Forensic Analysis · Technology / Software · as of Jun 28, 2026
Cerence Inc. (CRNC)
A forensic read on Cerence Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
D · Weak — demands caution
Forensic grade
Distress
Financial health
-3.6
Altman Z-score
Clean
Earnings quality
5
Forensic signals
-12.8%
ROE
$479M
Market cap
Cerence Inc. earns a D (Weak — demands caution) forensic quality grade, and its Altman Z-score is -3.6, placing it in the Distress zone. 5 forensic signals were flagged in its latest SEC filings, led by receivables vs revenue.
What the filings flag
85d DSOReceivables vs revenue.Days sales outstanding moved from 69 to 85 days FY2024→FY2025 (receivables -6% vs revenue -24%). Receivables are outrunning sales — a flag for aggressive revenue recognition or slipping collections.
-0%Return on invested capital.Return on invested capital is -0% and rising from -12% — well below its ~10% cost of capital, so reinvested dollars may be destroying value, not building it.
+3.4%/yrShare-count dilution.Diluted share count changed +10% over the last 3 years to FY2025 (+3.4%/yr). The count is GROWING — existing holders are being diluted. That's ~3.4% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2022 has been diluted ~10%.
11% of revStock-based comp load.Stock-based compensation ran 11% of revenue and 58% of free cash flow in FY2025 — about $0.63 per diluted share. Heavy — a large slice of 'free cash flow' is really being paid out in stock, so the true owner cash per share is well below the headline.
$823MGoodwill impairments.Took $823M of goodwill writedowns across 2 year(s) (FY2022 ($214M), FY2024 ($609M)). Writedowns mean past acquisitions underperformed what was paid for them — worth weighing on capital-allocation skill.
Key fundamentals
Net Margin-7.4%
Debt / Equity1.33x
Free Cash Flow$46.8M
Latest Revenue$251.8M
Return on Equity-12.4%
Revenue Growth YoY-24.0%
Go deeper — free with an account
The forensic grade and screens above are free — no account needed. An account adds the full interactive deep-dive on Cerence Inc.:
🔒The written investment read — what the numbers mean, in plain English
🔒Ask anything about CRNC's filings — AI Q&A across the 10-K, 10-Qs & 8-Ks
🔒Interactive valuation — reverse-DCF sliders, Monte Carlo & scenario stress
🔒Calibrated 12-month price forecast, with the math shown