Altair Engineering Inc. (NASDAQ:ALTR) Q2 2023 Earnings Conference Call August 3, 2023 5:00 PM ET Company Participants Dave Simon – Senior Vice President-Investor Relations Jim Scapa – Founder, Chairman, and Chief Executive Officer Matt Brown – Chief Financial Officer Conference Call Participants Matt Swanson – RBC Capital Markets Ken Wong – Oppenheimer Dylan Becker – William Blair Luke Mott – Wolfe Research Charles Shi – Needham & Company Blair Abernethy – Rosenblatt Securities Mark Schappel – Loop Capital ...

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 June 30, 2023 OR ☐ 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 in ...

Financial Data and Key Metrics Changes - Altair reported a strong start to 2023 with software product revenue, total revenue, and adjusted EBITDA exceeding guidance, marking an all-time high for both software product revenue and total revenue [6][21] - Adjusted EBITDA for Q1 2023 was $43.1 million, representing 25.9% of total revenue, compared to $46.6 million or 29.2% in Q1 2022 [27] - Total billings for the quarter were $163.5 million, a year-over-year decrease of 4.6% in reported currency and 0.9% in constant currency [22] - Software product revenue in Q1 2023 was $149.6 million, a year-over-year increase of 6.2% in reported currency and 10.0% in constant currency [23] - Total revenue in Q1 2023 was $166.0 million, a year-over-year increase of 3.9% in reported currency and 7.5% in constant currency [24] Business Line Data and Key Metrics Changes - Software product revenue as a percentage of total revenue for Q1 2023 was 90.1%, up from 88.2% in Q1 2022 [6][25] - The recurring software license rate was 95% for the quarter, compared to 93% in Q1 2022 [6] - The company experienced strong renewals and expansion in the automotive and aerospace verticals, contributing to software product revenue growth [23] Market Data and Key Metrics Changes - The automotive sector remains a significant market for Altair, with high demand for new cars despite a decline in revenue contribution as a percentage of total business [54] - The banking and financial services sector is showing positive dynamics, with the company converting accounts to its units model and receiving strong interest in its offerings [40] Company Strategy and Development Direction - Altair is focused on expanding its data analytics offerings and integrating them with simulation tools to enhance customer engagement and drive growth [62] - The company is investing in marketing and indirect channels to promote new products like SimSolid Cloud, targeting smaller and mid-market customers [60] - Altair aims to maintain a strong balance sheet and is well-positioned to withstand market uncertainties, with a cash balance of $378.4 million [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance against a backdrop of global uncertainty, highlighting strong customer demand and successful product integrations [19] - The company anticipates continued growth in software product revenue, maintaining guidance for Q2 and full year 2023 [29][30] Other Important Information - Altair's acquisition of World Programming was affirmed by the U.S. Court of Appeals, allowing the company to leverage open-source technologies [12] - The company is investing in cutting-edge technologies, including quantum computing and high-performance computing, to stay ahead of industry trends [19] Q&A Session Summary Question: Insights on Q2 guidance and sequential performance - Management indicated that the Q2 guidance reflects historical seasonal patterns, with Q1 and Q4 typically being stronger quarters [34] Question: Performance of RapidMiner post-acquisition - Management expressed confidence in the RapidMiner acquisition, noting increased customer interest and sales force confidence [37] Question: Demand dynamics outside manufacturing - Management reported positive engagement in the banking and financial services sector, despite challenges in the broader market [40] Question: Confidence in SimSolid technology - Management highlighted the unique capabilities of SimSolid, emphasizing its ease of use and rapid results for complex assemblies [42] Question: Long-term strategy for targeting less technical users - Management acknowledged the opportunity in mid and small market customers, focusing on democratizing simulation technology [50] Question: Outlook on the automotive end market - Management noted that while automotive revenue is declining as a percentage of total business, demand for new cars remains strong [54]

Financial Performance - Total revenue for the three months ended March 31, 2023, was $166,034 thousand, representing a 4% increase compared to $159,781 thousand for the same period in 2022[110]. - Adjusted EBITDA for the three months ended March 31, 2023, was $43,055 thousand, down 8% from $46,590 thousand in the same period of 2022[111]. - Net loss for the three months ended March 31, 2023, was $(1,959) thousand, compared to a net income of $11,528 thousand for the same period in 2022[111]. - Billings for the three months ended March 31, 2023, were $163,517 thousand, a decrease of 5% from $171,337 thousand in the same period of 2022[111]. - Gross profit increased by $5,121,000, or 4%, to $133,299,000 for the three months ended March 31, 2023, compared to $128,178,000 for the same period in 2022[126]. - Free cash flow for the three months ended March 31, 2023, was $57.5 million, a significant increase from $3.6 million in the same period of 2022[152]. - For the three months ended March 31, 2023, the company reported a net loss of $2.0 million, a significant decrease from a net income of $11.5 million in the same period of 2022, representing a change of NM[140][142]. Revenue Breakdown - Software revenue increased by 6% to $149,643 thousand, driven by growth in software license revenue, particularly in the automotive and aerospace sectors[111]. - Software related services revenue decreased by 22% to $7,100,000 for the three months ended March 31, 2023, compared to $9,061,000 for the same period in 2022[116]. - Client engineering services revenue decreased by 3% to $7,776,000 for the three months ended March 31, 2023, compared to $8,012,000 for the same period in 2022[117]. - Other revenue decreased by 16% to $1,515,000 for the three months ended March 31, 2023, compared to $1,811,000 for the same period in 2022[120]. Expenses and Costs - Research and development expenses increased by 13% to $53,251 thousand, compared to $47,079 thousand in the same period of 2022[111]. - Sales and marketing expenses increased by $5,652,000, or 15%, to $43,492,000 for the three months ended March 31, 2023, compared to $37,840,000 for the same period in 2022[129]. - Interest expense increased by $941,000, or 161%, to $1,526,000 for the three months ended March 31, 2023, compared to $585,000 for the same period in 2022[135]. - Other operating expense increased by $6,386,000 for the three months ended March 31, 2023, primarily due to a $7,000,000 loss on the mark-to-market adjustment of contingent consideration[133]. - Amortization of intangible assets increased by $1,911,000, or 32%, to $7,814,000 for the three months ended March 31, 2023, compared to $5,903,000 for the same period in 2022[131]. - Cost of software related services revenue decreased by $419,000, or 7%, to $5,616,000 for the three months ended March 31, 2023, compared to $6,035,000 for the same period in 2022[122]. Cash and Financing - The company had cash and cash equivalents of $378.4 million as of March 31, 2023, with an additional $200.0 million available under its credit facility[155][159]. - Net cash provided by operating activities for Q1 2023 was $59.2 million, an increase of $53.4 million compared to Q1 2022[163]. - Net cash used in investing activities for Q1 2023 was $3.1 million, a decrease of $12.4 million compared to Q1 2022[164]. - Net cash provided by financing activities for Q1 2023 was $5.5 million, an increase of $2.9 million compared to Q1 2022[165]. - The company had no outstanding borrowings under its 2019 Amended Credit Agreement as of March 31, 2023[172]. - The company issued $230.0 million of 1.750% convertible senior notes due in 2027 and $230.0 million of 0.250% convertible senior notes due 2024, with $81.8 million remaining outstanding as of March 31, 2023[171]. Strategic Outlook - The integration of recent acquisitions is expected to expand the portfolio of software and products, enhancing customer service capabilities[104]. - The company continues to evaluate potential acquisitions and strategic transactions to expand its business, which may impact its cash position and debt obligations[157]. - The company anticipates that revenues and profits may be impacted by changes in foreign currency rates due to substantial international operations[105]. - The effective tax rate increased to 127% for the three months ended March 31, 2023, compared to 36% in the same period of 2022, primarily due to changes in tax regulations affecting R&D expense capitalization[139]. Market and Risk Factors - The recurring software license rate improved to 95% for the three months ended March 31, 2023, up from 93% in the same period of 2022, indicating stronger customer retention[154]. - Interest rate risk is present due to potential fluctuations in interest income on invested cash balances[172]. - The company does not have any foreign currency hedging contracts as of March 31, 2023[169]. - The company does not plan on engaging in hedging activities in the near future based on current international operations[169]. - There was a favorable effect of exchange rate changes on cash of $0.4 million for Q1 2023, compared to an adverse effect of $1.0 million in Q1 2022[165].

Altair Engineering Inc. (NASDAQ:ALTR) Q4 2022 Earnings Conference Call February 23, 2023 5:00 PM ET Company Participants Dave Simon - Senior Vice President, Investor Relations Jim Scapa - Founder, Chairman, and Chief Executive Officer Matt Brown - Chief Financial Officer Conference Call Participants Ken Wong - Oppenheimer Matt Swanson - RBC Capital Markets Dylan Becker - William Blair Andrew DeGasperi - Berenberg Charles Shi - Needham & Company Blair Abernethy - Rosenblatt Mark Schappel - Loop Capital Dave ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ 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 c ...

Altair Engineering Inc. (NASDAQ:ALTR) Q3 2022 Results Conference Call November 3, 2022 5:00 PM ET Company Participants Dave Simon - SVP, IR James Scapa - Founder, Chairman and CEO Matt Brown - CFO Conference Call Participants Dylan Becker - William Blair Ahmad Khalil - Oppenheimer Blair Abernethy - Rosenblatt Matthew Murakami - RBC Capital Markets Gal Munda - Wolfe Research Mark Schappel - Loop Capital Andrew DeGasperi - Berenberg Operator Good day, and thank you for standing by. Welcome to Altair’s Third Q ...

Altair Engineering, Inc. (NASDAQ:ALTR) Q2 2022 Earnings Conference Call August 4, 2022 5:00 PM ET Company Participants Dave Simon - SVP, Investor Relations Jim Scapa - Founder, Chairman & CEO Matt Brown - CFO Conference Call Participants Ken Wong - Oppenheimer Blair Abernethy - Rosenblatt Operator Good day, and thank you for standing by. Welcome to the Altair Q2 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question ...