Altair Announces Second Quarter 2019 Financial Results
“We had a very strong second quarter and remain excited about the future of our industry and company.” said
Second Quarter 2019 Financial Highlights
- Software product revenue was
$84.4 million , an increase of 20% from$70.6 million for the second quarter of 2018. - Non-GAAP software product revenue was
$86.6 million , an increase of 23% from$70.6 million for the second quarter of 2018. Non-GAAP software product revenue includes revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations. - Total revenue was
$106.8 million , an increase of 14% from$93.4 million for the second quarter of 2018. - Non-GAAP total revenue was
$109.0 million , an increase of 17% from$93.4 million for the second quarter of 2018. Non-GAAP total revenue includes revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations. - Net loss was
($3.1) million , compared to net loss of($1.1) million for the second quarter of 2018. Diluted net loss per share was($0.04) based on 71.4 million diluted weighted average common shares outstanding, compared to diluted net loss per share of($0.02) for the second quarter of 2018, based on 65.6 million diluted weighted average common shares outstanding. - Adjusted EBITDA was
$5.2 million , compared to$5.3 million for the second quarter of 2018. 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. - Modified Adjusted EBITDA was
$7.4 million , compared to$5.3 million for the second quarter of 2018. Modified Adjusted EBITDA represents Adjusted EBITDA adjusted for revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations. - Non-GAAP net income was
$4.5 million , compared to$2.1 million for the second quarter of 2018. Non-GAAP diluted net income per share was$0.06 based on 77.7 million non-GAAP diluted common shares outstanding, compared to non-GAAP diluted net income per share of$0.03 for the second quarter of 2018, based on 77.0 million non-GAAP diluted common shares outstanding. Non-GAAP net income excludes stock-based compensation, amortization of intangible assets related to acquisitions, revenue not recognized under GAAP due to acquisition accounting and special items as identified by management and described elsewhere in this press release. - Free cash flow, which consists of cash flow from operations less capital expenditures, was
$4.5 million , compared to$9.2 million for the second quarter of 2018.
Business Outlook
Based on information available as of today, Altair is issuing guidance for the third quarter and full year 2019.
| (Unaudited) | ||||||||||
| (in millions) | Third Quarter 2019 | Full Year 2019 | ||||||||
| Software Product Revenue | $ | 79.0 | to | $ | 81.0 | $ | 366.0 | to | $ | 370.0 |
| Non-GAAP Software Product Revenue | $ | 81.2 | $ | 83.2 | $ | 375.0 | $ | 379.0 | ||
| Total Revenue | $ | 103.0 | $ | 105.0 | $ | 460.0 | $ | 464.0 | ||
| Non-GAAP Total Revenue | $ | 105.2 | $ | 107.2 | $ | 469.0 | $ | 473.0 | ||
| Net (Loss) Income | $ | (6.8) | $ | (5.5) | $ | 10.5 | $ | 13.1 | ||
| Non-GAAP Net Income | $ | 3.4 | $ | 4.7 | $ | 45.2 | $ | 47.8 | ||
| Adjusted EBITDA | $ | 0.8 | $ | 2.8 | $ | 53.0 | $ | 57.0 | ||
| Modified Adjusted EBITDA | $ | 3.0 | $ | 5.0 | $ | 62.0 | $ | 66.0 | ||
| (All figures in millions) | ||||||||||
| Conference Call Information | |
| What: | Altair’s Second Quarter 2019 Financial Results Conference Call |
| When: | Thursday, August 8, 2019 |
| Time: | 4:30 p.m. ET |
| Live Call: | (866) 754-5204, Domestic |
| (636) 812-6621, International | |
| Replay: | (855) 859-2056, Conference ID 4996438, Domestic |
| (404) 537-3406, Conference ID 4996438, International | |
| Webcast: | http://investor.altair.com (live & replay) |
| *** | |
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: Non-GAAP Software Product Revenue, Non-GAAP Total Revenue, Adjusted EBITDA, Modified Adjusted EBITDA, Non-GAAP Net Income, Non-GAAP Net Income Per Share and Free Cash Flow.
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.
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 technology company that provides software and cloud solutions in the areas of product design and development, high-performance computing (HPC) and data intelligence. Altair enables organizations across broad industry segments to compete more effectively in a connected world while creating a more sustainable future. To learn more, please visit 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 2019, statements regarding our anticipated success, expected expansion of our footprint, positioning for growth and convergence of technologies, 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 forward-looking statements due to a number of factors, including but not limited to, risks detailed in Altair’s quarterly and annual reports filed with the
Investor and Media Relations
Altair
248-614-2400 ext. 332
ir@altair.com
| ALTAIR ENGINEERING INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| June 30, 2019 | December 31, 2018 | |||||||
| (In thousands) | (Unaudited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 251,828 | $ | 35,345 | ||||
| Accounts receivable, net | 85,758 | 96,803 | ||||||
| Income tax receivable | 8,515 | 4,431 | ||||||
| Prepaid expenses and other current assets | 18,262 | 17,455 | ||||||
| Total current assets | 364,363 | 154,034 | ||||||
| Property and equipment, net | 34,050 | 30,153 | ||||||
| Operating lease right of use assets | 28,878 | — | ||||||
| Goodwill | 212,087 | 210,532 | ||||||
| Other intangible assets, net | 64,874 | 69,836 | ||||||
| Deferred tax assets | 5,901 | 5,354 | ||||||
| Other long-term assets | 19,567 | 17,288 | ||||||
| TOTAL ASSETS | $ | 729,720 | $ | 487,197 | ||||
| LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Current portion of long-term debt | $ | 472 | $ | 331 | ||||
| Accounts payable | 6,462 | 8,357 | ||||||
| Accrued compensation and benefits | 29,155 | 31,740 | ||||||
| Current portion of operating lease liabilities | 9,412 | — | ||||||
| Other accrued expenses and current liabilities | 27,979 | 27,039 | ||||||
| Deferred revenue | 67,587 | 59,765 | ||||||
| Total current liabilities | 141,067 | 127,232 | ||||||
| Long-term debt, net of current portion | 173,157 | 31,417 | ||||||
| Operating lease liabilities, net of current portion | 20,722 | — | ||||||
| Deferred revenue, non-current | 6,219 | 6,754 | ||||||
| Other long-term liabilities | 26,362 | 25,756 | ||||||
| TOTAL LIABILITIES | 367,527 | 191,159 | ||||||
| Commitments and contingencies | ||||||||
| MEZZANINE EQUITY | 2,352 | 2,352 | ||||||
| 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 39,672 and 38,349 shares as of June 30, 2019 and December 31, 2018, respectively |
4 | 4 | ||||||
| Class B common stock, authorized 41,203 shares, issued and outstanding 31,901 and 32,171 shares as of June 30, 2019 and December 31, 2018, respectively |
3 | 3 | ||||||
| Additional paid-in capital | 433,902 | 379,832 | ||||||
| Accumulated deficit | (64,964 | ) | (74,863 | ) | ||||
| Accumulated other comprehensive loss | (9,104 | ) | (11,290 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | 359,841 | 293,686 | ||||||
| TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY | $ | 729,720 | $ | 487,197 | ||||
| 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) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Revenue | ||||||||||||||||
| License | $ | 56,653 | $ | 46,700 | $ | 133,274 | $ | 113,635 | ||||||||
| Maintenance and other services | 27,755 | 23,907 | 54,425 | 46,641 | ||||||||||||
| Total software | 84,408 | 70,607 | 187,699 | 160,276 | ||||||||||||
| Software related services | 7,907 | 8,707 | 17,679 | 18,180 | ||||||||||||
| Total software and related services | 92,315 | 79,314 | 205,378 | 178,456 | ||||||||||||
| Client engineering services | 12,412 | 12,417 | 24,462 | 24,497 | ||||||||||||
| Other | 2,046 | 1,629 | 4,792 | 3,664 | ||||||||||||
| Total revenue | 106,773 | 93,360 | 234,632 | 206,617 | ||||||||||||
| Cost of revenue | ||||||||||||||||
| License * | 2,954 | 4,068 | 8,775 | 7,798 | ||||||||||||
| Maintenance and other services * | 9,430 | 7,915 | 17,961 | 15,107 | ||||||||||||
| Total software | 12,384 | 11,983 | 26,736 | 22,905 | ||||||||||||
| Software related services | 6,612 | 6,512 | 13,130 | 13,221 | ||||||||||||
| Total software and related services | 18,996 | 18,495 | 39,866 | 36,126 | ||||||||||||
| Client engineering services | 10,033 | 9,960 | 19,833 | 20,160 | ||||||||||||
| Other | 1,994 | 1,001 | 4,209 | 2,212 | ||||||||||||
| Total cost of revenue | 31,023 | 29,456 | 63,908 | 58,498 | ||||||||||||
| Gross profit | 75,750 | 63,904 | 170,724 | 148,119 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development * | 29,829 | 24,744 | 57,345 | 47,447 | ||||||||||||
| Sales and marketing * | 26,221 | 19,979 | 52,672 | 38,606 | ||||||||||||
| General and administrative * | 19,851 | 17,412 | 40,180 | 34,402 | ||||||||||||
| Amortization of intangible assets | 3,600 | 1,986 | 7,128 | 3,926 | ||||||||||||
| Other operating income | (549 | ) | (392 | ) | (1,166 | ) | (2,583 | ) | ||||||||
| Total operating expenses | 78,952 | 63,729 | 156,159 | 121,798 | ||||||||||||
| Operating (loss) income | (3,202 | ) | 175 | 14,565 | 26,321 | |||||||||||
| Interest expense | 590 | 45 | 860 | 61 | ||||||||||||
| Other income, net | (505 | ) | (176 | ) | (115 | ) | (1,076 | ) | ||||||||
| (Loss) income before income taxes | (3,287 | ) | 306 | 13,820 | 27,336 | |||||||||||
| Income tax (benefit) expense | (167 | ) | 1,386 | 3,921 | 3,732 | |||||||||||
| Net (loss) income | $ | (3,120 | ) | $ | (1,080 | ) | $ | 9,899 | $ | 23,604 | ||||||
| Income per share: | ||||||||||||||||
| Net (loss) income per share attributable to common | ||||||||||||||||
| stockholders, basic | $ | (0.04 | ) | $ | (0.02 | ) | $ | 0.14 | $ | 0.37 | ||||||
| Net (loss) income per share attributable to common | ||||||||||||||||
| stockholders, diluted | $ | (0.04 | ) | $ | (0.02 | ) | $ | 0.13 | $ | 0.32 | ||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Weighted average number of shares used in computing | ||||||||||||||||
| net (loss) income per share, basic | 71,373 | 65,580 | 71,081 | 64,614 | ||||||||||||
| Weighted average number of shares used in computing | ||||||||||||||||
| net (loss) income per share, diluted | 71,373 | 65,580 | 77,017 | 72,881 | ||||||||||||
| _________________ * Amounts include stock-based compensation expense as follows (in thousands) (unaudited): |
||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Cost of revenue – software | $ | 279 | $ | 8 | $ | 343 | $ | 16 | ||||
| Research and development | 579 | 108 | 937 | 155 | ||||||||
| Sales and marketing | 475 | 134 | 937 | 175 | ||||||||
| General and administrative | 747 | 184 | 1,075 | 304 | ||||||||
| Total stock-based compensation expense | $ | 2,080 | $ | 434 | $ | 3,292 | $ | 650 | ||||
| ALTAIR ENGINEERING INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOW | ||||||||
| (Unaudited) | ||||||||
| Six Months Ended June 30, | ||||||||
| (In thousands) | 2019 | 2018 | ||||||
| OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 9,899 | $ | 23,604 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 10,468 | 7,525 | ||||||
| Provision for bad debt | 134 | 269 | ||||||
| Amortization of debt discount and issuance costs | 459 | 12 | ||||||
| Stock-based compensation expense | 3,292 | 650 | ||||||
| Deferred income taxes | (703 | ) | 1,312 | |||||
| Other, net | (17 | ) | (166 | ) | ||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 10,406 | 11,743 | ||||||
| Prepaid expenses and other current assets | (4,952 | ) | (3,454 | ) | ||||
| Other long-term assets | (2,300 | ) | (276 | ) | ||||
| Accounts payable | (2,187 | ) | 335 | |||||
| Accrued compensation and benefits | (2,455 | ) | 73 | |||||
| Other accrued expenses and current liabilities | 1,887 | (4,511 | ) | |||||
| Operating lease right-of-use assets and liabilities, net | 197 | — | ||||||
| Deferred revenue | 7,740 | 197 | ||||||
| Net cash provided by operating activities | 31,868 | 37,313 | ||||||
| INVESTING ACTIVITIES: | ||||||||
| Capital expenditures | (6,667 | ) | (3,130 | ) | ||||
| Payments for acquisition of developed technology | (344 | ) | (2,738 | ) | ||||
| Payments for acquisition of businesses, net of cash acquired | (709 | ) | (7,028 | ) | ||||
| Other investing activities, net | 16 | 38 | ||||||
| Net cash used in investing activities | (7,704 | ) | (12,858 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of convertible senior notes, net of underwriters' discount and commissions |
223,101 | — | ||||||
| Payments on revolving commitment | (127,941 | ) | — | |||||
| Borrowings under revolving commitment | 96,991 | — | ||||||
| Proceeds from the exercise of stock options | 1,270 | 1,668 | ||||||
| Payments for issuance costs of convertible senior notes | (1,018 | ) | — | |||||
| Payments for follow-on public offering and initial public offering costs | — | (468 | ) | |||||
| Proceeds from issuance of Class A common stock in follow-on public offering, net of underwriters' discounts and commissions |
— | 135,572 | ||||||
| Other financing activities | (259 | ) | (342 | ) | ||||
| Net cash provided by financing activities | 192,144 | 136,430 | ||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 187 | (877 | ) | |||||
| Net increase in cash, cash equivalents and restricted cash | 216,495 | 160,008 | ||||||
| Cash, cash equivalents and restricted cash at beginning of year | 35,685 | 39,578 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 252,180 | $ | 199,586 | ||||
| Supplemental disclosure of cash flow: | ||||||||
| Interest paid | $ | 362 | $ | 41 | ||||
| Income taxes paid | $ | 4,054 | $ | 3,660 | ||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Finance leases | $ | 566 | $ | 1,010 | ||||
| Property and equipment in accounts payable | $ | 417 | $ | 935 | ||||
| Convertible senior notes issuance costs in accounts payable | $ | 216 | $ | — | ||||
| Follow-on public offering costs in accounts payable | $ | — | $ | 88 | ||||
| Promissory notes issued and deferred payment obligations for acquisitions | $ | — | $ | 278 | ||||
Financial Results
The following table provides a reconciliation of Non-GAAP net income and Non-GAAP diluted income per share to net (loss) income and (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) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Net (loss) income | $ | (3,120 | ) | $ | (1,080 | ) | $ | 9,899 | $ | 23,604 | ||||||
| Stock-based compensation expense | 2,080 | 434 | 3,292 | 650 | ||||||||||||
| Amortization of intangible assets | 3,600 | 1,986 | 7,128 | 3,926 | ||||||||||||
| Acquisition related deferred revenue (1) | 2,250 | — | 4,500 | — | ||||||||||||
| Special adjustments (2) | 776 | 929 | 1,004 | (223 | ) | |||||||||||
| Income tax effect of non-GAAP adjustments | (1,057 | ) | (124 | ) | (1,827 | ) | (199 | ) | ||||||||
| Non-GAAP net income | $ | 4,529 | $ | 2,145 | $ | 23,996 | $ | 27,758 | ||||||||
| (Loss) income per share - diluted | $ | (0.04 | ) | $ | (0.02 | ) | $ | 0.13 | $ | 0.32 | ||||||
| Non-GAAP income per share - diluted | $ | 0.06 | $ | 0.03 | $ | 0.31 | $ | 0.36 | ||||||||
| GAAP diluted shares outstanding: | 71,373 | 65,580 | 77,017 | 72,881 | ||||||||||||
| Non-GAAP diluted shares outstanding: | 77,700 | 77,000 | 77,700 | 77,000 | ||||||||||||
(1) Represents revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.
(2) Includes an impairment charge for royalty contracts resulting in
| The following table provides a reconciliation of Adjusted EBITDA and Modified 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) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Net (loss) income | $ | (3,120 | ) | $ | (1,080 | ) | $ | 9,899 | $ | 23,604 | ||||||
| Income tax (benefit) expense | (167 | ) | 1,386 | 3,921 | 3,732 | |||||||||||
| Stock-based compensation expense | 2,080 | 434 | 3,292 | 650 | ||||||||||||
| Interest expense | 590 | 45 | 860 | 61 | ||||||||||||
| Interest income and other (1) | 508 | 536 | 709 | (719 | ) | |||||||||||
| Depreciation and amortization | 5,274 | 3,982 | 10,468 | 7,525 | ||||||||||||
| Adjusted EBITDA | 5,165 | 5,303 | 29,149 | 34,853 | ||||||||||||
| Acquisition related deferred revenue (2) | 2,250 | — | 4,500 | — | ||||||||||||
| Modified Adjusted EBITDA | $ | 7,415 | $ | 5,303 | $ | 33,649 | $ | 34,853 | ||||||||
(1) Includes an impairment charge for royalty contracts resulting in
(2) Represents revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.
| The following table provides a reconciliation of Non-GAAP total revenue to total revenue, the most comparable GAAP financial measure: | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| (in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||||||
| Total revenue | $ | 106,773 | $ | 93,360 | $ | 234,632 | $ | 206,617 | |||||||
| Acquisition related deferred revenue(1) | 2,250 | — | 4,500 | — | |||||||||||
| Non-GAAP total revenue | $ | 109,023 | $ | 93,360 | $ | 239,132 | $ | 206,617 | |||||||
(1) Adjustment for revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.
| The following table provides a reconciliation of Non-GAAP total software product revenue to total software product revenue, the most comparable GAAP financial measure: | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| (in thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||
| Total software product revenue | $ | 84,408 | $ | 70,607 | $ | 187,699 | $ | 160,276 | ||||
| Acquisition related deferred revenue(1) | 2,250 | — | 4,500 | — | ||||||||
| Non-GAAP total software product revenue | $ | 86,658 | $ | 70,607 | $ | 192,199 | $ | 160,276 | ||||
(1) Adjustment for revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.
| The following table provides a recompilation 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) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Net cash provided by operating activities | $ | 6,553 | $ | 10,624 | $ | 31,868 | $ | 37,313 | ||||||||
| Capital expenditures | (2,084 | ) | (1,446 | ) | (6,667 | ) | (3,130 | ) | ||||||||
| Free cash flow | $ | 4,469 | $ | 9,178 | $ | 25,201 | $ | 34,183 | ||||||||
Effective
| (Unaudited) | ||||||||||||||||
| Three months ended | ||||||||||||||||
| ASC 606 | ||||||||||||||||
| (in thousands) | March 31, 2018 |
June 30, 2018 |
September 30, 2018 |
December 31, 2018 |
||||||||||||
| Software product revenue | $ | 89,670 | $ | 70,606 | $ | 64,182 | $ | 79,903 | ||||||||
| Total revenue | 113,257 | 93,360 | 86,751 | 103,011 | ||||||||||||
| Net income (loss) | 24,684 | (1,080 | ) | 934 | (9,003 | ) | ||||||||||
| Adjusted EBITDA | 29,550 | 5,303 | 2,399 | 12,928 | ||||||||||||
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, 2019 |
Year Ending December 31, 2019 |
|||||||||||||||
| (in thousands) | Low | High | Low | High | ||||||||||||
| Net (loss) income | $ | (6,750 | ) | $ | (5,450 | ) | $ | 10,500 | $ | 13,100 | ||||||
| Stock-based compensation expense | 2,100 | 2,100 | 7,500 | 7,500 | ||||||||||||
| Amortization of intangible assets | 3,800 | 3,800 | 15,200 | 15,200 | ||||||||||||
| Acquisition related deferred revenue(1) | 2,250 | 2,250 | 9,000 | 9,000 | ||||||||||||
| Non-recurring adjustments | 2,000 | 2,000 | 3,000 | 3,000 | ||||||||||||
| Non-GAAP net income | $ | 3,400 | $ | 4,700 | $ | 45,200 | $ | 47,800 | ||||||||
(1) Adjustment for revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.
| The following table provides a reconciliation of projected Adjusted EBITDA and Modified Adjusted EBITDA to projected net (loss) income, the most comparable GAAP financial measure: | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months ending September 30, 2019 |
Year Ending December 31, 2019 |
|||||||||||||
| (in thousands) | Low | High | Low | High | ||||||||||
| Net (loss) income | $ | (6,750 | ) | $ | (5,450 | ) | $ | 10,500 | $ | 13,100 | ||||
| Income tax (benefit) expense | (3,600 | ) | (2,900 | ) | 5,700 | 7,100 | ||||||||
| Stock-based compensation expense | 2,100 | 2,100 | 7,500 | 7,500 | ||||||||||
| Interest expense | 2,700 | 2,700 | 6,400 | 6,400 | ||||||||||
| Depreciation and amortization | 5,300 | 5,300 | 22,000 | 22,000 | ||||||||||
| Interest income and other non-recurring adjustments | 1,000 | 1,000 | 900 | 900 | ||||||||||
| Adjusted EBITDA | 750 | 2,750 | 53,000 | 57,000 | ||||||||||
| Acquisition related deferred revenue(1) | 2,250 | 2,250 | 9,000 | 9,000 | ||||||||||
| Modified Adjusted EBITDA | $ | 3,000 | $ | 5,000 | $ | 62,000 | $ | 66,000 | ||||||
(1) Adjustment for revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.
| The following table provides a reconciliation of projected Non-GAAP total revenue to projected total revenue, the most comparable GAAP financial measure: | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months ending September 30, 2019 |
Year Ending December 31, 2019 |
|||||||||||
| (in millions) | Low | High | Low | High | ||||||||
| Total revenue | $ | 103.0 | $ | 105.0 | $ | 460.0 | $ | 464.0 | ||||
| Acquisition related deferred revenue(1) | 2.2 | 2.2 | 9.0 | 9.0 | ||||||||
| Non-GAAP total revenue | $ | 105.2 | $ | 107.2 | $ | 469.0 | $ | 473.0 | ||||
(1) Adjustment for revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.
| The following table provides a reconciliation of projected Non-GAAP total software product revenue to projected total software product revenue, the most comparable GAAP financial measure: | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months ending September 30, 2019 |
Year Ending December 31, 2019 |
|||||||||||||||
| (in millions) | Low | High | Low | High | ||||||||||||
| Total software product revenue | $ | 79.0 | $ | 81.0 | $ | 366.0 | $ | 370.0 | ||||||||
| Acquisition related deferred revenue(1) | 2.2 | 2.2 | 9.0 | 9.0 | ||||||||||||
| Non-GAAP total software product revenue | $ | 81.2 | $ | 83.2 | $ | 375.0 | $ | 379.0 | ||||||||
(1) Adjustment for revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.
Source: Altair Engineering Inc.