Altair Engineering Inc. [ALTR] Filings

10-Q 1 altr-20240930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38263

ALTAIR ENGINEERING INC.

(Exact name of registrant as specified in its charter)


Delaware		38-2591828
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1820 East Big Beaver Road, Troy, Michigan		48083
(Address of principal executive offices)		(Zip Code)

(248) 614-2400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock $0.0001 par value per share	ALTR	The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

On October 16, 2024, there were 59,661,617 shares of the registrant’s Class A common stock outstanding and 25,419,574 shares of the registrant’s Class B common stock outstanding.

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2024

INDEX


				Page

PART I.	FINANCIAL INFORMATION

	Item 1.	Financial Statements – Unaudited		3

		a)	Consolidated Balance Sheets	3

		b)	Consolidated Statements of Operations	4

		c)	Consolidated Statements of Comprehensive Income	5

		d)	Consolidated Statements of Changes in Stockholders’ Equity	6

		e)	Consolidated Statements of Cash Flows	8

		f)	Notes to Consolidated Financial Statements	9

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		35

	Item 4.	Controls and Procedures		36

PART II.	OTHER INFORMATION

	Item 1.	Legal Proceedings		37

	Item 1A.	Risk Factors		37

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		38

	Item 3.	Defaults Upon Senior Securities		38

	Item 4.	Mine Safety Disclosures		39

	Item 5.	Other Information		39

	Item 6.	Exhibits		40

SIGNATURES				41

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	September 30, 2024			December 31, 2023
(In thousands)	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	513,371		$	467,459
Accounts receivable, net		121,345			190,461
Income tax receivable		20,794			16,650
Prepaid expenses and other current assets		31,489			26,053
Total current assets		686,999			700,623
Property and equipment, net		40,908			39,803
Operating lease right of use assets		31,856			30,759
Goodwill		476,209			458,125
Other intangible assets, net		84,904			83,550
Deferred tax assets		9,661			9,955
Other long-term assets		47,331			40,678
TOTAL ASSETS	$	1,377,868		$	1,363,493
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	3,607		$	8,995
Accrued compensation and benefits		43,497			45,081
Current portion of operating lease liabilities		8,212			8,825
Other accrued expenses and current liabilities		40,267			48,398
Deferred revenue		114,525			131,356
Current portion of convertible senior notes, net		—			81,455
Total current liabilities		210,108			324,110
Convertible senior notes, net		226,812			225,929
Operating lease liabilities, net of current portion		24,484			22,625
Deferred revenue, non-current		26,310			32,347
Other long-term liabilities		53,254			47,151
TOTAL LIABILITIES		540,968			652,162
Commitments and contingencies
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 59,518 and 55,240 shares as of September 30, 2024, and December 31, 2023, respectively		5			5
Class B common stock, authorized 41,203 shares, issued and outstanding 25,432 and 26,814 shares as of September 30, 2024, and December 31, 2023, respectively		3			3
Additional paid-in capital		971,835			864,135
Accumulated deficit		(117,324	)		(130,503	)
Accumulated other comprehensive loss		(17,619	)		(22,309	)
TOTAL STOCKHOLDERS’ EQUITY		836,900			711,331
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,377,868		$	1,363,493

See accompanying notes to consolidated financial statements.

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)	2024			2023			2024			2023
Revenue
License	$	92,939		$	79,825		$	303,345		$	279,972
Maintenance and other services		45,733			39,252			129,179			114,069
Total software		138,672			119,077			432,524			394,041
Engineering services and other		12,778			14,926			40,633			47,157
Total revenue		151,450			134,003			473,157			441,198
Cost of revenue
License		2,795			3,083			10,437			11,888
Maintenance and other services		16,045			13,689			46,410			41,754
Total software		18,840			16,772			56,847			53,642
Engineering services and other		11,175			12,314			34,577			38,976
Total cost of revenue		30,015			29,086			91,424			92,618
Gross profit		121,435			104,917			381,733			348,580
Operating expenses:
Research and development		56,111			51,598			164,014			160,126
Sales and marketing		45,559			44,069			136,468			132,543
General and administrative		17,500			17,218			54,555			53,791
Amortization of intangible assets		9,246			7,704			24,313			23,143
Other operating (income) expense, net		(2,669	)		(4,408	)		(4,337	)		1,324
Total operating expenses		125,747			116,181			375,013			370,927
Operating (loss) income		(4,312	)		(11,264	)		6,720			(22,347	)
Interest expense		1,317			1,529			4,497			4,583
Other income, net		(10,758	)		(1,890	)		(20,465	)		(9,698	)
Income (loss) before income taxes		5,129			(10,903	)		22,688			(17,232	)
Income tax expense (benefit)		3,350			(6,541	)		9,509			11,369
Net income (loss)	$	1,779		$	(4,362	)	$	13,179		$	(28,601	)
Earnings (loss) per share, basic
Earnings (loss) per share	$	0.02		$	(0.05	)	$	0.16		$	(0.36	)
Weighted average shares		84,835			80,431			83,680			80,204
Earnings (loss) per share, diluted
Earnings (loss) per share	$	0.02		$	(0.05	)	$	0.15		$	(0.36	)
Weighted average shares		88,425			80,431			87,854			80,204

See accompanying notes to consolidated financial statements.

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands)	2024		2023			2024		2023
Net income (loss)	$	1,779	$	(4,362	)	$	13,179	$	(28,601	)
Other comprehensive income (loss), net of tax:
Foreign currency translation (net of tax effect of $0 for all periods)		11,638		(8,107	)		4,542		(2,215	)
Retirement related benefit plans (net of tax effect of $0, $0, $0, and $(79), respectively)		33		5			148		(46	)
Total other comprehensive income (loss)		11,671		(8,102	)		4,690		(2,261	)
Comprehensive income (loss)	$	13,450	$	(12,464	)	$	17,869	$	(30,862	)

See accompanying notes to consolidated financial statements.

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)



															Accumulated
	Common stock									Additional					other			Total
	Class A				Class B					paid-in		Accumulated			comprehensive			stockholders’
(in thousands)	Shares		Amount		Shares			Amount		capital		deficit			loss			equity
Balance as of December 31, 2023		55,240	$	5		26,814		$	3	$	864,135	$	(130,503	)	$	(22,309	)	$	711,331
Net income		—		—		—			—		—		16,547			—			16,547
Issuance of common stock for acquisitions		35		—		—			—		75		—			—			75
Issuance of common stock for employee stock purchase program		64		—		—			—		4,127		—			—			4,127
Exercise of stock options		540		—		—			—		19,844		—			—			19,844
Vesting of restricted stock		303		—		—			—		—		—			—			—
Conversion of Class B to Class A common stock		730		—		(730	)		—		—		—			—			—
Stock-based compensation		—		—		—			—		15,999		—			—			15,999
Foreign currency translation, net of tax		—		—		—			—		—		—			(5,029	)		(5,029	)
Retirement related benefit plans, net of tax		—		—		—			—		—		—			34			34
Balance as of March 31, 2024		56,912		5		26,084			3		904,180		(113,956	)		(27,304	)		762,928
Net loss		—		—		—			—		—		(5,147	)		—			(5,147	)
Settlement of convertible senior notes		797		—		—			—		—		—			—			—
Issuance of common stock for acquisitions		188		—		—			—		516		—			—			516
Exercise of stock options		598		—		—			—		17,640		—			—			17,640
Vesting of restricted stock		90		—		—			—		—		—			—			—
Conversion of Class B to Class A common stock		613		—		(613	)		—		—		—			—			—
Stock-based compensation		—		—		—			—		17,355		—			—			17,355
Foreign currency translation, net of tax		—		—		—			—		—		—			(2,067	)		(2,067	)
Retirement related benefit plans, net of tax		—		—		—			—		—		—			81			81
Balance as of June 30, 2024		59,198		5		25,471			3		939,691		(119,103	)		(29,290	)		791,306
Net income		—		—		—			—		—		1,779			—			1,779
Issuance of common stock for acquisitions		36		—		—			—		3,429		—			—			3,429
Issuance of common stock for employee stock purchase program		61		—		—			—		4,586		—			—			4,586
Exercise of stock options		160		—		—			—		6,773		—			—			6,773
Vesting of restricted stock		24		—		—			—		—		—			—			—
Conversion of Class B to Class A common stock		39		—		(39	)		—		—		—			—			—
Stock-based compensation		—		—		—			—		17,356		—			—			17,356
Foreign currency translation, net of tax		—		—		—			—		—		—			11,638			11,638
Retirement related benefit plans, net of tax		—		—		—			—		—		—			33			33
Balance as of September 30, 2024		59,518	$	5		25,432		$	3	$	971,835	$	(117,324	)	$	(17,619	)	$	836,900

See accompanying notes to consolidated financial statements.

ALTAIR ENGINEERING INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)



																	Accumulated
	Common stock										Additional						other			Total
	Class A					Class B					paid-in			Accumulated			comprehensive			stockholders’
(in thousands)	Shares			Amount		Shares			Amount		capital			deficit			loss			equity
Balance as of December 31, 2022		52,277		$	5		27,745		$	3	$	721,307		$	(121,577	)	$	(30,002	)	$	569,736
Net loss		—			—		—			—		—			(1,959	)		—			(1,959	)
Issuance of common stock for acquisitions		34			—		—			—		—			—			—			—
Repurchase and retirement of common stock		(91	)		—		—			—		(4,256	)		—			—			(4,256	)
Issuance of common stock for employee stock purchase program		92			—		—			—		3,648			—			—			3,648
Exercise of stock options		265			—		—			—		10,324			—			—			10,324
Vesting of restricted stock		336			—		—			—		—			—			—			—
Conversion of Class B to Class A common stock		240			—		(240	)		—		—			—			—			—
Stock-based compensation		—			—		—			—		22,161			—			—			22,161
Foreign currency translation, net of tax		—			—		—			—		—			—			7,232			7,232
Retirement related benefit plans, net of tax		—			—		—			—		—			—			19			19
Balance as of March 31, 2023		53,153			5		27,505			3		753,184			(123,536	)		(22,751	)		606,905
Net loss		—

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10-Q	[2023-08-03]
10-Q	[2023-05-04]
10-K	[2023-02-24]
10-Q	[2022-11-04]
10-Q	[2022-08-04]
10-Q	[2022-05-05]
10-K	[2022-02-28]
10-Q	[2021-11-04]
10-Q	[2021-08-05]
10-Q	[2021-05-06]
10-K	[2021-02-26]
10-Q	[2020-11-05]
10-Q	[2020-08-06]
10-Q	[2020-05-07]
10-K	[2020-03-02]
10-Q	[2019-11-07]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2019-03-01]
10-Q	[2018-11-08]
10-Q	[2018-08-09]
S-1	[2018-06-04]
10-Q	[2018-05-14]
10-K	[2018-03-21]
10-Q	[2017-12-01]
S-1	[2017-09-29]