Altair Announces First Quarter 2023 Financial Results
“Altair had a very strong start to 2023, with software product revenue and total revenue above the high end of our guidance,” said
“Coming right on the heels of a very strong fourth quarter to end last year, we had impressive performance in the first quarter,” said
First Quarter 2023 Financial Highlights
- Software product revenue was
$149.6 million compared to$140.9 million for the first quarter of 2022, an increase of 6.2% in reported currency and 10.0% in constant currency - Total revenue was
$166.0 million compared to$159.8 million for the first quarter of 2022, an increase of 3.9% in reported currency and 7.5% in constant currency - Net loss was
$(2.0) million compared to net income of$11.5 million for the first quarter of 2022. Diluted net loss per share was$(0.02) based on 80.2 million diluted weighted average common shares outstanding, compared to diluted net income per share of$0.13 for the first quarter of 2022, based on 87.3 million diluted weighted average common shares outstanding. Net loss margin was -1.2% compared to net income margin 7.2% for the first quarter of 2022 - Non-GAAP net income was
$31.8 million , compared to non-GAAP net income of$32.9 million for the first quarter of 2022, a decrease of 3.5%. Non-GAAP diluted net income per share was$0.36 based on 88.0 million non-GAAP diluted common shares outstanding, compared to non-GAAP diluted net income per share of$0.38 for the first quarter of 2022, based on 87.3 million non-GAAP diluted common shares outstanding - Adjusted EBITDA was
$43.1 million compared to$46.6 million for the first quarter of 2022, a decrease of 7.6%. Adjusted EBITDA margin was 25.9% compared to 29.2% for the first quarter of 2022 - Cash provided by operating activities was
$59.2 million , compared to$5.8 million for the first quarter of 2022 - Free cash flow was
$57.5 million , compared to$3.6 million for the first quarter of 2022. Free cash flow in the first quarter of 2022 was impacted by the payment of a$65.9 million litigation judgement assumed as part of the World Programming acquisition.
Business Outlook
Based on information available as of today, Altair is issuing the following guidance for the second quarter and full year 2023:
| (in millions, except %) | Second Quarter 2023 | Full Year 2023 | ||||||||||||||
| Software Product Revenue | $ | 123.0 | to | $ | 125.0 | $ | 551.0 | to | $ | 561.0 | ||||||
| Growth Rate | 5.2 | % | 6.9 | % | 8.8 | % | 10.8 | % | ||||||||
| Growth Rate - Constant Currency | 6.7 | % | 8.4 | % | 9.1 | % | 11.0 | % | ||||||||
| Total Revenue | $ | 138.0 | $ | 140.0 | $ | 614.0 | $ | 624.0 | ||||||||
| Growth Rate | 4.0 | % | 5.5 | % | 7.3 | % | 9.0 | % | ||||||||
| Growth Rate - Constant Currency | 5.4 | % | 6.9 | % | 7.5 | % | 9.3 | % | ||||||||
| Net Loss | $ | (15.8 | ) | $ | (13.9 | ) | $ | (19.7 | ) | $ | (10.0 | ) | ||||
| Non-GAAP Net Income | $ | 11.5 | $ | 13.0 | $ | 89.8 | $ | 97.2 | ||||||||
| Adjusted EBITDA | $ | 15.0 | $ | 17.0 | $ | 120.0 | $ | 130.0 | ||||||||
| Net Cash Provided by Operating Activities | $ | 118.0 | $ | 126.0 | ||||||||||||
| Free Cash Flow | $ | 108.0 | $ | 116.0 | ||||||||||||
The following table provides a reconciliation of Full Year 2023 guidance to the last guidance provided in February:
| (Unaudited) | ||||||||||||||||
| Full Year 2023 | ||||||||||||||||
| (in millions) | Midpoint of Guidance in February |
Increase/ (Decrease) |
Currency Fluctuations from Prior Guidance |
Midpoint of Guidance in May |
||||||||||||
| Software Product Revenue | $ | 555.0 | $ | — | $ | 1.0 | $ | 556.0 | ||||||||
| Total Revenue | $ | 618.0 | $ | — | $ | 1.0 | $ | 619.0 | ||||||||
| Adjusted EBITDA | $ | 125.0 | $ | — | $ | — | $ | 125.0 | ||||||||
Conference Call Information
| What: | Altair’s First Quarter 2023 |
| When: | |
| Time: | |
| 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 science and artificial intelligence (AI) 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 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 second quarter and full year 2023, our statements regarding our expectations for 2023, 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
Media Relations
Altair
248-614-2400 ext. 332
dls@altair.com
Investor Relations
212-871-3927
ir@altair.com
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands) | (Unaudited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 378,377 | $ | 316,146 | ||||
| Accounts receivable, net | 130,636 | 170,279 | ||||||
| Income tax receivable | 11,226 | 11,259 | ||||||
| Prepaid expenses and other current assets | 28,363 | 29,142 | ||||||
| Total current assets | 548,602 | 526,826 | ||||||
| Property and equipment, net | 38,260 | 37,517 | ||||||
| Operating lease right of use assets | 33,297 | 33,601 | ||||||
| 451,170 | 449,048 | |||||||
| Other intangible assets, net | 101,586 | 107,609 | ||||||
| Deferred tax assets | 9,675 | 9,727 | ||||||
| Other long-term assets | 43,582 | 40,410 | ||||||
| TOTAL ASSETS | $ | 1,226,172 | $ | 1,204,738 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 6,014 | $ | 10,434 | ||||
| Accrued compensation and benefits | 30,341 | 42,456 | ||||||
| Current portion of operating lease liabilities | 9,939 | 10,396 | ||||||
| Other accrued expenses and current liabilities | 58,673 | 56,371 | ||||||
| Deferred revenue | 114,423 | 113,081 | ||||||
| 2024 Convertible senior notes, net | 81,004 | — | ||||||
| Total current liabilities | 300,394 | 232,738 | ||||||
| 2027 Convertible senior notes, net | 225,039 | 305,604 | ||||||
| Operating lease liabilities, net of current portion | 23,989 | 24,065 | ||||||
| Deferred revenue, non-current | 27,520 | 31,379 | ||||||
| Other long-term liabilities | 42,325 | 41,216 | ||||||
| TOTAL LIABILITIES | 619,267 | 635,002 | ||||||
| Commitments and contingencies | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Preferred stock ( |
— | — | ||||||
| Common stock ( |
||||||||
| Class A common stock, authorized 513,797 shares, issued and outstanding 53,153 and 52,277 shares as of |
5 | 5 | ||||||
| Class B common stock, authorized 41,203 shares, issued and outstanding 27,505 and 27,745 shares as of |
3 | 3 | ||||||
| Additional paid-in capital | 753,184 | 721,307 | ||||||
| Accumulated deficit | (123,536 | ) | (121,577 | ) | ||||
| Accumulated other comprehensive loss | (22,751 | ) | (30,002 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | 606,905 | 569,736 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,226,172 | $ | 1,204,738 | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended |
||||||||
| (in thousands, except per share data) | 2023 | 2022 | ||||||
| Revenue | ||||||||
| License | $ | 112,409 | $ | 106,169 | ||||
| Maintenance and other services | 37,234 | 34,728 | ||||||
| Total software | 149,643 | 140,897 | ||||||
| Software related services | 7,100 | 9,061 | ||||||
| Total software and related services | 156,743 | 149,958 | ||||||
| Client engineering services | 7,776 | 8,012 | ||||||
| Other | 1,515 | 1,811 | ||||||
| Total revenue | 166,034 | 159,781 | ||||||
| Cost of revenue | ||||||||
| License | 4,824 | 4,687 | ||||||
| Maintenance and other services | 14,426 | 12,719 | ||||||
| Total software * | 19,250 | 17,406 | ||||||
| Software related services | 5,616 | 6,035 | ||||||
| Total software and related services | 24,866 | 23,441 | ||||||
| Client engineering services | 6,624 | 6,641 | ||||||
| Other | 1,245 | 1,521 | ||||||
| Total cost of revenue | 32,735 | 31,603 | ||||||
| Gross profit | 133,299 | 128,178 | ||||||
| Operating expenses: | ||||||||
| Research and development * | 53,251 | 47,079 | ||||||
| Sales and marketing * | 43,492 | 37,840 | ||||||
| General and administrative * | 17,951 | 17,426 | ||||||
| Amortization of intangible assets | 7,814 | 5,903 | ||||||
| Other operating expense (income), net | 5,605 | (781 | ) | |||||
| Total operating expenses | 128,113 | 107,467 | ||||||
| Operating income | 5,186 | 20,711 | ||||||
| Interest expense | 1,526 | 585 | ||||||
| Other (income) expense, net | (3,613 | ) | 2,068 | |||||
| Income before income taxes | 7,273 | 18,058 | ||||||
| Income tax expense | 9,232 | 6,530 | ||||||
| Net (loss) income | $ | (1,959 | ) | $ | 11,528 | |||
| (Loss) income per share: | ||||||||
| Net (loss) income per share attributable to common stockholders, basic |
$ | (0.02 | ) | $ | 0.15 | |||
| Net (loss) income per share attributable to common stockholders, diluted |
$ | (0.02 | ) | $ | 0.13 | |||
| Weighted average shares outstanding: | ||||||||
| Weighted average number of shares used in computing net (loss) income per share, basic |
80,191 | 79,462 | ||||||
| Weighted average number of shares used in computing net (loss) income per share, diluted |
80,191 | 87,261 | ||||||
* Amounts include stock-based compensation expense as follows (in thousands):
| (Unaudited) | ||||||||
| Three Months Ended |
||||||||
| (in thousands) | 2023 | 2022 | ||||||
| Cost of revenue – software | $ | 2,752 | $ | 1,903 | ||||
| Research and development | 8,743 | 7,358 | ||||||
| Sales and marketing | 7,591 | 7,035 | ||||||
| General and administrative | 3,075 | 2,318 | ||||||
| Total stock-based compensation expense | $ | 22,161 | $ | 18,614 | ||||
| (Unaudited) | ||||||||
| Three Months Ended |
||||||||
| (in thousands) | 2023 | 2022 | ||||||
| Employee stock-based compensation plans | $ | 18,484 | $ | 13,259 | ||||
| Post combination expense in connection with acquisitions | 3,677 | 5,355 | ||||||
| Total stock-based compensation expense | $ | 22,161 | $ | 18,614 | ||||
| CONSOLIDATED STATEMENTS OF CASH FLOW | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended |
||||||||
| (In thousands) | 2023 | 2022 | ||||||
| OPERATING ACTIVITIES: | ||||||||
| Net (loss) income | $ | (1,959 | ) | $ | 11,528 | |||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 9,750 | 7,686 | ||||||
| Stock-based compensation expense | 22,161 | 18,614 | ||||||
| Loss on mark-to-market adjustment of contingent consideration | 7,006 | — | ||||||
| Other, net | 640 | 506 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 39,872 | 21,735 | ||||||
| Prepaid expenses and other current assets | 1,981 | (138 | ) | |||||
| Other long-term assets | (1,944 | ) | 2,139 | |||||
| Accounts payable | (5,362 | ) | (302 | ) | ||||
| Accrued compensation and benefits | (12,283 | ) | (6,896 | ) | ||||
| Other accrued expenses and current liabilities | 2,015 | (61,759 | ) | |||||
| Deferred revenue | (2,678 | ) | 12,673 | |||||
| Net cash provided by operating activities | 59,199 | 5,786 | ||||||
| INVESTING ACTIVITIES: | ||||||||
| Capital expenditures | (1,727 | ) | (2,190 | ) | ||||
| Payments for acquisition of businesses, net of cash acquired | — | (12,971 | ) | |||||
| Other investing activities, net | (1,405 | ) | (343 | ) | ||||
| Net cash used in investing activities | (3,132 | ) | (15,504 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Proceeds from the exercise of common stock options | 9,872 | 237 | ||||||
| Payments for repurchase of common stock | (6,255 | ) | — | |||||
| Proceeds from employee stock purchase plan contributions | 1,868 | 2,362 | ||||||
| Other financing activities | (29 | ) | (90 | ) | ||||
| Net cash provided by financing activities | 5,456 | 2,509 | ||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 379 | (970 | ) | |||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 61,902 | (8,179 | ) | |||||
| Cash, cash equivalents and restricted cash at beginning of year | 316,958 | 414,012 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 378,860 | $ | 405,833 | ||||
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 |
||||||||
| (in thousands, except per share amounts) | 2023 | 2022 | ||||||
| Net (loss) income | $ | (1,959 | ) | $ | 11,528 | |||
| Stock-based compensation expense | 22,161 | 18,614 | ||||||
| Amortization of intangible assets | 7,814 | 5,903 | ||||||
| Non-cash interest expense | 465 | 417 | ||||||
| Impact of non-GAAP tax rate(1) | (1,933 | ) | (5,036 | ) | ||||
| Special adjustments and other(2) | 5,231 | 1,492 | ||||||
| Non-GAAP net income | $ | 31,779 | $ | 32,918 | ||||
| Net (loss) income per share, diluted | $ | (0.02 | ) | $ | 0.13 | |||
| Non-GAAP net income per share, diluted | $ | 0.36 | $ | 0.38 | ||||
| GAAP diluted shares outstanding | 80,191 | 87,261 | ||||||
| Non-GAAP diluted shares outstanding | 88,041 | 87,261 | ||||||
(1) The Company uses a non-GAAP effective tax rate of 26%.
(2) The three months ended
The following table provides a reconciliation of Adjusted EBITDA to net (loss) income, the most comparable GAAP financial measure:
| (Unaudited) | ||||||||
| Three Months Ended |
||||||||
| (in thousands) | 2023 | 2022 | ||||||
| Net (loss) income | $ | (1,959 | ) | $ | 11,528 | |||
| Income tax expense | 9,232 | 6,530 | ||||||
| Stock-based compensation expense | 22,161 | 18,614 | ||||||
| Interest expense | 1,526 | 585 | ||||||
| Depreciation and amortization | 9,750 | 7,686 | ||||||
| Special adjustments, interest income and other(1) | 2,345 | 1,647 | ||||||
| Adjusted EBITDA | $ | 43,055 | $ | 46,590 | ||||
(1) The three months ended
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 |
||||||||
| (in thousands) | 2023 | 2022 | ||||||
| Net cash provided by operating activities(1) | $ | 59,199 | $ | 5,786 | ||||
| Capital expenditures | (1,727 | ) | (2,190 | ) | ||||
| Free cash flow(1) | $ | 57,472 | $ | 3,596 | ||||
(1) The three months ended
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 |
||||||||
| (in thousands) | 2023 | 2022 | ||||||
| Gross profit | $ | 133,299 | $ | 128,178 | ||||
| Stock-based compensation expense | 2,752 | 1,903 | ||||||
| Non-GAAP gross profit | $ | 136,051 | $ | 130,081 | ||||
| Gross profit margin | 80.3 | % | 80.2 | % | ||||
| Non-GAAP gross margin | 81.9 | % | 81.4 | % | ||||
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 |
||||||||
| (in thousands) | 2023 | 2022 | ||||||
| Total operating expense | $ | 128,113 | $ | 107,467 | ||||
| Stock-based compensation expense | (19,409 | ) | (16,711 | ) | ||||
| Amortization | (7,814 | ) | (5,903 | ) | ||||
| Loss on mark-to-market adjustment of contingent consideration | (7,006 | ) | — | |||||
| Non-GAAP operating expense | $ | 93,884 | $ | 84,853 | ||||
The following table provides a reconciliation of Billings to revenue, the most comparable GAAP financial measure:
| (Unaudited) | |||||||
| Three Months Ended |
|||||||
| (in thousands) | 2023 | 2022 | |||||
| Revenue | $ | 166,034 | $ | 159,781 | |||
| Ending deferred revenue | 141,943 | 118,403 | |||||
| Beginning deferred revenue | (144,460 | ) | (106,032 | ) | |||
| Deferred revenue acquired | — | (815 | ) | ||||
| Billings | $ | 163,517 | $ | 171,337 | |||
The following table provides revenue, Billings and Adjusted EBITDA on a constant currency basis:
| (Unaudited) | ||||||||||||||||||||||||
| Three Months Ended |
Three Months Ended |
Increase/ (Decrease) % |
||||||||||||||||||||||
| (in thousands) | As reported | Currency changes |
As adjusted for constant currency |
As reported | As reported | As adjusted for constant currency |
||||||||||||||||||
| Software revenue | $ | 149.6 | $ | 5.4 | $ | 155.0 | $ | 140.9 | 6.2 | % | 10.0 | % | ||||||||||||
| Total revenue | $ | 166.0 | $ | 5.8 | $ | 171.8 | $ | 159.8 | 3.9 | % | 7.5 | % | ||||||||||||
| Billings | $ | 163.5 | $ | 6.3 | $ | 169.8 | $ | 171.3 | -4.6 | % | -0.9 | % | ||||||||||||
| Adjusted EBITDA | $ | 43.1 | $ | 2.3 | $ | 45.4 | $ | 46.6 | -7.6 | % | -2.6 | % | ||||||||||||
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 income (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 loss, the most comparable GAAP financial measure:
| (Unaudited) | ||||||||||||||||
| Three Months Ending |
Year Ending |
|||||||||||||||
| (in thousands) | Low | High | Low | High | ||||||||||||
| Net loss | $ | (15,800 | ) | $ | (13,900 | ) | $ | (19,700 | ) | $ | (10,000 | ) | ||||
| Stock-based compensation expense | 21,000 | 21,000 | 85,200 | 85,200 | ||||||||||||
| Amortization of intangible assets | 7,600 | 7,600 | 30,200 | 30,200 | ||||||||||||
| Non-cash interest expense | 500 | 500 | 1,800 | 1,800 | ||||||||||||
| Impact of non-GAAP tax rate | (1,800 | ) | (2,200 | ) | (12,900 | ) | (15,200 | ) | ||||||||
| Special adjustments and other(1) | — | — | 5,200 | 5,200 | ||||||||||||
| Non-GAAP net income | $ | 11,500 | $ | 13,000 | $ | 89,800 | $ | 97,200 | ||||||||
(1) The year ending
The following table provides a reconciliation of projected Adjusted EBITDA to projected net loss, the most comparable GAAP financial measure:
| (Unaudited) | ||||||||||||||||
| Three Months Ending |
Year Ending |
|||||||||||||||
| (in thousands) | Low | High | Low | High | ||||||||||||
| Net loss | $ | (15,800 | ) | $ | (13,900 | ) | $ | (19,700 | ) | $ | (10,000 | ) | ||||
| Income tax expense | 2,300 | 2,400 | 18,700 | 19,000 | ||||||||||||
| Stock-based compensation expense | 21,000 | 21,000 | 85,200 | 85,200 | ||||||||||||
| Interest (income) expense | (2,000 | ) | (2,000 | ) | (7,300 | ) | (7,300 | ) | ||||||||
| Depreciation and amortization | 9,500 | 9,500 | 37,900 | 37,900 | ||||||||||||
| Special adjustments and other(1) | — | — | 5,200 | 5,200 | ||||||||||||
| Adjusted EBITDA | $ | 15,000 | $ | 17,000 | $ | 120,000 | $ | 130,000 | ||||||||
(1) The year ending
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 |
|||||||
| (in thousands) | Low | High | |||||
| Net cash provided by operating activities | $ | 117,700 | $ | 125,700 | |||
| Capital expenditures | (9,700 | ) | (9,700 | ) | |||
| Free cash flow | $ | 108,000 | $ | 116,000 | |||
Source: Altair Engineering Inc.