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Altair Announces Third Quarter 2019 Financial Results

November 7, 2019 at 4:05 PM EST

2019 Third Quarter Software Product Revenue Increased 21% year-over-year

TROY, Mich., Nov. 07, 2019 (GLOBE NEWSWIRE) -- Altair (Nasdaq:ALTR), a global technology company providing solutions in product development, high-performance computing and data intelligence, today released its financial results for the third quarter ended September 30, 2019.

“Software product revenue grew over 21% from a year ago, as we continued to execute on our vision to provide truly differentiated simulation, data analytics and high-performance cloud computing solutions that enable our customers to compete more effectively in a connected world,” said James Scapa, Founder, Chairman and Chief Executive Officer of Altair.  “Our core simulation and optimization technologies performed well during the quarter and we are highly encouraged by strong demand for our SimSolid product, which has had one of the fastest new product ramps in our history. We are also pleased to see continued strong recurring software subscription revenues.  While we are seeing some macro headwinds in our automotive market and continue to be impacted by foreign exchange challenges, our diversification across multiple verticals and products provides us with optimism that our momentum will continue into 2020 and beyond.”

Third Quarter 2019 Financial Highlights

  • Software product revenue was $77.8 million, an increase of 21% from $64.2 million for the third quarter of 2018 highlighted by 29% growth in the Americas region.
  • Non-GAAP software product revenue was $80.1 million, an increase of 25% from $64.2 million for the third quarter of 2018. 
  • Total revenue was $100.4 million, an increase of 16% from $86.8 million for the third quarter of 2018.
  • Non-GAAP total revenue was $102.7 million, an increase of 18% from $86.8 million for the third quarter of 2018. 
  • Net loss was $(15.9) million, compared to net income of $0.9 million for the third quarter of 2018. Diluted net loss per share was $(0.22) based on 71.8 million diluted weighted average common shares outstanding, compared to diluted net income per share of $0.01 for the third quarter of 2018, based on 76.7 million diluted weighted average common shares outstanding.
  • Adjusted EBITDA was $(2.3) million, compared to $2.4 million for the third quarter of 2018. 
  • Modified Adjusted EBITDA was $(0.1) million, compared to $2.4 million for the third quarter of 2018. 
  • Non-GAAP net loss was $(7.2) million, compared to $(1.4) million for the third quarter of 2018. Non-GAAP diluted net loss per share was $(0.09) based on 77.8 million non-GAAP diluted common shares outstanding, compared to non-GAAP diluted net loss per share of $(0.02) for the third quarter of 2018, based on 77.0 million non-GAAP diluted common shares outstanding.
  • Free cash flow, which consists of cash flow from operations less capital expenditures, was $(3.3) million, compared to $0.9 million for the third quarter of 2018.

 

Business Outlook
Based on information available as of today, Altair is issuing revised and reduced guidance for the fourth quarter and full year 2019. 

    (Unaudited)  
(in millions)   Fourth Quarter 2019 Full Year 2019  
Software Product Revenue   $ 83.5   to $ 87.5   $ 349.0   to $ 353.0  
Non-GAAP Software Product Revenue   $ 85.8     $ 89.8   $ 358.0     $ 362.0  
Total Revenue   $ 105.0     $ 109.0   $ 440.0     $ 444.0  
Non-GAAP Total Revenue   $ 107.3     $ 111.3   $ 449.0     $ 453.0  
Net (Loss)   $ (5.4)   $ (3.4) $ (11.4)   $ (9.4)
Non-GAAP Net Income   $ 2.2     $ 4.2   $ 20.1     $ 22.1  
Adjusted EBITDA   $ 7.3     $ 9.3   $ 34.0     $ 36.0  
Modified Adjusted EBITDA   $ 9.5     $ 11.5   $ 43.0     $ 45.0  

(All figures in millions)

Conference Call Information

What: Altair’s Third Quarter 2019 Financial Results Conference Call
When: Thursday, November 7, 2019
Time: 5:00 p.m. ET
Live Call: (866) 754-5204, Domestic
(636) 812-6621, International
Replay: (855) 859-2056, Conference ID 8382596, Domestic
(404) 537-3406, Conference ID 8382596, 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.

Non-GAAP software product revenue and Non-GAAP total revenue include revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.

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 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 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.

Non-GAAP diluted common shares includes total outstanding shares plus outstanding equity awards under the Altair equity award plans.

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 fourth quarter and full year 2019, statements regarding other future periods 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 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.

Investor and Media Relations
Dave Simon
Altair
248-614-2400 ext. 332
ir@altair.com

 

ALTAIR ENGINERING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

    September 30, 2019     December 31, 2018  
(In thousands)   (Unaudited)          
ASSETS                
CURRENT ASSETS:                
Cash and cash equivalents   $ 246,937     $ 35,345  
Accounts receivable, net     84,062       96,803  
Income tax receivable     11,551       4,431  
Prepaid expenses and other current assets     18,398       17,455  
Total current assets     360,948       154,034  
Property and equipment, net     33,720       30,153  
Operating lease right of use assets     26,507        
Goodwill     210,500       210,532  
Other intangible assets, net     60,956       69,836  
Deferred tax assets     5,870       5,354  
Other long-term assets     18,199       17,288  
TOTAL ASSETS   $ 716,700     $ 487,197  
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY  
CURRENT LIABILITIES:                
Current portion of long-term debt   $ 437     $ 331  
Accounts payable     8,286       8,357  
Accrued compensation and benefits     28,839       31,740  
Current portion of operating lease liabilities     8,891        
Other accrued expenses and current liabilities     27,426       27,039  
Deferred revenue     69,377       59,765  
Total current liabilities     143,256       127,232  
Long-term debt, net of current portion     175,624       31,417  
Operating lease liabilities, net of current portion     18,831        
Deferred revenue, non-current     7,666       6,754  
Other long-term liabilities     25,630       25,756  
TOTAL LIABILITIES     371,007       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 40,354
  and 38,349 shares as of September 30, 2019 and December 31, 2018, respectively
    4       4  
Class B common stock, authorized 41,203 shares, issued and outstanding 31,391
  and 32,171 shares as of September 30, 2019 and December 31, 2018, respectively
    3       3  
Additional paid-in capital     436,197       379,832  
Accumulated deficit     (80,903 )     (74,863 )
Accumulated other comprehensive loss     (11,960 )     (11,290 )
TOTAL STOCKHOLDERS’ EQUITY     343,341       293,686  
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY   $ 716,700     $ 487,197  

 

ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
(in thousands, except per share data)   2019     2018     2019     2018  
Revenue                                
License   $ 46,853     $ 40,880     $ 180,127     $ 154,515  
Maintenance and other services     30,963       23,302       85,388       69,943  
Total software     77,816       64,182       265,515       224,458  
Software related services     7,956       8,692       25,635       26,872  
Total software and related services     85,772       72,874       291,150       251,330  
Client engineering services     12,803       12,155       37,265       36,652  
Other     1,831       1,722       6,623       5,386  
Total revenue     100,406       86,751       335,038       293,368  
Cost of revenue                                
License     4,371       2,736       13,146       10,534  
Maintenance and other services     9,548       7,095       27,509       22,202  
Total software *     13,919       9,831       40,655       32,736  
Software related services     6,013       6,352       19,143       19,573  
Total software and related services     19,932       16,183       59,798       52,309  
Client engineering services     10,160       9,817       29,993       29,977  
Other     1,649       1,204       5,858       3,416  
Total cost of revenue     31,741       27,204       95,649       85,702  
Gross profit     68,665       59,547       239,389       207,666  
Operating expenses:                                
Research and development *     29,667       24,301       87,012       71,748  
Sales and marketing *     25,790       19,243       78,462       57,849  
General and administrative *     20,706       17,234       60,886       51,636  
Amortization of intangible assets     3,545       1,739       10,673       5,665  
Other operating income     (536 )     (4,850 )     (1,702 )     (7,433 )
Total operating expenses     79,172       57,667       235,331       179,465  
Operating (loss) income     (10,507 )     1,880       4,058       28,201  
Interest expense     2,726       31       3,586       92  
Other income, net     (588 )     (970 )     (703 )     (2,046 )
(Loss) income before income taxes     (12,645 )     2,819       1,175       30,155  
Income tax expense     3,294       1,885       7,215       5,617  
Net (loss) income   $ (15,939 )   $ 934     $ (6,040 )   $ 24,538  
Income per share:                                
Net (loss) income per share attributable to common
  stockholders, basic
  $ (0.22 )   $ 0.01     $ (0.08 )   $ 0.37  
Net (loss) income per share attributable to common
  stockholders, diluted
  $ (0.22 )   $ 0.01     $ (0.08 )   $ 0.33  
Weighted average shares outstanding:                                
Weighted average number of shares used in computing
  net (loss) income per share, basic
    71,770       70,001       71,313       66,429  
Weighted average number of shares used in computing
  net (loss) income per share, diluted
    71,770       76,709       71,313       74,182  

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

    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
    2019     2018     2019     2018  
Cost of revenue – software   $ 384     $ 8     $ 727     $ 24  
Research and development     674       175       1,611       330  
Sales and marketing     625       140       1,562       315  
General and administrative     609       240       1,684       544  
Total stock-based compensation expense   $ 2,292     $ 563     $ 5,584     $ 1,213  

 

ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)

    Nine Months Ended September 30,  
(In thousands)   2019     2018  
OPERATING ACTIVITIES:                
Net (loss) income   $ (6,040 )   $ 24,538  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:                
Depreciation and amortization     15,836       10,895  
Provision for bad debt     472       455  
Amortization of debt discount and issuance costs     3,044       18  
Stock-based compensation expense     5,584       1,213  
Gain on sale of assets held for sale and other           (4,544 )
Impairment of intangibles           608  
Deferred income taxes     (741 )     706  
Other, net     (16 )     (134 )
Changes in assets and liabilities:                
Accounts receivable     10,185       15,674  
Prepaid expenses and other current assets     (8,718 )     (6,821 )
Other long-term assets     (1,443 )     44  
Accounts payable     (420 )     796  
Accrued compensation and benefits     (2,111 )     2,650  
Other accrued expenses and current liabilities     2,110       (4,781 )
Operating lease right-of-use assets and liabilities, net     188        
Deferred revenue     12,075       (895 )
Net cash provided by operating activities     30,005       40,422  
INVESTING ACTIVITIES:                
Capital expenditures     (8,120 )     (5,333 )
Payments for acquisition of developed technology     (473 )     (2,738 )
Payments for acquisition of businesses, net of cash acquired     (709 )     (15,950 )
Proceeds from the sale of assets held for sale and other           6,613  
Other investing activities, net     16        
Net cash used in investing activities     (9,286 )     (17,408 )
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     1,441       1,929  
Payments for issuance costs of convertible senior notes     (1,233 )      
Payments for follow-on public offering and initial public offering costs           (541 )
Proceeds from issuance of Class A common stock in follow-on public offering,
  net of underwriters' discounts and commissions
          135,572  
Other financing activities     (399 )     (446 )
Net cash provided by financing activities     191,960       136,514  
Effect of exchange rate changes on cash, cash equivalents and restricted cash     (1,065 )     (1,354 )
Net increase in cash, cash equivalents and restricted cash     211,614       158,174  
Cash, cash equivalents and restricted cash at beginning of year     35,685       39,578  
Cash, cash equivalents and restricted cash at end of period   $ 247,299     $ 197,752  
Supplemental disclosure of cash flow:                
Interest paid   $ 385     $ 70  
Income taxes paid   $ 7,163     $ 5,900  
Supplemental disclosure of non-cash investing and financing activities:                
Finance leases   $ 588     $ 995  
Property and equipment in accounts payable, other current liabilities
  and other liabilities
  $ 1,827     $ 228  
Follow-on public offering costs in accounts payable   $     $ 15  
Promissory notes issued and deferred payment obligations for acquisitions   $     $ 278  

Financial Results

The following table provides a reconciliation of Non-GAAP net (loss) income and Non-GAAP net (loss) 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
September 30,
    Nine Months Ended
September 30,
 
(in thousands, except per share amounts)   2019     2018     2019     2018  
Net (loss) income   $ (15,939 )   $ 934     $ (6,040 )   $ 24,538  
Stock-based compensation expense     2,292       563       5,584       1,213  
Amortization of intangible assets     3,545       1,739       10,673       5,665  
Acquisition related deferred revenue (1)     2,250             6,750        
Special adjustments (2)     1,027       (4,177 )     2,031       (4,400 )
Income tax effect of non-GAAP adjustments     (368 )     (459 )     (1,103 )     (658 )
Non-GAAP net (loss) income   $ (7,193 )   $ (1,400 )   $ 17,895     $ 26,358  
                                 
Net (loss) income per share - diluted   $ (0.22 )   $ 0.01     $ (0.08 )   $ 0.33  
Non-GAAP net (loss) income per share - diluted   $ (0.09 )   $ (0.02 )   $ 0.23     $ 0.34  
                                 
GAAP diluted shares outstanding:     71,770       76,709       71,313       74,182  
Non-GAAP diluted shares outstanding:     77,800       77,000       77,800       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 a) nonrecurring severance expenses of $0.4 million and nonrecurring acquisition related costs of $0.6 million, for both the three and nine months ended September 30, 2019, and b) an impairment charge for royalty contracts resulting in $1.0 million of expenses for the nine months ended September 30, 2019.
  Includes a) a gain on the sale of a building of $4.4 million for the three and nine months ended September 30, 2018, b) an impairment charge for royalty contracts resulting in $0.2 million and $2.0 million for the three and nine months ended September 30, 2018, respectively and c) a non-recurring adjustment for a change in estimated legal expenses resulting in $2.0 million of income for the nine months ended September 30, 2018.

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
September 30,
    Nine Months Ended
September 30,
 
(in thousands)   2019     2018     2019     2018  
Net (loss) income   $ (15,939 )   $ 934     $ (6,040 )   $ 24,538  
Income tax expense     3,294       1,885       7,215       5,617  
Stock-based compensation expense     2,292       563       5,584       1,213  
Interest expense     2,726       31       3,586       92  
Interest income and other (1)     (76 )     (4,384 )     633       (5,103 )
Depreciation and amortization     5,368       3,370       15,836       10,895  
Adjusted EBITDA     (2,335 )     2,399       26,814       37,252  
Acquisition related deferred revenue (2)     2,250             6,750        
Modified Adjusted EBITDA   $ (85 )   $ 2,399     $ 33,564     $ 37,252  

 

(1)  Includes a) nonrecurring severance expenses of $0.4 million and nonrecurring acquisition related costs of $0.6 million, for both the three and nine months ended September 30, 2019, and b) impairment charges for royalty contracts resulting in $1.0 million of expense for the nine months ended September 30, 2019. 
  Includes a) a gain on the sale of a building of $4.4 million for the three and nine months ended September 30, 2018, b) impairment charges for royalty contracts and trade names resulting in $0.8 million and $2.6 million of expense for the three and nine months ended September 30, 2018, respectively, and c) a non-recurring adjustment for a change in estimated legal expenses resulting in $2.0 million of income for the nine months ended September 30, 2018.
(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
September 30,
    Nine Months Ended
September 30,
 
(in thousands)   2019     2018     2019     2018  
Total revenue   $ 100,406     $ 86,751     $ 335,038     $ 293,368  
Acquisition related deferred revenue (1)     2,250             6,750        
Non-GAAP total revenue   $ 102,656     $ 86,751     $ 341,788     $ 293,368  

 

(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
September 30,
    Nine Months Ended
September 30,
 
(in thousands)   2019     2018     2019     2018  
Total software product revenue   $ 77,816     $ 64,182     $ 265,515     $ 224,458  
Acquisition related deferred revenue(1)     2,250             6,750        
Non-GAAP total software product revenue   $ 80,066     $ 64,182     $ 272,265     $ 224,458  

 

(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
September 30,
    Nine Months Ended
September 30,
 
(in thousands)   2019     2018     2019     2018  
Net cash (used in) provided by operating activities   $ (1,863 )   $ 3,109     $ 30,005     $ 40,422  
Capital expenditures     (1,453 )     (2,203 )     (8,120 )     (5,333 )
Free cash flow   $ (3,316 )   $ 906     $ 21,885     $ 35,089  

Effective January 1, 2018, we adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASC 606). The following table sets forth selected quarterly information under ASC 606 for 2018:

    (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, the most comparable GAAP financial measure:

    (Unaudited)  
    Three Months ending
December 31, 2019
    Year Ending
December 31, 2019
 
(in thousands)   Low     High     Low     High  
Net loss   $ (5,350 )   $ (3,350 )   $ (11,400 )   $ (9,400 )
Stock-based compensation expense     2,100       2,100       7,700       7,700  
Amortization of intangible assets     3,600       3,600       14,300       14,300  
Acquisition related deferred revenue (1)     2,250       2,250       9,000       9,000  
Non-recurring adjustments                 2,000       2,000  
Income tax effect of non-GAAP adjustments     (370 )     (370 )     (1,500 )     (1,500 )
Non-GAAP net income   $ 2,230     $ 4,230     $ 20,100     $ 22,100  

 

(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, the most comparable GAAP financial measure:

    (Unaudited)  
    Three Months ending
December 31, 2019
    Year Ending
December 31, 2019
 
(in thousands)   Low     High     Low     High  
Net loss   $ (5,350 )   $ (3,350 )   $ (11,400 )   $ (9,400 )
Income tax expense     3,200       3,200       10,400       10,400  
Stock-based compensation expense     2,100       2,100       7,700       7,700  
Interest expense     2,800       2,800       6,300       6,300  
Depreciation and amortization     5,400       5,400       21,200       21,200  
Interest income and other non-recurring adjustments     (900 )     (900 )     (200 )     (200 )
Adjusted EBITDA     7,250       9,250       34,000       36,000  
Acquisition related deferred revenue (1)     2,250       2,250       9,000       9,000  
Modified Adjusted EBITDA   $ 9,500     $ 11,500     $ 43,000     $ 45,000  

 

(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
December 31, 2019
    Year Ending
December 31, 2019
 
(in thousands)   Low     High     Low     High  
Total revenue   $ 105,000     $ 109,000     $ 440,000     $ 444,000  
Acquisition related deferred revenue (1)     2,250       2,250       9,000       9,000  
Non-GAAP total revenue   $ 107,250     $ 111,250     $ 449,000     $ 453,000  

 

(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 software product revenue to projected total software product revenue, the most comparable GAAP financial measure:

    (Unaudited)  
    Three Months ending
December 31, 2019
    Year Ending
December 31, 2019
 
(in thousands)   Low     High     Low     High  
Total software product revenue   $ 83,500     $ 87,500     $ 349,000     $ 353,000  
Acquisition related deferred revenue (1)     2,250       2,250       9,000       9,000  
Non-GAAP total software product revenue   $ 85,750     $ 89,750     $ 358,000     $ 362,000  

 

(1)  Adjustment for revenue not recognized under GAAP due to acquisition accounting adjustments associated with the accounting for deferred revenue in significant business combinations.

Altair_horizontal_RGB_wout_guides.jpg

 

Source: Altair Engineering Inc.

 

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