TROY, Mich., Nov. 8, 2019 — Altair, 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 $0.9 million for the third quarter of 2018.
Based on information available as of today, Altair is issuing revised and reduced guidance for the fourth quarter and full year 2019.
|(in millions)||Fourth Quarter 2019||Full Year 2019|
|Software Product Revenue||$||83.5||to||$||87.5||$||349.0||to||$||353.0|
|Non-GAAP Software Product Revenue||$||85.8||$||89.8||$||358.0||$||362.0|
|Non-GAAP Total Revenue||$||107.3||$||111.3||$||449.0||$||453.0|
|Non-GAAP Net Income||$||2.2||$||4.2||$||20.1||$||22.1|
|Modified Adjusted EBITDA||$||9.5||$||11.5||$||43.0||$||45.0|
(All figures in millions)
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.
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.