Altair Announces Third Quarter 2024 Financial Results
Altair (ALTR) reported strong Q3 2024 financial results, with software revenue increasing 16.5% to $138.7 million and total revenue rising 13.0% to $151.5 million compared to Q3 2023. The company achieved a net income of $1.8 million, improving from a $4.4 million loss in the previous year. Adjusted EBITDA grew 66.3% to $25.7 million with a margin of 17.0%. Notably, Altair announced entering into a merger agreement with a Siemens subsidiary for acquisition.
Altair (ALTR) ha riportato risultati finanziari solidi per il terzo trimestre del 2024, con un aumento del fatturato software del 16,5%, arrivando a 138,7 milioni di dollari, e un incremento del fatturato totale del 13,0%, raggiungendo i 151,5 milioni di dollari rispetto al terzo trimestre del 2023. L'azienda ha conseguito un utile netto di 1,8 milioni di dollari, migliorando rispetto a una perdita di 4,4 milioni di dollari dell'anno precedente. L'EBITDA corretto è cresciuto del 66,3% fino a 25,7 milioni di dollari, con un margine del 17,0%. È importante notare che Altair ha annunciato di aver stipulato un accordo di fusione con una filiale della Siemens per un'acquisizione.
Altair (ALTR) informó sobre resultados financieros sólidos para el tercer trimestre de 2024, con un aumento del ingreso por software del 16.5% alcanzando los 138.7 millones de dólares y un incremento del ingreso total del 13.0% hasta 151.5 millones de dólares en comparación con el tercer trimestre de 2023. La compañía logró un ingreso neto de 1.8 millones de dólares, mejorando respecto a una pérdida de 4.4 millones del año anterior. El EBITDA ajustado creció un 66.3% hasta 25.7 millones de dólares, con un margen del 17.0%. Notablemente, Altair anunció la entrada en un acuerdo de fusión con una subsidiaria de Siemens para una adquisición.
Altair (ALTR)는 2024년 3분기 강력한 재무 결과를 보고했으며, 소프트웨어 수익이 16.5% 증가하여 1억 3천8백7십만 달러에 달하고, 총 수익도 13.0% 상승하여 1억 5천1백5십만 달러에 이르렀습니다. 이는 2023년 3분기와 비교한 결과입니다. 회사는 180만 달러의 순이익을 달성했으며, 이는 전년도의 440만 달러 손실에서 개선된 것입니다. 조정 EBITDA는 66.3% 증가하여 2천5백7십만 달러에 도달했고, 마진은 17.0%였습니다. 특히, Altair는 Siemens의 자회사와 인수 합병 계약을 체결했다고 발표했습니다.
Altair (ALTR) a annoncé de solides résultats financiers pour le troisième trimestre 2024, avec une augmentation de revenus logiciels de 16,5% à 138,7 millions de dollars et une hausse de revenus totaux de 13,0% à 151,5 millions de dollars par rapport au troisième trimestre 2023. L'entreprise a enregistré un bénéfice net de 1,8 million de dollars, améliorant sa situation après une perte de 4,4 millions de dollars l'année précédente. L'EBITDA ajusté a crû de 66,3% pour atteindre 25,7 millions de dollars, avec une marge de 17,0%. Notamment, Altair a annoncé être entrée dans un accord de fusion avec une filiale de Siemens pour une acquisition.
Altair (ALTR) hat im dritten Quartal 2024 starke finanzielle Ergebnisse gemeldet, wobei der Umsatz mit Software um 16,5% auf 138,7 Millionen Dollar gestiegen ist und der Gesamtumsatz um 13,0% auf 151,5 Millionen Dollar im Vergleich zum dritten Quartal 2023 gewachsen ist. Das Unternehmen erzielte einen Reingewinn von 1,8 Millionen Dollar, was eine Verbesserung gegenüber einem Verlust von 4,4 Millionen Dollar im Vorjahr darstellt. Das bereinigte EBITDA wuchs um 66,3% auf 25,7 Millionen Dollar mit einer Marge von 17,0%. Besonders erwähnenswert ist, dass Altair angekündigt hat, einen Fusionsvertrag mit einer Tochtergesellschaft von Siemens für eine Übernahme abgeschlossen zu haben.
- Software revenue increased 16.5% to $138.7 million
- Total revenue grew 13.0% to $151.5 million
- Net income improved to $1.8 million from -$4.4 million loss
- Adjusted EBITDA increased 66.3% to $25.7 million
- Adjusted EBITDA margin improved to 17.0% from 11.5%
- Free cash flow decreased to $9.8 million from $14.7 million
- Operating cash flow declined to $14.5 million from $16.4 million
Insights
The Q3 2024 results demonstrate robust growth with
The most significant development is the announced merger agreement with Siemens, which will result in Altair being acquired. This strategic move could reshape the company's market position in the simulation and optimization software industry. The suspension of quarterly guidance and conference calls signals the transitional phase as the merger progresses.
The announced Siemens acquisition represents a strategic consolidation in the industrial software sector. Altair's strong financial performance, particularly the
TROY, Mich., Oct. 30, 2024 (GLOBE NEWSWIRE) -- Altair (Nasdaq: ALTR), today released its financial results for the third quarter and nine months ended September 30, 2024.
Immediately prior to the dissemination of this press release, Altair issued a press release announcing that it has entered into a merger agreement with a subsidiary of Siemens pursuant to which Altair will be acquired and stockholders of Altair will receive cash merger consideration as more fully described in that press release.
Third Quarter 2024 Financial Results
- Software revenue was
$138.7 million compared to$119.1 million for the third quarter of 2023, an increase of16.5% in reported currency and16.2% in constant currency - Total revenue was
$151.5 million compared to$134.0 million for the third quarter of 2023, an increase of13.0% in reported currency and12.8% in constant currency - Net income was
$1.8 million compared to a net loss of$(4.4) million for the third quarter of 2023, an improvement in earnings of$6.2 million . Net income per share, diluted was$0.02 b ased on 88.4 million diluted weighted average common shares outstanding, compared to net loss per share, diluted of$(0.05) for the third quarter of 2023, based on 80.4 million diluted weighted average common shares outstanding. Net income margin was1.2% compared to net loss margin of (3.3)% for the third quarter of 2023 - Non-GAAP net income was
$21.2 million , compared to non-GAAP net income of$12.7 million for the third quarter of 2023, an increase of$8.5 million . Non-GAAP net income per share, diluted was$0.24 b ased on 88.4 million non-GAAP diluted common shares outstanding, compared to non-GAAP net income per share, diluted of$0.15 for the third quarter of 2023, based on 85.3 million non-GAAP diluted common shares outstanding - Adjusted EBITDA was
$25.7 million compared to$15.5 million for the third quarter of 2023, an increase of66.3% Adjusted EBITDA margin was17.0% compared to11.5% for the third quarter of 2023 - Cash provided by operating activities was
$14.5 million , compared to$16.4 million for the third quarter of 2023 - Free cash flow was
$9.8 million , compared to$14.7 million for the third quarter of 2023.
Conference Call Information
In light of the proposed transaction with Siemens, Altair is suspending quarterly financial results conference calls and its quarterly and annual guidance.
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 is calculated using the treasury stock method to calculate the effect of dilutive securities, stock options, restricted stock units and employee stock purchase plan shares and using the if-converted method to calculate the effect of convertible instruments. This is the same methodology that is used when calculating GAAP diluted shares. However, the determination of whether the shares are dilutive or antidilutive is made independently on a GAAP and non-GAAP net income (loss) basis and therefore the number of diluted shares outstanding for GAAP and non-GAAP may be different.
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.
Important Information and Where to Find It
This communication relates to a proposed transaction between Altair and Siemens Industry Software Inc. (“Parent”). In connection with this proposed transaction, Altair will file a Current Report on Form 8-K with further information regarding the terms and conditions contained in the definitive transaction agreements and a proxy statement on Schedule 14A or other documents with the United States Securities and Exchange Commission (the “SEC”). This communication is not a substitute for any proxy statement or other document that Altair may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF ALTAIR ARE URGED TO READ THE PROXY STATEMENT, INCLUDING THE DOCUMENTS INCORPORATED BY REFERENCE INTO THE PROXY STATEMENT, AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The definitive proxy statement, when available, will be mailed to stockholders of Altair as applicable. Investors and security holders will be able to obtain free copies of these documents, when available, and other documents filed with the SEC by Altair through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Altair will be available free of charge on Altair’s internet website at https://investor.altair.com or by contacting Altair’s primary investor relations contact by email at ir@altair.com or by phone at (248) 614-2400.
Participants in Solicitation
Altair, Parent, Siemens AG, their respective directors and certain of their respective executive officers may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of Altair, their ownership of Altair common shares, and Altair’s transactions with related persons is set forth in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 22, 2024 (and which is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/0001701732/000095017024018804/altr-20231231.htm), in its proxy statement on Schedule 14A for its 2024 Annual Meeting of Stockholders in the sections entitled “Corporate Governance Matters,” “Security Ownership of Certain Beneficial Owners and Management” and “Transactions with Related Persons”, which was filed with the SEC on April 5, 2024 (and which is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/0001701732/000119312524087903/d722499ddef14a.htm), certain of its Quarterly Reports on Form 10-Q and certain of its Current Reports on Form 8-K.
These documents can be obtained free of charge from the sources indicated above. Additional information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC when they become available.
No Offer or Solicitation
This communication is for informational purposes only and is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
This communication contains “forward-looking statements” within the Private Securities Litigation Reform Act of 1995. Any statements contained in this communication that are not statements of historical fact, including statements regarding the proposed transaction, including the expected timing and closing of the proposed transaction; Altair’s ability to consummate the proposed transaction; the expected benefits of the proposed transaction and other considerations taken into account by the Altair Board of Directors in approving the proposed transaction; the amounts to be received by stockholders and expectations for Altair prior to and following the closing of the proposed transaction, may be deemed to be forward-looking statements. All such forward-looking statements are intended to provide management’s current expectations for the future of Altair based on current expectations and assumptions relating to Altair’s business, the economy and other future conditions. Forward-looking statements generally can be identified through the use of words such as “believes,” “anticipates,” “may,” “should,” “will,” “plans,” “projects,” “expects,” “expectations,” “estimates,” “forecasts,” “predicts,” “targets,” “prospects,” “strategy,” “signs,” and other words of similar meaning in connection with the discussion of future performance, plans, actions or events. Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties and changes in circumstances that are difficult to predict. Such risks and uncertainties include, among others: (i) the timing to consummate the proposed transaction, (ii) the risk that a condition of closing of the proposed transaction may not be satisfied or that the closing of the proposed transaction might otherwise not occur, (iii) the risk that a regulatory approval that may be required for the proposed transaction is not obtained or is obtained subject to conditions that are not anticipated, (iv) the diversion of management time on transaction-related issues, (v) risks related to disruption of management time from ongoing business operations due to the proposed transaction, (vi) the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the common stock of Altair, (vii) the risk that the proposed transaction and its announcement could have an adverse effect on the ability of Altair to retain customers and retain and hire key personnel and maintain relationships with its suppliers and customers, (viii) the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the Merger Agreement, dated October 30, 2024, with Siemens (the “Merger Agreement”), including in circumstances requiring Altair to pay a termination fee, (ix) the risk that competing offers will be made; (x) unexpected costs, charges or expenses resulting from the merger, (xi) potential litigation relating to the merger that could be instituted against the parties to the Merger Agreement or their respective directors, managers or officers, including the effects of any outcomes related thereto, (xii) worldwide economic or political changes that affect the markets that Altair’s businesses serve which could have an effect on demand for Altair’s products and impact Altair’s profitability and (xiii) disruptions in the global credit and financial markets, including diminished liquidity and credit availability, changes in international trade agreements, including tariffs and trade restrictions, cyber-security vulnerabilities, foreign currency volatility, swings in consumer confidence and spending, raw material pricing and supply issues, retention of key employees, increases in fuel prices, and outcomes of legal proceedings, claims and investigations. Accordingly, actual results may differ materially from those contemplated by these forward-looking statements. Investors, therefore, are cautioned against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in Altair’s filings with the SEC, including the risks and uncertainties identified in Part I, Item 1A - Risk Factors of Altair’s Annual Report on Form 10-K for the year ended December 31, 2023 and in Altair’s other filings with the SEC. The list of factors is not intended to be exhaustive.
These forward-looking statements speak only as of the date of this communication, and Altair does not assume any obligation to update or revise any forward-looking statement made in this communication or that may from time to time be made by or on behalf of Altair.
Media Relations
Altair
Jennifer Ristic
216-849-3109
jristic@altair.com
Investor Relations
Altair
Stephen Palmtag
669-328-9111
spalmtag@altair.com
| ALTAIR ENGINEERING INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | ||||||||
| September 30, 2024 | December 31, 2023 | |||||||
| (In thousands) | (Unaudited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 513,371 | $ | 467,459 | ||||
| Accounts receivable, net | 121,345 | 190,461 | ||||||
| Income tax receivable | 20,794 | 16,650 | ||||||
| Prepaid expenses and other current assets | 31,489 | 26,053 | ||||||
| Total current assets | 686,999 | 700,623 | ||||||
| Property and equipment, net | 40,908 | 39,803 | ||||||
| Operating lease right of use assets | 31,856 | 30,759 | ||||||
| Goodwill | 476,209 | 458,125 | ||||||
| Other intangible assets, net | 84,904 | 83,550 | ||||||
| Deferred tax assets | 9,661 | 9,955 | ||||||
| Other long-term assets | 47,331 | 40,678 | ||||||
| TOTAL ASSETS | $ | 1,377,868 | $ | 1,363,493 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 3,607 | $ | 8,995 | ||||
| Accrued compensation and benefits | 43,497 | 45,081 | ||||||
| Current portion of operating lease liabilities | 8,212 | 8,825 | ||||||
| Other accrued expenses and current liabilities | 40,267 | 48,398 | ||||||
| Deferred revenue | 114,525 | 131,356 | ||||||
| Current portion of convertible senior notes, net | — | 81,455 | ||||||
| Total current liabilities | 210,108 | 324,110 | ||||||
| Convertible senior notes, net | 226,812 | 225,929 | ||||||
| Operating lease liabilities, net of current portion | 24,484 | 22,625 | ||||||
| Deferred revenue, non-current | 26,310 | 32,347 | ||||||
| Other long-term liabilities | 53,254 | 47,151 | ||||||
| TOTAL LIABILITIES | 540,968 | 652,162 | ||||||
| Commitments and contingencies | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Preferred stock ( | — | — | ||||||
| Common stock ( | ||||||||
| Class A common stock, authorized 513,797 shares, issued and outstanding 59,518 and 55,240 shares as of September 30, 2024, and December 31, 2023, respectively | 5 | 5 | ||||||
| Class B common stock, authorized 41,203 shares, issued and outstanding 25,432 and 26,814 shares as of September 30, 2024, and December 31, 2023, respectively | 3 | 3 | ||||||
| Additional paid-in capital | 971,835 | 864,135 | ||||||
| Accumulated deficit | (117,324 | ) | (130,503 | ) | ||||
| Accumulated other comprehensive loss | (17,619 | ) | (22,309 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | 836,900 | 711,331 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,377,868 | $ | 1,363,493 | ||||
| ALTAIR ENGINEERING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| (in thousands, except per share data) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenue | ||||||||||||||||
| License | $ | 92,939 | $ | 79,825 | $ | 303,345 | $ | 279,972 | ||||||||
| Maintenance and other services | 45,733 | 39,252 | 129,179 | 114,069 | ||||||||||||
| Total software | 138,672 | 119,077 | 432,524 | 394,041 | ||||||||||||
| Engineering services and other | 12,778 | 14,926 | 40,633 | 47,157 | ||||||||||||
| Total revenue | 151,450 | 134,003 | 473,157 | 441,198 | ||||||||||||
| Cost of revenue | ||||||||||||||||
| License | 2,795 | 3,083 | 10,437 | 11,888 | ||||||||||||
| Maintenance and other services | 16,045 | 13,689 | 46,410 | 41,754 | ||||||||||||
| Total software * | 18,840 | 16,772 | 56,847 | 53,642 | ||||||||||||
| Engineering services and other | 11,175 | 12,314 | 34,577 | 38,976 | ||||||||||||
| Total cost of revenue | 30,015 | 29,086 | 91,424 | 92,618 | ||||||||||||
| Gross profit | 121,435 | 104,917 | 381,733 | 348,580 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development * | 56,111 | 51,598 | 164,014 | 160,126 | ||||||||||||
| Sales and marketing * | 45,559 | 44,069 | 136,468 | 132,543 | ||||||||||||
| General and administrative * | 17,500 | 17,218 | 54,555 | 53,791 | ||||||||||||
| Amortization of intangible assets | 9,246 | 7,704 | 24,313 | 23,143 | ||||||||||||
| Other operating (income) expense, net | (2,669 | ) | (4,408 | ) | (4,337 | ) | 1,324 | |||||||||
| Total operating expenses | 125,747 | 116,181 | 375,013 | 370,927 | ||||||||||||
| Operating (loss) income | (4,312 | ) | (11,264 | ) | 6,720 | (22,347 | ) | |||||||||
| Interest expense | 1,317 | 1,529 | 4,497 | 4,583 | ||||||||||||
| Other income, net | (10,758 | ) | (1,890 | ) | (20,465 | ) | (9,698 | ) | ||||||||
| Income (loss) before income taxes | 5,129 | (10,903 | ) | 22,688 | (17,232 | ) | ||||||||||
| Income tax expense (benefit) | 3,350 | (6,541 | ) | 9,509 | 11,369 | |||||||||||
| Net income (loss) | $ | 1,779 | $ | (4,362 | ) | $ | 13,179 | $ | (28,601 | ) | ||||||
| Earnings (loss) per share, basic | ||||||||||||||||
| Earnings (loss) per share | $ | 0.02 | $ | (0.05 | ) | $ | 0.16 | $ | (0.36 | ) | ||||||
| Weighted average shares | 84,835 | 80,431 | 83,680 | 80,204 | ||||||||||||
| Earnings (loss) per share, diluted | ||||||||||||||||
| Earnings (loss) per share | $ | 0.02 | $ | (0.05 | ) | $ | 0.15 | $ | (0.36 | ) | ||||||
| Weighted average shares | 88,425 | 80,431 | 87,854 | 80,204 | ||||||||||||
* Amounts include stock-based compensation expense as follows (in thousands):
| (Unaudited) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Cost of revenue – software | $ | 2,131 | $ | 2,468 | $ | 6,230 | $ | 7,792 | ||||||||
| Research and development | 6,378 | 7,824 | 19,356 | 26,510 | ||||||||||||
| Sales and marketing | 5,176 | 6,933 | 14,675 | 22,105 | ||||||||||||
| General and administrative | 3,671 | 3,301 | 10,449 | 10,016 | ||||||||||||
| Total stock-based compensation expense | $ | 17,356 | $ | 20,526 | $ | 50,710 | $ | 66,423 | ||||||||
| ALTAIR ENGINEERING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) | ||||||||
| Nine Months Ended September 30, | ||||||||
| (In thousands) | 2024 | 2023 | ||||||
| OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | 13,179 | $ | (28,601 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 31,120 | 29,271 | ||||||
| Stock-based compensation expense | 50,710 | 66,423 | ||||||
| Deferred income taxes | (114 | ) | 2,178 | |||||
| Loss on mark-to-market adjustment of contingent consideration | 189 | 4,494 | ||||||
| Other, net | 1,520 | 1,385 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable, net | 72,916 | 47,226 | ||||||
| Prepaid expenses and other current assets | (7,895 | ) | 959 | |||||
| Other long-term assets | 408 | (1,491 | ) | |||||
| Accounts payable | (5,416 | ) | (5,494 | ) | ||||
| Accrued compensation and benefits | (1,977 | ) | (2,726 | ) | ||||
| Other accrued expenses and current liabilities | (12,261 | ) | (4,526 | ) | ||||
| Deferred revenue | (25,825 | ) | (3,442 | ) | ||||
| Net cash provided by operating activities | 116,554 | 105,656 | ||||||
| INVESTING ACTIVITIES: | ||||||||
| Payments for acquisition of businesses, net of cash acquired | (25,575 | ) | (3,235 | ) | ||||
| Capital expenditures | (9,739 | ) | (7,882 | ) | ||||
| Other investing activities, net | (5,036 | ) | (2,452 | ) | ||||
| Net cash used in investing activities | (40,350 | ) | (13,569 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Settlement of convertible senior notes | (81,729 | ) | — | |||||
| Proceeds from the exercise of common stock options | 43,721 | 25,526 | ||||||
| Proceeds from employee stock purchase plan contributions | 7,112 | 5,772 | ||||||
| Payments for repurchase and retirement of common stock | — | (6,255 | ) | |||||
| Other financing activities | — | (73 | ) | |||||
| Net cash (used in) provided by financing activities | (30,896 | ) | 24,970 | |||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 554 | (2,599 | ) | |||||
| Net increase in cash, cash equivalents and restricted cash | 45,862 | 114,458 | ||||||
| Cash, cash equivalents and restricted cash at beginning of year | 467,576 | 316,958 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 513,438 | $ | 431,416 | ||||
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||
| (in thousands, except per share amounts) | 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income (loss) | $ | 1,779 | $ | (4,362 | ) | $ | 13,179 | $ | (28,601 | ) | |||||||
| Stock-based compensation expense | 17,356 | 20,526 | 50,710 | 66,423 | |||||||||||||
| Amortization of intangible assets | 9,246 | 7,704 | 24,313 | 23,143 | |||||||||||||
| Non-cash interest expense | 310 | 469 | 1,204 | 1,399 | |||||||||||||
| Impact of non-GAAP tax rate (1) | (3,721 | ) | (10,997 | ) | (14,564 | ) | (8,897 | ) | |||||||||
| Special adjustments and other (2) | (3,756 | ) | (658 | ) | (2,622 | ) | 4,212 | ||||||||||
| Non-GAAP net income | $ | 21,214 | $ | 12,682 | $ | 72,220 | $ | 57,679 | |||||||||
| Net income (loss) per share, diluted | $ | 0.02 | $ | (0.05 | ) | $ | 0.15 | $ | (0.36 | ) | |||||||
| Non-GAAP net income per share, diluted | $ | 0.24 | $ | 0.15 | $ | 0.82 | $ | 0.68 | |||||||||
| GAAP diluted shares outstanding | 88,425 | 80,431 | 87,854 | 80,204 | |||||||||||||
| Non-GAAP diluted shares outstanding | 88,425 | 85,347 | 87,854 | 84,857 | |||||||||||||
| (1) | For the three and nine months ended September 30, 2024, the Company used a non-GAAP effective tax rate of | ||||||||||||||||
| (2) | The three months ended September 30, 2024, includes | ||||||||||||||||
The following table provides a reconciliation of Adjusted EBITDA to net income (loss), the most comparable GAAP financial measure:
| (Unaudited) | |||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income (loss) | $ | 1,779 | $ | (4,362 | ) | $ | 13,179 | $ | (28,601 | ) | |||||||
| Income tax (benefit) expense | 3,350 | (6,541 | ) | 9,509 | 11,369 | ||||||||||||
| Stock-based compensation expense | 17,356 | 20,526 | 50,710 | 66,423 | |||||||||||||
| Interest expense | 1,317 | 1,529 | 4,497 | 4,583 | |||||||||||||
| Depreciation and amortization | 11,563 | 9,783 | 31,120 | 29,271 | |||||||||||||
| Special adjustments, interest income and other (1) | (9,660 | ) | (5,481 | ) | (20,144 | ) | (7,480 | ) | |||||||||
| Adjusted EBITDA | $ | 25,705 | $ | 15,454 | $ | 88,871 | $ | 75,565 | |||||||||
| (1) | The three months ended September 30, 2024, includes | ||||||||||||||||
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 September 30, | Nine Months Ended September 30, | |||||||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net cash provided by operating activities | $ | 14,547 | $ | 16,427 | $ | 116,554 | $ | 105,656 | ||||||||
| Capital expenditures | (4,735 | ) | (1,698 | ) | (9,739 | ) | (7,882 | ) | ||||||||
| Free cash flow | $ | 9,812 | $ | 14,729 | $ | 106,815 | $ | 97,774 | ||||||||
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 September 30, | Nine Months Ended September 30, | |||||||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Gross profit | $ | 121,435 | $ | 104,917 | $ | 381,733 | $ | 348,580 | ||||||||
| Stock-based compensation expense | 2,131 | 2,468 | 6,230 | 7,792 | ||||||||||||
| Non-GAAP gross profit | $ | 123,566 | $ | 107,385 | $ | 387,963 | $ | 356,372 | ||||||||
| Gross profit margin | 80.2 | % | 78.3 | % | 80.7 | % | 79.0 | % | ||||||||
| Non-GAAP gross margin | 81.6 | % | 80.1 | % | 82.0 | % | 80.8 | % | ||||||||
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 September 30, | Nine Months Ended September 30, | |||||||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Total operating expense | $ | 125,747 | $ | 116,181 | $ | 375,013 | $ | 370,927 | ||||||||
| Stock-based compensation expense | (15,225 | ) | (18,058 | ) | (44,480 | ) | (58,631 | ) | ||||||||
| Amortization | (9,246 | ) | (7,704 | ) | (24,313 | ) | (23,143 | ) | ||||||||
| Loss on mark-to-market adjustment of contingent consideration | — | 3,493 | (189 | ) | (4,494 | ) | ||||||||||
| Non-GAAP operating expense | $ | 101,276 | $ | 93,912 | $ | 306,031 | $ | 284,659 | ||||||||
The following table provides the calculation of non-GAAP diluted common shares and non-GAAP net income per share, diluted:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| Numerator: | |||||||||||||||||
| Non-GAAP net income | $ | 21,214 | $ | 12,682 | $ | 72,220 | $ | 57,679 | |||||||||
| Interest expense related to convertible notes, net of tax (1) | — | — | — | — | |||||||||||||
| Numerator for non-GAAP diluted income per share | $ | 21,214 | $ | 12,682 | $ | 72,220 | $ | 57,679 | |||||||||
| Denominator: | |||||||||||||||||
| Weighted average shares outstanding, basic | 84,835 | 80,431 | 83,680 | 80,204 | |||||||||||||
| Effect of dilutive shares | 3,590 | 4,916 | 4,174 | 4,653 | |||||||||||||
| Non-GAAP diluted shares outstanding | 88,425 | 85,347 | 87,854 | 84,857 | |||||||||||||
| Non-GAAP net income per share, diluted | $ | 0.24 | $ | 0.15 | $ | 0.82 | $ | 0.68 | |||||||||
| (1) | Interest expense related to the convertible notes has been excluded from the numerator for non-GAAP diluted earnings per share because its effect would have been anti-dilutive. | ||||||||||||||||
The following table provides a reconciliation of Billings to revenue, the most comparable GAAP financial measure:
| (Unaudited) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| (in thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenue | $ | 151,450 | $ | 134,003 | $ | 473,157 | $ | 441,198 | ||||||||
| Ending deferred revenue | 140,835 | 138,933 | 140,835 | 138,933 | ||||||||||||
| Beginning deferred revenue | (152,184 | ) | (148,547 | ) | (163,703 | ) | (144,460 | ) | ||||||||
| Deferred revenue acquired | (253 | ) | — | (1,825 | ) | — | ||||||||||
| Billings | $ | 139,848 | $ | 124,389 | $ | 448,464 | $ | 435,671 | ||||||||
The following table provides Software revenue, Total revenue, Billings and Adjusted EBITDA on a constant currency basis:
| (Unaudited) | ||||||||||||||||||||||||
| Three Months Ended September 30, 2024 | Three Months Ended September 30, 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 | $ | 138.7 | $ | (0.3 | ) | $ | 138.4 | $ | 119.1 | 16.5 | % | 16.2 | % | |||||||||||
| Total revenue | $ | 151.5 | $ | (0.4 | ) | $ | 151.1 | $ | 134.0 | 13.0 | % | 12.8 | % | |||||||||||
| Billings | $ | 139.8 | $ | (0.1 | ) | $ | 139.7 | $ | 124.4 | 12.4 | % | 12.3 | % | |||||||||||
| Adjusted EBITDA | $ | 25.7 | $ | (0.1 | ) | $ | 25.6 | $ | 15.5 | 66.3 | % | 65.5 | % | |||||||||||
| Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 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 | $ | 432.5 | $ | 4.4 | $ | 436.9 | $ | 394.0 | 9.8 | % | 10.9 | % | ||||||||||||
| Total revenue | $ | 473.2 | $ | 4.6 | $ | 477.8 | $ | 441.2 | 7.2 | % | 8.3 | % | ||||||||||||
| Billings | $ | 448.5 | $ | 4.5 | $ | 453.0 | $ | 435.7 | 2.9 | % | 4.0 | % | ||||||||||||
| Adjusted EBITDA | $ | 88.9 | $ | 3.3 | $ | 92.2 | $ | 75.6 | 17.6 | % | 22.0 | % | ||||||||||||
FAQ
What was Altair's (ALTR) revenue growth in Q3 2024?
How much did Altair's (ALTR) software revenue increase in Q3 2024?
What was Altair's (ALTR) net income in Q3 2024?
What was Altair's (ALTR) Adjusted EBITDA margin in Q3 2024?
