Cerence Just Settled With Investors Over Revenue Manipulation—How to Get Your Payout

Court: D. Massachusetts

Case: 1:22-CV-10321

Cerence CRNC has agreed to a $30 million settlement to resolve a lawsuit from investors who say the company misled them about its financial health by inflating short-term revenue through risky accounting tactics. The deal comes after stock crashes, executive resignations, and mounting evidence of questionable practices.

What Really Happened Behind the Numbers

Starting in 2020, Cerence executives began pushing fixed-license and “minimum commitment” deals that front-loaded revenue without real sales traction. Internally, leadership—including former CEO Sanjay Dhawan and CFO Mark Gallenberger—knew the company was suffering from the global semiconductor shortage but publicly claimed strong, sustainable growth.

Instead of disclosing the long-term risk, they booked revenue upfront from future quarters, creating the illusion of demand. By 2021, Cerence had even raised its 2024 revenue target to $700 million, a goal based largely on pulled-forward sales.

The Cracks Start to Show

In November 2021, Cerence issued weaker-than-expected guidance for fiscal 2022, and the stock plunged 20%. The next month, CEO Dhawan abruptly resigned, triggering another 11% drop. But the biggest hit came in February 2022, when the company admitted it had withdrawn its 2024 guidance and revealed the extent of the damage from its aggressive sales tactics. Shares plummeted 31% in a single day.

Investors Push Back—And Get Results

After the revelations, investors filed a lawsuit accusing Cerence of manipulating revenue, masking long-term risks, and misleading the market. Now, with the $30 million settlement on the table, affected shareholders can file a claim and get compensated. Even though the original deadline has passed, there is still a chance to submit a late claim. You can check the latest details and file yours here.