Upgrade to SI Premium - Free Trial

Altair Announces Fourth Quarter and Full Year 2021 Financial Results

February 24, 2022 4:05 PM

TROY, Mich., Feb. 24, 2022 (GLOBE NEWSWIRE) -- Altair (Nasdaq: ALTR), a global leader in computational science and artificial intelligence today released its financial results for the fourth quarter and full year ended December 31, 2021.

“Altair had an excellent fourth quarter and full year 2021, highlighted by year-on-year software product revenue growth of 15.8%,” said James Scapa, Founder, Chairman and Chief Executive Officer of Altair. “Our vision for driving smarter decisions with computational science and artificial intelligence is resonating with customers, our products continue to gain market share, and we are expanding our footprint across all verticals.”

“Our fourth quarter 2021 financial performance was a fantastic end to an impressive year, with revenue and profit exceeding expectations and carrying momentum into 2022,” said Matt Brown, Chief Financial Officer of Altair. “We achieved software revenue growth in the mid-teens in 2021, while significantly improving our profitability, putting us well on track for our medium and long-term goals.”

Fourth Quarter 2021 Financial Highlights

Full Year 2021 Financial Highlights

Business Outlook

Based on information available as of today, Altair is issuing guidance for the first quarter and full year 2022.

(in millions) First Quarter 2022 Full Year 2022
Software Product Revenue $134.0 to$137.0 $496.0 to$508.0
Total Revenue $152.0 $155.0 $568.0 $582.0
Net Income (Loss) $5.6 $7.5 $(23.1) $(13.4)
Non-GAAP Net Income $25.2 $26.6 $65.3 $72.7
Adjusted EBITDA $36.0 $38.0 $96.0 $106.0
Net Cash Provided by Operating Activities $12.2 $19.2
Free Cash Flow (1) $5.0 $12.0

(1) Includes $65.9 million payment in January 2022 for legal judgement acquired in December 2021.

Conference Call Information

What:Altair’s Fourth Quarter and Full Year 2021 Financial Results Conference Call
When:Thursday, February 24, 2022
Time:5 p.m. ET
Live Call:(866) 754-5204, Domestic
(636) 812-6621, International
Replay:(855) 859-2056, Conference ID 8892192, Domestic(404) 537-3406, Conference ID 8892192, International
Webcast:http://investor.altair.com (live & replay)

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: 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.

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.

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 total outstanding shares plus outstanding equity awards under the Company’s equity award plans.

Free cash flow consists of cash flow from operations less capital expenditures.

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 AltairAltair is a global leader in computational science and artificial intelligence (AI) that provides software and cloud solutions in the areas of 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 fourth quarter and full year 2021, our statements regarding our expectation for 2022, and our reconciliations of projected non-GAAP financial measures. These forward-looking statements are made as of the date of this release and are based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond Altair’s control. Altair’s actual results could differ materially from those stated or implied in our forward-looking statements due to a number of factors, including but not limited to, the risks detailed in Altair’s quarterly and annual reports filed with the Securities and Exchange Commission as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent Altair’s views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its views to change. Altair undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing Altair’s views as of any date subsequent to the date of this press release.

Media RelationsDave SimonAltair248-614-2400 ext. 332[email protected]

Investor RelationsThe Blueshirt GroupMonica Gould212-871-3927[email protected]

Lindsay Savarese212-331-8417[email protected]

ALTAIR ENGINERING INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited)

December 31,
(in thousands) 2021 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents $413,743 $241,221
Accounts receivable, net 137,561 117,878
Income tax receivable 9,388 6,736
Prepaid expenses and other current assets 27,529 21,100
Total current assets 588,221 386,935
Property and equipment, net 40,478 36,332
Operating lease right of use assets 28,494 33,526
Goodwill 370,178 264,481
Other intangible assets, net 99,057 76,114
Deferred tax assets 8,495 7,125
Other long-term assets 28,352 25,389
TOTAL ASSETS $1,163,275 $829,902
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $— $29,962
Accounts payable 6,647 8,594
Accrued compensation and benefits 42,307 34,772
Current portion of operating lease liabilities 9,933 10,331
Other accrued expenses and current liabilities 122,226 31,404
Deferred revenue 93,160 85,691
Convertible senior notes, net 199,705 —
Total current liabilities 473,978 200,754
Convertible senior notes, net — 188,300
Operating lease liabilities, net of current portion 19,550 24,323
Deferred revenue, non-current 12,872 9,388
Other long-term liabilities 42,894 27,767
TOTAL LIABILITIES 549,294 450,532
Commitments and contingencies
MEZZANINE EQUITY 784 784
STOCKHOLDERS’ EQUITY
Preferred stock ($0.0001 par value), authorized 45,000 shares, none issued or outstanding — —
Common stock ($0.0001 par value)
Class A common stock, authorized 513,797 shares, issued and outstanding 51,524 and 44,216 shares as of December 31, 2021 and 2020, respectively 5 4
Class B common stock, authorized 41,203 shares, issued and outstanding 27,745 and 30,111 shares as of December 31, 2021 and 2020, respectively 3 3
Additional paid-in capital 724,226 474,669
Accumulated deficit (102,087) (93,293)
Accumulated other comprehensive loss (8,950) (2,797)
TOTAL STOCKHOLDERS’ EQUITY 613,197 378,586
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY $1,163,275 $829,902

ALTAIR ENGINEERING INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

For the Three Months EndedDecember 31, For the Year EndedDecember 31,
(in thousands, except per share data) 2021 2020 2021 2020
Revenue
License $94,178 $76,381 $324,808 $259,965
Maintenance and other services 28,180 37,244 128,938 131,746
Total software 122,358 113,625 453,746 391,711
Software related services 8,594 7,906 31,823 26,454
Total software and related services 130,952 121,531 485,569 418,165
Client engineering services 8,277 9,934 39,282 44,320
Other 1,568 1,976 7,328 7,436
Total revenue 140,797 133,441 532,179 469,921
Cost of revenue
License 6,223 6,786 19,929 19,637
Maintenance and other services 12,494 10,105 47,862 38,688
Total software * 18,717 16,891 67,791 58,325
Software related services 5,645 6,102 23,205 21,243
Total software and related services 24,362 22,993 90,996 79,568
Client engineering services 6,547 8,067 31,710 35,684
Other 1,888 1,631 6,960 6,053
Total cost of revenue 32,797 32,691 129,666 121,305
Gross profit 108,000 100,750 402,513 348,616
Operating expenses:
Research and development * 38,177 34,966 151,049 126,081
Sales and marketing * 38,182 30,537 132,750 111,440
General and administrative * 23,517 22,933 91,500 86,432
Amortization of intangible assets 4,433 4,986 18,357 16,376
Other operating (income) loss, net (956) 5 (3,482) (3,426)
Total operating expenses 103,353 93,427 390,174 336,903
Operating income 4,647 7,323 12,339 11,713
Interest expense 3,067 3,008 12,065 11,598
Other (income) loss, net (1,105) (65) 562 (1,917)
Income (loss) before income taxes 2,685 4,380 (288) 2,032
Income tax expense 4,082 2,182 8,506 12,532
Net (loss) income $(1,397) $2,198 $(8,794) $(10,500)
(Loss) income per share:
Net (loss) income per share attributable to common stockholders, basic $(0.02) $0.03 $(0.12) $(0.14)
Net (loss) income per share attributable to common stockholders, diluted $(0.02) $0.03 $(0.12) $(0.14)
Weighted average shares outstanding:
Weighted average number of shares used in computing net (loss) income per share, basic 79,008 74,020 76,179 73,241
Weighted average number of shares used in computing net (loss) income per share, diluted 79,008 78,484 76,179 73,241

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

(Unaudited)
Three Months EndedDecember 31, Twelve Months EndedDecember 31,
2021 2020 2021 2020
Cost of revenue-software $1,828 $871 $5,619 $2,473
Research and development 5,338 2,686 16,561 8,372
Sales and marketing 4,244 2,474 15,044 6,423
General and administrative 1,910 1,385 7,325 4,087
Total stock-based compensation expense $13,320 $7,416 $44,549 $21,355

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

Year Ended December 31,
(in thousands) 2021 2020
OPERATING ACTIVITIES:
Net loss $(8,794) $(10,500)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 25,644 23,806
Provision for credit loss 514 1,259
Amortization of debt discount and issuance costs 11,428 10,829
Stock-based compensation expense 44,549 21,355
Deferred income taxes (1,502) (10,350)
Other, net 757 118
Changes in assets and liabilities:
Accounts receivable (15,645) (11,032)
Prepaid expenses and other current assets (9,026) (2,131)
Other long-term assets (6,682) (4,527)
Accounts payable (3,857) (1,839)
Accrued compensation and benefits 7,761 1,985
Other accrued expenses and current liabilities 6,365 5,629
Deferred revenue 10,111 8,280
Net cash provided by operating activities 61,623 32,882
INVESTING ACTIVITIES:
Payments for acquisition of businesses, net of cash acquired (53,983) (41,028)
Capital expenditures (7,849) (6,093)
Payments for acquisition of developed technology (344) (2,133)
Other investing activities, net (306) 162
Net cash used in investing activities (62,482) (49,092)
FINANCING ACTIVITIES:
Proceeds from private placement of common stock 200,000 —
Payments on revolving commitment (30,000) —
Proceeds from employee stock purchase plan contributions 4,222 —
Proceeds from the exercise of common stock options 2,262 1,710
Borrowings under revolving commitment — 30,000
Other financing activities (537) (460)
Net cash provided by financing activities 175,947 31,250
Effect of exchange rate changes on cash, cash equivalents and restricted cash (2,623) 3,010
Net increase in cash, cash equivalents and restricted cash 172,465 18,050
Cash, cash equivalents and restricted cash at beginning of year 241,547 223,497
Cash, cash equivalents and restricted cash at end of period $414,012 $241,547
Supplemental disclosures of cash flow:
Interest paid $633 $731
Income taxes paid $9,168 $12,666
Supplemental disclosure of non-cash investing and financing activities:
Issuance of common stock in connection with acquisitions $3,690 $3,504
Promissory notes issued and deferred payment obligations for acquisitions $86,936 $1,266
Finance leases $9 $118
Property and equipment in accounts payable and other current liabilities $1,056 $1,671

Financial Results

The following table provides a reconciliation Adjusted EBITDA, Non-GAAP net income and Non-GAAP net income per share – diluted, to net loss and net loss per share – diluted, the most comparable GAAP financial measures:

(Unaudited)
Three Months EndedDecember 31, Twelve Months EndedDecember 31,
(in thousands, except per share amounts) 2021 2020 2021 2020
Net (loss) income $(1,397) $2,198 $(8,794) $(10,500)
Stock-based compensation expense 13,320 7,416 44,549 21,355
Amortization of intangible assets 4,433 4,986 18,357 16,376
Non-cash interest expense 2,915 2,762 11,428 10,824
Restructuring expense 99 — 5,053 —
Impact of non-GAAP tax rate (1,696) (2,900) (11,740) (525)
Special adjustments and other (1) (1,229) — (1,229) (372)
Non-GAAP net income 16,445 14,462 57,624 37,158
Depreciation expense 1,856 1,904 7,287 7,430
Cash interest (income) expense (114) 244 96 (357)
Income tax expense, net of non-GAAP impact 5,778 5,082 20,246 13,057
Adjusted EBITDA $23,965 $21,692 $85,253 $57,288
Net (loss) income per share, diluted $(0.02) $0.03 $(0.12) $(0.14)
Non-GAAP net income per share, diluted $0.19 $0.17 $0.66 $0.45
GAAP diluted shares outstanding: 79,008 78,484 76,179 73,241
Non-GAAP diluted shares outstanding: 87,300 83,000 87,300 83,000

(1) The three and twelve months ended December 31, 2021, includes $1.2 million currency gains on acquisition-related intercompany loans. The twelve months ended December 31, 2020, includes $1.0 million of proceeds from settlements related to a historical acquisition and $0.6 million of severance expense.

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 EndedDecember 31, Twelve Months EndedDecember 31,
(in thousands) 2021 2020 2021 2020
Net cash provided by operating activities $6,029 $5,503 $61,623 $32,882
Capital expenditures (1,038) (2,087) (7,849) (6,093)
Free Cash Flow $4,991 $3,416 $53,774 $26,789

Business Outlook

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

(Unaudited)
Three Months EndingMarch 31, 2022 Year EndingDecember 31, 2022
(in thousands) Low High Low High
Net income (loss) $5,600 $7,500 $(23,100) $(13,400)
Stock-based compensation expense 18,000 18,000 71,600 71,600
Amortization of intangible assets 5,900 5,900 23,000 23,000
Non-cash interest expense 300 300 1,300 1,300
Impact of non-GAAP tax rate (4,600) (5,100) (7,500) (9,800)
Non-GAAP net income 25,200 26,600 65,300 72,700
Depreciation expense 1,900 1,900 7,400 7,400
Cash interest expense, net 100 100 300 300
Income tax expense, net of non-GAAP impact 8,800 9,400 23,000 25,600
Adjusted EBITDA $36,000 $38,000 $96,000 $106,000

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 EndingDecember 31, 2022
(in thousands) Low High
Net cash provided by operating activities (1) $12,200 $19,200
Capital expenditures (7,200) (7,200)
Free Cash Flow (1) $5,000 $12,000

(1) Includes $65.9 million payment in January 2022 for legal judgement acquired in December 2021.

Primary Logo

Source: Altair Engineering Inc.

Categories

Globe Newswire Press Releases

Next Articles