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 RelationsAltairDave Simon248-614-2400
ext. 332dls@altair.com
Investor RelationsThe Blueshirt GroupMonica
Gould212-871-3927ir@altair.com
ALTAIR ENGINEERING INC. AND
SUBSIDIARIESCONSOLIDATED 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
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited) |
|
|
Three Months EndedDecember 31,
2023 |
|
|
Year EndedDecember 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 EndedDecember
31, |
|
|
Year EndedDecember 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 EndedDecember
31, |
|
|
Year EndedDecember 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
SUBSIDIARIESCONSOLIDATED 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 EndedDecember
31, |
|
|
Year EndedDecember 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 EndedDecember
31, |
|
|
Year EndedDecember 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 EndedDecember
31, |
|
|
Year EndedDecember 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 EndedDecember 31,
2023 |
|
|
Year EndedDecember 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 EndedDecember 31,
2023 |
|
|
Year EndedDecember 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 EndedDecember
31, |
|
|
Year EndedDecember 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 EndedDecember 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 EndedDecember 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 EndingMarch 31,
2024 |
|
|
Year EndingDecember 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 EndingMarch 31,
2024 |
|
|
Year EndingDecember 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 EndingDecember 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 |
|
Altair Engineering (NASDAQ:ALTR)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Altair Engineering (NASDAQ:ALTR)
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De May 2023 a May 2024