, from $67.8 million for the three months ended March 31, 2024. The increase in revenues was driven by license revenue. The increase was partly offset by decreases in connected service and professional service revenues.
Previous report
Total cost of revenues for the three months ended March 31, 2025 were $17.8 million, a decrease of $3.1 million, or 14.6%, from $20.9 million for the three months ended March 31, 2024.
Previous report
Cost of license revenue for the three months ended March 31, 2025 was $2.4 million, an increase of $1.0 million, or 73.2%, from $1.4 million for the three months ended March 31, 2024. Cost of license revenues increased due to the costs associated with our Cerence Link product revenue. As a percentage of total cost of revenues, cost of license revenue increased by 6.9 percentage points from 6.7% for the three months ended March 31, 2024 to 13.6% for the three months ended March 31, 2025.
Previous report
Connected services gross profit decreased $0.5 million, or 6.9%, from $8.2 million for the three months ended March 31, 2024 to $7.7 million for the three months ended March 31, 2025, primarily due to declines in connected services revenues.
Previous report
Total cost of revenues for the six months ended March 31, 2025 were $35.7 million, a decrease of $11.5 million, or 24.5%, from $47.2 million for the six months ended March 31, 2024.
Previous report
Cost of license revenue for the six months ended March 31, 2025 was $4.2 million, an increase of $1.2 million, or 40.1%, from $3.0 million for the six months ended March 31, 2024. Cost of license revenues increased primarily due to costs associated with our Cerence Link product revenue. As a percentage of total cost of revenues, cost of license revenue increased by 5.4 percentage points from 6.4% for the six months ended March 31, 2024 to 11.8% for the six months ended March 31, 2025.
Previous report
Sales and marketing expenses for the three months ended March 31, 2025 were $4.9 million, a decrease of $0.7 million, or 12.3%, from $5.6 million for the three months ended March 31, 2024. The decrease in sales and marketing expenses was primarily attributable to a $0.5 million decrease in professional services, and a $0.2 million decrease in commissions expenditures. As a percentage of total operating expenses, sales and marketing expenses decreased by 9.7 percentage points from 1.8% for the three months ended March 31, 2024 to 11.5% for the three months ended March 31, 2025.
Previous report
For the three months ended March 31, 2024, we recorded restructuring and other costs, net of $4.6 million which included a $4.4 million severance charge related to the elimination of personnel and a $0.1 million charge resulting from the closure of facilities that will no longer be utilized.
Previous report
For the six months ended March 31, 2024, we recorded restructuring and other costs, net of $5.3 million, which included a $4.5 million severance charge related to the elimination of personnel, $0.4 million related to other one-time charges and a $0.3 million charge resulting from the closure of facilities that will no longer be utilized.
Previous report
Our effective income tax rate for the six months ended March 31, 2025 was negative 2.7%, compared to negative 22.1% for the six months ended March 31, 2024. Our provision for income taxes for the six months ended March 31, 2025 was $0.1 million, a net change of $45.9 million from a provision for income taxes of $46.0 million for the six months ended March 31, 2024. This difference was attributable to the impairment of book goodwill and one-time acceleration of legacy deferred revenue in the six months ended March 31, 2024.
Previous report
(a)
Previous report
The 2025 Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. The conversion rate is 26.7271 shares of our common stock per $1,000 principal amount of 2025 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 deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2025 Notes in connection with such a corporate event or convert its 2025 Notes called for redemption in connection with such notice of redemption, as the case may be.
Reworded paragraphs (65)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our Unaudited Condensed Consolidated Financial Statements, and the related notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”), and our consolidated financial statements and the related notes and other financial information included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024, filed with the Securities and Exchange Commission (“SEC”) on November 25, 2024. Some of the information contained in this discussion and analysis or elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, our performance and future success, our liquidity and capital resources, including our ability to meet our liquidity needs after the repayment of the Notes due in the third quarter of fiscal 2025, results of operations and financial condition, macroeconomic conditions, volatility in the political, legal and regulatory environment in which we operate including trade, tariffs and other policies implemented by the new administration in the United States or actions taken by other countries in response, trends in the global auto industry and adjacent markets, including shipping and production issues, new products, process optimization efforts and cost management, litigation, and tax estimates and other tax matters, includes forward-looking statements that involve risks and uncertainties. See “Cautionary Statement Concerning Forward-Looking Statements.” You should review the “Risk Factors” sections in Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Note that the results of operations for the three and six months ended March 31, 2025 are not necessarily indicative of what our operating results for the full fiscal year will be. In this Item, “we,” “us,” “our,” “Cerence” and the “Company” refer to Cerence Inc. and its consolidated subsidiaries, collectively.
Current wording
You should read the following discussion and analysis of our financial condition and results of operations together with our Unaudited Condensed Consolidated Financial Statements, and the related notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”), and our consolidated financial statements and the related notes and other financial information included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024, filed with the Securities and Exchange Commission (“SEC”) on November 25, 2024. Some of the information contained in this discussion and analysis or elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, our performance and future success, our liquidity and capital resources, including our ability to meet our liquidity needs, results of operations and financial condition, macroeconomic conditions, volatility in the political, legal and regulatory environment in which we operate including trade, tariffs and other policies implemented by the new administration in the United States or actions taken by other countries in response, trends in the global auto industry and adjacent markets, including shipping and production issues, new products, process optimization efforts and cost management, litigation, and tax estimates and other tax matters, includes forward-looking statements that involve risks and uncertainties. See “Cautionary Statement Concerning Forward-Looking Statements.” You should review the “Risk Factors” sections in Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Note that the results of operations for the three and nine months ended June 30, 2025 are not necessarily indicative of what our operating results for the full fiscal year will be. In this Item, “we,” “us,” “our,” “Cerence” and the “Company” refer to Cerence Inc. and its consolidated subsidiaries, collectively.
Previous wording
Cerence builds AI powered virtual assistants for the mobility/transportation market. Our primary target is the automobile market, but our solutions can apply to all forms of transportation, including, but not limited to, two-wheel vehicles, planes, tractors, cruise ships and elevators. Our solutions power natural conversational and intuitive interactions between automobiles, drivers and passengers, and the broader digital world. We possess one of the leading software platforms for building automotive virtual assistants. Our customers include nearly all major 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. Our vision is to enable a more enjoyable, safer journey for everyone.
Current wording
Cerence builds AI powered virtual assistants for the mobility/transportation market. Our primary target is the automobile market, but our solutions can apply to all forms of transportation, including, but not limited to, two-wheel vehicles, planes, tractors, cruise ships and elevators as well as the Internet of Things industry as a whole. Our solutions power natural conversational and intuitive interactions between automobiles, drivers and passengers, and the broader digital world. We possess one of the leading software platforms for building automotive virtual assistants. Our customers include nearly all major 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. Our vision is to enable a more enjoyable, safer journey for everyone.
Previous wording
We generate revenue primarily by selling software licenses and cloud-connected services. Our edge software components are typically sold under a traditional per unit perpetual software license model, in which a per unit fee is charged on a variable basis for each software instance installed on an automotive head unit. We typically license cloud-connected software components in the form of a service to the vehicle end user, which is paid for in advance. In addition, we generate professional services revenue from our work with our customers during the design, development, and deployment phases of the vehicle model lifecycle and through maintenance and enhancement projects. We have existing relationships with nearly all major OEMs or their tier 1 suppliers, and while our customer contracts vary, they generally represent multi-year engagements, giving us some level of visibility into future revenue; however, such revenue may not materialize as expected due to delays in automobile production, volatility in the political, legal and regulatory environment in which we operate including trade, tariffs and other policies implemented by the new administration in the United States or actions taken by other countries in response and automotive production curtailment or delays related thereto, changing customer forecasts, macroeconomic conditions or other factors discussed elsewhere in this Quarterly Report.
Current wording
We generate revenue primarily by selling software licenses and cloud-connected services. Our edge software components are typically sold under a traditional per unit perpetual software license model, in which a per unit fee is charged on a variable basis for each software instance installed on an automotive head unit. We typically license cloud-connected software components in the form of a service to the vehicle end user, which is paid for in advance. In addition, we generate professional services revenue from our work with our customers during the design, development, and deployment phases of the vehicle model lifecycle and through maintenance and enhancement projects. We have existing relationships with nearly all major OEMs or their tier 1 suppliers, and while our customer contracts vary, they generally represent multi-year engagements, giving us some level of visibility into future revenue; however, such revenue may not materialize as expected due to delays in automobile production, volatility in the political, legal and regulatory environment in which we operate including trade, tariffs and other policies implemented by the new administration in the United States or actions taken by other countries in response, automotive production curtailment or delays related thereto, changing customer forecasts, macroeconomic conditions or other factors discussed elsewhere in this Quarterly Report.
Previous wording
The condensed consolidated balance sheet data as of September 30, 2024 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting primarily of normal recurring accruals, necessary for a fair presentation of our financial position and results of operations. The operating results for the three and six months ended March 31, 2025 are not necessarily indicative of the results expected for the full fiscal year ending September 30, 2025.
Current wording
The condensed consolidated balance sheet data as of September 30, 2024 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting primarily of normal recurring accruals, necessary for a fair presentation of our financial position and results of operations. The operating results for the three and nine months ended June 30, 2025 are not necessarily indicative of the results expected for the full fiscal year ending September 30, 2025.
Previous wording
Operating margin increased 412.0 percentage points to positive 22.2% from negative 389.8%.
Current wording
•Operating margin increased 501.6 percentage points to negative 1.5% from negative 503.1%.
Previous wording
Operating margin increased 100.1 percentage points to positive 0.3% from negative 99.8%.
Current wording
•Operating margin increased 202.4 percentage points to negative 0.3% from negative 202.6%.
Previous wording
The following table shows the Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2025 and 2024 (dollars in thousands):
Current wording
The following table shows the Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2025 and 2024 (dollars in thousands):
Previous wording
Our operating expenses include R&D, sales and marketing and general and administrative expenses. R&D expenses primarily consist of salaries, benefits, and overhead relating to research and engineering staff. Sales and marketing expenses includes salaries, benefits, and commissions related to our sales, product marketing, product management, and business unit management teams. General and administrative expenses primarily consist of personnel costs for administration, finance, human resources, general management, fees for external professional advisers including accountants and attorneys, and provisions for credit losses.
Current wording
Our operating expenses include R&D, sales and marketing and general and administrative expenses. R&D expenses primarily consist of salaries, benefits, and overhead relating to research and engineering staff. Sales and marketing expenses includes salaries, benefits, and commissions related to our sales, product marketing, product management, and business unit management teams. General and administrative expenses primarily consist of personnel costs for administration, legal, finance, human resources, general management, fees for external professional advisers including accountants and attorneys, and provisions for credit losses.
Previous wording
License revenue for the three months ended March 31, 2025 was $51.5 million, an increase of $16.0 million, or 44.8%, from $35.5 million for the three months ended March 31, 2024. The increase in license revenue was primarily driven by a $11.0 million increase in fixed contracts and a $5.0 million increase associated with variable contract revenue, as we continue to assess the levels of fixed license contracts and make adjustments. As a percentage of total revenues, license revenue increased 13.6 percentage points from 52.4% for the three months ended March 31, 2024 to 66.0% for the three months ended March 31, 2025.
Current wording
License revenue for the three months ended June 30, 2025 was $34.2 million, a decrease of $8.9 million, or 20.6%, from $43.1 million for the three months ended June 30, 2024. The decrease in license revenue was primarily driven by a $20.0 million decrease in fixed contracts as we continue to normalize the levels of fixed license contracts. This decrease was partially offset by an $11.1 million increase associated with variable contract revenue attributable to higher volumes and favorable foreign exchange impacts. As a percentage of total revenues, license revenue decreased 6.0 percentage points from 61.0% for the three months ended June 30, 2024 to 54.9% for the three months ended June 30, 2025.
Previous wording
Connected services revenue for the three months ended March 31, 2025 was $12.6 million, a decrease of $1.0 million, or 7.0%, from $13.6 million for the three months ended March 31, 2024. This decrease was driven by a $2.6 million catch up recognized in the 2024 period related to amended customer royalty reports, which did not recur in the 2025 period, partially offset by increased demand for our connected services products. As a percentage of total revenues, connected services revenue decreased by 3.8 percentage points from 20.0% for the three months ended March 31, 2024 to 16.2% for the three months ended March 31, 2025.
Current wording
Connected services revenue for the three months ended June 30, 2025 was $12.8 million, an increase of $1.9 million, or 17.4%, from $10.9 million for the three months ended June 30, 2024. This increase was driven by increased demand for our connected services products. As a percentage of total revenues, connected services revenue increased by 5.0 percentage points from 17.4% for the three months ended June 30, 2024 to 20.6% for the three months ended June 30, 2025.
Previous wording
Professional service revenue for the three months ended March 31, 2025 was $13.9 million, a decrease of $4.8 million, or 25.7%, from $18.7 million for the three months ended March 31, 2024. This decrease was driven by the increased standardization of our software product offerings, which requires less professional services effort to implement, other efficiencies in our professional services processes and, in some cases, customers opting to perform these activities internally. As a percentage of total revenues, professional services revenue decreased by 9.8 percentage points from 27.6% for the three months ended March 31, 2024 to 17.8% for the three months ended March 31, 2025.
Current wording
Professional services revenue for the three months ended June 30, 2025 was $15.2 million, a decrease of $1.3 million, or 8.0%, from $16.5 million for the three months ended June 30, 2024. This decrease was driven by the increased standardization of our software product offerings, which requires less professional services effort to implement, other efficiencies in our professional services processes and, in some cases, customers opting to perform these activities internally. As a percentage of total revenues, professional services revenue increased by 1.0 percentage points from 23.5% for the three months ended June 30, 2024 to 24.5% for the three months ended June 30, 2025.
Previous wording
The following table shows total revenues by product type, including the corresponding percentage change, for the six months ended March 31, 2025 and 2024 (dollars in thousands):
Current wording
The following table shows total revenues by product type, including the corresponding percentage change, for the nine months ended June 30, 2025 and 2024 (dollars in thousands):
Previous wording
Total revenues for the six months ended March 31, 2025 were $128.9 million, a decrease of $77.3 million, or 37.5%, from $206.2 million for the six months ended March 31, 2024. The decrease in revenues was driven primarily by connected services revenue due to the early termination of a legacy contract acquired by Nuance through a 2013 acquisition and the termination of services provided to a separate customer, who in turn provided services to our legacy customer and a decrease in professional services revenue. The decrease was partially offset by increases in license revenue primarily related to fixed contracts.
Current wording
Total revenues for the nine months ended June 30, 2025 were $191.1 million, a decrease of $85.6 million, or 30.9%, from $276.7 million for the nine months ended June 30, 2024. The decrease in revenues was driven primarily by connected services revenue due to the early termination of a legacy contract acquired by Nuance through a 2013 acquisition and the termination of services provided to a separate customer, who in turn provided services to our legacy customer, which together resulted in the recognition of $86.6 million of revenue in the first quarter of 2024, and a decrease in professional services revenue. The decrease also was partially driven by a decrease in fixed contract revenue of $8.9 million.
Previous wording
License revenue for the six months ended March 31, 2025 was $74.2 million, an increase of $17.8 million, or 31.7%, from $56.4 million for the six months ended March 31, 2024. The increase in license revenue was primarily driven by a $11.1 million increase in fixed license contracts, a $5.2 million increase associated with variable contract revenue, as we continue to assess the levels of fixed license contracts and make adjustments, and $1.5 million associated with our Cerence Link product. As a percentage of total revenues, license revenue increased 30.2 percentage points from 27.3% for the six months ended March 31, 2024 to 57.5% for the six months ended March 31, 2025.
Current wording
License revenue for the nine months ended June 30, 2025 was $108.4 million, an increase of $9.0 million, or 9.0%, from $99.4 million for the nine months ended June 30, 2024. The increase in license revenue was primarily driven by a $17.9 million increase associated with variable contract revenue attributable to higher volumes and favorable foreign exchange impacts, partially offset by a $8.9 million decrease in fixed license contracts as we continue to normalize the levels of fixed license contracts. As a percentage of total revenues, license revenue increased 20.8 percentage points from 35.9% for the nine months ended June 30, 2024 to 56.7% for the nine months ended June 30, 2025.
Previous wording
Connected services revenue for the six months ended March 31, 2025 was $26.4 million, a decrease of $84.0 million, or 76.1%, from $110.4 million for the six months ended March 31, 2024. This decrease was primarily driven by the early termination of a legacy contract acquired by Nuance through a 2013 acquisition and the termination of services provided to a separate customer, who in turn provided services to our legacy customer. The effect of these changes was an acceleration of $67.8 million and $9.9 million of deferred revenue, respectively, as well as in period revenue of $8.9 million for these terminated contracts, in the first quarter of fiscal year 2024. This decrease was offset by an increase of $2.6 million in new connected revenue during the first half of fiscal year 2025. As a percentage of total revenues, connected services revenue decreased by 33.2 percentage points from 53.6% for the six months ended March 31, 2024 to 20.4% for the six months ended March 31, 2025.
Current wording
Connected services revenue for the nine months ended June 30, 2025 was $39.2 million, a decrease of $82.2 million, or 67.7%, from $121.4 million for the nine months ended June 30, 2024. This decrease was primarily driven by the early termination of a legacy contract acquired by Nuance through a 2013 acquisition and the termination of services provided to a separate customer, who in turn provided services to our legacy customer. The effect of these changes was an acceleration of $67.8 million and $9.9 million of deferred revenue, respectively, as well as in period revenue of $8.9 million for these terminated contracts, in the first quarter of fiscal year 2024. This decrease was partially offset by an increase in new connected services revenue during fiscal year 2025. As a percentage of total revenues, connected services revenue decreased by 23.4 percentage points from 43.9% for the nine months ended June 30, 2024 to 20.5% for the nine months ended June 30, 2025.
Previous wording
Professional service revenue for the six months ended March 31, 2025 was $28.4 million, a decrease of $11.0 million, or 28.0%, from $39.4 million for the six months ended March 31, 2024. This decrease was primarily driven by the increased standardization of our software product offerings, which requires less professional services effort to implement, other efficiencies in our professional services processes and, in some cases, customers opting to perform these activities internally. As a percentage of total revenues, professional services revenue increased by 3.0 percentage points from 19.1% for the six months ended March 31, 2024 to 22.1% for the six months ended March 31, 2025.
Current wording
Professional service revenue for the nine months ended June 30, 2025 was $43.6 million, a decrease of $12.4 million, or 22.1%, from $55.9 million for the nine months ended June 30, 2024. This decrease was primarily driven by the increased standardization of our software product offerings, which requires less professional services effort to implement, other efficiencies in our professional services processes and, in some cases, customers opting to perform these activities internally. As a percentage of total revenues, professional services revenue increased by 2.6 percentage points from 20.2% for the nine months ended June 30, 2024 to 22.8% for the nine months ended June 30, 2025.
Previous wording
We experienced an increase in total gross profit of $13.3 million, or 28.2%, from $46.9 million for the three months ended March 31, 2024 to $60.2 million for the three months ended March 31, 2025. The increase was primarily driven by the increase in license revenues due to a higher volume of fixed contracts.
Current wording
We experienced a decrease in total gross profit of $4.5 million, or 9.0%, from $50.4 million for the three months ended June 30, 2024 to $45.9 million for the three months ended June 30, 2025. The decrease was primarily driven by the decrease in the volume of fixed contracts.
Previous wording
License gross profit increased by $14.9 million, or 43.7%, for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024, primarily due to increases in license revenues.
Current wording
License gross profit decreased by $8.2 million, or 19.8%, for the three months ended June 30, 2025 when compared to the three months ended June 30, 2024, primarily due to decreases in license revenues.
Previous wording
Cost of connected services revenue for the three months ended March 31, 2025 was $5.0 million, a decrease of $0.4 million, or 7.1%, from $5.4 million for the three months ended March 31, 2024. Cost of connected services revenue decreased primarily due to a $0.2 million decrease in our cloud infrastructure costs and $0.1 million decrease in amortization of costs previously deferred, and a $0.1 million decrease in internal allocated labor. As a percentage of total cost of revenues, cost of connected services revenue increased by 2.2 percentage points from 25.7% for the three months ended March 31, 2024 to 27.9% for the three months ended March 31, 2025.
Current wording
Cost of connected services revenue for the three months ended June 30, 2025 was $4.8 million, a decrease of $0.9 million, or 16.0%, from $5.7 million for the three months ended June 30, 2024. Cost of connected services revenue decreased primarily due to a $0.5 million decrease in our cloud infrastructure costs and a $0.6 million decrease in internal allocated labor. As a percentage of total cost of revenues, cost of connected services revenue increased by 1.0 percentage points from 28.4% for the three months ended June 30, 2024 to 29.4% for the three months ended June 30, 2025.
Previous wording
Cost of professional services revenue for the three months ended March 31, 2025 was $10.4 million, a decrease of $3.7 million, or 26.2%, from $14.1 million for the three months ended March 31, 2024. Cost of professional services revenue decreased primarily due to a $2.4 million decrease in third party contract labor and a $1.3 million decrease in salary-related expenditures. Decreases were driven by the increased standardization of our software product offerings, which requires less professional services effort to implement, and other efficiencies in our professional services processes. As a percentage of total cost of revenues, cost of professional services revenue decreased by 9.2 percentage points from 67.6% for the three months ended March 31, 2024 to 58.4% for the three months ended March 31, 2025.
Current wording
Cost of professional services revenue for the three months ended June 30, 2025 was $10.5 million, a decrease of $2.1 million, or 16.9%, from $12.6 million for the three months ended June 30, 2024. Cost of professional services revenue decreased primarily due to a $1.1 million decrease in third party contract labor and other third party costs, a $0.8 million decrease in internal allocated labor and a $0.2 million decrease in salary-related expenditures. Decreases were driven by the increased standardization of our software product offerings, which requires less professional services effort to implement, and other efficiencies in our professional services processes. As a percentage of total cost of revenues, cost of professional services revenue increased by 1.4 percentage points from 62.6% for the three months ended June 30, 2024 to 64.0% for the three months ended June 30, 2025.
Previous wording
Professional services gross profit decreased $1.1 million, or 24.0%, from $4.6 million for the three months ended March 31, 2024 to $3.5 million for the three months ended March 31, 2025, which was primarily due to a decrease in professional services revenue.
Current wording
Professional services gross profit increased $0.8 million, or 20.1%, from $4.0 million for the three months ended June 30, 2024 to $4.7 million for the three months ended June 30, 2025, which was primarily due to a decrease in the cost of professional services revenue.
Previous wording
We experienced a decrease in total gross profit of $65.6 million, or 41.3%, from $158.9 million for the six months ended March 31, 2024 to $93.3 million for the six months ended March 31, 2025. The decrease was primarily driven by the decrease in connected service revenue due to the early termination of a legacy contract acquired by Nuance through a 2013 acquisition and the termination of services provided to a separate customer, who in turn provided services to our legacy customer.
Current wording
We experienced a decrease in total gross profit of $70.2 million, or 33.5%, from $209.4 million for the nine months ended June 30, 2024 to $139.1 million for the nine months ended June 30, 2025. The decrease was primarily driven by the decrease in connected services revenue due to the early termination of a legacy contract acquired by Nuance through a 2013 acquisition and the termination of services provided to a separate customer, who in turn provided services to our legacy customer, which together resulted in the recognition of $86.6 million of revenue in the first quarter of 2024.
Previous wording
License gross profit increased by $16.6 million, or 31.2%, for the six months ended March 31, 2025 when compared to the six months ended March 31, 2024, primarily due to increases in license revenues.
Current wording
License gross profit increased by $8.5 million, or 9.0%, for the nine months ended June 30, 2025 when compared to the nine months ended June 30, 2024, primarily due to the increase in license revenues.
Previous wording
Cost of connected services revenue for the six months ended March 31, 2025 was $11.3 million, a decrease of $1.4 million, or (10.8)%, from $12.7 million for the six months ended March 31, 2024. Cost of connected services revenue decreased primarily due to a $0.7 million decrease in amortization of costs previously deferred, a $0.3 million decrease in our cloud infrastructure costs and a $0.4 million decrease in internally allocated labor costs. As a percentage of total cost of revenues, cost of connected service revenue increased by 4.9 percentage points from 26.8% for the six months ended March 31, 2024 to 31.7% for the six months ended March 31, 2025.
Current wording
Cost of connected services revenue for the nine months ended June 30, 2025 was $16.1 million, a decrease of $2.3 million, or 12.4%, from $18.4 million for the nine months ended June 30, 2024. Cost of connected services revenue decreased primarily due to a $0.5 million decrease in amortization of costs previously deferred, a $0.7 million decrease in our cloud infrastructure costs and a $0.8 million decrease in internally allocated labor costs. As a percentage of total cost of revenues, cost of connected services revenue increased by 3.6 percentage points from 27.3% for the nine months ended June 30, 2024 to 31.0% for the nine months ended June 30, 2025.
Previous wording
Connected services gross profit decreased $82.7 million, or 84.6%, from $97.8 million for the six months ended March 31, 2024 to $15.1 million for the six months ended March 31, 2025, primarily due to the decrease in connected service revenue due to the early termination of a legacy contract acquired by Nuance through a 2013 acquisition and the termination of services provided to a separate customer, who in turn provided services to our legacy customer.
Current wording
Connected services gross profit decreased $79.9 million, or 77.6%, from $103.0 million for the nine months ended June 30, 2024 to $23.1 million for the nine months ended June 30, 2025, primarily due to the decrease in connected service revenue due to the early termination of a legacy contract acquired by Nuance through a 2013 acquisition and the termination of services provided to a separate customer, who in turn provided services to our legacy customer.
Previous wording
Cost of professional services revenue for the six months ended March 31, 2025 was $20.1 million, a decrease of $11.3 million, or 35.9%, from $31.4 million for the six months ended March 31, 2024. Cost of professional services revenue decreased primarily due to a $7.6 million decrease in third-party contractor costs, a $1.7 million decrease in salary-related expenditures, a $1.7 million decrease in internally allocated labor, a $0.2 million decrease in travel-related expenses, and a $0.1 million decrease in hardware costs. Decreases were driven by the increased standardization of our software product offerings, which requires less professional services effort to implement, and other efficiencies in our professional services processes. As a percentage of total cost of revenues, cost of professional services revenue decreased by 10.1 percentage points from 66.6% for the six months ended March 31, 2024 to 56.5% for the six months ended March 31, 2025.
Current wording
Cost of professional services revenue for the nine months ended June 30, 2025 was $30.6 million, a decrease of $13.4 million, or 30.5%, from $44.0 million for the nine months ended June 30, 2024. Cost of professional services revenue decreased primarily due to a $8.4 million decrease in third-party contractor costs, a $1.4 million decrease in compensation-related expenditures, a $2.5 million decrease in internally allocated labor, a $0.3 million decrease in travel-related expenses. Decreases were driven by the increased standardization of our software product offerings, which requires less professional services effort to implement, and other efficiencies in our professional services processes. As a percentage of total cost of revenues, cost of professional services revenue decreased by 6.5 percentage points from 65.4% for the nine months ended June 30, 2024 to 58.9% for the nine months ended June 30, 2025.
Previous wording
Professional services gross profit increased $0.3 million, or 3.4%, from $7.9 million for the six months ended March 31, 2024 to $8.2 million for the six months ended March 31, 2025, which was primarily due to the composition of our professional service arrangements.
Current wording
Professional services gross profit increased $1.1 million, or 8.9%, from $11.9 million for the nine months ended June 30, 2024 to $13.0 million for the nine months ended June 30, 2025, which was primarily due to the reduction in cost of professional services revenue.
Previous wording
Historically, R&D expenses are our largest operating expense as we continue to build on our existing software platforms and develop new technologies. R&D expenses for the three months ended March 31, 2025 were $23.3 million, a decrease of $8.5 million, or 26.7%, from $31.8 million for the three months ended March 31, 2024. The decrease was primarily attributable to a $2.6 million decrease in third-party contract labor, a $2.2 million international tax credit catch-up, $2.0 million in capitalized costs associated with internally developed software and a $1.7 million decrease in salary-related expenditures. As a percentage of total operating expenses, R&D expenses increased by 44.3 percentage points from 10.2% for the three months ended March 31, 2024 to 54.5% for the three months ended March 31, 2025.
Current wording
Historically, R&D expenses are our largest operating expense as we continue to build on our existing software platforms and develop new technologies. R&D expenses for the three months ended June 30, 2025 were $27.2 million, a decrease of $4.0 million, or 12.9%, from $31.2 million for the three months ended June 30, 2024. The decrease was primarily attributable to a $2.3 million decrease in third-party contract labor, a $1.1 million international tax credit catch-up, and a $2.3 million increase in capitalized costs associated with internally developed software. These decreases were offset by a $1.3 million decrease in internally allocated labor expenses. As a percentage of total operating expenses, R&D expenses increased by 50.3 percentage points from 7.7% for the three months ended June 30, 2024 to 58.0% for the three months ended June 30, 2025.
Previous wording
Historically, R&D expenses are our largest operating expense as we continue to build on our existing software platforms and develop new technologies. R&D expenses for the six months ended March 31, 2025 were $44.2 million, a decrease of $21.0 million, or 32.2%, from $65.2 million for the six months ended March 31, 2024. The decrease was primarily attributable to a $5.3 million decrease in third-party contractor costs, a $4.9 million international tax credit catch-up related to two different tax jurisdictions, a $5.9 million decrease in salary-related expenditures, a $1.9 million decrease in stock-based compensation expense, and a $3.2 million decrease in capitalized costs associated with internally developed software. The decreases are offset by a $0.2 million increase in our cloud infrastructure costs. As a percentage of total operating expenses, R&D expenses increased by 29.7 percentage points from 17.9% for the six months ended March 31, 2024 to 47.6% for the six months ended March 31, 2025.
Current wording
Historically, R&D expenses are our largest operating expense as we continue to build on our existing software platforms and develop new technologies. R&D expenses for the nine months ended June 30, 2025 were $71.4 million, a decrease of $25.0 million, or 25.9%, from $96.3 million for the nine months ended June 30, 2024. The decrease was primarily attributable to a $7.9 million decrease in third-party contractor costs, a $6.0 million international tax credit catch-up related to two different tax jurisdictions, a $8.1 million decrease in compensation-related expenditures and a $5.5 million increase in capitalized costs associated with internally developed software. The decreases are offset by a $3.2 million increase in our internally allocated salary expenses. As a percentage of total operating expenses, R&D expenses increased by 38.6 percentage points from 12.5% for the nine months ended June 30, 2024 to 51.1% for the nine months ended June 30, 2025.
Previous wording
Sales and marketing expenses for the six months ended March 31, 2025 were $9.7 million, a decrease of $2.0 million, or 17.1%, from $11.7 million for the six months ended March 31, 2024. The decrease in sales and marketing expenses was primarily attributable to a $1.2 million decrease in salary-related expenditures, a $0.5 million decrease in travel-related expenditures, and a $0.3 million decrease in professional services. As a percentage of total operating expenses, sales and marketing expenses increased by 7.2 percentage points from 3.2% for the six months ended March 31, 2024 to 10.4% for the six months ended March 31, 2025.
Current wording
Sales and marketing expenses for the nine months ended June 30, 2025 were $15.6 million, a decrease of $1.3 million, or 7.6%, from $16.9 million for the nine months ended June 30, 2024. The decrease in sales and marketing expenses was primarily attributable to a $0.6 million decrease in travel-related expenditures, a $0.4 million decrease in marketing related expenditures, and a $0.1 million decrease in third party contract labor. As a percentage of total operating expenses, sales and marketing expenses increased by 9.0 percentage points from 2.2% for the nine months ended June 30, 2024 to 11.2% for the nine months ended June 30, 2025.
Previous wording
General and administrative expenses for the six months ended March 31, 2025 were $24.0 million, a decrease of $5.5 million, or 18.7%, from $29.5 million for the six months ended March 31, 2024. The decrease in general and administrative expenses was primarily attributable to a $6.1 million credit loss provision related to the bankruptcy of one fitness equipment manufacturer recognized in the second quarter of 2024. The decrease was partially offset by a $0.6 million increase in third-party contract labor. As a percentage of total operating expenses, general and administrative expenses increased by 17.7 percentage points from 8.1% for the six months ended March 31, 2024 to 25.8% for the six months ended March 31, 2025.
Current wording
General and administrative expenses for the three months ended June 30, 2025 were $12.3 million, an increase of $2.5 million, or 25.5%, from $9.8 million for the three months ended June 30, 2024. The increase in general and administrative expenses was primarily attributable to a $2.4 million credit loss provision reversal recognized in the third quarter of 2024. As a percentage of total operating expenses, general and administrative expenses increased by 23.9 percentage points from 2.4% for the three months ended June 30, 2024 to 26.3% for the three months ended June 30, 2025.
Previous wording
General and administrative expenses for the three months ended March 31, 2025 were $11.2 million, a decrease of $5.5 million, or 32.8%, from $16.7 million for the three months ended March 31, 2024. The decrease in general and administrative expenses was primarily attributable to a $6.1 million credit loss provision related to the bankruptcy of one fitness equipment manufacturer recognized in the second quarter of 2024, a $0.5 million decrease in salary-related expenditures, and a $0.4 million decrease in rent expenditures. The decrease was partially offset by a $0.8 million increase in stock-based compensation costs and a $0.7 million increase in depreciation expense. As a percentage of total operating expenses, general and administrative expenses increased by 20.7 percentage points from 5.4% for the three months ended March 31, 2024 to 26.1% for the three months ended March 31, 2025.
Current wording
General and administrative expenses for the nine months ended June 30, 2025 were $36.3 million, a decrease of $3.0 million, or 7.6%, from $39.3 million for the nine months ended June 30, 2024. The decrease in general and administrative expenses was primarily attributable to a $2.4 million decrease in compensation-related expenditures and a $3.5 million decrease in credit loss provisions. These decreases were partially offset by a $1.0 million increase in third party contract labor, a $0.9 million increase in professional services and a $0.7 million increase in depreciation expense. As a percentage of total operating expenses, general and administrative expenses increased by 20.9 percentage points from 5.1% for the nine months ended June 30, 2024 to 26.0% for the nine months ended June 30, 2025.
Previous wording
Intangible asset amortization for the three months ended March 31, 2025 was $0.5 million, a decrease of $0.1 million, or 3.4%, from $0.6 million for the three months ended March 31, 2024. The decrease in amortization relates to certain intangible assets having been fully amortized during fiscal year 2025 and 2024. Amortization expense for acquired technology and patents is included in the cost of revenues in the accompanying Condensed Consolidated Statements of Operations. Acquired technology and patents were fully amortized as of December 31, 2024. Amortization expense for customer relationships is included in operating expenses in the accompanying Condensed Consolidated Statements of Operations.
Current wording
Amortization expense for acquired technology and patents is included in the cost of revenues in the accompanying Condensed Consolidated Statements of Operations. Acquired technology and patents were fully amortized as of December 31, 2024. Amortization expense for customer relationships is included in operating expenses in the accompanying Condensed Consolidated Statements of Operations. Customer relationships were fully amortized as of June 30, 2025.
Previous wording
As a percentage of total operating expenses, intangible asset amortization expenses within operating expenses increased by 1.1 percentage point from 0.2% for the six months ended March 31, 2024 as compared to 1.3% for the six months ended March 31, 2025.
Current wording
As a percentage of total operating expenses, intangible asset amortization expenses within operating expenses increased by 1.1 percentage points from 0.1% for the nine months ended June 30, 2024 as compared to 1.2% for the nine months ended June 30, 2025.
Previous wording
Intangible asset amortization for the six months ended March 31, 2025 was $1.1 million, a decrease of $0.1 million, or 9.4%, from $1.2 million for the six months ended March 31, 2024. The decrease in amortization relates to certain intangible assets having been fully amortized during fiscal year 2025 and 2024. Amortization expense for acquired technology and patents is included in the cost of revenues in the accompanying Condensed Consolidated Statements of Operations. Amortization expense for customer relationships is included in operating expenses in the accompanying Condensed Consolidated Statements of Operations.
Current wording
Intangible asset amortization for the nine months ended June 30, 2025 was $1.7 million, a decrease of $0.1 million, or 4.8%, from $1.8 million for the nine months ended June 30, 2024. The decrease in amortization relates to certain intangible assets having been fully amortized during fiscal years 2025 and 2024. Amortization expense for acquired technology and patents is included in the cost of revenues in the accompanying Condensed Consolidated Statements of Operations. Amortization expense for customer relationships is included in operating expenses in the accompanying Condensed Consolidated Statements of Operations.
Previous wording
As a percentage of total cost of revenues, intangible asset amortization within cost of revenues decreased by 0.2 percentage points from 0.2% for the six months ended March 31, 2024 to 0.0% for the six months ended March 31, 2025. As a percentage of total operating expenses, intangible asset amortization expenses within operating expenses increased by 0.9 percentage points from 0.3% for the six months ended March 31, 2024 as compared to 1.2% for the six months ended March 31, 2025.
Current wording
As a percentage of total cost of revenues, intangible asset amortization within cost of revenues was 0.2% for the nine months ended June 30, 2024 and 0.0% for the nine months ended June 30, 2025. As a percentage of total operating expenses, intangible asset amortization expenses within operating expenses increased by 1.0 percentage points from 0.2% for the nine months ended June 30, 2024 as compared to 1.2% for the nine months ended June 30, 2025.
Previous wording
For the three months ended March 31, 2025, we recorded restructuring and other costs, net of $2.8 million, which included a $1.6 million charge related to the elimination of personnel, and a $1.1 million charge related to our transformation initiatives.
Current wording
For the three months ended June 30, 2025, we recorded restructuring and other costs, net of $0.9 million, which included a $0.1 million charge related to the elimination of personnel, and a $0.7 million charge related to our transformation initiatives.
Previous wording
Goodwill impairment for the three months ended March 31, 2024 was $252.1 million. At March 31, 2024, we concluded indicators of impairment were present due to the current macroeconomic conditions, including declines in our stock price. The fair value of our reporting unit was determined using a combination of the income approach and the market approach. We weighted the methodologies appropriately to estimate a fair value of approximately $463.4 million as of March 31, 2024. The carrying value of our reporting unit exceeded the estimated fair value. Based upon the results of the impairment test, we recorded a goodwill impairment charge of $252.1 million.
Current wording
Goodwill impairment for the three months ended June 30, 2024 was $357.1 million. At June 30, 2024, we concluded indicators of impairment were present due to the then current macroeconomic conditions, including declines in our stock price. The fair value of our reporting unit was determined using a combination of the income approach and the market approach. We weighted the methodologies appropriately to estimate a fair value of approximately $154.2 million as of June 30, 2024. The carrying value of our reporting unit exceeded the estimated fair value. Based upon the results of the impairment test, we recorded a goodwill impairment charge of $357.1 million.
Previous wording
As a percentage of total operating expenses, restructuring and other costs, net increased by 5.1 percentage points from 1.5% for the three months ended March 31, 2024 to 6.6% for the three months ended March 31, 2025.
Current wording
As a percentage of total operating expenses, restructuring and other costs, net increased by 1.4 percentage points from 0.4% for the three months ended June 30, 2024 to 1.8% for the three months ended June 30, 2025.
Previous wording
For the six months ended March 31, 2025,we recorded restructuring and other costs, net of $13.9 million, which included an $12.0 million charge related to the elimination of personnel, of which $3.0 million related to the stock-based compensation expense for the termination of our former senior management employees, and a $1.9 million charge related to our transformation initiatives. We are focused on pursuing actions intended to position us to deliver on our generative AI and LLM product roadmap and also deliver improved financial results which include process optimization efforts and cost reductions. During the remainder of fiscal year 2025, we expect additional personnel-related restructuring costs in connection with the Plan as we better align our cost structure with current levels of revenue.
Current wording
For the nine months ended June 30, 2025,we recorded restructuring and other costs, net of $14.7 million, which included a $12.1 million charge related to the elimination of personnel, of which $3.0 million related to the stock-based compensation expense for the termination of former senior management employees, and a $2.6 million charge related to our transformation initiatives. We are focused on pursuing actions intended to position us to deliver on our generative AI and LLM product roadmap and also deliver improved financial results which include process optimization efforts and cost reductions. During the remainder of fiscal year 2025, we expect additional personnel-related restructuring costs as we better align our cost structure with current levels of revenue.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
June 30, 2025, the carrying amount of the 2025 Modified Notes was $77.8 million, net of unamortized costs of $9.7 million.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The 2025 Notes are senior, unsecured obligations and accrue interest payable semiannually in arrears on June 1 and December 1 of each year at a rate of 3.00% per year. The 2025 Notes will mature on June 1, 2025, unless earlier converted, redeemed, or repurchased. The repayment of the 2025 Notes in cash upon maturity could adversely affect our liquidity.