Artificial Intelligence
Altair Announces Fourth Quarter and Full Year 2022 Financial Results
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TROY, Mich., Feb. 23, 2023 (GLOBE NEWSWIRE) — Altair (Nasdaq: ALTR), a global leader in computational science and artificial intelligence, today released its financial results for the fourth quarter and full year ended December 31, 2022.
“Altair had an outstanding fourth quarter, achieving record high software revenue, and showing exceptional momentum for the full year,” said James Scapa, founder, chairman and chief executive officer of Altair. “This performance is clearly well above expectations, and I am extremely proud of Altair’s global team for their exceptional achievements.”
“The fourth quarter was very strong, capping one of the most successful years in our long history,” said Matt Brown, chief financial officer of Altair. “We ended 2022 with record high annual revenue and exceeded our profit expectations. We’ve been successful in our disciplined approach to spending and expect to carry that approach into 2023, as we remain committed to exiting the year with 20% EBITDA margin, while continuing to add 200 to 300 basis points of margin per year into the future.”
Fourth Quarter 2022 Financial Highlights
- Software product revenue was $145.0 million compared to $122.4 million for the fourth quarter of 2021, an increase of 18.5% in reported currency and 25.5% in constant currency
- Total revenue was $160.4 million compared to $140.8 million for the fourth quarter of 2021, an increase of 13.9% in reported currency and an increase of 20.6% in constant currency
- Net income was $12.1 million compared to a net loss of $(1.4) million for the fourth quarter of 2021. Diluted net income per share was $0.14 based on 87.5 million diluted weighted average common shares outstanding, compared to diluted net loss per share of $(0.02) for the fourth quarter of 2021, based on 79.0 million diluted weighted average common shares outstanding. Net income margin was 7.5% compared to a net loss margin of -1.0% for the fourth quarter of 2021
- Non-GAAP net income was $27.5 million, compared to non-GAAP net income of $16.4 million for the fourth quarter of 2021, an increase of 67.5%. Non-GAAP diluted net income per share was $0.31 based on 87.5 million non-GAAP diluted common shares outstanding, compared to non-GAAP diluted net income per share of $0.19 for the fourth quarter of 2021, based on 84.6 million non-GAAP diluted common shares outstanding
- Adjusted EBITDA was $38.7 million compared to $24.0 million for the fourth quarter of 2021, an increase of 61.7%. Adjusted EBITDA margin was 24.1% compared to 17.0% for the fourth quarter of 2021
- Cash provided by operating activities was $13.0 million, compared to $6.0 million for the fourth quarter of 2021
- Free cash flow was $10.1 million, compared to $5.0 million for the fourth quarter of 2021.
Full Year 2022 Financial Highlights
- Software product revenue was $506.5 million compared to $453.7 million for the full year of 2021, an increase of 11.6% in reported currency and 17.6% in constant currency
- Total revenue was $572.2 million compared to $532.2 million for the full year of 2021, an increase of 7.5% in reported currency and an increase of 13.1% in constant currency
- Net loss was $(43.4) million compared to $(8.8) million for the full year of 2021. Diluted net loss per share was $(0.55) based on 79.5 million diluted weighted average common shares outstanding, compared to diluted net loss per share of $(0.12) for the full year of 2021, based on 76.2 million diluted weighted average common shares outstanding. Net loss margin was -7.6% compared to -1.7% for the full year of 2021
- Non-GAAP net income was $75.6 million, compared to non-GAAP net income of $57.6 million for the full year of 2021, an increase of 31.2%. Non-GAAP diluted net income per share was $0.89 based on 85.4 million non-GAAP diluted common shares outstanding, compared to non-GAAP diluted net income per share of $0.71 for the full year of 2021, based on 81.2 million non-GAAP diluted common shares outstanding
- Adjusted EBITDA was $108.6 million compared to $85.3 million for the full year of 2021, an increase of 27.4%. Adjusted EBITDA margin was 19.0% compared to 16.0% for the full year of 2021
- Cash provided by operating activities was $39.6 million, compared to $61.6 million for the full year of 2021
- Free cash flow was $29.9 million, compared to $53.8 million for the full year of 2021.
Business Outlook
Based on information available as of today, Altair is issuing the following guidance for the first quarter and full year 2023:
(in millions, except %) | First Quarter 2023 | Full Year 2023 | ||||||||||||||
Software Product Revenue | $ | 139.0 | to | $ | 142.0 | $ | 550.0 | to | $ | 560.0 | ||||||
Growth Rate | -1.3 | % | 0.8 | % | 8.6 | % | 10.6 | % | ||||||||
Growth Rate – Constant Currency | 3.7 | % | 5.9 | % | 9.5 | % | 11.4 | % | ||||||||
Total Revenue | $ | 155.0 | $ | 158.0 | $ | 613.0 | $ | 623.0 | ||||||||
Growth Rate | -3.0 | % | -1.1 | % | 7.1 | % | 8.9 | % | ||||||||
Growth Rate – Constant Currency | 2.0 | % | 3.9 | % | 8.0 | % | 9.7 | % | ||||||||
Net (Loss) Income | $ | (0.4 | ) | $ | 1.5 | $ | (16.4 | ) | $ | (6.7 | ) | |||||
Non-GAAP Net Income | $ | 24.2 | $ | 25.7 | $ | 85.4 | $ | 92.8 | ||||||||
Adjusted EBITDA | $ | 34.0 | $ | 36.0 | $ | 120.0 | $ | 130.0 | ||||||||
Net Cash Provided by Operating Activities | $ | 118.0 | $ | 126.0 | ||||||||||||
Free Cash Flow | $ | 108.0 | $ | 116.0 | ||||||||||||
Conference Call Information
What: | Altair’s Fourth Quarter and Full Year 2022 Financial Results Conference Call | |
When: | Thursday, February 23, 2023 | |
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.
Billings consists of our total revenue plus the change in our deferred revenue, excluding deferred revenue from acquisitions.
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 first quarter and full year 2023, our statements regarding our expectations for 2023 and impacts on margin in future years, 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 ENGINERING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31, | ||||||||
(in thousands) | 2022 | 2021 | ||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 316,146 | $ | 413,743 | ||||
Accounts receivable, net | 170,279 | 137,561 | ||||||
Income tax receivable | 11,259 | 9,388 | ||||||
Prepaid expenses and other current assets | 29,142 | 27,529 | ||||||
Total current assets | 526,826 | 588,221 | ||||||
Property and equipment, net | 37,517 | 40,478 | ||||||
Operating lease right of use assets | 33,601 | 28,494 | ||||||
Goodwill | 449,048 | 370,178 | ||||||
Other intangible assets, net | 107,609 | 99,057 | ||||||
Deferred tax assets | 9,727 | 8,495 | ||||||
Other long-term assets | 40,410 | 28,352 | ||||||
TOTAL ASSETS | $ | 1,204,738 | $ | 1,163,275 | ||||
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 10,434 | $ | 6,647 | ||||
Accrued compensation and benefits | 42,456 | 42,307 | ||||||
Current portion of operating lease liabilities | 10,396 | 9,933 | ||||||
Other accrued expenses and current liabilities | 56,371 | 122,226 | ||||||
Deferred revenue | 113,081 | 93,160 | ||||||
Convertible senior notes, net | — | 199,705 | ||||||
Total current liabilities | 232,738 | 473,978 | ||||||
Convertible senior notes, net | 305,604 | — | ||||||
Operating lease liabilities, net of current portion | 24,065 | 19,550 | ||||||
Deferred revenue, non-current | 31,379 | 12,872 | ||||||
Other long-term liabilities | 41,216 | 42,894 | ||||||
TOTAL LIABILITIES | 635,002 | 549,294 | ||||||
Commitments and contingencies | ||||||||
MEZZANINE EQUITY | — | 784 | ||||||
STOCKHOLDERS’ EQUITY | ||||||||
Preferred stock ($0.0001 par value), authorized 45,000 shares, none issued or outstanding | — | — | ||||||
Common stock ($0.0001 par value) | ||||||||
Class A common stock, authorized 513,797 shares, issued and outstanding 52,277 and 51,524 shares as of December 31, 2022 and 2021, respectively | 5 | 5 | ||||||
Class B common stock, authorized 41,203 shares, issued and outstanding 27,745 shares as of December 31, 2022 and 2021 | 3 | 3 | ||||||
Additional paid-in capital | 721,307 | 724,226 | ||||||
Accumulated deficit | (121,577 | ) | (102,087 | ) | ||||
Accumulated other comprehensive loss | (30,002 | ) | (8,950 | ) | ||||
TOTAL STOCKHOLDERS’ EQUITY | 569,736 | 613,197 | ||||||
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY | $ | 1,204,738 | $ | 1,163,275 | ||||
ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
(in thousands, except per share data) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Revenue | ||||||||||||||||
License | $ | 107,418 | $ | 94,178 | $ | 363,520 | $ | 324,808 | ||||||||
Maintenance and other services | 37,535 | 28,180 | 142,988 | 128,938 | ||||||||||||
Total software | 144,953 | 122,358 | 506,508 | 453,746 | ||||||||||||
Software related services | 7,518 | 8,594 | 30,661 | 31,823 | ||||||||||||
Total software and related services | 152,471 | 130,952 | 537,169 | 485,569 | ||||||||||||
Client engineering services | 6,469 | 8,277 | 28,883 | 39,282 | ||||||||||||
Other | 1,493 | 1,568 | 6,169 | 7,328 | ||||||||||||
Total revenue | 160,433 | 140,797 | 572,221 | 532,179 | ||||||||||||
Cost of revenue | ||||||||||||||||
License | 9,111 | 6,223 | 20,497 | 19,929 | ||||||||||||
Maintenance and other services | 13,318 | 12,494 | 51,946 | 47,862 | ||||||||||||
Total software * | 22,429 | 18,717 | 72,443 | 67,791 | ||||||||||||
Software related services | 5,119 | 5,645 | 21,858 | 23,205 | ||||||||||||
Total software and related services | 27,548 | 24,362 | 94,301 | 90,996 | ||||||||||||
Client engineering services | 5,187 | 6,547 | 23,577 | 31,710 | ||||||||||||
Other | 1,119 | 1,888 | 5,011 | 6,960 | ||||||||||||
Total cost of revenue | 33,854 | 32,797 | 122,889 | 129,666 | ||||||||||||
Gross profit | 126,579 | 108,000 | 449,332 | 402,513 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development * | 47,511 | 38,177 | 185,863 | 151,049 | ||||||||||||
Sales and marketing * | 41,203 | 38,182 | 155,245 | 132,750 | ||||||||||||
General and administrative * | 24,993 | 23,517 | 97,606 | 91,500 | ||||||||||||
Amortization of intangible assets | 8,828 | 4,433 | 27,510 | 18,357 | ||||||||||||
Other operating income, net | (572 | ) | (956 | ) | (9,955 | ) | (3,482 | ) | ||||||||
Total operating expenses | 121,963 | 103,353 | 456,269 | 390,174 | ||||||||||||
Operating income (loss) | 4,616 | 4,647 | (6,937 | ) | 12,339 | |||||||||||
Interest expense | 1,526 | 3,067 | 4,377 | 12,065 | ||||||||||||
Other (income) loss, net | (9,183 | ) | (1,105 | ) | 16,899 | 562 | ||||||||||
Income (loss) before income taxes | 12,273 | 2,685 | (28,213 | ) | (288 | ) | ||||||||||
Income tax expense | 208 | 4,082 | 15,216 | 8,506 | ||||||||||||
Net income (loss) | $ | 12,065 | $ | (1,397 | ) | $ | (43,429 | ) | $ | (8,794 | ) | |||||
Income (loss) per share: | ||||||||||||||||
Net income (loss) per share attributable to common stockholders, basic | $ | 0.15 | $ | (0.02 | ) | $ | (0.55 | ) | $ | (0.12 | ) | |||||
Net income (loss) per share attributable to common stockholders, diluted | $ | 0.14 | $ | (0.02 | ) | $ | (0.55 | ) | $ | (0.12 | ) | |||||
Weighted average shares outstanding: | ||||||||||||||||
Weighted average number of shares used in computing net income (loss) per share, basic | 80,266 | 79,008 | 79,472 | 76,179 | ||||||||||||
Weighted average number of shares used in computing net income (loss) per share, diluted | 87,498 | 79,008 | 79,472 | 76,179 | ||||||||||||
* Amounts include stock-based compensation expense as follows (in thousands):
(Unaudited) | ||||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Cost of revenue-software | $ | 2,086 | $ | 1,828 | $ | 8,351 | $ | 5,619 | ||||||||
Research and development | 9,670 | 5,338 | 36,250 | 16,561 | ||||||||||||
Sales and marketing | 7,865 | 4,244 | 30,370 | 15,044 | ||||||||||||
General and administrative | 2,642 | 1,910 | 9,816 | 7,325 | ||||||||||||
Total stock-based compensation expense | $ | 22,263 | $ | 13,320 | $ | 84,787 | $ | 44,549 |
(Unaudited) | ||||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Employee stock-based compensation plans | $ | 15,933 | $ | 11,792 | $ | 59,555 | $ | 40,801 | ||||||||
Post combination expense in connection with acquisitions | 6,330 | 1,528 | 25,232 | 3,748 | ||||||||||||
Total stock-based compensation expense | $ | 22,263 | $ | 13,320 | $ | 84,787 | $ | 44,549 | ||||||||
ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
Year Ended December 31, | ||||||||
(in thousands) | 2022 | 2021 | ||||||
OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (43,429 | ) | $ | (8,794 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 35,504 | 25,644 | ||||||
Amortization of debt discount and issuance costs | 1,792 | 11,428 | ||||||
Stock-based compensation expense | 84,787 | 44,549 | ||||||
Deferred income taxes | (4,164 | ) | (1,502 | ) | ||||
Gain on mark-to-market adjustment of contingent consideration | (7,153 | ) | — | |||||
Expense on repurchase of convertible senior notes | 16,621 | — | ||||||
Other, net | 387 | 1,271 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (34,175 | ) | (15,645 | ) | ||||
Prepaid expenses and other current assets | 1,014 | (9,026 | ) | |||||
Other long-term assets | 2,852 | (6,682 | ) | |||||
Accounts payable | 3,771 | (3,857 | ) | |||||
Accrued compensation and benefits | 280 | 7,761 | ||||||
Other accrued expenses and current liabilities | (59,463 | ) | 6,365 | |||||
Deferred revenue | 40,946 | 10,111 | ||||||
Net cash provided by operating activities | 39,570 | 61,623 | ||||||
INVESTING ACTIVITIES: | ||||||||
Payments for acquisition of businesses, net of cash acquired | (134,541 | ) | (53,983 | ) | ||||
Capital expenditures | (9,648 | ) | (7,849 | ) | ||||
Other investing activities, net | (10,322 | ) | (650 | ) | ||||
Net cash used in investing activities | (154,511 | ) | (62,482 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Proceeds from issuance of convertible senior notes, net of underwriters’ discounts and commissions | 224,265 | — | ||||||
Repurchase of convertible senior notes | (192,422 | ) | — | |||||
Repurchase and retirement of common stock | (19,659 | ) | — | |||||
Proceeds from employee stock purchase plan contributions | 8,976 | 4,222 | ||||||
Proceeds from the exercise of common stock options | 3,577 | 2,262 | ||||||
Payments for issuance costs of convertible senior notes | (1,523 | ) | — | |||||
Proceeds from private placement of common stock | — | 200,000 | ||||||
Payments on revolving commitment | — | (30,000 | ) | |||||
Other financing activities | (233 | ) | (537 | ) | ||||
Net cash provided by financing activities | 22,981 | 175,947 | ||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (5,094 | ) | (2,623 | ) | ||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (97,054 | ) | 172,465 | |||||
Cash, cash equivalents and restricted cash at beginning of year | 414,012 | 241,547 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 316,958 | $ | 414,012 | ||||
Financial Results
The following table provides a reconciliation of Non-GAAP net income and Non-GAAP net income per share – diluted, to net income (loss) and net income (loss) per share – diluted, the most comparable GAAP financial measures:
(Unaudited) | ||||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
(in thousands, except per share amounts) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Net income (loss) | $ | 12,065 | $ | (1,397 | ) | $ | (43,429 | ) | $ | (8,794 | ) | |||||
Stock-based compensation expense | 22,263 | 13,320 | 84,787 | 44,549 | ||||||||||||
Amortization of intangible assets | 8,828 | 4,433 | 27,510 | 18,357 | ||||||||||||
Non-cash interest expense | 467 | 2,915 | 1,806 | 11,428 | ||||||||||||
Restructuring expense | — | 99 | — | 5,053 | ||||||||||||
Impact of non-GAAP tax rate(1) | (9,468 | ) | (1,696 | ) | (11,346 | ) | (11,740 | ) | ||||||||
Special adjustments and other(2) | (6,614 | ) | (1,229 | ) | 16,272 | (1,229 | ) | |||||||||
Non-GAAP net income | $ | 27,541 | $ | 16,445 | $ | 75,600 | $ | 57,624 | ||||||||
Net income (loss) per share, diluted | $ | 0.14 | $ | (0.02 | ) | $ | (0.55 | ) | $ | (0.12 | ) | |||||
Non-GAAP net income per share, diluted | $ | 0.31 | $ | 0.19 | $ | 0.89 | $ | 0.71 | ||||||||
GAAP diluted shares outstanding: | 87,498 | 79,008 | 79,472 | 76,179 | ||||||||||||
Non-GAAP diluted shares outstanding:(3) | 87,498 | 84,604 | 85,392 | 81,159 |
(1) The Company uses a non-GAAP effective tax rate of 26%.
(2) The three months ended December 31, 2022, includes $6.9 million currency gains on acquisition-related intercompany loans and a $0.3 million loss from a mark-to-market adjustment of contingent consideration associated with the World Programming acquisition. The twelve months ended December 31, 2022, includes $16.6 million expense on the repurchase of convertible senior notes, $6.8 million currency losses on acquisition-related intercompany loans, and a $7.2 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 twelve months ended December 31, 2021, has been changed to align with the current definition.
The following table provides a reconciliation of Adjusted EBITDA to net income (loss), the most comparable GAAP financial measure:
(Unaudited) | ||||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Net income (loss) | $ | 12,065 | $ | (1,397 | ) | $ | (43,429 | ) | $ | (8,794 | ) | |||||
Income tax expense | 208 | 4,082 | 15,216 | 8,506 | ||||||||||||
Stock-based compensation expense | 22,263 | 13,320 | 84,787 | 44,549 | ||||||||||||
Interest expense | 1,526 | 3,067 | 4,377 | 12,065 | ||||||||||||
Depreciation and amortization | 11,412 | 6,289 | 35,504 | 25,644 | ||||||||||||
Restructuring expense | — | 99 | — | 5,053 | ||||||||||||
Special adjustments, interest income and other(1) | (8,733 | ) | (1,495 | ) | 12,145 | (1,770 | ) | |||||||||
Adjusted EBITDA | $ | 38,741 | $ | 23,965 | $ | 108,600 | $ | 85,253 |
(1) The three months ended December 31, 2022, includes $6.9 million currency gains on acquisition-related intercompany loans, a $0.3 million loss from a mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, and $2.1 million of interest income. The twelve months ended December 31, 2022, includes $16.6 million expense on the repurchase of convertible senior notes, $6.8 million currency losses on acquisition-related intercompany loans, a $7.2 million gain from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, and $4.1 million of interest income.
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 December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Net cash provided by operating activities(1) | $ | 13,036 | $ | 6,029 | $ | 39,570 | $ | 61,623 | ||||||||
Capital expenditures | (2,927 | ) | (1,038 | ) | (9,648 | ) | (7,849 | ) | ||||||||
Free Cash Flow(1) | $ | 10,109 | $ | 4,991 | $ | 29,922 | $ | 53,774 |
(1) The twelve months ended December 31, 2022, includes a $65.9 million payment in January 2022 for a damages judgement assumed as part of an acquisition in December 2021.
The following table provides a reconciliation of Non-GAAP gross profit to gross profit, the most comparable GAAP financial measure, and a comparison of Non-GAAP gross margin (Non-GAAP gross profit as a percentage of total revenue) to gross profit margin (gross profit as a percentage of total revenue) the most comparable GAAP financial measure:
(Unaudited) | ||||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Gross profit | $ | 126,579 | $ | 108,000 | $ | 449,332 | $ | 402,513 | ||||||||
Stock-based compensation expense | 2,086 | 1,828 | 8,351 | 5,619 | ||||||||||||
Restructuring expense | — | 99 | — | 1,025 | ||||||||||||
Non-GAAP gross profit | $ | 128,665 | $ | 109,927 | $ | 457,683 | $ | 409,157 | ||||||||
Gross profit margin | 78.9 | % | 76.7 | % | 78.5 | % | 75.6 | % | ||||||||
Non-GAAP gross margin | 80.2 | % | 78.1 | % | 80.0 | % | 76.9 | % | ||||||||
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 December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Total operating expense | $ | 121,963 | $ | 103,353 | $ | 456,269 | $ | 390,174 | ||||||||
Stock-based compensation expense | (20,177 | ) | (11,492 | ) | (76,436 | ) | (38,930 | ) | ||||||||
Amortization | (8,828 | ) | (4,433 | ) | (27,510 | ) | (18,357 | ) | ||||||||
Gain on mark-to-market adjustment of contingent consideration | (329 | ) | — | 7,153 | — | |||||||||||
Restructuring expense | — | — | — | (4,028 | ) | |||||||||||
Non-GAAP operating expense | $ | 92,629 | $ | 87,428 | $ | 359,476 | $ | 328,859 | ||||||||
The following table provides a reconciliation of Billings to revenue, the most comparable GAAP financial measure:
(Unaudited) | ||||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Revenue | $ | 160,433 | $ | 140,797 | $ | 572,221 | $ | 532,179 | ||||||||
Ending deferred revenue | 144,460 | 106,032 | 144,460 | 106,032 | ||||||||||||
Beginning deferred revenue | (116,540 | ) | (84,428 | ) | (106,032 | ) | (95,079 | ) | ||||||||
Deferred revenue acquired | (449 | ) | (3,277 | ) | (3,047 | ) | (3,277 | ) | ||||||||
Billings | $ | 187,904 | $ | 159,124 | $ | 607,602 | $ | 539,855 | ||||||||
The following tables provide our revenue, Billings and Adjusted EBITDA on a constant currency basis:
(Unaudited) | ||||||||||||||||||||||||
Three Months Ended December 31, 2022 |
Three Months Ended December 31, 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 | $ | 145.0 | $ | 8.5 | $ | 153.5 | $ | 122.4 | 18.5 | % | 25.5 | % | ||||||||||||
Total revenue | $ | 160.4 | $ | 9.3 | $ | 169.7 | $ | 140.8 | 13.9 | % | 20.6 | % | ||||||||||||
Billings | $ | 187.9 | $ | 8.2 | $ | 196.1 | $ | 159.1 | 18.1 | % | 23.2 | % | ||||||||||||
Adjusted EBITDA | $ | 38.7 | $ | 3.0 | $ | 41.7 | $ | 24.0 | 61.7 | % | 73.9 | % | ||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Twelve Months Ended December 31, 2022 |
Twelve Months Ended December 31, 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 | $ | 506.5 | $ | 27.0 | $ | 533.5 | $ | 453.7 | 11.6 | % | 17.6 | % | ||||||||||||
Total revenue | $ | 572.2 | $ | 29.5 | $ | 601.7 | $ | 532.2 | 7.5 | % | 13.1 | % | ||||||||||||
Billings | $ | 607.6 | $ | 32.0 | $ | 639.6 | $ | 539.9 | 12.5 | % | 18.5 | % | ||||||||||||
Adjusted EBITDA | $ | 108.6 | $ | 7.2 | $ | 115.8 | $ | 85.3 | 27.4 | % | 35.8 | % | ||||||||||||
Business Outlook
The following table provides a reconciliation of projected Non-GAAP net income to projected net (loss) income, the most comparable GAAP financial measure:
(Unaudited) | ||||||||||||||||
Three Months Ending March 31, 2023 |
Year Ending December 31, 2023 |
|||||||||||||||
(in thousands) | Low | High | Low | High | ||||||||||||
Net (loss) income | $ | (400 | ) | $ | 1,500 | $ | (16,400 | ) | $ | (6,700 | ) | |||||
Stock-based compensation expense | 20,700 | 20,700 | 82,800 | 82,800 | ||||||||||||
Amortization of intangible assets | 7,700 | 7,700 | 30,100 | 30,100 | ||||||||||||
Non-cash interest expense | 400 | 400 | 1,800 | 1,800 | ||||||||||||
Impact of non-GAAP tax rate | (4,200 | ) | (4,600 | ) | (12,900 | ) | (15,200 | ) | ||||||||
Non-GAAP net income | $ | 24,200 | $ | 25,700 | $ | 85,400 | $ | 92,800 | ||||||||
The following table provides a reconciliation of projected Adjusted EBITDA to projected net (loss) income, the most comparable GAAP financial measure:
(Unaudited) | ||||||||||||||||
Three Months Ending March 31, 2023 |
Year Ending December 31, 2023 |
|||||||||||||||
(in thousands) | Low | High | Low | High | ||||||||||||
Net (loss) income | $ | (400 | ) | $ | 1,500 | $ | (16,400 | ) | $ | (6,700 | ) | |||||
Income tax expense | 4,300 | 4,400 | 17,100 | 17,400 | ||||||||||||
Stock-based compensation expense | 20,700 | 20,700 | 82,800 | 82,800 | ||||||||||||
Interest (income) expense | (900 | ) | (900 | ) | (3,900 | ) | (3,900 | ) | ||||||||
Depreciation and amortization | 10,300 | 10,300 | 40,400 | 40,400 | ||||||||||||
Adjusted EBITDA | $ | 34,000 | $ | 36,000 | $ | 120,000 | $ | 130,000 | ||||||||
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, 2023 |
||||||||
(in thousands) | Low | High | ||||||
Net cash provided by operating activities | $ | 118,000 | $ | 126,000 | ||||
Capital expenditures | (10,000 | ) | (10,000 | ) | ||||
Free cash flow | $ | 108,000 | $ | 116,000 | ||||
Artificial Intelligence
Tanmyah to Unify Management Processes & Boost Investment Value with Yardi Cloud Technology
Property management company to utilise Yardi’s end-to-end solution to strengthen its commercial operations & enhance efficiency across the Kingdom of Saudi Arabia
JEDDAH, Saudi Arabia, May 8, 2024 /PRNewswire/ — Advanced Development Real Estate Investments (Tanmyah), recognised as one of the early pioneers in property management and development brokerage across Saudi Arabia, is set to improve its commercial property management operations and tenant experience with Yardi®.
The Yardi® Commercial Suite will allow Tanmyah to streamline its commercial and retail operations into one system and effectively manage its portfolio from leasing and reporting to forecasting and accounting. Yardi will also help deliver a self-service portal and app, improving convenience and accessibility for tenants to update details, manage maintenance and view sales metrics. With a more unified system in place, Tanmyah can enhance staff productivity, tenant relations and maximise return on assets.
“We’re thrilled to implement Yardi’s cloud technology into our operations and enhance our ability to deliver exceptional services to all our stakeholders,” expressed Mutaz Alattas, property management and leasing manager for Tanmyah. “With Yardi as our central solution, we will be positioned to efficiently manage our expansive commercial and retail portfolio and become one of the top choices for management and development within the region.”
“Yardi’s unified technology is purpose-built to cater to the strategic expansion and evolving needs of businesses such as Tanmyah,” noted Said Haider, senior director of middle east sales for Yardi®. “We are delighted to contribute to the progression of Tanmyah and are excited about the prospects of our partnership.”
See how Yardi can boost your commercial portfolio activities with a cloud-based management platform.
About TanmyahAdvanced Development Real Estate Investments Company Ltd., known as Tanmyah, is a Saudi Company based in Jeddah on the Western Coast of Saudi Arabia. Tanmyah is recognised as one of the early pioneers in property management and development in the region due to its historic achievements in the real estate market coupled with the generous contributions by its founders to the local community. For more information, visit tanmyah.com.sa.
About YardiCelebrating its 40-year anniversary in 2024, Yardi® develops and supports industry-leading investment and property management software for all types and sizes of real estate companies. With over 9,000 employees, Yardi is working with clients globally to drive significant innovation in the real estate industry. For more information on how Yardi is Energised for Tomorrow, visit yardi.ae.
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Artificial Intelligence
Mashreq Partners with Silent Eight for Compliance Alert Adjudication
Leading financial institution in MENA region selects AI-based platform to process and resolve customer screening alerts related to anti-money laundering and sanctions requirements.Silent Eight’s groundbreaking platform allows financial institutions to reduce manual workloads and risk while maintaining sustainable growth plans. DUBAI, UAE and SINGAPORE, May 8, 2024 /PRNewswire/ — Mashreq, a leading financial institution in the MENA region, today announced that it has selected Silent Eight to provide Name Screening and Adverse Media Alert Adjudication automation capabilities related to sanctions and anti-money laundering regulatory requirements.
Silent Eight is a pioneering RegTech company whose artificial intelligence-based platform offers solutions across the compliance workflow. This strategic partnership will allow for Mashreq to maintain its innovative solution offerings, reduce workflow and resolution times for compliance alerts, and identify true risks in a faster and more efficient way.
Under the partnership announced today, Silent Eight will provide Mashreq with a solution for Alert Adjudication, in which alerts related to potentially risky or proscribed customers are evaluated, false positives are quickly investigated and closed, and potential true positive alerts are more quickly escalated to Mashreq analysts. Through the efficiency gains offered by Silent Eight’s platform, Mashreq will easily be able to improve its processing rates and reduce friction at the time of customer onboarding.
The multi-year partnership aligns with Mashreq’s core strategy of leveraging digital tools and other innovations in order to enhance convenience for customers and also significantly reduces the bank’s environmental footprint. Thanks to the power of Silent Eight’s AI platform, Mashreq’s compliance and risk professionals will be able to easily identify and investigate alerts that represent genuine financial crime risk.
“Mashreq has stood out amongst financial institutions in the Middle East and North Africa for its commitment to innovative banking solutions, as well as strengthening the overall safety of the global banking system,” said Ben Rayner, Regional Head of UK & EMEA for Silent Eight. “Our Name and Adverse Media Adjudication Platform is perfectly tailored to the compliance and business needs of fast-growing financial institutions, and we’re excited to help support Mashreq’s current and future ambitions.”
“At Mashreq, we are committed to maintaining the highest standards of compliance and regulatory adherence as well as leveraging cutting-edge solutions, and our partnership with Silent Eight is a testament to this commitment,” said Scott Ramsay, Group Head of Compliance & Bank MLRO, Mashreq. “With increasing regulatory requirements surrounding sanctions and anti-money laundering, it is crucial for us to adopt innovative technologies that can effectively and efficiently identify potential risks. Silent Eight’s automation capabilities and AI-driven approach will enable us to stay ahead of evolving threats, ensuring compliance and safeguarding our customers’ interests.”
About
Silent EightSilent Eight is a RegTech company that partners with financial institutions to create solutions blending the best of humans and the best of technology, leveraging artificial intelligence. SilentEight’s solution, automates the alert screening, investigation and adjudication process byreplicating human reasoning and decision making based on historical case data and continuouslearning. Silent Eight enables financial institutions to reduce false positives, increase accuracy,and enhance auditability of their compliance operations. Silent Eight works with some of thelargest banks and insurance companies in the world, including Standard Chartered, HSBC, FirstAbu Dhabi Bank and Emirates NBD. Silent Eight is headquartered in Singapore and has officesin New York, London, Warsaw, and Bangalore. For more information, visit www.silenteight.com.
About Mashreq
Mashreq is a more than half-century old bank, yet proudly thinks like a challenger, startup, and innovator. Mashreq pioneered key innovations and developments in banking, starting with entry-level digital-first customers, all the way to powering some of the region’s most prominent corporations and wealth accounts.
The bank’s mandate is to help customers find their way to Rise Every Day, partnering through the highs and lows to help them reach fulfillment, achieve financial goals, and unlock their vision of success.
Reassuringly present in major financial centres of the world, Mashreq’s home and global HQ remains in the Middle East, offering services whenever and wherever opportunity takes its customers.
Find your way to Rise Every Day at www.Mashreq.com/RiseEveryDay.
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Artificial Intelligence
INSPIRED BY A FIFTIES AUTOMOTIVE LEGEND: INTRODUCING AUTOMOBILI PININFARINA BATTISTA CINQUANTACINQUE
Battista Cinquantacinque bears the iconic Blu Savoia Gloss bodywork and contrasting Bianco Sestriere Gloss roof which is inspired by the original 1955 Lancia Florida show carCinquantacinque name, derived from the Italian word for 55, pays tribute to the iconic Pininfarina-designed classic carElegant Lancia Florida was a favourite of the man who penned the classic model and who gave his name to the fastest and most powerful Italian road car – Battista ‘Pinin’ FarinaOne-of-a-kind Battista Cinquantacinque pictured alongside one of only three Lancia Florida sedansAutomobili Pininfarina Design Team was inspired by the 1955 Lancia Florida when also creating the PURA Vision design concept, which sets the template for all future Automobili Pininfarina modelsAccompanying assets available to download hereCAMBIANO, Italy, May 8, 2024 /PRNewswire/ — Automobili Pininfarina has curated a unique Battista commission as a fitting tribute to the 1955 Lancia Florida – a vehicle designed and loved by Battista ‘Pinin’ Farina.
The Lancia Florida was penned by Battista ‘Pinin’ Farina in the early fifties. It was renowned as a rolling sculpture which inspired new design perspectives. Pinin’s personal Florida, which can be admired as part of the Pininfarina SpA Collection in Cambiano (Torino), was the daily driver of Carrozzeria Pininfarina’s founder throughout his career. The stunning Battista Cinquantacinque hyper GT pays homage to this unique heritage.
Its exterior is finished in a flawless Blu Savoia Gloss paint, contrasted by the Bianco Sestriere Gloss roof and completed by the elegant Brushed Anodised jewellery pack. Inside, it is upholstered in a bespoke Mahagoni (Poltrona Frau Heritage Leather). The livery and name Cinquantacinque, translating to ’55’ in Italian, elegantly honours the iconic, classic 1955 Lancia Florida, styled by Carrozzeria Pininfarina.
The Cinquantacinque model features a number of unique inscriptions that point to its heritage and provenance. The passenger door plate as well as the underside of the active rear wing both feature the ‘Cinquantacinque 55’ signature.
Each Battista is propelled by four independent electric motors and a powerful 120 kWh lithium-ion battery, delivering 1,900hp and 2,340Nm of torque. This advanced powertrain ensures thrilling performances, such as accelerating 0-100 kph in 1.86 seconds and 0-200 kph in 4.75 seconds, as well as a comfortable driving range of up to 476 km.
The Battista Cinquantacinque will make its public debut in Tokyo, Japan, when it is introduced to clients in the region, alongside retail partner, SKY GROUP, as part of Automobili Pininfarina’s continued global expansion.
Clients in the region will get to see Automobili Pininfarina’s promise of ‘Dream Cars. Made Real.’ first-hand, providing a personalised client experience and ensuring every hand-crafted vehicle to leave the Atelier facility in Cambiano destined for Japan is a unique expression of each client’s personality.
Dave Amantea, Chief Design Officer at Automobili Pininfarina, said: “This was a truly special and unique opportunity to design a car that plays homage to Pininfarina SpA’s heritage. The colour combination of the Battista Cinquantacinque is incredible and shows the vision Battista Farina had when he designed the Lancia Florida back in the early fifties. Not only that, but that very same model helped guide me when creating the PURA Vision design concept, a truly unique vehicle that sets the template for future models from Automobili Pininfarina.”
The Lancia Florida sedan not only inspired the Cinquantacinque Battista, but also some of the key design elements of the PURA Vision design concept, a vehicle which sets the template for all future Automobili Pininfarina models.
The 50s sedan has rear-opening doors and no B pillar, which directly translated to the Lounge Doors on the PURA Vision. They hinge dramatically upwards and, in combination with the pillarless opening and rear-hinged back doors, provide unrestricted access to the design concept’s spacious 2+2 seating.
Automobili Pininfarina stands at the vanguard of pure Italian luxury experience, with its bespoke curated approach allowing for precise tailoring to the specific preferences of individual clients. Each vehicle is a unique, hand-crafted masterpiece and a reflection of the client’s personality with inspiration from Automobili Pininfarina’s artisans.
FOR MORE INFORMATION, VISIT: automobili-pininfarina.com/media-hub
EDITOR’S NOTES
ABOUT AUTOMOBILI PININFARINA
Automobili Pininfarina is based in operational headquarters in Cambiano, Italy, with a commercial office in Munich, Germany, and resourced with a team of experienced automotive executives from luxury and premium car brands. Designed, engineered and produced by hand in Italy, with a focus on designing experiences for the world’s foremost taste makers, all of Automobili Pininfarina’s vehicles embody the PURA design philosophy. This philosophy will also permeate all future production cars, seamlessly blending classic inspiration with cutting-edge technology.
THE AUTOMOBILI PININFARINA BATTISTA (LINK TO PRESS KIT)
The Battista is the most powerful car ever designed and built in Italy and it delivers a level of performance that is unachievable today in any road-legal sports car featuring internal combustion engine technology. Faster than a current Formula 1 race car in its 0-100 km/h sub-two second sprint, and with 1,900 hp and 2,340 Nm torque on tap, the Battista will combine extreme engineering and technology in a zero emissions package. The Battista’s 120 kWh battery provides power to four electric motors – one at each wheel – with a combined WLTP range of up to 476 km (U.S. combined EPA: 300 miles) on a single charge. No more than 150 examples of Battista will be individually hand-crafted at the Pininfarina SpA atelier in Cambiano, Italy.
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