Altair (Nasdaq: ALTR), a global leader in computational intelligence, today released its financial results for the second quarter and six months ended June 30, 2024.

“Altair maintained its strong trajectory during the second quarter, with software revenue and total revenue above the high end of guidance,” said James R. Scapa, founder, chairman, and chief executive officer, Altair. “Our Q2 results underscore the robustness of our software product lineup, which continues to empower customers with industry-leading computational intelligence.”

“We are pleased with our execution in the second quarter and first half of the year,” said Matt Brown, chief financial officer, Altair. “Our quarterly revenues exceeded expectations as we continued to deliver software revenue growth, which gives us confidence in our path to meet our financial targets for the year.”

Second Quarter 2024 Financial Highlights

  • Software revenue was $135.4 million compared to $125.3 million for the second quarter of 2023, an increase of 8.1% in reported currency and 10.6% in constant currency
  • Total revenue was $148.8 million compared to $141.2 million for the second quarter of 2023, an increase of 5.4% in reported currency and 7.8% in constant currency
  • Net loss was $(5.1) million compared to a net loss of $(22.3) million for the second quarter of 2023. Net loss per share, diluted was $(0.06) based on 83.6 million diluted weighted average common shares outstanding, compared to net loss per share, diluted of $(0.28) for the second quarter of 2023, based on 80.0 million diluted weighted average common shares outstanding. Net loss margin was -3.5% compared to net loss margin of -15.8% for the second quarter of 2023
  • Non-GAAP net income was $14.8 million, compared to non-GAAP net income of $13.2 million for the second quarter of 2023, an increase of 12.1%. Non-GAAP net income per share, diluted was $0.16 based on 91.0 million non-GAAP diluted common shares outstanding, compared to non-GAAP net income per share, diluted of $0.15 for the second quarter of 2023, based on 88.4 million non-GAAP diluted common shares outstanding
  • Adjusted EBITDA was $17.3 million compared to $17.1 million for the second quarter of 2023, an increase of 1.7%. Adjusted EBITDA margin was 11.7% compared to 12.1% for the second quarter of 2023
  • Cash provided by operating activities was $28.6 million, compared to $30.0 million for the second quarter of 2023
  • Free cash flow was $26.3 million, compared to $25.6 million for the second quarter of 2023.

Business Outlook

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

(in millions, except %)   Third Quarter 2024     Full Year 2024  
Software Revenue   $ 130   to $ 133     $ 590   to $ 600  
Growth Rate     9.2 %     11.7 %     7.3 %     9.1 %
Growth Rate - Constant Currency     11.1 %     13.7 %     8.9 %     10.8 %
Total Revenue   $ 145     $ 148     $ 648     $ 658  
Growth Rate     8.2 %     10.4 %     5.8 %     7.4 %
Growth Rate - Constant Currency     10.0 %     12.3 %     7.5 %     9.1 %
Net (Loss) Income   $ (14.0 )   $ (11.1 )   $ 22.6     $ 30.3  
Non-GAAP Net Income   $ 13.4     $ 15.7     $ 108.4     $ 114.4  
Adjusted EBITDA   $ 16     $ 19     $ 136     $ 144  
Net Cash Provided by Operating Activities               $ 133     $ 141  
Free Cash Flow               $ 122     $ 130  

The following table provides a reconciliation of Full Year 2024 guidance to the last guidance provided in May

    (Unaudited)  
    Full Year 2024  
(in millions)   Midpoint of Guidance in May     Increase/ (Decrease)     Currency Fluctuations from Prior Guidance     Midpoint of Guidance in August  
Software Revenue   $ 595.0     $ 3.0     $ (3.0 )   $ 595.0  
Total Revenue   $ 657.0     $     $ (4.0 )   $ 653.0  
Adjusted EBITDA   $ 142.0     $     $ (2.0 )   $ 140.0  

Conference Call Information

What:   Altair’s Second Quarter 2024 Financial Results Conference Call
When:   Thursday, August 1, 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 third 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 

ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
    June 30, 2024     December 31, 2023  
(In thousands)   (Unaudited)        
ASSETS            
CURRENT ASSETS:            
Cash and cash equivalents   $ 507,008     $ 467,459  
Accounts receivable, net     126,560       190,461  
Income tax receivable     17,682       16,650  
Prepaid expenses and other current assets     28,582       26,053  
Total current assets     679,832       700,623  
Property and equipment, net     38,463       39,803  
Operating lease right of use assets     31,816       30,759  
Goodwill     459,070       458,125  
Other intangible assets, net     77,537       83,550  
Deferred tax assets     9,120       9,955  
Other long-term assets     40,119       40,678  
TOTAL ASSETS   $ 1,335,957     $ 1,363,493  
LIABILITIES AND STOCKHOLDERS’ EQUITY  
CURRENT LIABILITIES:            
Accounts payable   $ 4,002     $ 8,995  
Accrued compensation and benefits     39,819       45,081  
Current portion of operating lease liabilities     8,057       8,825  
Other accrued expenses and current liabilities     41,508       48,398  
Deferred revenue     123,439       131,356  
Current portion of convertible senior notes, net           81,455  
Total current liabilities     216,825       324,110  
Convertible senior notes, net     226,518       225,929  
Operating lease liabilities, net of current portion     24,568       22,625  
Deferred revenue, non-current     28,745       32,347  
Other long-term liabilities     47,995       47,151  
TOTAL LIABILITIES     544,651       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 59,198 and 55,240 shares as of June 30, 2024, and December 31, 2023, respectively     5       5  
Class B common stock, authorized 41,203 shares, issued and outstanding 25,471 and 26,814 shares as of June 30, 2024, and December 31, 2023, respectively     3       3  
Additional paid-in capital     939,691       864,135  
Accumulated deficit     (119,103 )     (130,503 )
Accumulated other comprehensive loss     (29,290 )     (22,309 )
TOTAL STOCKHOLDERS’ EQUITY     791,306       711,331  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 1,335,957     $ 1,363,493  

ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
    Three Months Ended June 30,     Six Months Ended June 30,  
(in thousands, except per share data)   2024     2023     2024     2023  
Revenue                        
License   $ 92,699     $ 87,738     $ 210,406     $ 200,147  
Maintenance and other services     42,724       37,583       83,446       74,817  
Total software     135,423       125,321       293,852       274,964  
Engineering services and other     13,372       15,840       27,855       32,231  
Total revenue     148,795       141,161       321,707       307,195  
Cost of revenue                        
License     3,152       3,981       7,642       8,805  
Maintenance and other services     16,199       13,639       30,365       28,065  
Total software *     19,351       17,620       38,007       36,870  
Engineering services and other     11,165       13,177       23,402       26,662  
Total cost of revenue     30,516       30,797       61,409       63,532  
Gross profit     118,279       110,364       260,298       243,663  
Operating expenses:                        
Research and development *     55,570       55,277       107,903       108,528  
Sales and marketing *     46,475       44,982       90,909       88,474  
General and administrative *     19,294       18,622       37,055       36,573  
Amortization of intangible assets     7,629       7,625       15,067       15,439  
Other operating (income) expense, net     (786 )     127       (1,668 )     5,732  
Total operating expenses     128,182       126,633       249,266       254,746  
Operating (loss) income     (9,903 )     (16,269 )     11,032       (11,083 )
Interest expense     1,604       1,528       3,180       3,054  
Other income, net     (5,750 )     (4,195 )     (9,707 )     (7,808 )
(Loss) income before income taxes     (5,757 )     (13,602 )     17,559       (6,329 )
Income tax (benefit) expense     (610 )     8,678       6,159       17,910  
Net (loss) income   $ (5,147 )   $ (22,280 )   $ 11,400     $ (24,239 )
(Loss) earnings per share, basic                        
(Loss) earnings per share   $ (0.06 )   $ (0.28 )   $ 0.14     $ (0.30 )
Weighted average shares     83,607       79,986       83,097       80,088  
(Loss) earnings per share, diluted                        
(Loss) earnings per share   $ (0.06 )   $ (0.28 )   $ 0.13     $ (0.30 )
Weighted average shares     83,607       79,986       87,397       80,088  

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

    (Unaudited)  
    Three Months Ended June 30,     Six Months Ended June 30,  
(in thousands)   2024     2023     2024     2023  
Cost of revenue – software   $ 2,097     $ 2,572     $ 4,099     $ 5,324  
Research and development     6,618       9,943       12,978       18,686  
Sales and marketing     4,979       7,581       9,499       15,172  
General and administrative     3,661       3,640       6,778       6,715  
Total stock-based compensation expense   $ 17,355     $ 23,736     $ 33,354     $ 45,897  

ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
 
    Six Months Ended June 30,  
(In thousands)   2024     2023  
OPERATING ACTIVITIES:            
Net income (loss)   $ 11,400     $ (24,239 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:            
Depreciation and amortization     19,557       19,488  
Stock-based compensation expense     33,354       45,897  
Deferred income taxes     (367 )     2,015  
Loss on mark-to-market adjustment of contingent consideration     189       7,987  
Other, net     1,166       1,335  
Changes in assets and liabilities:            
Accounts receivable, net     61,360       45,077  
Prepaid expenses and other current assets     (3,647 )     (3,166 )
Other long-term assets     164       (2,516 )
Accounts payable     (4,382 )     (5,529 )
Accrued compensation and benefits     (4,071 )     (6,591 )
Other accrued expenses and current liabilities     (2,834 )     4,857  
Deferred revenue     (9,882 )     4,614  
Net cash provided by operating activities     102,007       89,229  
INVESTING ACTIVITIES:            
Payments for acquisition of businesses, net of cash acquired     (13,680 )     (721 )
Capital expenditures     (5,004 )     (6,184 )
Other investing activities, net     (398 )     (1,452 )
Net cash used in investing activities     (19,082 )     (8,357 )
FINANCING ACTIVITIES:            
Settlement of convertible senior notes     (81,729 )      
Proceeds from the exercise of common stock options     37,227       23,507  
Proceeds from employee stock purchase plan contributions     4,363       3,797  
Payments for repurchase and retirement of common stock           (6,255 )
Other financing activities           (48 )
Net cash (used in) provided by financing activities     (40,139 )     21,001  
Effect of exchange rate changes on cash, cash equivalents and restricted cash     (3,295 )     (44 )
Net increase in cash, cash equivalents and restricted cash     39,491       101,829  
Cash, cash equivalents and restricted cash at beginning of year     467,576       316,958  
Cash, cash equivalents and restricted cash at end of period   $ 507,067     $ 418,787  

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 (loss) income and net (loss) income per share – diluted, the most comparable GAAP financial measures:

    (Unaudited)  
    Three Months Ended June 30,     Six Months Ended June 30,  
(in thousands, except per share amounts)   2024     2023     2024     2023  
Net (loss) income   $ (5,147 )   $ (22,280 )   $ 11,400     $ (24,239 )
Stock-based compensation expense     17,355       23,736       33,354       45,897  
Amortization of intangible assets     7,629       7,625       15,067       15,439  
Non-cash interest expense     422       465       894       930  
Impact of non-GAAP tax rate (1)     (5,548 )     4,033       (10,843 )     2,100  
Special adjustments and other (2)     104       (361 )     1,134       4,870  
Non-GAAP net income   $ 14,815     $ 13,218     $ 51,006     $ 44,997  
                         
Net (loss) income per share, diluted   $ (0.06 )   $ (0.28 )   $ 0.13     $ (0.30 )
Non-GAAP net income per share, diluted   $ 0.16     $ 0.15     $ 0.56     $ 0.51  
                         
GAAP diluted shares outstanding     83,607       79,986       87,397       80,088  
Non-GAAP diluted shares outstanding     90,994       88,383       90,606       88,735  
(1)   For the three and six months ended June 30, 2024, the Company used a non-GAAP effective tax rate of 25%. For the three and six months ended June 30, 2023, the Company used a non-GAAP effective tax rate of 26%.
     
(2)   The three months ended June 30, 2024, includes $0.1 million of currency losses on acquisition-related intercompany loans. The three months ended June 30, 2023, includes a $1.0 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition and $1.3 million of currency gains on acquisition-related intercompany loans. The six months ended June 30, 2024, includes $0.9 million of currency losses on acquisition-related intercompany loans, and a $0.2 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition. The six months ended June 30, 2023, includes an $8.0 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition and $3.1 million currency gains on acquisition-related intercompany loans.

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

    (Unaudited)  
    Three Months Ended June 30,     Six Months Ended June 30,  
(in thousands)   2024     2023     2024     2023  
Net (loss) income   $ (5,147 )   $ (22,280 )   $ 11,400     $ (24,239 )
Income tax (benefit) expense     (610 )     8,678       6,159       17,910  
Stock-based compensation expense     17,355       23,736       33,354       45,897  
Interest expense     1,604       1,528       3,180       3,054  
Depreciation and amortization     9,938       9,738       19,557       19,488  
Special adjustments, interest income and other (1)     (5,792 )     (4,344 )     (10,484 )     (1,999 )
Adjusted EBITDA   $ 17,348     $ 17,056     $ 63,166     $ 60,111  
(1)   The three months ended June 30, 2024, primarily includes $5.9 million of interest income. The three months ended June 30, 2023, includes $4.0 million of interest income, $1.3 million of currency gains on acquisition-related intercompany loans, and a $1.0 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition. The six months ended June 30, 2024, includes $11.6 million of interest income, $0.9 million of currency losses on acquisition-related intercompany loans, and a $0.2 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition. The six months ended June 30, 2023, includes an $8.0 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, $6.9 million of interest income, and $3.1 million 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 June 30,     Six Months Ended June 30,  
(in thousands)   2024     2023     2024     2023  
Net cash provided by operating activities   $ 28,557     $ 30,030     $ 102,007     $ 89,229  
Capital expenditures     (2,238 )     (4,457 )     (5,004 )     (6,184 )
Free cash flow   $ 26,319     $ 25,573     $ 97,003     $ 83,045  

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 June 30,     Six Months Ended June 30,  
(in thousands)   2024     2023     2024     2023  
Gross profit   $ 118,279     $ 110,364     $ 260,298     $ 243,663  
Stock-based compensation expense     2,097       2,572       4,099       5,324  
Non-GAAP gross profit   $ 120,376     $ 112,936     $ 264,397     $ 248,987  
                         
Gross profit margin     79.5 %     78.2 %     80.9 %     79.3 %
Non-GAAP gross margin     80.9 %     80.0 %     82.2 %     81.1 %

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 June 30,     Six Months Ended June 30,  
(in thousands)   2024     2023     2024     2023  
Total operating expense   $ 128,182     $ 126,633     $ 249,266     $ 254,746  
Stock-based compensation expense     (15,258 )     (21,164 )     (29,255 )     (40,573 )
Amortization     (7,629 )     (7,625 )     (15,067 )     (15,439 )
Loss on mark-to-market adjustment of contingent consideration     (44 )     (981 )     (189 )     (7,987 )
Non-GAAP operating expense   $ 105,251     $ 96,863     $ 204,755     $ 190,747  

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

    (Unaudited)  
    Three Months Ended June 30,     Six Months Ended June 30,  
(in thousands)   2024     2023     2024     2023  
Revenue   $ 148,795     $ 141,161     $ 321,707     $ 307,195  
Ending deferred revenue     152,184       148,547       152,184       148,547  
Beginning deferred revenue     (144,939 )     (141,943 )     (163,703 )     (144,460 )
Deferred revenue acquired     (1,572 )           (1,572 )      
Billings   $ 154,468     $ 147,765     $ 308,616     $ 311,282  

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

    (Unaudited)  
    Three Months Ended June 30, 2024     Three Months Ended June 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   $ 135.4     $ 3.3     $ 138.7     $ 125.3       8.1 %     10.6 %
Total revenue   $ 148.8     $ 3.4     $ 152.2     $ 141.2       5.4 %     7.8 %
Billings   $ 154.5     $ 3.7     $ 158.2     $ 147.8       4.5 %     7.1 %
Adjusted EBITDA   $ 17.3     $ 2.2     $ 19.5     $ 17.1       1.7 %     14.1 %
                                     
                                     
    (Unaudited)  
    Six Months Ended June 30, 2024     Six Months Ended June 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   $ 293.9     $ 4.7     $ 298.6     $ 275.0       6.9 %     8.6 %
Total revenue   $ 321.7     $ 4.9     $ 326.6     $ 307.2       4.7 %     6.3 %
Billings   $ 308.6     $ 4.5     $ 313.1     $ 311.3       -0.9 %     0.6 %
Adjusted EBITDA   $ 63.2     $ 3.4     $ 66.6     $ 60.1       5.1 %     10.8 %

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 September 30, 2024     Year Ending December 31, 2024  
(in thousands)   Low     High     Low     High  
Net (loss) income   $ (14,000 )   $ (11,100 )   $ 22,600     $ 30,300  
Stock-based compensation expense     17,800       17,800       68,900       68,900  
Amortization of intangible assets     8,400       8,400       31,500       31,500  
Non-cash interest expense     300       300       1,500       1,500  
Impact of non-GAAP tax rate(1)     900       300       (17,200 )     (18,900 )
Special adjustments and other(2)                 1,100       1,100  
Non-GAAP net income   $ 13,400     $ 15,700     $ 108,400     $ 114,400  
(1)   The Company uses a non-GAAP effective tax rate of 25%.
     
(2)   The year ending December 31, 2024, includes a $0.2 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 September 30, 2024     Year Ending December 31, 2024  
(in thousands)   Low     High     Low     High  
Net (loss) income   $ (14,000 )   $ (11,100 )   $ 22,600     $ 30,300  
Income tax expense     5,400       5,500       19,000       19,300  
Stock-based compensation expense     17,800       17,800       68,900       68,900  
Interest (income) expense     (3,900 )     (3,900 )     (16,200 )     (16,200 )
Depreciation and amortization     10,700       10,700       40,600       40,600  
Special adjustments and other(1)                 1,100       1,100  
Adjusted EBITDA   $ 16,000     $ 19,000     $ 136,000     $ 144,000  
(1)   The year ending December 31, 2024, includes a $0.2 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   $ 133,000     $ 141,000  
Capital expenditures     (11,000 )     (11,000 )
Free cash flow   $ 122,000     $ 130,000  
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