Cerence Inc.

i

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (“Form 10-K”), filed by Cerence Inc. together with its consolidated subsidiaries, “Cerence,” the “Company,” “we,” “us” or “our” unless the context indicates otherwise, contains “forward-looking statements” that involve risks and uncertainties. These statements can be identified by the fact that they do not relate strictly to historical or current facts, but rather are based on current beliefs, expectations, anticipations, intentions, estimates, assumptions, plans and projections about our company, business, operations, industry and market trends, financial results, financial condition, strategy and plans, goals or prospects. Forward-looking statements often include words such as “anticipates,” “estimates,” “expects,” “projects,” “forecasts,” “intends,” “plans,” “continues,” “believes,” “may,” “will,” “could,” “goals,” “objectives” and words and terms of similar substance. Forward-looking statements in this Form 10-K include, among others, statements regarding our strategy, plans and goals, new products and innovation, industry and market trends, our ability to navigate the current macroeconomic environment, our future operating or financial performance or condition, backlog, cost savings initiatives, our ability to generate cash flow, our transition to a lower level of fixed contracts, liquidity, competition, litigation, and our prospects. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. Our actual results may vary materially from those expressed or implied in our forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statement made by us or on our behalf.

Although we believe that the forward-looking statements contained in this Form 10-K are based on reasonable assumptions as of the date of this report, you should be aware that many factors could affect our actual financial results, financial condition or results of operations and could cause actual results to differ materially from those set forth in such forward-looking statements. Readers are directed to the risks and uncertainties identified below under “Risk Factor Summary,” “Risk Factors,” Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report for additional detail regarding factors that may cause actual results to be different than those expressed in these forward-looking statements. Such factors, among others, could cause actual results to differ materially from those contained in forward-looking statements made in this Form 10-K, in the documents incorporated by reference into this Form 10-K or presented elsewhere by our management from time to time. Even if our results of operations, financial condition and liquidity and the development of our business or the industry in which we operate are consistent with the forward-looking statements contained in this Form 10-K, those results or developments may not be indicative of results or developments in subsequent periods.

Any forward-looking statements made by us in this Form 10-K speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, subsequent events or otherwise, except as required by law.

Risk Factor Summary

The following is a summary of the principal risks described below in Part I, Item 1A “Risk Factors” in this Form 10-K. We believe that the risks described in the “Risk Factors” section are material to investors, but other factors not presently known to us or that we currently believe are immaterial may also adversely affect us. The following summary should not be considered an exhaustive summary of the material risks facing us, and it should be read in conjunction with the “Risk Factors” section and the other information contained in this Form 10-K.

Risks Relating to Our Business

•The market in which we operate is highly competitive and rapidly changing and we may be unable to compete successfully.

•Adverse conditions in the automotive industry or the global economy more generally could have adverse effects on our results of operations.

•Our process optimization and cost-reduction efforts may not be successful.

•Our strategy to increase cloud connected services may adversely affect our near-term revenue growth and results of operations.

•Pricing pressures from our customers may adversely affect our business.

•We invest effort and money seeking validation of our technology by original equipment manufacturers (“OEMs”), and there can be no assurance that we will win or be able to renew service contracts.

•Our business could be materially and adversely affected if we lost any of our largest customers.

•Our operating results may fluctuate significantly from period to period, and this may cause our stock price to decline.

•We may not be successful with the adoption of new products.

•We may be unable to attract and retain management and other key personnel.

•We depend on skilled employees and could be impacted by a shortage of critical skills.

•Some of our employees are represented by workers councils or unions or are subject to local laws that are less favorable to employers than the laws of the U.S.

•Cybersecurity and data privacy incidents or breaches may damage client relations and inhibit our growth.

•Compliance with global privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and process data globally, and the failure to comply with such requirements could have a material adverse effect on our business, financial condition or results of operations.

•The development and use of artificial intelligence AI (“AI”) presents risks and challenges that can impact our business including by posing security risks to our confidential information, proprietary information, and personal data and could give rise to legal and/or regulatory actions, damage our reputation or otherwise materially harm our business.

•A significant portion of our revenues and research and development activities originate outside the United States. Our results could be harmed by economic, political and regulatory risks associated with these international regions and foreign currency fluctuations.

•Our business in China is subject to aggressive competition and is sensitive to economic, market and political conditions.

•Interruptions or delays in our services or services from data center hosting facilities or public clouds could impair the delivery of our services and harm our business.

•If our goodwill or other intangible assets become impaired, our operating results could be negatively impacted.

•Public health events, such as pandemics or disease outbreaks, have disrupted, and may in the future disrupt, our business, which could adversely affect our financial performance.

Risks Relating to our Intellectual Property and Technology

•Third parties have claimed and may claim in the future that we are infringing their intellectual property, and we could be exposed to significant litigation or licensing expenses or be prevented from selling our products if such claims are successful.

•Unauthorized use of our proprietary technology and intellectual property could adversely affect our business and results of operations.

•Our software products may have bugs, which could result in delayed or lost revenue, expensive correction, liability to our customers and claims against us.

•We may be unable to respond quickly enough to changes in technology and technological risks and to develop our intellectual property into commercially viable products.

•We utilize certain key technologies, content and services from, and integrate certain of our solutions with, third parties and may be unable to replace those technologies, content and services if they become obsolete, unavailable or incompatible with our solutions.

Risks Relating to the Spin-Off

•The allocation of intellectual property rights and data between Nuance and Cerence as part of the Spin-Off, could adversely impact our reputation, our ability to enforce certain intellectual property rights, and our competitive position.

Risks Relating to Our Securities and Indebtedness

•We may evaluate whether to pay cash dividends on our common stock in the future.

•Servicing our debt may require a significant amount of cash. We may not have sufficient cash flow from our business to pay our indebtedness.

•The conditional conversion feature of the 2028 Notes, if triggered, may adversely affect our financial condition and results of operations and the value of our common stock.

•The accounting method for convertible debt securities that may be settled in cash, such as the 2028 Notes, could have a material effect on our reported financial results.

•Certain provisions in our organizational documents, including amendments thereto, and Delaware law may discourage takeovers.

•Our organizational documents, including amendments thereto, designate the courts of the State of Delaware or the U.S. district courts as the sole and exclusive forum for certain types of proceedings, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes.

General Risk Factors

•Tax matters may cause significant variability in our financial results and may impact our overall financial condition.

•The commercial and credit environment may adversely affect our access to, and the cost of, capital.

•Our stock price may fluctuate significantly.

•Your percentage ownership in Cerence may be diluted in the future.

•If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired and investors’ views of us could be harmed.