TROY, Mich., Feb. 28, 2019 (GLOBE NEWSWIRE) -- Altair (Nasdaq:ALTR), a global technology company providing solutions in product development, high-performance computing and data intelligence, today released its financial results for the fourth quarter and full year ended December 31, 2018.
“Altair delivered better than expected revenue and profitability in the fourth quarter, capping a very strong year for the company,” said James Scapa, founder, chairman and chief executive officer. “We believe our strong performance across the business reflects the market’s growing recognition that our modeling, visualization and solver solutions bring significant value to the product design process.”
“The recent expansion into the data intelligence market through the Datawatch acquisition has further expanded our market opportunity and Altair’s value proposition. We believe the convergence of data and simulation in the coming years will provide new growth opportunities. In addition, we are incredibly excited by the opportunity with SimSolid, which represents a major step forward in generating fast and highly accurate design simulations. Altair enters 2019 with significant momentum, and we believe we are uniquely positioned to deliver another year of strong revenue growth and expanding profitability.”
Note: We adopted ASC 606 on January 1, 2018, which impacted our financial results. The year ended December 31, 2018 has been reported under ASC 606. The year ended December 31, 2017 has been reported under ASC 605 and has not been adjusted under the modified retrospective approach. For ease of comparison, in the commentary below all amounts used to calculate differences between 2017 and 2018 results are reported under ASC 605, unless otherwise indicated.
Fourth Quarter 2018 Financial Highlights under ASC 606
- Software product revenue was $79.9 million.
- Total revenue was $103.0 million.
- Net loss was $(10.8) million. The fourth quarter of 2018 included non-cash stock-based compensation expenses of $2.1 million. Diluted net loss per share was $(0.15), based on 70.5 million diluted weighted average common shares outstanding.
- Adjusted EBITDA was $12.9 million. Adjusted EBITDA represents net income (loss) adjusted for income tax expense, interest expense, interest income and other, depreciation and amortization, stock-based compensation expense, restructuring charges, asset impairment charges and other special items as determined by management.
- Non-GAAP net income was $4.0 million. Non-GAAP diluted net income per share was $0.05, based on 77.7 million non-GAAP diluted common shares outstanding. Non-GAAP net income excludes stock-based compensation, amortization of intangible assets related to acquisitions, non-recurring adjustments, and certain tax adjustments.
- Cash flow metrics are not impacted by our adoption of 606 and we can compare them to the same period in 2017. Cash flow from operations was an outflow of $(4.2) million, compared to an outflow of $(1.4) million for the fourth quarter of 2017.
- Free cash flow, which consists of cash flow from operations less capital expenditures, was an outflow of $(5.5) million compared to an outflow of $(4.5) million for the fourth quarter of 2017.
For Reference, we compare Fourth Quarter 2018 Financial Highlights under ASC 605 (as if previous revenue recognition guidance was in effect) to those in Fourth Quarter 2017
- Software product revenue was $80.8 million, an increase of 19% from $67.9 million for the fourth quarter of 2017.
- Total revenue was $103.9 million, an increase of 16% from $89.9 million for the fourth quarter of 2017.
- Net loss was $(9.8) million, compared to net loss of $(60.3) million for the fourth quarter of 2017. The fourth quarter of 2018 included non-cash stock-based compensation expenses of $2.1 million, while the fourth quarter of 2017 included non-cash stock-based compensation expenses of $8.0 million. In addition, $56.6 million in tax expenses were recognized in the fourth quarter on 2017, substantially due to the recording of a valuation allowance on U.S. deferred tax assets based, in part, upon the actual or potential exercise value tax benefit of non-qualified stock options in the U.S., and to a lesser degree as a result of recent tax law changes. Diluted net loss per share was $(0.14), based on 70.5 million diluted weighted average common shares outstanding, compared to diluted net loss per share of $(1.03) for the fourth quarter of 2017, based on 58.7 million diluted weighted average common shares outstanding.
- Adjusted EBITDA was $14.1 million, compared to $8.4 million for the fourth quarter of 2017.
- Non-GAAP net income was $5.0 million, compared to $12.6 million for the fourth quarter of 2017. Non-GAAP diluted net income per share was $0.06, based on 77.7 million non-GAAP diluted common shares outstanding, compared to non-GAAP diluted net income per share of $0.18 for the fourth quarter of 2017, based on 68.2 million non-GAAP diluted common shares outstanding.
Full Year 2018 Financial Highlights under ASC 606
- Software product revenue was $304.4 million.
- Total revenue was $396.4 million.
- Net Income was $13.7 million. The full year of 2018 included non-cash stock-based compensation expenses of $3.3 million. Diluted net income per share was $0.18, based on 74.9 million diluted weighted average common shares outstanding.
- Adjusted EBITDA was $50.2 million. Adjusted EBITDA represents net income (loss) adjusted for income tax expense, interest expense, interest income and other, depreciation and amortization, stock-based compensation expense, restructuring charges, asset impairment charges and other special items as determined by management.
- Non-GAAP net income was $31.6 million. Non-GAAP diluted net income per share was $0.41, based on 77.7 million non-GAAP diluted common shares outstanding. Non-GAAP net income excludes stock-based compensation, amortization of intangible assets related to acquisitions, non-recurring adjustments, and certain tax adjustments.
- Cash flow from operations was $36.2 million, compared to $16.1 million for 2017.
- Free cash flow, which consists of cash flow from operations less capital expenditures, was $29.6 million, compared to $8.6 million for 2017.
For Reference, we compare Full Year 2018 Financial Highlights under ASC 605 (as if previous revenue recognition guidance was in effect) to Full Year 2017
- Software product revenue was $293.0 million, an increase of 20% from $244.8 million for 2017.
- Total revenue was $385.1 million, an increase of 16% from $333.3 million for 2017.
- Net income was $2.9 million, compared to net loss of $(99.4) million for 2017. 2018 included the impact of $3.3 million in non-cash stock-based compensation expenses, while 2017 included the impact of $47.3 million in non-cash stock-based compensation expenses, as well as $63.0 million in tax expenses. Diluted net income per share was $0.04, based on 74.9 million diluted weighted average common shares outstanding, compared to diluted net loss per share of $(1.89) for 2017, based on 52.5 million diluted weighted average common shares outstanding.
- Adjusted EBITDA was $38.5 million, an increase of 71% from $22.5 million for 2017.
- Non-GAAP net income was $20.8 million, compared to $16.1 million for 2017. Non-GAAP net income per share was $0.27, based on 77.7 million diluted weighted average common shares outstanding, compared to $0.26 for 2017, based on 62.6 million diluted weighted average common shares outstanding.
Business Outlook under ASC 606
Based on information available as of today, Altair is issuing guidance for the first quarter and full year 2019 under the ASC 606 standard as indicated below.
| First Quarter 2019 | Full Year 2019 | |||||||||
| Software Product Revenue | $99.0 | to | $101.0 | $373.0 | to | $377.0 | ||||
| Non-GAAP Software Product Revenue | $101.2 | $103.2 | $382.0 | $386.0 | ||||||
| Total Revenue | $123.0 | $125.0 | $470.0 | $474.0 | ||||||
| Non-GAAP Total Revenue | $125.2 | $127.2 | $479.0 | $483.0 | ||||||
| Net Income | $10.5 | $12.5 | $18.0 | $22.0 | ||||||
| Adjusted EBITDA | $23.0 | $25.0 | $61.0 | $65.0 | ||||||
| Non-GAAP Net Income | $15.8 | $17.8 | $40.2 | $44.2 | ||||||
(All figures in millions)
Conference Call Information
| What: | Altair Fourth Quarter and Full Year 2018 Financial Results Conference Call |
| When: | Thursday, February 28, 2019 |
| Time: | 4:30 p.m. EST |
| Live Call: | (866) 754-5204, domestic |
| (636) 812-6621, international | |
| Replay: | (855) 859-2056, passcode 2093538, domestic |
| (404) 537-3406, passcode 2093538, international | |
| Webcast: | http://investor.altair.com (live & replay) |
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: Adjusted EBITDA, Non-GAAP Net Income, Non-GAAP Net Income Per Share and Free Cash Flow.
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.
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 technology company that provides software and cloud solutions in the areas of product design and development, high-performance computing (HPC) and data intelligence. Altair enables organizations across broad industry segments to compete more effectively in a connected world while creating a 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, statements regarding our business outlook, statements regarding the comparative business outlook under ASC 605, potential growth, potential impact of the SimSolid and Datawatch transactions and expanded product offerings, 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 forward-looking statements due to a number of factors, including but not limited to, 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.
Investor Relations
Brian Denyeau
ICR
248-614-2400 ext. 346
ir@altair.com
Media Relations
Dave Simon
Altair
248-614-2400 ext. 332
pr@altair.com
| Altair Engineering Inc. and Subsidiaries | ||||||
| Consolidated Balance Sheets | ||||||
| December 31, 2018 | December 31, 2017 | |||||
| (In thousands, except per share data) | ||||||
| ASSETS | ||||||
| CURRENT ASSETS: | ||||||
| Cash and cash equivalents | $ | 35,345 | $ | 39,213 | ||
| Accounts receivable, net | 96,803 | 86,635 | ||||
| Inventory, net | 1,964 | 1,980 | ||||
| Income tax receivable | 4,431 | 6,054 | ||||
| Prepaid expenses and other current assets | 15,491 | 10,006 | ||||
| Total current assets | 154,034 | 143,888 | ||||
| Property and equipment, net | 30,153 | 31,446 | ||||
| Goodwill | 210,532 | 62,706 | ||||
| Other intangible assets, net | 69,836 | 24,461 | ||||
| Deferred tax assets | 1,373 | 8,351 | ||||
| Other long-term assets | 17,288 | 17,019 | ||||
| TOTAL ASSETS | $ | 483,216 | $ | 287,871 | ||
| LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY | ||||||
| CURRENT LIABILITIES: | ||||||
| Current portion of long-term debt | $ | 331 | $ | 232 | ||
| Accounts payable | 8,357 | 4,880 | ||||
| Accrued compensation and benefits | 31,740 | 26,560 | ||||
| Obligations for acquisition of businesses | 1,218 | 13,925 | ||||
| Other accrued expenses and current liabilities | 26,347 | 21,744 | ||||
| Deferred revenue | 59,765 | 130,122 | ||||
| Total current liabilities | 127,758 | 197,463 | ||||
| Long-term debt, net of current portion | 31,417 | 178 | ||||
| Deferred revenue, non-current | 6,754 | 9,640 | ||||
| Other long-term liabilities | 28,153 | 17,647 | ||||
| TOTAL LIABILITIES | 194,082 | 224,928 | ||||
| Commitments and contingencies | ||||||
| MEZZANINE EQUITY | 2,352 | 2,352 | ||||
| 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 38,349 and 26,725 shares as of December 31, 2018 and December 31, 2017, respectively | 4 | 2 | ||||
| Class B common stock, authorized 41,203 shares, issued and outstanding 32,171 and 36,508 shares as of December 31, 2018 and December 31, 2017, respectively | 3 | 4 | ||||
| Additional paid-in capital | 379,832 | 232,156 | ||||
| Accumulated deficit | (82,005) | (166,499) | ||||
| Accumulated other comprehensive loss | (11,052) | (5,072) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | 286,782 | 60,591 | ||||
| TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY | $ | 483,216 | $ | 287,871 | ||
| Altair Engineering Inc. and Subsidiaries | ||||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||
| (in thousands, except per share data) | 2018 606 | 2018 605 | 2017 605 | 2018 606 | 2018 605 | 2017 605 | ||||||||||||
| Revenue | ||||||||||||||||||
| Software | $ | 79,903 | $ | 80,786 | $ | 67,912 | 304,361 | $ | 293,044 | $ | 244,817 | |||||||
| Software related services | 10,073 | 10,073 | 9,648 | 36,945 | 36,945 | 35,397 | ||||||||||||
| Total software | 89,976 | 90,859 | 77,560 | 341,306 | 329,989 | 280,214 | ||||||||||||
| Client engineering services | 11,200 | 11,200 | 10,439 | 47,852 | 47,852 | 46,510 | ||||||||||||
| Other | 1,835 | 1,835 | 1,868 | 7,221 | 7,221 | 6,609 | ||||||||||||
| Total revenue | 103,011 | 103,894 | 89,867 | 396,379 | 385,062 | 333,333 | ||||||||||||
| Cost of revenue | ||||||||||||||||||
| Software* | 13,038 | 13,038 | 9,561 | 45,774 | 45,774 | 36,360 | ||||||||||||
| Software related services | 6,842 | 6,842 | 6,658 | 26,415 | 26,415 | 26,888 | ||||||||||||
| Total software | 19,880 | 19,880 | 16,219 | 72,189 | 72,189 | 63,248 | ||||||||||||
| Client engineering services | 9,002 | 9,002 | 8,931 | 38,979 | 38,979 | 38,131 | ||||||||||||
| Other | 1,389 | 1,389 | 1,467 | 4,805 | 4,805 | 5,212 | ||||||||||||
| Total cost of revenue | 30,271 | 30,271 | 26,617 | 115,973 | 115,973 | 106,591 | ||||||||||||
| Gross profit | 72,740 | 73,623 | 63,250 | 280,406 | 269,089 | 226,742 | ||||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development* | 25,844 | 25,844 | 24,036 | 97,592 | 97,592 | 93,234 | ||||||||||||
| Sales and marketing* | 22,427 | 22,178 | 21,275 | 80,277 | 80,613 | 79,958 | ||||||||||||
| General and administrative* | 28,114 | 28,114 | 21,514 | 79,751 | 79,751 | 87,979 | ||||||||||||
| Amortization of intangible assets | 2,076 | 2,076 | 2,161 | 7,739 | 7,739 | 5,448 | ||||||||||||
| Other operating income | (2,164) | (2,164) | (2,555) | (9,597) | (9,597) | (6,620) | ||||||||||||
| Total operating expenses | 76,297 | 76,048 | 66,431 | 255,762 | 256,098 | 259,999 | ||||||||||||
| Operating income (loss) | (3,557) | (2,425) | (3,181) | 24,644 | 12,991 | (33,257) | ||||||||||||
| Interest expense | 108 | 108 | 367 | 200 | 200 | 2,160 | ||||||||||||
| Other (income) expense, net | (534) | (534) | 156 | (2,580) | (2,580) | 994 | ||||||||||||
| Income (loss) before income taxes | (3,131) | (1,999) | (3,704) | 27,024 | 15,371 | (36,411) | ||||||||||||
| Income tax expense | 7,692 | 7,843 | 56,643 | 13,309 | 12,472 | 62,996 | ||||||||||||
| Net income (loss) | $ | (10,823) | $ | (9,842) | $ | (60,347) | $ | 13,715 | $ | 2,899 | $ | (99,407) | ||||||
| Income (loss) per share: | ||||||||||||||||||
| Net income (loss) per share attributable to common stockholders, basic | $ | (0.15) | $ | (0.14) | $ | (1.03) | $ | 0.20 | $ | 0.04 | $ | (1.89) | ||||||
| Net income (loss) per share attributable to common stockholders, diluted | $ | (0.15) | $ | (0.14) | $ | (1.03) | $ | 0.18 | $ | 0.04 | $ | (1.89) | ||||||
| Weighted average shares outstanding: | ||||||||||||||||||
| Weighted average number of shares used in computing net income (loss) per share, basic | 70,548 | 70,548 | 58,674 | 67,468 | 67,468 | 52,466 | ||||||||||||
| Weighted average number of shares used in computing net income (loss) per share, diluted | 70,548 | 70,548 | 58,674 | 74,878 | 74,878 | 52,466 | ||||||||||||
The year ended December 31, 2018 has been reported under ASC 606, and the year ended December 31, 2017 has been reported under ASC 605 and has not been adjusted under the modified retrospective approach.
| *Amounts include stock-based compensation expense as follows (in thousands): | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||
| Cost of revenue – software | $ | 7 | $ | 8 | $ | 31 | $ | 350 | ||||
| Research and development | 410 | 2,045 | 740 | 12,540 | ||||||||
| Sales and marketing | 595 | 1,533 | 910 | 7,693 | ||||||||
| General and administrative | 1,114 | 4,393 | 1,658 | 26,698 | ||||||||
| Total stock-based compensation expense | $ | 2,126 | $ | 7,979 | $ | 3,339 | $ | 47,281 | ||||
| Altair Engineering Inc. and Subsidiaries | ||||||
| Consolidated Statements of Cash Flows | ||||||
| (Unaudited) | ||||||
| Twelve Months Ended December 31, | ||||||
| (In thousands) | 2018 | 2017 | ||||
| OPERATING ACTIVITIES: | ||||||
| Net income (loss) | $ | 13,715 | $ | (99,407) | ||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||
| Depreciation and amortization | 14,734 | 11,747 | ||||
| Provision for bad debt | 394 | 610 | ||||
| Stock-based compensation expense | 3,339 | 47,281 | ||||
| Gain on sale of assets held for sale and other | (4,503) | (244) | ||||
| Impairment of intangible assets | 608 | — | ||||
| Deferred income taxes | 763 | 52,571 | ||||
| Other, net | (183) | 542 | ||||
| Changes in assets and liabilities: | ||||||
| Accounts receivable | (1,394) | (10,397) | ||||
| Prepaid expenses and other current assets | 204 | 1,559 | ||||
| Other long-term assets | (1,660) | (11,288) | ||||
| Accounts payable | 1,647 | (1,087) | ||||
| Accrued compensation and benefits | 5,678 | 2,060 | ||||
| Other accrued expenses and current liabilities | (6,667) | 6,207 | ||||
| Deferred revenue | 9,555 | 15,937 | ||||
| Net cash provided by operating activities | 36,230 | 16,091 | ||||
| INVESTING ACTIVITIES: | ||||||
| Payments for acquisition of businesses, net of cash acquired | (203,438) | (15,582) | ||||
| Capital expenditures | (6,659) | (7,522) | ||||
| Proceeds from sale of assets held for sale and other | 6,614 | 446 | ||||
| Payments for acquisition of developed technology | (2,727) | (2,120) | ||||
| Other investing activities, net | — | (73) | ||||
| Net cash used in investing activities | (206,210) | (24,851) | ||||
| FINANCING ACTIVITIES: | ||||||
| Proceeds from issuance of Class A common stock in follow-on public offering, net of underwriters' discounts and commissions | 135,572 | — | ||||
| Borrowings under revolving commitment | 37,041 | 126,832 | ||||
| Payments on revolving commitment | (6,091) | (154,187) | ||||
| Proceeds form issuance of common stock | 2,077 | 1,792 | ||||
| Payments for follow-on public offering and IPO offering costs | (556) | (4,644) | ||||
| Principal payments on long-term debt | (126) | (59,869) | ||||
| Payments for redemption of common stock | (119) | (1,045) | ||||
| Proceeds from issuance of Class A common stock in initial public offering, net of underwriters' commissions | — | 119,268 | ||||
| Proceeds from issuance of debt | — | 1,541 | ||||
| Other financing activities | (268) | (130) | ||||
| Net cash provided by financing activities | 167,530 | 29,558 | ||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,443) | 1,641 | ||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (3,893) | 22,439 | ||||
| Cash, cash equivalents and restricted cash at beginning of year | 39,578 | 17,139 | ||||
| Cash, cash equivalents and restricted cash at end of period | $ | 35,685 | $ | 39,578 | ||
| Supplemental disclosure of cash flow: | ||||||
| Interest paid | $ | 223 | $ | 2,092 | ||
| Income taxes paid | $ | 6,735 | $ | 5,893 | ||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||
| Issuance of common stock in connection with acquisitions | $ | 8,681 | $ | 8,712 | ||
| Promissory notes issued and deferred payment obligations for acquisitions | $ | 1,729 | $ | 12,352 | ||
| Capital leases | $ | 895 | $ | 124 | ||
| Property and equipment in accounts payable | $ | 330 | $ | 582 | ||
| Issuance of common stock with put rights | $ | - | $ | 2,352 | ||
| Initial public offering costs in other long-term assets | $ | - | $ | 186 | ||
| The following table presents the effect of the adoption of ASC 606 on the consolidated statement of operations (in thousands): | ||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||
| (in thousands, except per share data) | As Reported 606 | Adjustments for ASC 606 | ASC 605 | As Reported 606 | Adjustments for ASC 606 | ASC 605 | ||||||||||||
| Revenue | ||||||||||||||||||
| Software | $ | 79,903 | $ | 883 | $ | 80,786 | $ | 304,361 | $ | (11,317) | $ | 293,044 | ||||||
| Total software | 89,976 | 883 | 90,859 | 341,306 | (11,317) | 329,989 | ||||||||||||
| Total revenue | 103,011 | 883 | 103,894 | 396,379 | (11,317) | 385,062 | ||||||||||||
| Gross profit | 72,740 | 883 | 73,623 | 280,406 | (11,317) | 269,089 | ||||||||||||
| Operating expenses: | ||||||||||||||||||
| Sales and marketing* | 22,427 | (249) | 22,178 | 80,277 | 336 | 80,613 | ||||||||||||
| Total operating expenses | 76,297 | (249) | 76,048 | 255,762 | 336 | 256,098 | ||||||||||||
| Operating income (loss) | (3,557) | 1,132 | (2,425) | 24,644 | (11,653) | 12,991 | ||||||||||||
| Income (loss) before income taxes | (3,131) | 1,132 | (1,999) | 27,024 | (11,653) | 15,371 | ||||||||||||
| Income tax expense | 7,692 | 151 | 7,843 | 13,309 | (837) | 12,472 | ||||||||||||
| Net income (loss) | $ | (10,823) | $ | 981 | $ | (9,842) | $ | 13,715 | $ | (10,816) | $ | 2,899 | ||||||
| Income (loss) per share: | ||||||||||||||||||
| Net income (loss) per share attributable to common stockholders, basic | (0.15) | 0.01 | (0.14) | 0.20 | (0.16) | 0.04 | ||||||||||||
| Net income (loss) per share attributable to common stockholders, diluted | (0.15) | 0.01 | (0.14) | 0.18 | (0.14) | 0.04 | ||||||||||||
| The following table provides a reconciliation of Non-GAAP net income and Non-GAAP diluted income per share to net income (loss) and income (loss) per share - diluted, the most comparable GAAP financial measures (in thousands, except per share amounts): | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||
| 2018 606 | 2018 605 | 2017 605 | 2018 606 | 2018 605 | 2017 605 | |||||||||||||||
| Net income (loss) | $ | (10,823) | $ | (9,842) | $ | (60,347) | $ | 13,715 | $ | 2,899 | $ | (99,407) | ||||||||
| Stock-based compensation expense | 2,126 | 2,126 | 7,979 | 3,339 | 3,339 | 47,281 | ||||||||||||||
| Amortization of intangible assets | 2,076 | 2,076 | 2,161 | 7,739 | 7,739 | 5,448 | ||||||||||||||
| Non-recurring adjustments | 10,627 | 10,627 | 47,429 | 6,837 | 6,837 | 47,429 | ||||||||||||||
| Income tax effect of non-GAAP adjustments* | - | - | 15,366 | - | - | 15,366 | ||||||||||||||
| Non-GAAP net income | $ | 4,006 | $ | 4,987 | $ | 12,588 | $ | 31,630 | $ | 20,814 | $ | 16,117 | ||||||||
| Income (loss) per share - diluted | $ | (0.15) | $ | (0.14) | $ | (1.03) | $ | 0.18 | $ | 0.04 | $ | (1.89) | ||||||||
| Non-GAAP income per share - diluted | $ | 0.05 | $ | 0.06 | $ | 0.18 | $ | 0.41 | $ | 0.27 | $ | 0.26 | ||||||||
| GAAP diluted shares outstanding: | ||||||||||||||||||||
| Weighted average number of shares used in computing net income (loss) per share, diluted | 70,548 | 70,548 | 58,674 | 74,878 | 74,878 | 52,466 | ||||||||||||||
| Non-GAAP diluted shares outstanding: | ||||||||||||||||||||
| Number of shares used in computing net income per share, diluted | 77,700 | 77,700 | 68,156 | 77,700 | 77,700 | 62,632 | ||||||||||||||
| * | The income tax effect of non-GAAP adjustments for 2018 is affected by the U.S. valuation allowance. | |||||||||||||||||||
| The following table provides a reconciliation of Adjusted EBITDA to net income (loss), the most comparable GAAP financial measure (in thousands): | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||
| 2018 606 | 2018 605 | 2017 605 | 2018 606 | 2018 605 | 2017 605 | ||||||||||||||
| Net income (loss) | $ | (10,823) | $ | (9,842) | $ | (60,347) | $ | 13,715 | $ | 2,899 | $ | (99,407) | |||||||
| Income tax expense | 7,692 | 7,843 | 56,643 | 13,309 | 12,472 | 62,996 | |||||||||||||
| Stock-based compensation expense | 2,126 | 2,126 | 7,979 | 3,339 | 3,339 | 47,281 | |||||||||||||
| Interest expense | 108 | 108 | 367 | 200 | 200 | 2,160 | |||||||||||||
| Interest income and other(1) | 9,986 | 9,986 | (76) | 4,882 | 4,882 | (2,260) | |||||||||||||
| Depreciation and amortization | 3,839 | 3,839 | 3,852 | 14,734 | 14,734 | 11,747 | |||||||||||||
| Adjusted EBITDA | $ | 12,928 | $ | 14,060 | $ | 8,418 | $ | 50,180 | $ | 38,527 | $ | 22,517 | |||||||
| (1) | Includes for the year ended December 31, 2018 a) nonrecurring costs from the acquisition of Datawatch of $10.4 million, b) gain on the sale of a building of $4.4 million, c) impairment charges for royalty contracts and trade names resulting in $2.8 million of expense. Includes for the years ended December 31, 2018 and 2017, a non-recurring adjustment for a change in estimated legal expenses resulting in $2.0 million of income in each year. | ||||||||||||||||||
| The following table provides a reconciliation of Free Cash Flow to net cash provided by operating activities, the most comparable GAAP financial measure (in thousands): | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||
| Net cash (used in) provided by operating activities | $ | (4,192) | $ | (1,364) | $ | 36,230 | $ | 16,091 | ||||
| Capital expenditures | (1,326) | (3,155) | (6,659) | (7,522) | ||||||||
| Free cash flow | $ | (5,518) | $ | (4,519) | $ | 29,571 | $ | 8,569 | ||||
| The following table provides a reconciliation of Non-GAAP Total Revenue to Total Revenue, the most comparable GAAP financial measure (in millions): | ||||||||||||
| (Unaudited) | ||||||||||||
| Three months ending | Year ending | |||||||||||
| March 31, 2019 | December 31, 2019 | |||||||||||
| low | high | low | high | |||||||||
| Total Revenue (GAAP) | $ | 123.0 | $ | 125.0 | $ | 470.0 | $ | 474.0 | ||||
| Software licenses deferred revenue fair value adjustment (1) | 2.2 | 2.2 | 9.0 | 9.0 | ||||||||
| Non-GAAP Total Revenue | $ | 125.2 | $ | 127.2 | $ | 479.0 | $ | 483.0 | ||||
| (1) Adjustment for revenue impact of the Datawatch deferred revenue purchase accounting haircut required by U.S. GAAP | ||||||||||||
| The following table provides a reconciliation of Non-GAAP Software Product Revenue to Total Software Product Revenue, the most comparable GAAP financial measure (in millions): | ||||||||||||
| (Unaudited) | ||||||||||||
| Three months ending | Year ending | |||||||||||
| March 31, 2019 | December 31, 2019 | |||||||||||
| low | high | low | high | |||||||||
| Total Software Product Revenue (GAAP) | $ | 99.0 | $ | 101.0 | $ | 373.0 | $ | 377.0 | ||||
| Software licenses deferred revenue fair value adjustment (1) | 2.2 | 2.2 | 9.0 | 9.0 | ||||||||
| Non-GAAP Total Software Product Revenue | $ | 101.2 | $ | 103.2 | $ | 382.0 | $ | 386.0 | ||||
| (1) Adjustment for revenue impact of the Datawatch deferred revenue purchase accounting haircut required by U.S. GAAP | ||||||||||||
| The following table provides a reconciliation of projected net income to projected Non-GAAP net income, the most comparable GAAP financial measure (in thousands): | ||||||||||||
| (Unaudited) | ||||||||||||
| Three months ending | Year ending | |||||||||||
| March 31, 2019 | December 31, 2019 | |||||||||||
| low | high | low | high | |||||||||
| Net income | $ | 10,500 | $ | 12,500 | $ | 18,000 | $ | 22,000 | ||||
| Stock-based compensation expense | 1,500 | 1,500 | 7,000 | 7,000 | ||||||||
| Amortization of intangible assets | 3,800 | 3,800 | 15,200 | 15,200 | ||||||||
| Non-GAAP net income | $ | 15,800 | $ | 17,800 | $ | 40,200 | $ | 44,200 | ||||
| The following table provides a reconciliation of projected Adjusted EBITDA to projected net income, the most comparable GAAP financial measure (in thousands): | ||||||||||||
| (Unaudited) | ||||||||||||
| Three months ending | Year ending | |||||||||||
| March 31, 2019 | December 31, 2019 | |||||||||||
| low | high | low | high | |||||||||
| Net income | $ | 10,500 | $ | 12,500 | $ | 18,000 | $ | 22,000 | ||||
| Income tax expense | 2,500 | 2,500 | 3,900 | 3,900 | ||||||||
| Stock-based compensation expense | 1,500 | 1,500 | 7,000 | 7,000 | ||||||||
| Interest expense | - | - | - | - | ||||||||
| Depreciation and amortization | 5,600 | 5,600 | 22,200 | 22,200 | ||||||||
| Interest income and other non-recurring adjustments | 700 | 700 | 900 | 900 | ||||||||
| Software licenses deferred revenue fair value adjustment (1) | 2,200 | 2,200 | 9,000 | 9,000 | ||||||||
| Adjusted EBITDA | $ | 23,000 | $ | 25,000 | $ | 61,000 | $ | 65,000 | ||||
| (1) Adjustment for revenue impact of the Datawatch deferred revenue purchase accounting haircut required by U.S. GAAP | ||||||||||||