Breaking Down Altair Engineering Inc. (ALTR) Financial Health: Key Insights for Investors

Are you tracking Altair Engineering Inc. (ALTR) and trying to decode its financial performance? Did you know that in 2024, Altair's software revenue reached $611.9 million, marking an 11.3% increase from 2023? But what does this growth really mean for investors, especially with a pending merger with Siemens Industry Software Inc.? Let’s delve into the key financial insights from 2024, including a total revenue of $665.8 million, a net income of $14.2 million, and an adjusted EBITDA of $149.9 million, to help you make informed decisions.

Altair Engineering Inc. (ALTR) Revenue Analysis

Understanding Altair Engineering Inc.'s revenue streams involves examining its primary sources, growth rates, segment contributions, and any significant shifts. This analysis provides key insights into the company's financial health and strategic direction.

Altair Engineering Inc. generates revenue from several key areas:

• Software: This includes revenue from the company's simulation, high-performance computing (HPC), and data analytics software.
• Services: Altair offers a range of services, including consulting, training, and support related to its software offerings.
• Geographic Regions: Revenue can be broken down by different geographic regions, such as North America, Europe, and Asia-Pacific.

Analyzing Altair's year-over-year revenue growth rate provides insights into its performance trends. For example, examining the historical data to see percentage increases or decreases in revenue helps to understand the company’s growth trajectory. In the 2024 fiscal year, Altair reported total revenue of $635.8 million, representing a 12.9% increase compared to the $563.6 million in 2023. Software revenue specifically grew 13.5% year-over-year. This growth indicates strong demand for Altair's solutions across various industries.

The contribution of different business segments to overall revenue is also crucial. The breakdown helps investors understand which areas are driving growth and which may need improvement. In 2024, software revenue constituted a significant portion of the total, with services contributing the remainder. Understanding the specific percentages can highlight the company's reliance on its core software products versus its service offerings.

Significant changes in revenue streams should be carefully analyzed to understand their impact on the company's financial performance. This could include new product launches, changes in pricing models, or shifts in customer demand. Reviewing Altair's financial reports and investor presentations can provide insights into these changes.

Here's a summary of Altair's revenue performance:

For more insights into Altair Engineering Inc.'s investor profile, consider reading: Exploring Altair Engineering Inc. (ALTR) Investor Profile: Who’s Buying and Why?

Altair Engineering Inc. (ALTR) Profitability Metrics

Assessing the financial health of Altair Engineering Inc. (ALTR) requires a close examination of its profitability metrics. These metrics provide insights into the company's ability to generate profits from its revenue and manage its operational costs effectively. Key profitability measures include gross profit margin, operating profit margin, and net profit margin.

Here's a detailed look into ALTR's profitability:

• Gross Profit Margin: This ratio indicates the percentage of revenue remaining after deducting the cost of goods sold (COGS). A higher gross profit margin suggests that a company is efficient in converting revenue into profit.

Altair Engineering's gross profit margin has shown consistent improvement over the past five years. According to Finbox, the gross profit margin for Altair Engineering Inc. (ALTR) is impressive:

• The latest twelve months gross profit margin is 81.3%.
• The gross profit margin for fiscal years ending December 2020 to 2024 averaged 77.9%.
• The gross profit margin peaked in December 2024 at 81.3%.
• The gross profit margin hit its 5-year low in December 2020 of 74.2%.
• The gross profit margin increased in each of the last 5 fiscal years from 74.2% in 2020 to 81.3% in 2024.

Macrotrends reports Altair Engineering's gross profit for the twelve months ending December 31, 2024, was $0.541B, a 10.2% increase year-over-year.

The historical data trend for Altair Engineering's Gross Margin % can be seen below:

• Minimum: 66.27
• Median: 72.65
• Maximum: 81.26
• Current: 81.26

Altair Engineering had a gross margin of 82.67% for the quarter that ended in Dec. 2024.

Altair Engineering's latest twelve months EBITDA margin is 9.1%. Looking back at the last 5 years, Altair Engineering's EBITDA margin peaked in December 2024 at 9.1%.

For the full year 2024, Altair Engineering Inc reported a total revenue of $665.8 million. The company also transitioned from a net loss of $(8.9) million in 2023 to a net income of $14.2 million in 2024.

While the gross profit margin illustrates the direct profitability of products, operating profit margin incorporates operating expenses, providing a more comprehensive view of profitability.

Net profit margin is a critical metric that shows the percentage of revenue that remains as profit after all expenses, including taxes and interest, are accounted for.

• For Q4 2024, the net income was $1.0 million, a significant decrease from $19.7 million in the same quarter of 2023. The net income per share, diluted, was $0.01.
• The net income for the year was $14.2 million compared to a net loss of $(8.9) million for the full year of 2023, an improvement in earnings of $23.1 million.

Here’s a look at the net profit margin averages:

• Altair Engineering average net profit margin for 2023 was -5.38%, a 14.87% decline.
• Altair Engineering average net profit margin for 2022 was -6.32%, a 422.31% decline from 2021.
• Altair Engineering average net profit margin for 2021 was -1.21%, a 64.72% increase from 2020.

Examining the trends in Altair Engineering Inc.'s profitability over time provides valuable insights into the company's performance. The company's management uses 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.

A comparison of Altair Engineering's profitability ratios with industry averages helps contextualize the company's performance. It reveals whether Altair Engineering Inc. is performing above or below its peers, offering insights into its competitive positioning.

Operational efficiency is critical for maintaining and improving profitability. Effective cost management and favorable gross margin trends can significantly impact a company's bottom line. In Q3 2024, gross profit increased to $121.435 million, up from $104.917 million in Q3 2023, driven by higher revenue and effective cost management.

To learn more about Altair Engineering Inc.'s mission, vision, and core values, check out: Mission Statement, Vision, & Core Values of Altair Engineering Inc. (ALTR).

Altair Engineering Inc. (ALTR) Debt vs. Equity Structure

Understanding how Altair Engineering Inc. (ALTR) finances its growth involves analyzing its debt levels, debt-to-equity ratio, and recent financing activities. This provides insights into the company's financial strategy and risk profile.

As of December 31, 2023, Altair Engineering Inc. (ALTR) reported the following debt figures:

• Total current liabilities: $229.1 million
• Total long-term liabilities: $393.9 million

These figures include various short-term obligations such as accounts payable, accrued expenses, and deferred revenue, as well as long-term debt and lease liabilities. These values are sourced directly from the company's balance sheet, providing a clear picture of its obligations.

The debt-to-equity ratio is a critical metric for assessing a company's financial leverage. As of the most recent data, Altair Engineering Inc.'s (ALTR) debt-to-equity ratio can be calculated using the total liabilities and total equity figures from its balance sheet. As of December 31, 2023, total equity was reported at $648.3 million. Using the total liabilities (current and long-term) of $623 million, the debt-to-equity ratio is approximately 0.96.

A debt-to-equity ratio of 0.96 indicates that Altair Engineering Inc. (ALTR) has nearly an equal amount of debt and equity financing. Whether this is high or low depends on industry standards and company-specific factors. Compared to software companies, which often have lower debt-to-equity ratios, a ratio of 0.96 might be considered moderate. This level suggests that Altair Engineering Inc. (ALTR) uses a balanced approach to funding its operations and growth.

Recent activities, such as debt issuances or refinancing, can significantly impact a company's financial structure. Reviewing Altair Engineering Inc.'s (ALTR) recent financial filings, including 10-K and 10-Q reports, would provide detailed information on any new debt, repayment schedules, and credit ratings. Unfortunately, I do not have specific information on recent debt issuances, credit ratings, or refinancing activities beyond the data provided in the 10-K report.

Altair Engineering Inc. (ALTR) strategically balances debt and equity to fund its operations and growth initiatives. While debt financing can provide capital for expansion and strategic investments, equity funding helps maintain a healthy balance sheet and reduces financial risk. The company's approach to balancing debt and equity reflects its overall financial strategy and risk tolerance.

For additional insights into Altair Engineering Inc.'s (ALTR) strategic direction, consider exploring: Mission Statement, Vision, & Core Values of Altair Engineering Inc. (ALTR).

Altair Engineering Inc. (ALTR) Liquidity and Solvency

Liquidity and solvency are crucial indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Altair Engineering Inc. (ALTR), assessing these metrics provides insights into its financial stability and risk profile.

Assessing Altair Engineering Inc.'s Liquidity:

Analyzing Altair Engineering Inc.'s liquidity involves examining its current and quick ratios, working capital trends, and cash flow statements. These metrics collectively paint a picture of the company's ability to cover its immediate liabilities.

• Current and Quick Ratios: These ratios measure a company's ability to pay off its short-term liabilities with its current assets. The current ratio includes all current assets, while the quick ratio excludes inventory, which is often less liquid.
• Analysis of Working Capital Trends: Working capital, calculated as current assets minus current liabilities, indicates a company's operational efficiency and short-term financial health. Monitoring changes in working capital provides insights into whether a company is becoming more or less efficient in managing its short-term resources.
• Cash Flow Statements Overview: A thorough examination of cash flow statements is essential to understand the trends in operating, investing, and financing activities, offering a clear view of how Altair Engineering Inc. generates and uses cash.

The cash flow statement is divided into three main sections:

• Operating Activities: This section reflects the cash generated or used from the company's core business operations. A positive cash flow from operations indicates that the company is generating sufficient cash from its business activities to cover its operating expenses.
• Investing Activities: This section includes cash flows related to the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E), and investments in other companies.
• Financing Activities: This section involves cash flows related to debt, equity, and dividends. It shows how the company raises capital and returns it to investors.

Analyzing these cash flow trends helps in understanding Altair Engineering Inc.'s financial strategy and its ability to fund its operations and growth.

Potential Liquidity Concerns or Strengths:

By evaluating the aforementioned metrics, investors can identify potential liquidity concerns or strengths for Altair Engineering Inc. Consistently strong cash flow from operations, healthy current and quick ratios, and positive working capital trends suggest a solid liquidity position. Conversely, declining ratios, negative cash flow from operations, or significant increases in short-term debt may signal potential liquidity issues.

Altair Engineering Inc. (ALTR) Valuation Analysis

Assessing whether Altair Engineering Inc. (ALTR) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. These factors, when considered together, provide a comprehensive view of the company's valuation.

Key valuation ratios to consider include:

• Price-to-Earnings (P/E) Ratio: This ratio compares the company's stock price to its earnings per share, indicating how much investors are willing to pay for each dollar of earnings.
• Price-to-Book (P/B) Ratio: This ratio compares the company's market capitalization to its book value of equity, reflecting how much investors are paying for the net assets of the company.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares the company's enterprise value (market capitalization plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization, providing a valuation measure that is independent of capital structure and accounting practices.

Currently, detailed, real-time P/E, P/B, and EV/EBITDA ratios for Altair Engineering Inc. are not available in the search results. For the most up-to-date figures, refer to financial websites such as Yahoo Finance, Bloomberg, or reputable financial analysis platforms.

Analyzing Altair Engineering Inc.'s stock price trends over the past 12 months offers insights into market sentiment and investor confidence. Recent data indicates:

• On April 18, 2025, ALTR's stock closed at $63.98, marking a 0.41% decrease from the previous day.
• The stock has shown considerable volatility, with its 52-week range spanning from $42.28 to $68.93.

This volatility suggests a dynamic market perception of the stock, influenced by factors such as earnings reports, industry trends, and broader economic conditions.

As of now, Altair Engineering Inc. does not offer a dividend. Therefore, dividend yield and payout ratios are not applicable.

Analyst consensus is a crucial indicator of stock valuation. According to the available data:

• The consensus among analysts is to Hold the stock.
• The average price target is $63.50.
• Price targets range from a high of $75.00 to a low of $53.00.

These ratings and price targets reflect analysts' expectations for the stock's future performance, based on their assessment of the company's financial health, growth prospects, and competitive positioning.

Here is a summary of analyst ratings for Altair Engineering Inc.:

Overall, the valuation of Altair Engineering Inc. appears balanced, with the stock trading near its average price target and a consensus Hold rating from analysts. However, investors should conduct their own due diligence and consider their individual investment objectives and risk tolerance before making any investment decisions.

For more insights, check out: Breaking Down Altair Engineering Inc. (ALTR) Financial Health: Key Insights for Investors

Altair Engineering Inc. (ALTR) Risk Factors

Understanding the risks facing Altair Engineering Inc. (ALTR) is crucial for investors. These risks can stem from both internal and external factors, influencing the company's financial stability and future prospects. Key areas of concern include industry competition, regulatory changes, and overall market conditions.

Here’s a detailed look at some of the significant risks:

• Intense Industry Competition: The software industry is highly competitive. Altair faces competition from both large, established companies and smaller, emerging players. This competition can put pressure on pricing and market share.
• Rapid Technological Changes: The pace of technological advancement requires continuous innovation and adaptation. Failure to keep up with new technologies could render Altair's products and services obsolete.
• Dependence on Key Personnel: The company's success depends significantly on its key management and technical personnel. Losing key employees could adversely affect operations and strategic direction.
• Security Threats: Like all software companies, Altair Engineering Inc. faces constant cybersecurity threats, including potential data breaches and intellectual property theft.
• Global Economic Conditions: Economic downturns in key markets could reduce demand for Altair's products and services, impacting revenue and profitability.

To give a clearer picture of the financial risks, consider the following overview based on recent financial data. Note that actual figures may vary as financial reports are updated.

Understanding these risks is essential for investors. For more in-depth analysis, read the full article here: Breaking Down Altair Engineering Inc. (ALTR) Financial Health: Key Insights for Investors.

Altair Engineering Inc. (ALTR) Growth Opportunities

Altair Engineering Inc. (ALTR) demonstrates strong future growth potential driven by several key factors. These include ongoing product innovations, strategic market expansions, well-planned acquisitions, and significant partnerships.

Key growth drivers for Altair include:

• Product Innovations: Continuous development and enhancement of their simulation and AI-driven solutions.
• Market Expansions: Targeting growth in various sectors, including automotive, aerospace, and high-tech industries.
• Acquisitions: Strategic acquisitions to broaden their technology portfolio and market reach.

For fiscal year 2024, analysts predict robust revenue growth for Altair. While specific earnings estimates vary among analysts, the general consensus points towards a positive trajectory, supported by increased adoption of their software and services.

Strategic initiatives and partnerships expected to fuel future growth include:

• AI and Machine Learning Integrations: Expanding the use of AI and machine learning within their simulation tools to offer more advanced and predictive analytics.
• Cloud Solutions: Enhancing their cloud-based offerings to provide scalable and accessible solutions for a wider range of customers.
• Strategic Partnerships: Collaborating with industry leaders and technology providers to integrate and expand their solutions.

Altair's competitive advantages that position the company for sustained growth are:

• Comprehensive Solutions: Offering a broad suite of simulation, high-performance computing, and AI-driven solutions.
• Industry Expertise: Deep understanding of the engineering and manufacturing sectors, allowing them to tailor solutions to specific industry needs.
• Strong Customer Relationships: Building long-term relationships with key customers, fostering repeat business and providing a stable revenue base.

Here's a look at potential future revenue projections based on available data and growth forecasts:

These projections suggest a continued upward trend in both revenue and earnings, reflecting Altair's strategic focus and market position.

Read more about Altair Engineering Inc.'s financial health: Breaking Down Altair Engineering Inc. (ALTR) Financial Health: Key Insights for Investors