Earnings Per Share

12 Months Ended

Sep. 30, 2025

Basic earnings per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net loss 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 per share by applying the treasury stock method.

The dilutive effect of the Notes (as defined in Note 17) is reflected in net loss 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 loss per share, we would assume conversion of the Notes at the respective conversion ratio as further described in Note 17. Assumed converted shares of our common stock are weighted for the period the Notes were outstanding.

The following table presents the reconciliation of the numerator and denominator for calculating net loss per share:


	September 30,
in thousands, except per share data	2025		2024		2023
Numerator:
Net loss	$	(18,714)	$	(588,078)	$	(56,254)

Denominator:
Weighted average common shares outstanding - basic and diluted	43,180		41,642		40,215

Net loss per common share:
Basic	$	(0.43)	$	(14.12)	$	(1.40)
Diluted	$	(0.43)	$	(14.12)	$	(1.40)

We exclude weighted-average potentially issuable shares from the calculations of diluted net loss 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 for the fiscal years ended September 30, 2025, 2024 and 2023:


	Year Ended September 30,
in thousands	2025	2024	2023
Restricted stock awards	981	—	273
Contingently issuable stock awards	384	232	150
Conversion option of our Notes	6,401	7,495	5,402

Cerence Inc. 10-K