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Altair Announces First Quarter 2024 Financial Results
Источник: Nasdaq GlobeNewswire / 02 май 2024 15:05:01 America/Chicago
TROY, Mich., May 02, 2024 (GLOBE NEWSWIRE) -- Altair (Nasdaq: ALTR), a global leader in computational intelligence, today released its financial results for the first quarter ended March 31, 2024.
“Altair continued its positive momentum into the start of 2024, with record-high quarterly software revenue and total revenue,” said James R. Scapa, founder, chairman, and chief executive officer, Altair. “The first quarter exceeded our expectations and demonstrates the strength of our product portfolio in bringing computational intelligence to our customers.”
“The start of this year has been marked by strong execution, setting new records in software revenue and total revenue in the first quarter 2024,” said Matt Brown, chief financial officer, Altair. “Revenues and profit were ahead of expectations for the quarter, driven by growth across all three major geographies and multiple verticals.”
First Quarter 2024 Financial Highlights
- Software revenue was $158.4 million compared to $149.6 million for the first quarter of 2023, an increase of 5.9% in reported currency and 6.9% in constant currency
- Total revenue was $172.9 million compared to $166.0 million for the first quarter of 2023, an increase of 4.1% in reported currency and 5.1% in constant currency
- Net income was $16.5 million compared to a net loss of $(2.0) million for the first quarter of 2023. Net income per share, diluted was $0.20 based on 89.8 million diluted weighted average common shares outstanding, compared to net loss per share, diluted of $(0.02) for the first quarter of 2023, based on 80.2 million diluted weighted average common shares outstanding. Net income margin was 9.6% compared to net loss margin of -1.2% for the first quarter of 2023
- Non-GAAP net income was $36.2 million, compared to non-GAAP net income of $31.8 million for the first quarter of 2023, an increase of 13.9%. Non-GAAP net income per share, diluted was $0.40 based on 89.8 million non-GAAP diluted common shares outstanding, compared to non-GAAP net income per share, diluted of $0.36 for the first quarter of 2023, based on 88.0 million non-GAAP diluted common shares outstanding
- Adjusted EBITDA was $45.8 million compared to $43.1 million for the first quarter of 2023, an increase of 6.4%. Adjusted EBITDA margin was 26.5% compared to 25.9% for the first quarter of 2023
- Cash provided by operating activities was $73.5 million, compared to $59.2 million for the first quarter of 2023
- Free cash flow was $70.7 million, compared to $57.5 million for the first quarter of 2023.
Business Outlook
Based on information available as of today, Altair is issuing the following guidance for the second quarter and full year 2024:
(in millions, except %) Second Quarter 2024 Full Year 2024 Software Revenue $ 131 to $ 134 $ 590 to $ 600 Growth Rate 4.5 % 6.9 % 7.3 % 9.1 % Growth Rate - Constant Currency 6.7 % 9.2 % 8.3 % 10.1 % Total Revenue $ 145 $ 148 $ 652 $ 662 Growth Rate 2.7 % 4.8 % 6.4 % 8.0 % Growth Rate - Constant Currency 4.7 % 6.8 % 7.5 % 9.1 % Net (Loss) Income $ (12.3 ) $ (9.4 ) $ 23.2 $ 30.9 Non-GAAP Net Income $ 12.7 $ 15.0 $ 109.9 $ 115.9 Adjusted EBITDA $ 15 $ 18 $ 138 $ 146 Net Cash Provided by Operating Activities $ 135 $ 143 Free Cash Flow $ 124 $ 132 The following table provides a reconciliation of Full Year 2024 guidance to the last guidance provided in February
(Unaudited) Full Year 2024 (in millions) Midpoint of
Guidance in FebruaryIncrease/
(Decrease)Currency Fluctuations
from Prior GuidanceMidpoint of
Guidance in MaySoftware Revenue $ 605.0 $ — $ (10.0 ) $ 595.0 Total Revenue $ 668.0 $ — $ (11.0 ) $ 657.0 Adjusted EBITDA $ 147.0 $ — $ (5.0 ) $ 142.0 Conference Call Information
What: Altair’s First Quarter 2024 Financial Results Conference Call When: Thursday, May 2, 2024 Time: 5 p.m. ET Webcast: http://investor.altair.com (live & replay) Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: Non-GAAP Net Income, Non-GAAP Net Income Per Share, Billings, Adjusted EBITDA, Free Cash Flow, Non-GAAP Gross Profit and Non-GAAP Operating Expense.
Altair believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. The Company’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods for trend analysis, for purposes of determining executive and senior management incentive compensation and for budgeting and planning purposes. The Company also believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.
Non-GAAP net income excludes stock-based compensation, amortization of intangible assets related to acquisitions, asset impairment charges, non-cash interest expense, other special items as identified by management and described elsewhere in this press release, and the impact of non-GAAP tax rate to income tax expense, which approximates our tax rate excluding discrete items and other specific events that can fluctuate from period to period.
Non-GAAP diluted common shares includes the diluted weighted average shares outstanding per GAAP regardless of whether the Company is in a loss position.
Billings consists of total revenue plus the change in deferred revenue, excluding deferred revenue from acquisitions.
Adjusted EBITDA represents net income adjusted for income tax expense, interest expense, interest income and other, depreciation and amortization, stock-based compensation expense, asset impairment charges and other special items as identified by management and described elsewhere in this press release.
Free cash flow consists of cash flow from operations less capital expenditures.
Non-GAAP gross profit represents gross profit adjusted for stock-based compensation expense and other special items as identified by management and described elsewhere in this press release.
Non-GAAP operating expense represents operating expense excluding stock-based compensation expense, amortization, asset impairment charges and other special items as identified by management and described elsewhere in this press release.
Company management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. Altair urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business.
Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables at the end of this release.
About Altair
Altair is a global leader in computational intelligence that provides software and cloud solutions in simulation, high-performance computing (HPC), data analytics and AI. Altair enables organizations across all industries to compete more effectively and drive smarter decisions in an increasingly connected world – all while creating a greener, more sustainable future. To learn more, please visit https://www.altair.com.
Cautionary Language Concerning Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, our guidance for the second quarter and full year 2024, our statements regarding our expectations for 2024, and our reconciliations of projected non-GAAP financial measures. These forward-looking statements are made as of the date of this release and are based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Altair’s control. Altair’s actual results could differ materially from those stated or implied in our forward-looking statements due to a number of factors, including but not limited to, the risks detailed in Altair’s quarterly and annual reports filed with the Securities and Exchange Commission as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent Altair’s views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its views to change. Altair undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing Altair’s views as of any date subsequent to the date of this press release.
Media Relations
Altair
Jennifer Ristic
216-849-3109
jristic@altair.comInvestor Relations
Altair
Stephen Palmtag
669-328-9111
spalmtag@altair.comThe Blueshirt Group
Monica Gould
212-871-3927
ir@altair.comALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETSMarch 31, 2024 December 31, 2023 (In thousands) (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 557,605 $ 467,459 Accounts receivable, net 127,870 190,461 Income tax receivable 18,898 16,650 Prepaid expenses and other current assets 26,026 26,053 Total current assets 730,399 700,623 Property and equipment, net 38,837 39,803 Operating lease right of use assets 30,175 30,759 Goodwill 454,953 458,125 Other intangible assets, net 75,357 83,550 Deferred tax assets 9,699 9,955 Other long-term assets 40,491 40,678 TOTAL ASSETS $ 1,379,911 $ 1,363,493 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 6,522 $ 8,995 Accrued compensation and benefits 35,911 45,081 Current portion of operating lease liabilities 8,330 8,825 Other accrued expenses and current liabilities 43,820 48,398 Deferred revenue 120,554 131,356 Current portion of convertible senior notes, net 81,617 81,455 Total current liabilities 296,754 324,110 Convertible senior notes, net 226,223 225,929 Operating lease liabilities, net of current portion 22,508 22,625 Deferred revenue, non-current 24,385 32,347 Other long-term liabilities 47,113 47,151 TOTAL LIABILITIES 616,983 652,162 Commitments and contingencies STOCKHOLDERS’ EQUITY: Preferred stock ($0.0001 par value), authorized 45,000 shares, none issued and outstanding — — Common stock ($0.0001 par value) Class A common stock, authorized 513,797 shares, issued and outstanding 56,912
and 55,240 shares as of March 31, 2024, and December 31, 2023, respectively5 5 Class B common stock, authorized 41,203 shares, issued and outstanding 26,084
and 26,814 shares as of March 31, 2024, and December 31, 2023, respectively3 3 Additional paid-in capital 904,180 864,135 Accumulated deficit (113,956 ) (130,503 ) Accumulated other comprehensive loss (27,304 ) (22,309 ) TOTAL STOCKHOLDERS’ EQUITY 762,928 711,331 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,379,911 $ 1,363,493 ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)Three Months Ended
March 31,(in thousands, except per share data) 2024 2023 Revenue License $ 117,707 $ 112,409 Maintenance and other services 40,722 37,234 Total software 158,429 149,643 Engineering services and other 14,483 16,391 Total revenue 172,912 166,034 Cost of revenue License 4,490 4,824 Maintenance and other services 14,166 14,426 Total software * 18,656 19,250 Engineering services and other 12,237 13,485 Total cost of revenue 30,893 32,735 Gross profit 142,019 133,299 Operating expenses: Research and development * 52,333 53,251 Sales and marketing * 44,434 43,492 General and administrative * 17,761 17,951 Amortization of intangible assets 7,438 7,814 Other operating (income) expense, net (882 ) 5,605 Total operating expenses 121,084 128,113 Operating income 20,935 5,186 Interest expense 1,576 1,526 Other income, net (3,957 ) (3,613 ) Income before income taxes 23,316 7,273 Income tax expense 6,769 9,232 Net income (loss) $ 16,547 $ (1,959 ) Income (loss) per share: Net income (loss) per share attributable to common stockholders, basic $ 0.20 $ (0.02 ) Net income (loss) per share attributable to common stockholders, diluted $ 0.20 $ (0.02 ) Weighted average shares outstanding: Weighted average number of shares used in computing net income (loss) per share, basic 82,587 80,191 Weighted average number of shares used in computing net income (loss) per share, diluted 89,806 80,191 * Amounts include stock-based compensation expense as follows (in thousands):
(Unaudited) Three Months Ended
March 31,(in thousands) 2024 2023 Cost of revenue – software $ 2,002 $ 2,752 Research and development 6,360 8,743 Sales and marketing 4,520 7,591 General and administrative 3,117 3,075 Total stock-based compensation expense $ 15,999 $ 22,161 ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)Three Months Ended
March 31,(In thousands) 2024 2023 OPERATING ACTIVITIES: Net income (loss) $ 16,547 $ (1,959 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 9,619 9,750 Stock-based compensation expense 15,999 22,161 Loss on mark-to-market adjustment of contingent consideration 145 7,006 Other, net 580 640 Changes in assets and liabilities: Accounts receivable, net 60,245 39,872 Prepaid expenses and other current assets (2,679 ) 1,981 Other long-term assets 9 (1,944 ) Accounts payable (1,667 ) (5,362 ) Accrued compensation and benefits (8,503 ) (12,283 ) Other accrued expenses and current liabilities (199 ) 2,015 Deferred revenue (16,646 ) (2,678 ) Net cash provided by operating activities 73,450 59,199 INVESTING ACTIVITIES: Capital expenditures (2,766 ) (1,727 ) Other investing activities, net 2 (1,405 ) Net cash used in investing activities (2,764 ) (3,132 ) FINANCING ACTIVITIES: Proceeds from the exercise of common stock options 19,844 9,872 Proceeds from employee stock purchase plan contributions 2,182 1,868 Payments for repurchase and retirement of common stock — (6,255 ) Other financing activities — (29 ) Net cash provided by financing activities 22,026 5,456 Effect of exchange rate changes on cash, cash equivalents and restricted cash (2,592 ) 379 Net increase in cash, cash equivalents and restricted cash 90,120 61,902 Cash, cash equivalents and restricted cash at beginning of year 467,576 316,958 Cash, cash equivalents and restricted cash at end of period $ 557,696 $ 378,860 Change in Presentation of Revenue and Cost of Revenue
Effective in the first quarter of 2024, the Company changed the presentation of revenue and cost of revenue in its Consolidated Statements of Operations to combine the financial statement line items (“FSLIs”) labeled “Software related services”, “Client engineering services” and “Other” into one FSLI labeled “Engineering services and other”. The change in presentation has been applied retrospectively and does not affect the software revenue, total revenue, software cost of revenue or total cost of revenue amounts previously reported or have any effect on segment reporting.
Financial Results
The following table provides a reconciliation of Non-GAAP net income and Non-GAAP net income per share – diluted, to net income (loss) and net income (loss) per share – diluted, the most comparable GAAP financial measures:
(Unaudited) Three Months Ended
March 31,(in thousands, except per share amounts) 2024 2023 Net income (loss) $ 16,547 $ (1,959 ) Stock-based compensation expense 15,999 22,161 Amortization of intangible assets 7,438 7,814 Non-cash interest expense 472 465 Impact of non-GAAP tax rate (1) (5,295 ) (1,933 ) Special adjustments and other (2) 1,030 5,231 Non-GAAP net income $ 36,191 $ 31,779 Net income (loss) per share, diluted $ 0.20 $ (0.02 ) Non-GAAP net income per share, diluted $ 0.40 $ 0.36 GAAP diluted shares outstanding 89,806 80,191 Non-GAAP diluted shares outstanding 89,806 88,041 (1) For the three months ended March 31, 2024 and 2023, the Company used a non-GAAP effective tax rate of 25% and 26%, respectively. (2) The three months ended March 31, 2024, includes a $0.1 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, and $0.9 million of currency losses on acquisition-related intercompany loans. The three months ended March 31, 2023, includes a $7.0 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, and $1.8 million of currency gains on acquisition-related intercompany loans. The following table provides a reconciliation of Adjusted EBITDA to net income (loss), the most comparable GAAP financial measure:
(Unaudited) Three Months Ended
March 31,(in thousands) 2024 2023 Net income (loss) $ 16,547 $ (1,959 ) Income tax expense 6,769 9,232 Stock-based compensation expense 15,999 22,161 Interest expense 1,576 1,526 Depreciation and amortization 9,619 9,750 Special adjustments, interest income and other (1) (4,692 ) 2,345 Adjusted EBITDA $ 45,818 $ 43,055 (1) The three months ended March 31, 2024, primarily includes $5.7 million of interest income and $0.9 million of currency losses on acquisition-related intercompany loans. The three months ended March 31, 2023, includes a $7.0 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, $2.9 million of interest income, and $1.8 million of currency gains on acquisition-related intercompany loans. The following table provides a reconciliation of Free Cash Flow to net cash provided by operating activities, the most comparable GAAP financial measure:
(Unaudited) Three Months Ended
March 31,(in thousands) 2024 2023 Net cash provided by operating activities $ 73,450 $ 59,199 Capital expenditures (2,766 ) (1,727 ) Free cash flow $ 70,684 $ 57,472 The following table provides a reconciliation of Non-GAAP gross profit to gross profit, the most comparable GAAP financial measure, and a comparison of Non-GAAP gross margin (Non-GAAP gross profit as a percentage of total revenue) to gross margin (gross profit as a percentage of total revenue), the most comparable GAAP financial measure:
(Unaudited) Three Months Ended
March 31,(in thousands) 2024 2023 Gross profit $ 142,019 $ 133,299 Stock-based compensation expense 2,002 2,752 Non-GAAP gross profit $ 144,021 $ 136,051 Gross profit margin 82.1 % 80.3 % Non-GAAP gross margin 83.3 % 81.9 % The following table provides a reconciliation of Non-GAAP operating expense to Total operating expense, the most comparable GAAP financial measure:
(Unaudited) Three Months Ended
March 31,(in thousands) 2024 2023 Total operating expense $ 121,084 $ 128,113 Stock-based compensation expense (13,997 ) (19,409 ) Amortization (7,438 ) (7,814 ) Loss on mark-to-market adjustment of contingent consideration (145 ) (7,006 ) Non-GAAP operating expense $ 99,504 $ 93,884 The following table provides a reconciliation of Billings to revenue, the most comparable GAAP financial measure:
(Unaudited) Three Months Ended
March 31,(in thousands) 2024 2023 Revenue $ 172,912 $ 166,034 Ending deferred revenue 144,939 141,943 Beginning deferred revenue (163,703 ) (144,460 ) Billings $ 154,148 $ 163,517 The following table provides Software revenue, Total revenue, Billings and Adjusted EBITDA on a constant currency basis:
(Unaudited) Three Months Ended
March 31, 2024Three Months Ended
March 31, 2023Increase/
(Decrease) %(in thousands) As reported Currency changes As adjusted for
constant currencyAs reported As reported As adjusted for
constant currencySoftware revenue $ 158.4 $ 1.5 $ 159.9 $ 149.6 5.9 % 6.9 % Total revenue $ 172.9 $ 1.6 $ 174.5 $ 166.0 4.1 % 5.1 % Billings $ 154.1 $ 0.8 $ 154.9 $ 163.5 -5.7 % -5.3 % Adjusted EBITDA $ 45.8 $ 1.3 $ 47.1 $ 43.1 6.4 % 9.5 % Business Outlook
The following table provides a reconciliation of projected Non-GAAP net income to projected net (loss) income, the most comparable GAAP financial measure:
(Unaudited) Three Months Ending
June 30, 2024Year Ending
December 31, 2024(in thousands) Low High Low High Net (loss) income $ (12,300 ) $ (9,400 ) $ 23,200 $ 30,900 Stock-based compensation expense 17,800 17,800 72,500 72,500 Amortization of intangible assets 7,300 7,300 28,900 28,900 Non-cash interest expense 400 400 1,500 1,500 Impact of non-GAAP tax rate(1) (500 ) (1,100 ) (17,200 ) (18,900 ) Special adjustments and other(2) — — 1,000 1,000 Non-GAAP net income $ 12,700 $ 15,000 $ 109,900 $ 115,900 (1) The Company uses a non-GAAP effective tax rate of 25%. (2) The year ending December 31, 2024, includes a $0.1 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, and $0.9 million of currency losses on acquisition-related intercompany loans. The following table provides a reconciliation of projected Adjusted EBITDA to projected net (loss) income, the most comparable GAAP financial measure:
(Unaudited) Three Months Ending
June 30, 2024Year Ending
December 31, 2024(in thousands) Low High Low High Net (loss) income $ (12,300 ) $ (9,400 ) $ 23,200 $ 30,900 Income tax expense 3,800 3,900 19,500 19,800 Stock-based compensation expense 17,800 17,800 72,500 72,500 Interest (income) expense (3,800 ) (3,800 ) (15,800 ) (15,800 ) Depreciation and amortization 9,500 9,500 37,600 37,600 Special adjustments and other(1) — — 1,000 1,000 Adjusted EBITDA $ 15,000 $ 18,000 $ 138,000 $ 146,000 (1) The year ending December 31, 2024, includes a $0.1 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, and $0.9 million of currency losses on acquisition-related intercompany loans. The following table provides a reconciliation of projected Free Cash Flow to projected net cash provided by operating activities, the most comparable GAAP financial measure:
(Unaudited) Year Ending
December 31, 2024(in thousands) Low High Net cash provided by operating activities $ 135,300 $ 143,300 Capital expenditures (11,300 ) (11,300 ) Free cash flow $ 124,000 $ 132,000