TROY, Mich., Feb. 28, 2019 (GLOBE NEWSWIRE) -- Altair (Nasdaq:ALTR), a global technology company providing solutions in product development, high-performance computing and data intelligence, today released its financial results for the fourth quarter and full year ended December 31, 2018.

“Altair delivered better than expected revenue and profitability in the fourth quarter, capping a very strong year for the company,” said James Scapa, founder, chairman and chief executive officer.  “We believe our strong performance across the business reflects the  market’s growing recognition that our modeling, visualization and solver solutions bring significant value to the product design process.”

“The recent expansion into the data intelligence market through the Datawatch acquisition has further expanded our market opportunity and Altair’s value proposition.  We believe the convergence of data and simulation in the coming years will provide new growth opportunities.  In addition, we are incredibly excited by the opportunity with SimSolid, which represents a major step forward in generating fast and highly accurate design simulations.  Altair enters 2019 with significant momentum, and we believe we are uniquely positioned to deliver another year of strong revenue growth and expanding profitability.”

Note: We adopted ASC 606 on January 1, 2018, which impacted our financial results. The year ended December 31, 2018 has been reported under ASC 606.  The year ended December 31, 2017 has been reported under ASC 605 and has not been adjusted under the modified retrospective approach. For ease of comparison, in the commentary below all amounts used to calculate differences between 2017 and 2018 results are reported under ASC 605, unless otherwise indicated.

Fourth Quarter 2018 Financial Highlights under ASC 606

• Software product revenue was $79.9 million.
• Total revenue was $103.0 million.
• Net loss was $(10.8) million. The fourth quarter of 2018 included non-cash stock-based compensation expenses of $2.1 million. Diluted net loss per share was $(0.15), based on 70.5 million diluted weighted average common shares outstanding.
• Adjusted EBITDA was $12.9 million.  Adjusted EBITDA represents net income (loss) 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 determined by management.
• Non-GAAP net income was $4.0 million. Non-GAAP diluted net income per share was $0.05, based on 77.7 million non-GAAP diluted common shares outstanding. Non-GAAP net income excludes stock-based compensation, amortization of intangible assets related to acquisitions, non-recurring adjustments, and certain tax adjustments.
• Cash flow metrics are not impacted by our adoption of 606 and we can compare them to the same period in 2017.  Cash flow from operations was an outflow of $(4.2) million, compared to an outflow of $(1.4) million for the fourth quarter of 2017.
• Free cash flow, which consists of cash flow from operations less capital expenditures, was an outflow of $(5.5) million compared to an outflow of $(4.5) million for the fourth quarter of 2017. 

For Reference, we compare Fourth Quarter 2018 Financial Highlights under ASC 605 (as if previous revenue recognition guidance was in effect) to those in Fourth Quarter 2017

• Software product revenue was $80.8 million, an increase of 19% from $67.9 million for the fourth quarter of 2017.
• Total revenue was $103.9 million, an increase of 16% from $89.9 million for the fourth quarter of 2017.
• Net loss was $(9.8) million, compared to net loss of $(60.3) million for the fourth quarter of 2017. The fourth quarter of 2018 included non-cash stock-based compensation expenses of $2.1 million, while the fourth quarter of 2017 included non-cash stock-based compensation expenses of $8.0 million.  In addition, $56.6 million in tax expenses were recognized in the fourth quarter on 2017, substantially due to the recording of a valuation allowance on U.S. deferred tax assets based, in part, upon the actual or potential exercise value tax benefit of non-qualified stock options in the U.S., and to a lesser degree as a result of recent tax law changes. Diluted net loss per share was $(0.14), based on 70.5 million diluted weighted average common shares outstanding, compared to diluted net loss per share of $(1.03) for the fourth quarter of 2017, based on 58.7 million diluted weighted average common shares outstanding.
• Adjusted EBITDA was $14.1 million, compared to $8.4 million for the fourth quarter of 2017.
• Non-GAAP net income was $5.0 million, compared to $12.6 million for the fourth quarter of 2017. Non-GAAP diluted net income per share was $0.06, based on 77.7 million non-GAAP diluted common shares outstanding, compared to non-GAAP diluted net income per share of $0.18 for the fourth quarter of 2017, based on 68.2 million non-GAAP diluted common shares outstanding.

Full Year 2018 Financial Highlights under ASC 606

• Software product revenue was $304.4 million.
• Total revenue was $396.4 million.
• Net Income was $13.7 million. The full year of 2018 included non-cash stock-based compensation expenses of $3.3 million. Diluted net income per share was $0.18, based on 74.9 million diluted weighted average common shares outstanding.
• Adjusted EBITDA was $50.2 million. Adjusted EBITDA represents net income (loss) 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 determined by management.
• Non-GAAP net income was $31.6 million. Non-GAAP diluted net income per share was $0.41, based on 77.7 million non-GAAP diluted common shares outstanding. Non-GAAP net income excludes stock-based compensation, amortization of intangible assets related to acquisitions, non-recurring adjustments, and certain tax adjustments.
• Cash flow from operations was $36.2 million, compared to $16.1 million for 2017.
• Free cash flow, which consists of cash flow from operations less capital expenditures, was $29.6 million, compared to $8.6 million for 2017. 

For Reference, we compare Full Year 2018 Financial Highlights under ASC 605 (as if previous revenue recognition guidance was in effect) to Full Year 2017

• Software product revenue was $293.0 million, an increase of 20% from $244.8 million for 2017.
• Total revenue was $385.1 million, an increase of 16% from $333.3 million for 2017.
• Net income was $2.9 million, compared to net loss of $(99.4) million for 2017.  2018 included the impact of $3.3 million in non-cash stock-based compensation expenses, while 2017 included the impact of $47.3 million in non-cash stock-based compensation expenses, as well as $63.0 million in tax expenses. Diluted net income per share was $0.04, based on 74.9 million diluted weighted average common shares outstanding, compared to diluted net loss per share of $(1.89) for 2017, based on 52.5 million diluted weighted average common shares outstanding.
• Adjusted EBITDA was $38.5 million, an increase of 71% from $22.5 million for 2017.
• Non-GAAP net income was $20.8 million, compared to $16.1 million for 2017. Non-GAAP net income per share was $0.27, based on 77.7 million diluted weighted average common shares outstanding, compared to $0.26 for 2017, based on 62.6 million diluted weighted average common shares outstanding.

Business Outlook under ASC 606

Based on information available as of today, Altair is issuing guidance for the first quarter and full year 2019 under the ASC 606 standard as indicated below. 

 (All figures in millions)