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 February |
|
|
Increase/ (Decrease) |
|
|
Currency Fluctuations from Prior Guidance |
|
|
Midpoint of Guidance in May |
|
Software 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.com
Investor Relations Altair Stephen
Palmtag 669-328-9111 spalmtag@altair.com
The Blueshirt Group Monica Gould 212-871-3927
ir@altair.com
ALTAIR ENGINEERING INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS
|
|
March 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, respectively |
|
|
5 |
|
|
|
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, respectively |
|
|
3 |
|
|
|
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,
2024 |
|
|
Three Months Ended March 31,
2023 |
|
|
Increase/ (Decrease) % |
|
(in
thousands) |
|
As reported |
|
|
Currency changes |
|
|
As adjusted for constant currency |
|
|
As reported |
|
|
As reported |
|
|
As adjusted for constant currency |
|
Software 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,
2024 |
|
|
Year 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,
2024 |
|
|
Year 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 |
|
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