Altair(ALTR) - 2023 Q4 - Annual Results

Financial Performance - Software product revenue for Q4 2023 was $155.9 million, a 7.6% increase from $145.0 million in Q4 2022[2] - Total revenue for Q4 2023 reached $171.5 million, up 6.9% from $160.4 million in Q4 2022[2] - Net income for Q4 2023 was $19.7 million, compared to $12.1 million in Q4 2022, resulting in a net income margin of 11.5%[2] - Non-GAAP net income for Q4 2023 was $41.1 million, a 49.2% increase from $27.5 million in Q4 2022[2] - Adjusted EBITDA for Q4 2023 was $53.6 million, reflecting a 38.3% increase from $38.7 million in Q4 2022, with an adjusted EBITDA margin of 31.2%[2] - For the full year 2023, software product revenue was $550.0 million, an 8.6% increase from $506.5 million in 2022[3] - Total revenue for the full year 2023 was $612.7 million, up 7.1% from $572.2 million in 2022[3] - Non-GAAP net income for the full year 2023 was $98.8 million, a 30.6% increase from $75.6 million in 2022[3] - Total revenue for the three months ended December 31, 2023, was $171,503,000, representing an increase of 6.7% compared to $160,433,000 for the same period in 2022[20] - The company reported a net income of $19,675,000 for the three months ended December 31, 2023, compared to a net income of $12,065,000 for the same period in 2022, marking a 63.5% increase[20] - Total revenue for the year ended December 31, 2023, reached $612,701,000, up 7.1% from $572,221,000 in 2022[34] Guidance and Projections - The company expects Q1 2024 software product revenue guidance between $152 million and $155 million, with a growth rate of 1.6%[4] - Full year 2024 total revenue guidance is projected between $663 million and $673 million, with a growth rate of 8.2%[4] - The company expects Non-GAAP net income for the three months ending March 31, 2024, to be between $29,500,000 and $31,700,000[44] - Net income for the three months ending March 31, 2024, is projected to be between $8,000 and $11,000 thousand, while for the year ending December 31, 2024, it is projected to be between $30,000 and $37,700 thousand[45] - Adjusted EBITDA for the three months ending March 31, 2024, is projected to be between $37,000 and $40,000 thousand, and for the year ending December 31, 2024, it is projected to be between $143,000 and $151,000 thousand[45] - Net cash provided by operating activities is projected to be between $140,000 and $148,000 thousand for the year ending December 31, 2024[46] - Free cash flow is projected to be between $129,000 and $137,000 thousand for the year ending December 31, 2024[46] Cash and Assets - Total current assets increased to $700,623,000 as of December 31, 2023, from $526,826,000 in 2022, representing a growth of 32.8%[18] - The company’s cash and cash equivalents increased to $467,459,000 in December 2023, up from $316,146,000 in December 2022, a growth of 47.8%[18] - The company ended the year with cash, cash equivalents, and restricted cash of $467,576,000, up from $316,958,000 at the end of 2022, enhancing liquidity[25] Expenses and Investments - Research and development expenses for the year ended December 31, 2023, totaled $212,645,000, an increase from $202,542,000 in 2022, indicating a focus on innovation[20] - Stock-based compensation expense for the year was $85,581,000, slightly up from $84,787,000 in 2022, reflecting ongoing employee incentive programs[25] - Capital expenditures for the year totaled $10,193,000, an increase from $9,648,000 in 2022, indicating continued investment in growth[25] - Non-GAAP operating expenses for the year ended December 31, 2023, totaled $378,624,000, an increase from $359,476,000 in 2022[33] - Stock-based compensation expense for the three months ended December 31, 2023, was $2,303,000, compared to $2,086,000 in the same period of 2022[32] Profitability and Margins - Adjusted EBITDA for the year ended December 31, 2023, was $129,138,000, up from $108,600,000 in 2022, indicating improved profitability[29] - Free Cash Flow for the year ended December 31, 2023, was $117,114,000, compared to $29,922,000 in 2022, demonstrating strong cash generation capabilities[31] - Non-GAAP gross profit margin improved to 84.3% for the three months ended December 31, 2023, compared to 80.2% in the same period of 2022[32] - The diluted net income per share for the year was $(0.11), an improvement from $(0.55) in 2022, indicating progress towards profitability[27] Liabilities and Equity - Total liabilities rose to $652,162,000 as of December 31, 2023, compared to $635,002,000 in 2022, reflecting a 2.4% increase[18] - The company’s total stockholders' equity increased to $711,331,000 as of December 31, 2023, compared to $569,736,000 in 2022, reflecting a growth of 24.8%[18] Operational Performance - Net cash provided by operating activities increased to $127,307,000 in 2023, compared to $39,570,000 in 2022, reflecting a strong operational performance[25] - Operating income for the year ended December 31, 2023, was $243,000, a significant improvement from a loss of $6,937,000 in 2022[20] - Net loss for the year ended December 31, 2023, was $8,926,000, a significant improvement from a loss of $43,429,000 in 2022[25] Future Focus - The company is focusing on maintaining a strong free cash flow to support future investments and operational needs[46] - The company refined its classification of indirect costs starting Q1 2023 to improve comparability with peers, impacting the presentation of operating expenses without affecting total operating expenses[38]