Artificial Intelligence

Altair Announces Third Quarter 2022 Financial Results

Published

2 years ago

November 3, 2022

TROY, Mich., Nov. 03, 2022 (GLOBE NEWSWIRE) — Altair (Nasdaq: ALTR), a global leader in computational science and artificial intelligence (AI), today released its financial results for the third quarter ended September 30, 2022.

“Altair had a solid third quarter, showing exceptional momentum despite significant macro-economic uncertainty, led by double digit growth in billings on a constant currency basis and strong demand across all geographies,” said James Scapa, founder, chairman and chief executive officer of Altair. “Our dedicated global teams continue to push forward with outstanding technology developments and applications.”

“We’re very pleased with the third quarter, continuing the success we had in the first half of the year,” said Matt Brown, chief financial officer of Altair. “Our third quarter revenue was at the high end of our guidance range, despite significant currency headwinds, while our profitability exceeded our expectations. These strong results give us the confidence to raise our full year 2022 guidance in constant currency.”

Third Quarter 2022 Financial Highlights

Software product revenue was $103.8 million compared to $102.3 million for the third quarter of 2021, an increase of 1.4% in reported currency and 10.1% in constant currency
Total revenue was $119.4 million compared to $121.3 million for the third quarter of 2021, a decrease of 1.6% in reported currency and an increase of 6.3% in constant currency
Net loss was $(33.2) million compared to $(8.1) million for the third quarter of 2021. Diluted net loss per share was $(0.42) based on 79.2 million diluted weighted average common shares outstanding, compared to diluted net loss per share of $(0.11) for the third quarter of 2021, based on 75.8 million diluted weighted average common shares outstanding. Net loss margin was -27.9% compared to -6.7% for the third quarter of 2021
Non-GAAP net income was $4.3 million, compared to non-GAAP net income of $9.6 million for the third quarter of 2021, a decrease of 55.7%. Non-GAAP diluted net income per share was $0.05 based on 88.1 million non-GAAP diluted common shares outstanding, compared to non-GAAP diluted net income per share of $0.12 for the third quarter of 2021, based on 81.1 million non-GAAP diluted common shares outstanding
Adjusted EBITDA was $6.8 million compared to $14.8 million for the third quarter of 2021, a decrease of 54.0%. Adjusted EBITDA margin was 5.7% compared to 12.2% for the third quarter of 2021
Cash provided by operating activities was $8.5 million, compared to $0.9 million for the third quarter of 2021
Free cash flow was $5.2 million, compared to $(0.5) million for the third quarter of 2021.

Business Outlook

Based on information available as of today, Altair is issuing the following guidance for the fourth quarter and full year 2022:

(in millions)	Fourth Quarter 2022								Full Year 2022
Software Product Revenue		$	126.0		to	$	131.0			$	488.0		to	$	493.0
Total Revenue		$	143.0			$	148.0			$	555.0			$	560.0
Net Loss		$	(15.0	)		$	(12.1	)		$	(70.3	)		$	(67.4	)
Non-GAAP Net Income		$	15.5			$	17.8			$	63.8			$	66.0
Adjusted EBITDA		$	22.0			$	25.0			$	92.0			$	95.0
Net Cash Provided by Operating Activities										$	23.0			$	27.0
Free Cash Flow										$	14.0			$	18.0

The following table provides a reconciliation of 2022 Full Year guidance to the last guidance provided in August:

	(Unaudited)
	Full Year 2022
(in millions)	Midpoint of Guidance in August		Increase/ (Decrease)		Currency Fluctuations from Prior Guidance			Midpoint of Guidance in November
Software Product Revenue	$	492.5	$	4.2	$	(6.2	)	$	490.5
Total Revenue	$	560.5	$	3.7	$	(6.7	)	$	557.5
Adjusted EBITDA	$	94.0	$	1.0	$	(1.5	)	$	93.5

Conference Call Information

What:		Altair’s Third Quarter 2022 Financial Results Conference Call
When:		Thursday, November 3, 2022
Time:		5 p.m. ET
Webcast:		http://investor.altair.com (live & replay)

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: Non-GAAP Net Income, Non-GAAP Net Income Per Share, Adjusted EBITDA, Free Cash Flow, Non-GAAP Gross Profit and Non-GAAP Operating Expense.

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.

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 as defined starting with Q1 2022, includes the diluted weighted average shares outstanding per GAAP regardless of whether the Company is in a loss position. All periods presented will be adjusted to align with this new definition.

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.

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

Non-GAAP gross profit represents gross profit adjusted for stock-based compensation expense, restructuring expense and other special items as identified by management and described elsewhere in this press release.

Non-GAAP operating expense represents operating expense excluding stock-based compensation expense, amortization, restructuring charges, asset impairment charges and other special items as identified by management and described elsewhere in this press release.

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 Altair

Altair is a global leader in computational science and artificial intelligence (AI) that provides software and cloud solutions in 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 2022, our statements regarding our expectations 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 Relations
Altair
Dave Simon
248-614-2400 ext. 332
[email protected]

Investor Relations
The Blueshirt Group
Monica Gould
212-871-3927
[email protected]


ALTAIR ENGINEERING INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

	September 30, 2022			December 31, 2021
(In thousands)	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	311,853		$	413,743
Accounts receivable, net		119,921			137,561
Income tax receivable		10,465			9,388
Prepaid expenses and other current assets		23,492			27,529
Total current assets		465,731			588,221
Property and equipment, net		38,938			40,478
Operating lease right of use assets		32,627			28,494
Goodwill		455,211			370,178
Other intangible assets, net		86,080			99,057
Deferred tax assets		7,605			8,495
Other long-term assets		38,736			28,352
TOTAL ASSETS	$	1,124,928		$	1,163,275
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	6,235		$	6,647
Accrued compensation and benefits		37,036			42,307
Current portion of operating lease liabilities		9,996			9,933
Other accrued expenses and current liabilities		50,686			122,226
Deferred revenue		94,523			93,160
Convertible senior notes, net		—			199,705
Total current liabilities		198,476			473,978
Operating lease liabilities, net of current portion		23,466			19,550
Deferred revenue, non-current		22,017			12,872
Convertible senior notes, net		305,158			—
Other long-term liabilities		40,282			42,894
TOTAL LIABILITIES		589,399			549,294
Commitments and contingencies
MEZZANINE EQUITY		—			784
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 52,377 and 51,524 shares as of September 30, 2022, and December 31, 2021, respectively		5			5
Class B common stock, authorized 41,203 shares, issued and outstanding 27,745 shares as of September 30, 2022, and December 31, 2021		3			3
Additional paid-in capital		715,736			724,226
Accumulated deficit		(133,642	)		(102,087	)
Accumulated other comprehensive loss		(46,573	)		(8,950	)
TOTAL STOCKHOLDERS’ EQUITY		535,529			613,197
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY	$	1,124,928		$	1,163,275


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)	2022			2021			2022			2021
Revenue
License	$	67,245		$	67,603		$	256,102		$	230,630
Maintenance and other services		36,520			34,686			105,453			100,758
Total software		103,765			102,289			361,555			331,388
Software related services		6,706			7,650			23,143			23,229
Total software and related services		110,471			109,939			384,698			354,617
Client engineering services		7,355			10,060			22,414			31,005
Other		1,525			1,308			4,676			5,760
Total revenue		119,351			121,307			411,788			391,382
Cost of revenue
License		2,579			4,694			11,386			13,706
Maintenance and other services		13,025			11,770			38,628			35,368
Total software *		15,604			16,464			50,014			49,074
Software related services		5,240			5,707			16,739			17,560
Total software and related services		20,844			22,171			66,753			66,634
Client engineering services		5,835			7,982			18,390			25,163
Other		1,230			1,348			3,892			5,072
Total cost of revenue		27,909			31,501			89,035			96,869
Gross profit		91,442			89,806			322,753			294,513
Operating expenses:
Research and development *		48,781			35,839			138,352			112,872
Sales and marketing *		39,244			30,589			114,042			94,568
General and administrative *		24,677			22,196			72,613			67,983
Amortization of intangible assets		6,571			4,432			18,682			13,924
Other operating income, net		(2,835	)		(1,324	)		(9,383	)		(2,526	)
Total operating expenses		116,438			91,732			334,306			286,821
Operating (loss) income		(24,996	)		(1,926	)		(11,553	)		7,692
Interest expense		1,566			3,037			2,851			8,998
Other expense, net		2,107			124			26,082			1,667
Loss before income taxes		(28,669	)		(5,087	)		(40,486	)		(2,973	)
Income tax expense		4,579			3,022			15,008			4,424
Net loss	$	(33,248	)	$	(8,109	)	$	(55,494	)	$	(7,397	)
Loss per share:
Net loss per share attributable to common stockholders, basic	$	(0.42	)	$	(0.11	)	$	(0.70	)	$	(0.10	)
Net loss per share attributable to common stockholders, diluted	$	(0.42	)	$	(0.11	)	$	(0.70	)	$	(0.10	)
Weighted average shares outstanding:
Weighted average number of shares used in computing net loss per share, basic		79,207			75,750			79,205			75,226
Weighted average number of shares used in computing net loss per share, diluted		79,207			75,750			79,205			75,226

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

	(Unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Cost of revenue – software	$	2,332	$	1,411	$	6,265	$	3,791
Research and development		10,243		3,894		26,580		11,223
Sales and marketing		7,806		3,673		22,505		10,800
General and administrative		2,329		1,955		7,174		5,415
Total stock-based compensation expense	$	22,710	$	10,933	$	62,524	$	31,229

	(Unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Employee stock-based compensation plans	$	15,490	$	10,194	$	43,622	$	29,009
Equity issued in connection with acquisitions		7,220		739		18,902		2,220
Total stock-based compensation expense	$	22,710	$	10,933	$	62,524	$	31,229


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

	Nine Months Ended September 30,
(In thousands)	2022			2021
OPERATING ACTIVITIES:
Net loss	$	(55,494	)	$	(7,397	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		24,092			19,355
Provision for credit loss		183			330
Amortization of debt discount and issuance costs		1,330			8,513
Stock-based compensation expense		62,524			31,229
Deferred income taxes		4			(510	)
Gain on mark-to-market adjustment of contingent consideration		(7,482	)		—
Expense on repurchase of convertible senior notes		16,621			—
Other, net		153			40
Changes in assets and liabilities:
Accounts receivable		13,859			26,770
Prepaid expenses and other current assets		1,906			(7,612	)
Other long-term assets		3,134			(5,018	)
Accounts payable		(270	)		(2,432	)
Accrued compensation and benefits		(3,639	)		481
Other accrued expenses and current liabilities		(48,698	)		483
Deferred revenue		18,311			(8,638	)
Net cash provided by operating activities		26,534			55,594
INVESTING ACTIVITIES:
Payments for acquisition of businesses, net of cash acquired		(134,130	)		(5,472	)
Capital expenditures		(6,721	)		(6,811	)
Other investing activities, net		(10,322	)		(628	)
Net cash used in investing activities		(151,173	)		(12,911	)
FINANCING ACTIVITIES:
Proceeds from issuance of convertible senior notes, net of discounts and commissions		224,265			—
Repurchase of convertible senior notes		(192,422	)		—
Proceeds from employee stock purchase plan contributions		6,549			2,110
Repurchase and retirement of common stock		(4,387	)		—
Proceeds from the exercise of common stock options		2,840			2,059
Payments of debt issuance costs		(1,523	)		—
Proceeds from private placement of common stock		—			200,000
Payments on revolving commitment		—			(30,000	)
Other financing activities		(170	)		(434	)
Net cash provided by financing activities		35,152			173,735
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(12,142	)		(1,951	)
Net (decrease) increase in cash, cash equivalents and restricted cash		(101,629	)		214,467
Cash, cash equivalents and restricted cash at beginning of year		414,012			241,547
Cash, cash equivalents and restricted cash at end of period	$	312,383		$	456,014
Supplemental disclosure of cash flow:
Interest paid	$	296		$	344
Income taxes paid	$	6,818		$	8,077
Supplemental disclosure of non-cash investing and financing activities:
Property and equipment in accounts payable, other current liabilities and other liabilities	$	707		$	480

Financial Results

The following table provides a reconciliation of 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 Ended September 30,						Nine Months Ended September 30,
(in thousands, except per share amounts)	2022			2021			2022			2021
Net loss	$	(33,248	)	$	(8,109	)	$	(55,494	)	$	(7,397	)
Stock-based compensation expense		22,710			10,933			62,524			31,229
Amortization of intangible assets		6,571			4,432			18,682			13,924
Non-cash interest expense		501			2,876			1,339			8,513
Restructuring expense		—			(124	)		—			4,954
Impact of non-GAAP tax rate⁽¹⁾		3,079			(366	)		(1,878	)		(10,044	)
Special adjustments and other⁽²⁾		4,657			—			22,886			—
Non-GAAP net income	$	4,270		$	9,642		$	48,059		$	41,179

Net loss per share, diluted	$	(0.42	)	$	(0.11	)	$	(0.70	)	$	(0.10	)
Non-GAAP net income per share, diluted	$	0.05		$	0.12		$	0.55		$	0.51

GAAP diluted shares outstanding		79,207			75,750			79,205			75,226
Non-GAAP diluted shares outstanding⁽³⁾		88,100			81,063			86,708			80,345

(1) The Company uses a non-GAAP effective tax rate of 26%.

(2) The three months ended September 30, 2022, includes $6.8 million currency losses on acquisition-related intercompany loans and a $2.2 million gain from a mark-to-market adjustment of contingent consideration associated with the World Programming acquisition. The nine months ended September 30, 2022, includes $16.6 million expense on the repurchase of convertible senior notes, $13.7 million currency losses on acquisition-related intercompany loans and a $7.5 million gain from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition.

(3) The Non-GAAP diluted shares outstanding for the three and nine months ended September 30, 2021, has been changed to align with the current definition.

The following table provides a reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP financial measure:

	(Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2022			2021			2022			2021
Net loss	$	(33,248	)	$	(8,109	)	$	(55,494	)	$	(7,397	)
Income tax expense		4,579			3,022			15,008			4,424
Stock-based compensation expense		22,710			10,933			62,524			31,229
Interest expense		1,566			3,037			2,851			8,998
Depreciation and amortization		8,273			6,175			24,092			19,355
Restructuring expense		—			(124	)		—			4,954
Special adjustments, interest income and other⁽¹⁾		2,949			(102	)		20,878			(275	)
Adjusted EBITDA	$	6,829		$	14,832		$	69,859		$	61,288

(1) The three months ended September 30, 2022, includes $6.8 million currency losses on acquisition-related intercompany loans and a $2.2 million gain from a mark-to-market adjustment of contingent consideration associated with the World Programming acquisition. The nine months ended September 30, 2022, includes $16.6 million expense on the repurchase of convertible senior notes, $13.7 million currency losses on acquisition-related intercompany loans and a $7.5 million gain from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition.

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 Ended September 30,						Nine Months Ended September 30,
(in thousands)	2022			2021			2022			2021
Net cash provided by operating activities⁽¹⁾	$	8,493		$	872		$	26,534		$	55,594
Capital expenditures		(3,264	)		(1,420	)		(6,721	)		(6,811	)
Free cash flow⁽¹⁾	$	5,229		$	(548	)	$	19,813		$	48,783

(1) The nine months ended September 30, 2022, includes a $65.9 million payment in January 2022 for a legal judgement acquired in December 2021.

The following table provides a reconciliation of Non-GAAP gross profit to gross profit, the most comparable GAAP financial measure:

	(Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2022			2021			2022			2021
Gross profit	$	91,442		$	89,806		$	322,753		$	294,513
Stock-based compensation expense		2,332			1,411			6,265			3,791
Restructuring expense		—			(10	)		—			926
Non-GAAP gross profit	$	93,774		$	91,207		$	329,018		$	299,230
Non-GAAP gross margin		78.6	%		75.2	%		79.9	%		76.5	%

The following table provides a reconciliation of Non-GAAP operating expense to Total operating expense, the most comparable GAAP financial measure:

	(Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2022			2021			2022			2021
Total operating expense	$	116,438		$	91,732		$	334,306		$	286,821
Stock-based compensation expense		(20,378	)		(9,522	)		(56,259	)		(27,438	)
Amortization		(6,571	)		(4,432	)		(18,682	)		(13,924	)
Gain on mark-to-market adjustment of contingent consideration		2,178			—			7,482			—
Restructuring expense		—			114			—			(4,028	)
Non-GAAP operating expense	$	91,667		$	77,892		$	266,847		$	241,431

The following table provides our revenue and Adjusted EBITDA on a constant currency basis:

	(Unaudited)
	Three Months Ended September 30, 2022						Three Months Ended September 30, 2021		Increase/ (Decrease) %
(in thousands)	As reported		Currency changes		As adjusted for constant currency		As reported		As reported			As adjusted for constant currency
Software revenue	$	103.8	$	8.8	$	112.6	$	102.3		1.4	%		10.1	%
Total revenue	$	119.4	$	9.6	$	129.0	$	121.3		-1.6	%		6.3	%
Adjusted EBITDA	$	6.8	$	2.0	$	8.8	$	14.8		-53.9	%		-40.5	%


	(Unaudited)
	Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2021		Increase/ (Decrease) %
(in thousands)	As reported		Currency changes		As adjusted for constant currency		As reported		As reported			As adjusted for constant currency
Software revenue	$	361.6	$	18.3	$	379.9	$	331.4		9.1	%		14.7	%
Total revenue	$	411.8	$	20.2	$	432.0	$	391.4		5.2	%		10.4	%
Adjusted EBITDA	$	69.9	$	4.2	$	74.1	$	61.3		14.0	%		20.9	%

Business Outlook
The following table provides a reconciliation of projected Non-GAAP net income to projected net loss, the most comparable GAAP financial measure:

	(Unaudited)
	Three Months Ending December 31, 2022						Year Ending December 31, 2022
(in thousands)	Low			High			Low			High
Net loss	$	(15,000	)	$	(12,100	)	$	(70,300	)	$	(67,400	)
Stock-based compensation expense		21,600			21,600			84,100			84,100
Amortization of intangible assets		10,100			10,100			28,800			28,800
Non-cash interest expense		400			400			1,800			1,800
Impact of non-GAAP tax rate		(1,600	)		(2,200	)		(3,500	)		(4,200	)
Special adjustments and other⁽¹⁾		—			—			22,900			22,900
Non-GAAP net income	$	15,500		$	17,800		$	63,800		$	66,000

(1) Year ending December 31, 2022, includes $16.6 million expense on the repurchase of convertible senior notes, $13.7 million currency losses on acquisition-related intercompany loans and $7.5 million gain from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition.

The following table provides a reconciliation of projected Adjusted EBITDA to projected net loss, the most comparable GAAP financial measure:

	(Unaudited)
	Three Months Ending December 31, 2022						Year Ending December 31, 2022
(in thousands)	Low			High			Low			High
Net loss	$	(15,000	)	$	(12,100	)	$	(70,300	)	$	(67,400	)
Income tax expense		3,900			4,000			18,900			19,000
Stock-based compensation expense		21,600			21,600			84,100			84,100
Interest (income) expense		(300	)		(300	)		500			500
Depreciation and amortization		11,800			11,800			35,900			35,900
Special adjustments and other⁽¹⁾		—			—			22,900			22,900
Adjusted EBITDA	$	22,000		$	25,000		$	92,000		$	95,000

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 Ending December 31, 2022
(in thousands)	Low			High
Net cash provided by operating activities⁽¹⁾	$	23,000		$	27,000
Capital expenditures		(9,000	)		(9,000	)
Free cash flow⁽¹⁾	$	14,000		$	18,000

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

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Artificial Intelligence

AI-Driven Advertising to Surge from $370B in 2022 to $1.3T by 2032

Published

14 mins ago

May 30, 2024

CISION (PR Newswire)

USA News Group News CommentaryIssued on behalf of Scope AI Corp.
VANCOUVER, BC, May 30, 2024 /PRNewswire/ — USA News Group News Commentary – The use of artificial intelligence is on the rise, with the advertising and marketing sector gaining some of the most benefits. Analysts are already projecting major gains, with Statista projecting advertising spending enabled by AI amounted to a respectable $370 billion in 2022, but will rise significantly to $1.3 trillion by 2032. According to analysts at McKinsey & Company who are projecting generative AI (gen AI) could add $4.4 trillion annually to the global economy. Several tech companies have recently enhanced the integration of AI in marketing, offering swift, secure, and cost-effective solutions for businesses to adopt AI technology in advertising over the past week, including: Scope AI Corp. (CSE: SCPE) (OTCQB: SCPCF), Meta Platforms, Inc. (NASDAQ: META), Veritone, Inc. (NASDAQ: VERI), Alphabet Inc. (NASDAQ: GOOG, GOOGL), and Adobe Inc. (NASDAQ: ADBE).

The article continued: Seeing the extraordinary speed of AI’s advancements and impacts, combined with surging private- and public-sector demand, is causing regulators in the USA and EU to issue legislation calling for action. Now analysts are trying to determine whether the GenAI boom is setting up to be another bubble, or a legitimate long-term investment opportunity.
SCOPE AI ENGAGES WITH AD AGENCIES AND NETWORKS TO OPTIMIZE GEM PLATFORM
Scope AI Corp. (CSE: SCPE) (OTCQB: SCPCF) (FSE: VN8) (“Scope” or the “Company”) today announced its collaboration with several leading ad agencies and ad networks. This initiative aims to gain insights into the primary challenges these organizations face in analyzing the efficacy of different ad creatives and page layouts, as well as the difficulties and costs associated with testing.
These friendly collaborations are part of Scope AI’s commitment to ensuring that the functionality and features of its GEM (General Enterprise Machine Learning) platform are the best market-product fit. By engaging directly with industry professionals, Scope AI is gathering critical feedback to refine and enhance GEM’s capabilities, making it a more valuable tool for advertisers, brands, agencies, and Adtech service providers.
GEM, Scope AI’s flagship product, is designed to revolutionize the advertising technology sector through advanced AI-driven visual recognition and neural network technology. The platform will enable users to streamline processes, maximize return on ad spend, and analyze user behavior through custom neural networks without the need for expensive and risky live campaign testing.
“Our approach is to start with the pain points of our potential users and build solutions based on those insights,” said James Young, CEO of Scope AI Corp. “We believe in understanding the real-world challenges faced by our partners, rather than falling into the common software trap of ‘build it and they will come.’ This collaboration ensures that GEM is not just another tool, but a solution that addresses the specific needs of the advertising community.”
Scope AI’s commitment to innovation and user-centric development is further evidenced by its expanding development team, which is focused on incorporating feedback from these collaborations into the GEM platform. By doing so, Scope AI aims to deliver cutting-edge AI solutions that drive growth, productivity, and campaign performance in the advertising technology sector.
CONTINUED… Read this and more news for Scope AI at: https://usanewsgroup.com/2024/04/26/the-currency-of-tomorrow-why-investing-in-cutting-edge-ai-recognition-tech-could-mean-big-money/
In other industry developments and happenings in the market this week include:
Meta Platforms, Inc. (NASDAQ: META), the parent company of Facebook, Instagram, and WhatsApp, recently said it had found “likely AI-generated” content used deceptively on its Facebook and Instagram platforms. In its latest quarterly security report, the social media company reported that certain accounts were masquerading as Jewish students, African Americans, and other concerned groups, targeting audiences primarily in the United States and Canada. These activities were linked to STOIC, a political marketing firm based in Tel Aviv.
“With the issues with AI, we’re concerned with Meta’s inability to evaluate, particularly advertising and paid content related to the elections,” said Christina O’Connell, manager of shareholder engagement at Ekō, a corporate accountability organization representing Meta’s retail shareholders.
In a statement, Meta said its commitment to responsible AI principles, board oversight, efforts to tackle misinformation and disinformation, and the creation of watermarking tools enhance transparency regarding the impact of its products.
“AI tools help us identify and remove content that violates our policies, in some cases even before users report it to us,” said Meta in the statement. “We have also built one of the largest independent fact-checking networks of any platform, with more than 90 partners around the world to review and rate viral misinformation in more than 60 languages.”
Veritone, Inc. (NASDAQ: VERI), a designer of human-centered AI solutions serving customers in talent acquisition, was recently tapped by talent agency Creative Artists Agency (CAA) as a tech partner to build and operate an early-stage database housing replicas of its clients’ digital likenesses. Dubbed ‘The CAA Vault’, the in-house service was launched in September 2023 to scan, capture, and securely store clients’ digital likenesses (face and body) and voice, with the intent to give talent ownership, control and permission over their digital identities to address issues of consent, credit, and compensation related to AI usage.
CAA and Veritone are boasting that their collaboration is an example of “the power of ethical AI” that showcases the “importance of fostering responsible practices within the entertainment industry.”
“Ethics-led and talent-friendly applications of emerging technologies, like AI, are a top priority for CAA, driving us to innovate new ways to support and protect artists,” said Alexandra Shannon, head of strategic development at CAA. “The launch of The CAA Vault is one such innovation. By partnering with a trusted organization like Veritone, we can maintain the security of the artist’s assets, while working to ensure that AI is responsibly integrated into opportunities across the entertainment landscape.”
As per the deal, CAA is accessing Veritone’s Digital Media Hub technology to store the intellectual property for participating talent, with Veritone ingesting, organizing and storing the digital assets and all associated metadata, like synthetic counterparts, including digital scans and voice recordings.
Alphabet Inc. (NASDAQ: GOOG, GOOGL), parent company to Google and YouTube, recently stated a press roundtable ahead of Google’s Marketing Live event, that advertisers will get prominent placement for the platforms’ generative AI search features. AI Overviews will incorporate ads above, below, and within AI-generated search results, according to Rachel Melgaard, Google’s Director of Global Search.
“We’ve been testing this for a while now and we’ve actually found that people find these ads really helpful and advertisers can find these ads effective,” said Melgaard. With these updates, Google bolstered its already massive search advertisement business improving its generative-AI powered search results, and building up on the more than $46 billion in revenue the company made last quarter.
This followed upon when Google introduced a suite of ad products powered by generative AI, tools that could produce instant copy and images, in mid-2023.
Adobe Inc. (NASDAQ: ADBE), a global leader in digital media and marketing solutions, recently announced the new Adobe Express for Enterprise, built to empower businesses to accelerate marketing content creation and extend easy, on-brand content production to communications, sales and other business users.
“With the exponential growth in demand for personalized experiences, companies must find new ways to supercharge the production of content that connects with customers and elevates their brands,” said Govind Balakrishnan, senior vice president, Adobe Express Product Group and Creative Cloud Services at Adobe. “Adobe Express for Enterprise is the only solution that brings together enterprise-grade brand management, intuitive tools, advanced AI designed to be safe for business and seamless workflows with world-class creative apps – empowering individuals across the enterprise to produce more impactful, on-brand content faster than ever before.”
Article Source: https://usanewsgroup.com/2024/04/26/the-currency-of-tomorrow-why-investing-in-cutting-edge-ai-recognition-tech-could-mean-big-money/
CONTACT:USA NEWS [email protected](604) 265-2873
DISCLAIMER: Nothing in this publication should be considered as personalized financial advice. We are not licensed under securities laws to address your particular financial situation. No communication by our employees to you should be deemed as personalized financial advice. Please consult a licensed financial advisor before making any investment decision. This is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. USA News Group is a wholly-owned subsidiary of Market IQ Media Group, Inc. (“MIQ”). MIQ has been paid a fee for Scope AI Corp. advertising and digital media from the company directly. There may be 3rd parties who may have shares Scope AI Corp., and may liquidate their shares which could have a negative effect on the price of the stock. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled company. Because of this conflict, individuals are strongly encouraged to not use this publication as the basis for any investment decision. The owner/operator of MIQ own shares of Scope AI Corp. which were purchased as a part of a private placement. MIQ reserves the right to buy and sell, and will buy and sell shares of Scope AI Corp. at any time thereafter without any further notice. We also expect further compensation as an ongoing digital media effort to increase visibility for the company, no further notice will be given, but let this disclaimer serve as notice that all material disseminated by MIQ has been approved by the above mentioned company; this is a paid advertisement, and we own shares of the mentioned company that we will sell, and we also reserve the right to buy shares of the company in the open market, or through further private placements and/or investment vehicles. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between any predictions and actual results. Always consult a licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

View original content:https://www.prnewswire.co.uk/news-releases/ai-driven-advertising-to-surge-from-370b-in-2022-to-1-3t-by-2032–302159602.html

Artificial Intelligence

Diving Deep: Divirod Partners with Hospitality Groups to Take on Climate Change and Water Data Scarcity with New Global Coastal Observation Network Initiative

Published

14 mins ago

May 30, 2024

CISION (PR Newswire)

BOULDER, Colo., May 30, 2024 /PRNewswire/ — As the risks posed by climate change increase, the lack of comprehensive water data and gaps in coastal monitoring infrastructure pose significant challenges to people and assets across the globe. Only 0.07% of the world’s coasts are monitored, according to NOAA (National Oceanic and Atmospheric Association), and outdated methods result in inaccurate forecasts for local conditions. This compromises the accuracy of predictive models and leaves vulnerable communities without the necessary information to make informed decisions. Addressing the issue demands densifying the coastline with more tidal monitoring sensors and continuously capturing real-time data to ensure effective risk mitigation and sustainable planning through environmental uncertainties and evolving climate patterns.

Divirod is announcing its Global Coastal Observation Network in response to this urgent need. This initiative aims to establish partnerships with hospitality groups worldwide that have access to prime coastal real estate. Climate change significantly affects coastal tourism by creating unpredictable weather patterns, increased storm activity, and rising sea levels, often resulting in property damage, disrupted operations, and endangering staff and guests. By participating in this initiative, hospitality groups will gain access to invaluable water data that will not only help them understand the environmental conditions of their locations more comprehensively but also play a vital role in addressing the significant global gaps in coastal water data.
Due to the vast number of coastal hotel properties across the globe, the integration of sensing technology at these locations is pivotal to combating water data scarcity. “The initiation of the Global Coastal Observation Network marks a significant milestone in our mission to revolutionize water data collection. By mobilizing hospitality groups to host Divirod sensors at their locations, we’re creating a network that delivers actionable insights, enhances safety, and fosters sustainability. Together, we’re shaping a future where data-driven solutions drive positive change for our oceans, coastlines, and the communities they support,” says Ava Jordan, Program Administrator and Executive Assistant to the CEO.
The benefits of this program for the hospitality groups are immeasurable. In the occurrence of a high-water event, such as king tide, storm surge, or flood, these sensors will provide real-time data and actionable insights, prompting resiliency plans to be enacted to mitigate damage, and ensure staff, and guest safety. Furthermore, this data is extremely useful for insurers protecting these properties. Traditionally, insurance claims for flood damage rely heavily on post-event assessments and subjective reports. However, with the accurate, localized data provided by Divirod, insurers would gain access to objective, immediate information to assist them in their damage assessment, expediting the claims process and minimizing potential rate increases and disputes.
Incorporating data insights from Divirod’s units not only enhances the hotel or hospitality groups’ internal sustainability programs, but also serves as a powerful marketing tool. Through this initiative, hoteliers can transparently showcase their environmental commitment, sharing their data with guests through QR codes, signage, or digital displays in public areas. Additionally, they can provide access to reports on Environmental, Social, and Governance (ESG) initiatives, and reinforce their brand as a sustainable hospitality leader. Utilizing Divirod data as a benchmark for sea level rise preparedness further strengthens the hotel’s credibility and resilience in the face of climate-related challenges, all without incurring additional costs.
To join the network, or learn more about the initiative contact [email protected]
About DivirodDivirod’s mission is to build the most comprehensive local, national, and global environmental water-data network ever established. The company utilizes cutting-edge technology to rapidly deploy and measure all forms of water with accurate precision, addressing critical geographical data gaps and augmenting existing, but outdated, sparse, and disparate environmental water-monitoring systems. In the short term, the Divirod network fills data gaps, enabling localized and real-time “speed to knowledge/action” for more-informed emergency responses to protect against impending water risks that threaten properties, economies, and human lives. Over time, the increase in captured data, through the Divirod global network coverage, enhances smarter water-risk decisions and guides critical resiliency initiatives to greatly minimize future water risks. For more information on Divirod and to become part of the network, please visit https://www.divirod.com/ or contact [email protected]. Connect with Divirod on LinkedIn, Twitter, Facebook, and Instagram.
Contact Information:Divirod, Inc.Tamara HesseDirector of Marketing(404) [email protected]
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Artificial Intelligence

Bitcoin Alora AI: Transforming Trading with Cutting-Edge AI Technology

Published

14 mins ago

May 30, 2024

CISION (PR Newswire)

PONTELAND, England, May 30, 2024 /PRNewswire/ — Bitcoin Alora AI, a leader in trading technology, is revolutionizing the trading landscape with its state-of-the-art AI-driven platform. The newly launched BTC Alora 2.0 offers continuous trading, minimized risk, and bespoke strategies, setting a new standard for traders aiming for market success.

Bitcoin Alora AI provides traders with round-the-clock AI-driven trading capabilities, ensuring they never miss a market opportunity. The platform’s sophisticated AI analyzes real-time market data, enabling informed decisions and significantly reducing the uncertainties traditionally associated with trading.
“Our mission at Bit Alora XP is to provide a pioneering, data-driven trading solution,” says a spokesperson for Bitcoin Alora AI. “We are confident that our AI-enhanced platform will substantially improve trading outcomes by mitigating risk and refining strategic decision-making.”
Bitcoin Alora AI delivers comprehensive support and cutting-edge technology, equipping traders with the insights and tools needed for success. The AI customizes strategies to match each trader’s unique style and goals, enhancing overall performance.
Beyond its innovative technology, BTC Alora 2.0 emphasizes user security and efficiency. The platform leverages advanced AI to minimize risk exposure, optimizing strategies to identify more profitable opportunities. This strategic application of AI ensures traders can maximize returns while maintaining a lower risk profile.
BTC Alora 2.0 also offers seamless access to in-depth analysis and real-time market data, empowering traders to make well-informed decisions. This focus on data-driven trading distinguishes Bit Alora XP as a leader in the industry.
Operating with a commitment to transparency and user satisfaction, Bitcoin Alora AI ensures all transactions are secure and efficient. The platform’s dedication to excellence assures traders of reliable and superior service.
With its groundbreaking features and unwavering dedication to enhancing the trading experience, Bitcoin Alora AI is poised to lead the trading industry. By continually offering top-tier services and emphasizing strategic, data-driven trading, BTC Alora 2.0 is redefining possibilities for traders globally.
For more information about Bitcoin Alora AI and its offerings, please visit bitcoinalora.com.
Press Contact:Email: [email protected]: +447788655602
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