Altair Engineering (ALTR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $148.8 million, up 5.4%–5% year-over-year, with software revenue at $135.4 million, up 8.1%–10.6% in constant currency, both exceeding guidance.

• Net loss for Q2 2024 was $5.1 million, a significant improvement from $22.3 million in Q2 2023, driven by higher gross profit and lower tax expense.

• Adjusted EBITDA was $17.3 million, above the midpoint of guidance and up 1.7% year-over-year.

• Major product enhancements and acquisitions, including HyperWorks 2024, Metrics Design Automation, Cambridge Semantics, and Research in Flight, expanded analytics and simulation capabilities.

• Strong performance across technologies and verticals, especially aerospace and defense, with the largest deal ever signed.

Financial highlights

• Calculated total billings were $154.5 million, up 4.5%–7.1% year-over-year in constant currency.

• Non-GAAP gross margin rose to 80.9%, with GAAP gross margin at 79%–79.5%.

• Free cash flow for the first half was $97.0 million, up 16.8%–17% year-over-year; Q2 free cash flow was $26.3 million.

• Ended Q2 with $507.0 million in cash and cash equivalents; no outstanding borrowings under the $200 million credit facility.

• GAAP operating expenses were $128.2 million, non-GAAP operating expenses were $105.3 million, reflecting investments in product and sales.

Outlook and guidance

• Q3 software revenue expected at $130–$133 million, up 9.2%–11.7% year-over-year.

• Full-year 2024 software revenue guidance raised to $590–$600 million, up 7.3%–9.1%.

• Q3 total revenue expected at $145–$148 million, up 8.2%–10.4% year-over-year.

• Full-year total revenue outlook adjusted to $648–$658 million, up 5.8%–7.5%.

• Adjusted EBITDA for 2024 guided to $136–$144 million; free cash flow expected at $122–$130 million.