• Altair Announces Fourth Quarter and Full Year 2023 Financial Results

    Источник: Nasdaq GlobeNewswire / 22 фев 2024 16:05:01   America/New_York

    TROY, Mich., Feb. 22, 2024 (GLOBE NEWSWIRE) -- Altair (Nasdaq: ALTR), a global leader in computational intelligence, today released its financial results for the fourth quarter and full year ended December 31, 2023.

    "Altair finished 2023 with a strong fourth quarter, notching record-high revenue and profit for the quarter and full-year," said James R. Scapa, founder, chairman and chief executive officer of Altair. "We are seeing strong momentum across a number of verticals, where computational intelligence is becoming increasingly important. We are excited about our recent and upcoming product releases and believe that our investments in engineering AI are positioning us as a leader in this important and growing domain.”

    "Our global team worked hard to achieve outstanding results for 2023, and we finished the year exceeding our profitability goals. We are thrilled to have surpassed the 20% adjusted EBITDA margin target for 2023 that we established three years ago," said Matt Brown, chief financial officer of Altair. “Our strong results despite somewhat difficult macroeconomic conditions demonstrate the importance of our products in solving our customers’ most important challenges. We are excited about the tremendous opportunity ahead of us as we continue to execute on our financial targets.”

    Fourth Quarter 2023 Financial Highlights

    • Software product revenue was $155.9 million compared to $145.0 million for the fourth quarter of 2022, an increase of 7.6% in reported currency and 6.7% in constant currency
    • Total revenue was $171.5 million compared to $160.4 million for the fourth quarter of 2022, an increase of 6.9% in reported currency and 6.0% in constant currency
    • Net income was $19.7 million compared to $12.1 million for the fourth quarter of 2022. Net income per share, diluted was $0.22 based on 89.0 million diluted weighted average common shares outstanding, compared to net income per share, diluted of $0.14 for the fourth quarter of 2022, based on 87.5 million diluted weighted average common shares outstanding. Net income margin was 11.5% compared to net income margin of 7.5% for the fourth quarter of 2022
    • Non-GAAP net income was $41.1 million, compared to non-GAAP net income of $27.5 million for the fourth quarter of 2022, an increase of 49.2%. Non-GAAP net income per share, diluted was $0.46 based on 89.0 million non-GAAP diluted common shares outstanding, compared to non-GAAP net income per share, diluted of $0.31 for the fourth quarter of 2022, based on 87.5 million non-GAAP diluted common shares outstanding
    • Adjusted EBITDA was $53.6 million compared to $38.7 million for the fourth quarter of 2022, an increase of 38.3%. Adjusted EBITDA margin was 31.2% compared to 24.1% for the fourth quarter of 2022
    • Cash provided by operating activities was $21.7 million, compared to $13.0 million for the fourth quarter of 2022
    • Free cash flow was $19.3 million, compared to $10.1 million for the fourth quarter of 2022.

    Full Year 2023 Financial Highlights

    • Software product revenue was $550.0 million compared to $506.5 million for the full year of 2022, an increase of 8.6% in reported currency and 9.8% in constant currency
    • Total revenue was $612.7 million compared to $572.2 million for the full year of 2022, an increase of 7.1% in reported currency and 8.2% in constant currency
    • Net loss was $(8.9) million compared to net loss of $(43.4) million for the full year of 2022. Net loss per share, diluted was $(0.11) based on 80.6 million diluted weighted average common shares outstanding, compared to net loss per share, diluted of $(0.55) for the full year of 2022, based on 79.5 million diluted weighted average common shares outstanding. Net loss margin was -1.5% compared to net loss margin of -7.6% for the full year of 2022
    • Non-GAAP net income was $98.8 million, compared to non-GAAP net income of $75.6 million for the full year of 2022, an increase of 30.6%. Non-GAAP net income per share, diluted was $1.13 based on 87.6 million non-GAAP diluted common shares outstanding, compared to non-GAAP net income per share, diluted of $0.89 for the full year of 2022, based on 85.4 million non-GAAP diluted common shares outstanding
    • Adjusted EBITDA was $129.1 million compared to $108.6 million for the full year of 2022, an increase of 18.9%. Adjusted EBITDA margin was 21.1% compared to 19.0% for the full year of 2022
    • Cash provided by operating activities was $127.3 million, compared to $39.6 million for the full year of 2022
    • Free cash flow was $117.1 million, compared to $29.9 million for the full year of 2022.

    Business Outlook

    Based on information available as of today, Altair is issuing the following guidance for the first quarter and full year 2024:

       
    (in millions, except %) First Quarter 2024  Full Year 2024 
    Software Product Revenue $152 to$155  $600 to$610 
    Growth Rate  1.6%  3.6%  9.1%  10.9%
    Growth Rate - Constant Currency  0.8%  2.8%  8.3%  10.1%
    Total Revenue $167  $170  $663  $673 
    Growth Rate  0.6%  2.4%  8.2%  9.8%
    Growth Rate - Constant Currency  -0.1%  1.7%  7.5%  9.1%
    Net Income $8.0  $11.0  $30.0  $37.7 
    Non-GAAP Net Income $29.5  $31.7  $114.4  $120.4 
    Adjusted EBITDA $37  $40  $143  $151 
    Net Cash Provided by Operating Activities       $140  $148 
    Free Cash Flow       $129  $137 


    Conference Call Information
      
    What: Altair’s Fourth Quarter and Full Year 2023 Financial Results Conference Call
    When:Thursday, February 22, 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, restructuring charges, 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, restructuring charges, 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, restructuring 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, restructuring charges, 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. For more information, 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 first 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
    Dave Simon
    248-614-2400 ext. 332
    dls@altair.com

    Investor Relations
    The Blueshirt Group
    Monica Gould
    212-871-3927
    ir@altair.com


    ALTAIR ENGINEERING INC. AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    (Unaudited)
     
     December 31, 
    (in thousands)2023  2022 
    ASSETS     
    CURRENT ASSETS     
    Cash and cash equivalents$467,459  $316,146 
    Accounts receivable, net 190,461   170,279 
    Income tax receivable 16,650   11,259 
    Prepaid expenses and other current assets 26,053   29,142 
    Total current assets 700,623   526,826 
    Property and equipment, net 39,803   37,517 
    Operating lease right of use assets 30,759   33,601 
    Goodwill 458,125   449,048 
    Other intangible assets, net 83,550   107,609 
    Deferred tax assets 9,955   9,727 
    Other long-term assets 40,678   40,410 
    TOTAL ASSETS$1,363,493  $1,204,738 
    LIABILITIES AND STOCKHOLDERS’ EQUITY     
    CURRENT LIABILITIES     
    Accounts payable$8,995  $10,434 
    Accrued compensation and benefits 45,081   42,456 
    Current portion of operating lease liabilities 8,825   10,396 
    Other accrued expenses and current liabilities 48,398   56,371 
    Deferred revenue 131,356   113,081 
    Current portion of convertible senior notes, net 81,455    
    Total current liabilities 324,110   232,738 
    Convertible senior notes, net 225,929   305,604 
    Operating lease liabilities, net of current portion 22,625   24,065 
    Deferred revenue, non-current 32,347   31,379 
    Other long-term liabilities 47,151   41,216 
    TOTAL LIABILITIES 652,162   635,002 
    Commitments and contingencies     
    STOCKHOLDERS’ EQUITY     
    Preferred stock ($0.0001 par value), authorized 45,000 shares, none issued or outstanding     
    Common stock ($0.0001 par value)     
    Class A common stock, authorized 513,797 shares, issued and outstanding 55,240 and 52,277 shares as of December 31, 2023 and 2022, respectively 5   5 
    Class B common stock, authorized 41,203 shares, issued and outstanding 26,814 and 27,745 shares as of December 31, 2023 and 2022, respectively 3   3 
    Additional paid-in capital 864,135   721,307 
    Accumulated deficit (130,503)  (121,577)
    Accumulated other comprehensive loss (22,309)  (30,002)
    TOTAL STOCKHOLDERS’ EQUITY 711,331   569,736 
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$1,363,493  $1,204,738 



    ALTAIR ENGINEERING INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited)
     
     Three Months Ended
    December 31, 2023
      Year Ended
    December 31, 2023
     
    (in thousands, except per share data)2023  2022  2023  2022 
    Revenue           
    License$113,172  $107,418  $393,144  $363,520 
    Maintenance and other services 42,761   37,535   156,830   142,988 
    Total software 155,933   144,953   549,974   506,508 
    Software related services 7,751   7,518   28,032   30,661 
    Total software and related services 163,684   152,471   578,006   537,169 
    Client engineering services 6,561   6,469   29,497   28,883 
    Other 1,258   1,493   5,198   6,169 
    Total revenue 171,503   160,433   612,701   572,221 
    Cost of revenue           
    License 3,200   9,111   15,088   20,497 
    Maintenance and other services 14,340   13,318   56,094   51,946 
    Total software * 17,540   22,429   71,182   72,443 
    Software related services 5,655   5,119   21,830   21,858 
    Total software and related services 23,195   27,548   93,012   94,301 
    Client engineering services 5,129   5,187   24,450   23,577 
    Other 849   1,119   4,329   5,011 
    Total cost of revenue 29,173   33,854   121,791   122,889 
    Gross profit 142,330   126,579   490,910   449,332 
    Operating expenses:           
    Research and development * 52,519   51,934   212,645   202,542 
    Sales and marketing * 43,595   43,539   176,138   163,884 
    General and administrative * 17,096   18,234   70,887   72,288 
    Amortization of intangible assets 7,708   8,828   30,851   27,510 
    Other operating (income) expense, net (1,178)  (572)  146   (9,955)
    Total operating expenses 119,740   121,963   490,667   456,269 
    Operating income (loss) 22,590   4,616   243   (6,937)
    Interest expense 1,533   1,526   6,116   4,377 
    Other (income) loss, net (8,794)  (9,183)  (18,492)  16,899 
    Income (loss) before income taxes 29,851   12,273   12,619   (28,213)
    Income tax expense 10,176   208   21,545   15,216 
    Net income (loss)$19,675  $12,065  $(8,926) $(43,429)
    Income (loss) per share:           
    Net income (loss) per share attributable to common stockholders, basic$0.24  $0.15  $(0.11) $(0.55)
    Net income (loss) per share attributable to common stockholders, diluted$0.22  $0.14  $(0.11) $(0.55)
    Weighted average shares outstanding:           
    Weighted average number of shares used in computing net income (loss) per share, basic 81,760   80,266   80,596   79,472 
    Weighted average number of shares used in computing net income (loss) per share, diluted 88,977   87,498   80,596   79,472 


    * Amounts include stock-based compensation expense as follows (in thousands):

     (Unaudited) 
     Three Months Ended
    December 31,
      Year Ended
    December 31,
     
    (in thousands)2023  2022  2023  2022 
    Cost of revenue – software$2,303  $2,086  $10,095  $8,351 
    Research and development 7,332   9,670   33,842   36,250 
    Sales and marketing 6,271   7,865   28,376   30,370 
    General and administrative 3,252   2,642   13,268   9,816 
    Total stock-based compensation expense$19,158  $22,263  $85,581  $84,787 


     (Unaudited) 
     Three Months Ended
    December 31,
      Year Ended
    December 31,
     
    (in thousands)2023  2022  2023  2022 
    Employee stock-based compensation plans$16,688  $15,933  $73,548  $59,555 
    Post combination expense in connection with acquisitions 2,470   6,330   12,033   25,232 
    Total stock-based compensation expense$19,158  $22,263  $85,581  $84,787 




    ALTAIR ENGINEERING INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOW
    (Unaudited)
     
     Year Ended December 31, 
    (in thousands)2023  2022  2021 
    OPERATING ACTIVITIES:        
    Net loss$(8,926) $(43,429) $(8,794)
    Adjustments to reconcile net loss to net cash provided by operating activities:        
    Depreciation and amortization 39,124   35,504   25,644 
    Amortization of debt discount and issuance costs 1,869   1,792   11,428 
    Stock-based compensation expense 85,581   84,787   44,549 
    Deferred income taxes (2,319)  (4,164)  (1,502)
    Loss (gain) on mark-to-market adjustment of contingent consideration 5,706   (7,153)   
    Expense on repurchase of convertible senior notes    16,621    
    Other, net 74   387   1,271 
    Changes in assets and liabilities:        
    Accounts receivable (19,141)  (34,175)  (15,645)
    Prepaid expenses and other current assets (1,915)  1,014   (9,026)
    Other long-term assets (52)  2,852   (6,682)
    Accounts payable (1,878)  3,771   (3,857)
    Accrued compensation and benefits 1,783   280   7,761 
    Other accrued expenses and current liabilities 9,068   (59,463)  6,365 
    Deferred revenue 18,333   40,946   10,111 
    Net cash provided by operating activities 127,307   39,570   61,623 
    INVESTING ACTIVITIES:        
    Capital expenditures (10,193)  (9,648)  (7,849)
    Payments for acquisition of businesses, net of cash acquired (3,236)  (134,541)  (53,983)
    Other investing activities, net (2,423)  (10,322)  (650)
    Net cash used in investing activities (15,852)  (154,511)  (62,482)
    FINANCING ACTIVITIES:        
    Proceeds from the exercise of common stock options 36,140   3,577   2,262 
    Proceeds from employee stock purchase plan contributions 7,978   8,976   4,222 
    Payments for repurchase and retirement of common stock (6,255)  (19,659)   
    Proceeds from issuance of convertible senior notes, net of underwriters' discounts and commissions    224,265    
    Repurchase of convertible senior notes    (192,422)   
    Payments for issuance costs of convertible senior notes    (1,523)   
    Proceeds from private placement of common stock       200,000 
    Payments on revolving commitment       (30,000)
    Other financing activities (97)  (233)  (537)
    Net cash provided by financing activities 37,766   22,981   175,947 
    Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,397   (5,094)  (2,623)
    Net increase (decrease) in cash, cash equivalents and restricted cash 150,618   (97,054)  172,465 
    Cash, cash equivalents and restricted cash at beginning of year 316,958   414,012   241,547 
    Cash, cash equivalents and restricted cash at end of period$467,576  $316,958  $414,012 


    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
    December 31,
      Year Ended
    December 31,
     
    (in thousands, except per share amounts)2023  2022  2023  2022 
    Net income (loss)$19,675  $12,065  $(8,926) $(43,429)
    Stock-based compensation expense 19,158   22,263   85,581   84,787 
    Amortization of intangible assets 7,708   8,828   30,851   27,510 
    Non-cash interest expense 470   467   1,869   1,806 
    Impact of non-GAAP tax rate(1) (4,261)  (9,468)  (13,158)  (11,346)
    Special adjustments and other(2) (1,659)  (6,614)  2,553   16,272 
    Non-GAAP net income$41,091  $27,541  $98,770  $75,600 
                
    Net income (loss) per share, diluted$0.22  $0.14  $(0.11) $(0.55)
    Non-GAAP net income per share, diluted$0.46  $0.31  $1.13  $0.89 
                
    GAAP diluted shares outstanding: 88,977   87,498   80,596   79,472 
    Non-GAAP diluted shares outstanding: 88,977   87,498   87,642   85,392 

    (1)  The Company uses a non-GAAP effective tax rate of 26%.

    (2)  The three months ended December 31, 2023, includes a $1.2 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition and $2.9 million currency gains on acquisition-related intercompany loans. The three months ended December 31, 2022, includes $6.9 million currency gains on acquisition-related intercompany loans and a $0.3 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition. The twelve months ended December 31, 2023, includes a $5.7 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition and $3.2 million currency gains on acquisition-related intercompany loans. The twelve months ended December 31, 2022, includes $16.6 million expense on repurchase of convertible senior notes, $6.8 million currency losses on acquisition-related intercompany loans, and a $7.2 million gain from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition.


    The following table provides a reconciliation of Adjusted EBITDA to net income (loss), the most comparable GAAP financial measure:

     (Unaudited) 
     Three Months Ended
    December 31,
      Year Ended
    December 31,
     
    (in thousands)2023  2022  2023  2022 
    Net income (loss)$19,675  $12,065  $(8,926) $(43,429)
    Income tax expense 10,176   208   21,545   15,216 
    Stock-based compensation expense 19,158   22,263   85,581   84,787 
    Interest expense 1,533   1,526   6,116   4,377 
    Depreciation and amortization 9,853   11,412   39,124   35,504 
    Special adjustments, interest income and other(1) (6,822)  (8,733)  (14,302)  12,145 
    Adjusted EBITDA$53,573  $38,741  $129,138  $108,600 

    (1)  The three months ended December 31, 2023, includes a $1.2 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, $2.9 million currency gains on acquisition-related intercompany loans, and $5.2 million of interest income. The three months ended December 31, 2022, includes $6.9 million currency gains on acquisition-related intercompany loans, a $0.3 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, and $2.1 million of interest income. The twelve months ended December 31, 2023, includes a $5.7 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, $3.2 million currency gains on acquisition-related intercompany loans, and $16.9 million of interest income. The twelve months ended December 31, 2022, includes $16.6 million expense on repurchase of convertible senior notes, $6.8 million currency losses on acquisition-related intercompany loans, a $7.2 million gain from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, and $4.1 million of interest income.


    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
    December 31,
      Year Ended
    December 31,
     
    (in thousands)2023  2022  2023  2022 
    Net cash provided by operating activities(1)$21,651  $13,036  $127,307  $39,570 
    Capital expenditures (2,311)  (2,927)  (10,193)  (9,648)
    Free Cash Flow(1)$19,340  $10,109  $117,114  $29,922 

    (1)  The twelve months ended December 31, 2022, includes a $65.9 million payment in January 2022 for a damages judgment assumed as part of an acquisition in 2021.


    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
    December 31, 2023
      Year Ended
    December 31,
     
    (in thousands)2023  2022  2023  2022 
    Gross profit$142,330  $126,579  $490,910  $449,332 
    Stock-based compensation expense 2,303   2,086   10,095   8,351 
    Non-GAAP gross profit$144,633  $128,665  $501,005  $457,683 
                
    Gross profit margin 83.0%  78.9%  80.1%  78.5%
    Non-GAAP gross margin 84.3%  80.2%  81.8%  80.0%



    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
    December 31, 2023
      Year Ended
    December 31,
     
    (in thousands)2023  2022  2023  2022 
    Total operating expense$119,740  $121,963  $490,667  $456,269 
    Stock-based compensation expense (16,855)  (20,177)  (75,486)  (76,436)
    Amortization (7,708)  (8,828)  (30,851)  (27,510)
    (Gain) loss on mark-to-market adjustment of contingent consideration (1,212)  (329)  (5,706)  7,153 
    Non-GAAP operating expense$93,965  $92,629  $378,624  $359,476 



    The following table provides a reconciliation of Billings to revenue, the most comparable GAAP financial measure:

     (Unaudited) 
     Three Months Ended
    December 31,
      Year Ended
    December 31,
     
    (in thousands)2023  2022  2023  2022 
    Revenue$171,503  $160,433  $612,701  $572,221 
    Ending deferred revenue 163,703   144,460   163,703   144,460 
    Beginning deferred revenue (138,933)  (116,540)  (144,460)  (106,032)
    Deferred revenue acquired (149)  (449)  (149)  (3,047)
    Billings$196,124  $187,904  $631,795  $607,602 



    The following table provides revenue, Billings and Adjusted EBITDA on a constant currency basis:

     (Unaudited) 
     Three Months Ended
    December 31, 2023
      Three Months Ended December 31, 2022  Increase/
    (Decrease) %
     
    (in thousands)As reported  Currency changes  As adjusted for constant currency  As reported  As reported  As adjusted for constant currency 
    Software revenue$155.9  $(1.3) $154.6  $145.0   7.6%  6.7%
    Total revenue$171.5  $(1.5) $170.0  $160.4   6.9%  6.0%
    Billings$196.1  $(1.4) $194.7  $187.9   4.4%  3.6%
    Adjusted EBITDA$53.6  $0.3  $53.9  $38.7   38.3%  39.1%
                      
                      
     (Unaudited) 
     Year Ended
    December 31, 2023
      Year Ended December 31, 2022  Increase/
    (Decrease) %
     
    (in thousands)As reported  Currency changes  As adjusted for constant currency  As reported  As reported  As adjusted for constant currency 
    Software revenue$550.0  $6.4  $556.4  $506.5   8.6%  9.8%
    Total revenue$612.7  $6.6  $619.3  $572.2   7.1%  8.2%
    Billings$631.8  $5.1  $636.9  $607.6   4.0%  4.8%
    Adjusted EBITDA$129.1  $5.2  $134.3  $108.6   18.9%  23.7%


    Change in Classification of Indirect Costs

    Beginning in the first quarter of 2023, the Company refined its classification of certain indirect costs to reflect the way management is now reviewing the information in decision making and to improve comparability with peers. These indirect costs include certain IT, facilities, and depreciation expenses that were previously reported primarily in General and administrative expense. These indirect costs have now been reclassified to Research and development, Sales and marketing, and General and administrative expenses based on global headcount. Management believes this refined methodology better reflects the nature of the costs and financial performance of the Company.

    As a result, the Company’s consolidated statements of operations have been recast for prior periods presented to reflect the effects of the changes to Research and development, Sales and marketing, and General and administrative expense. There was no net impact to total operating expenses, income from operations, net income or net income per share for any periods presented. The consolidated balance sheets, consolidated statements of comprehensive income, consolidated statements of changes in stockholders’ equity, and the consolidated statements of cash flows were not affected by changes in the presentation of these costs.

    Each prior period that will be presented in the forthcoming Form 10-Q and Form 10-K filings will be recast to conform to current period presentation. The following tables provide the relevant financial results as previously reported, as recast for the current period and forthcoming filings, and the associated impacts of the changes. Within these tables, the references to periods such as “FY 2021” and “Q1 2022” refer to the corresponding periods as reported in the applicable Form 10-K, Form 10-Q, or Form 8-K filings.

    The following table summarizes the changes made to the consolidated statements of operations (in thousands):

     Previously Reported 
     FY 2021  Q1 2022  Q2 2022  Q3 2022  Q4 2022  FY 2022 
    Operating expenses:                 
    Research and development$151,049  $43,094  $46,477  $48,781  $47,511  $185,863 
    Sales and marketing 132,750   35,682   39,116   39,244   41,203   155,245 
    General and administrative 91,500   23,569   24,367   24,677   24,993   97,606 
    Amortization of intangible assets 18,357   5,903   6,208   6,571   8,828   27,510 
    Other operating income, net (3,482)  (781)  (5,767)  (2,835)  (572)  (9,955)
    Total operating expenses$390,174  $107,467  $110,401  $116,438  $121,963  $456,269 
                      
     Recast 
     FY 2021  Q1 2022  Q2 2022  Q3 2022  Q4 2022  FY 2022 
    Operating expenses:                 
    Research and development$167,341  $47,079  $50,437  $53,092  $51,934  $202,542 
    Sales and marketing 141,484   37,840   41,153   41,352   43,539   163,884 
    General and administrative 66,474   17,426   18,370   18,258   18,234   72,288 
    Amortization of intangible assets 18,357   5,903   6,208   6,571   8,828   27,510 
    Other operating income, net (3,482)  (781)  (5,767)  (2,835)  (572)  (9,955)
    Total operating expenses$390,174  $107,467  $110,401  $116,438  $121,963  $456,269 
                      
     Change 
     FY 2021  Q1 2022  Q2 2022  Q3 2022  Q4 2022  FY 2022 
    Operating expenses:                 
    Research and development$16,292  $3,985  $3,960  $4,311  $4,423  $16,679 
    Sales and marketing 8,734   2,158   2,037   2,108   2,336   8,639 
    General and administrative (25,026)  (6,143)  (5,997)  (6,419)  (6,759)  (25,318)
    Amortization of intangible assets                 
    Other operating income, net                 
    Total operating expenses$  $  $  $  $  $ 



    Business Outlook

    The following table provides a reconciliation of projected Non-GAAP net income to projected net income, the most comparable GAAP financial measure:

     (Unaudited) 
     Three Months Ending
    March 31, 2024
      Year Ending
    December 31, 2024
     
    (in thousands)Low  High  Low  High 
    Net income$8,000  $11,000  $30,000  $37,700 
    Stock-based compensation expense 18,900   18,900   74,500   74,500 
    Amortization of intangible assets 7,400   7,400   28,800   28,800 
    Non-cash interest expense 500   500   1,500   1,500 
    Impact of non-GAAP tax rate(1) (5,300)  (6,100)  (20,400)  (22,100)
    Non-GAAP net income$29,500  $31,700  $114,400  $120,400 

    (1) The Company uses a non-GAAP effective tax rate of 25%.



    The following table provides a reconciliation of projected Adjusted EBITDA to projected net income, the most comparable GAAP financial measure:

     (Unaudited) 
     Three Months Ending
    March 31, 2024
      Year Ending
    December 31, 2024
     
    (in thousands)Low  High  Low  High 
    Net income$8,000  $11,000  $30,000  $37,700 
    Income tax expense 4,500   4,500   17,700   18,000 
    Stock-based compensation expense 18,900   18,900   74,500   74,500 
    Interest (income) expense, net (3,900)  (3,900)  (16,600)  (16,600)
    Depreciation and amortization 9,500   9,500   37,400   37,400 
    Adjusted EBITDA$37,000  $40,000  $143,000  $151,000 



    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$140,000  $148,000 
    Capital expenditures (11,000)  (11,000)
    Free cash flow$129,000  $137,000 


    Primary Logo

Опубликовать