Altair Engineering Inc. (NASDAQ:ALTR) Q3 2018 Earnings Conference Call Transcript

Nov 08, 2018 • 04:30 pm ET

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Altair Engineering Inc. (NASDAQ:ALTR) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day ladies and gentlemen and welcome to the Altair Third Quarter 2018 Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Mr. Howard Morof, CFO. Sir, you may begin.

Executive
Howard Morof

Thank you. Good afternoon, welcome, and thank you for attending Altair's earnings conference call for the third quarter 2018. I'm Howard Morof, CFO of Altair, and with me on the call is Jim Scapa, our Founder, Chairman and CEO.

After market close today, we issued a press release with details regarding our third quarter performance, which can be accessed on the IR section of our website at investor.altair.com. This call is being recorded, and a replay will be available on our IR website following the conclusion of the call.

(Forward-Looking Cautionary Statements) With that, let me turn the call over to Jim for his prepared remarks.

Executive
James Scapa

Thank you, Howard, and thank you all for joining our call today. We will talk about our quarterly results, our recent acquisitions of SIMSOLID and Datawatch, some customer stories and our outlook for the remainder of the year.

Our third quarter profitability exceeded expectations and we continue to move forward with excellent year-on-year growth. We had total revenue of $93.9 million, an increase of 11% from a year ago. We produced adjusted EBITDA of $9.5 million, which was nicely above the upper end of our guidance range.

Our quarterly revenue was impacted by exchange rate fluctuations and revenue recognition timing, which Howard will discuss later on the call.

Our software momentum continues to be strong with 17% year-to-date growth and our constant currency calculated billings grew 16% in Q3 and 13% on a year-to-date basis.

On October 17, we announced the acquisition of SIMSOLID, which we believe is truly game-changing technology, targeting designers and design engineers. Unlike traditional simulation software, SIMSOLID provides extremely fast, accurate and robust structural analysis without requiring geometry simplification, cleanup or meshing. Large and complex assemblies can be solved rapidly, even on laptop computers.

The SIMSOLID computational engine is a commercial implementation of novel and unpublished mathematics based on extensions to the theory of external approximations. We believe SIMSOLID is a revolutionary technological breakthrough, which will have a profound impact on product design. We also expect this technology can be extended to other physics regimes.

Since SIMSOLID's acquisitions just a few weeks ago, we've developed new training and marketing material, added HyperWorks units licensing and CAD readers and we are aggressively making the software ready for commercial release on January 1, 2019.

Since the announcement three weeks ago at our conference in Paris, the excitement around this technology is palpable. We've had almost 900,000 views of our introductory video and more than 1.5 million social media impressions. Registration exceeded 2,000 for yesterday's introductory webinar and there have been almost 2,000 downloads of the free trial version. These are big numbers.

We believe SIMSOLID will deliver meaningful new revenue for Altair over the next 3 years