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

If you are looking at Altair Engineering Inc. (ALTR) today, November 2025, the most critical financial health insight is simple: the company is no longer publicly traded, having been acquired by Siemens Industry Software Inc. on March 26, 2025, so your investment action is already decided. This acquisition, which resulted in the stock ceasing to trade on NASDAQ, came right as the company was projecting a strong 2025, with analyst consensus revenue forecasts hitting around $729.96 million and Earnings Per Share (EPS) expected to reach $1.46, up sharply from the prior year's reported net income of $14.2 million. That kind of growth and profitability turnaround is exactly what makes a company an attractive acquisition target, and it's why the discussion now shifts from a stock valuation to understanding the underlying computational science and AI assets that Siemens bought. We need to look at the last reported financials and the pre-deal projections to understand the true value that was unlocked, because the market's decision was final. Honestly, the only thing left to analyze is the deal's aftermath.

Revenue Analysis

You need a clear picture of where Altair Engineering Inc. (ALTR)'s money came from right before its acquisition, and the takeaway is simple: it was overwhelmingly a software company with a strong global footprint. In the 2024 fiscal year, which is the last full reporting period before the significant 2025 merger, Altair Engineering Inc. generated total revenue of $665.8 million. The bulk of this, a staggering 91.9%, came from its Software segment.

The company operates primarily through two segments: Software and Client Engineering Services. The Software segment includes solvers, optimization technology, data analytics, and its unique units-based subscription licensing model. The remaining revenue comes from the Client Engineering Services segment, which provides consulting, implementation, and training, and other minor revenue streams.

Here's the quick math on the segment contribution for fiscal year 2024:

Altair Engineering Inc. was defintely a growth story leading into 2025. The total revenue for fiscal year 2024 showed an increase of 8.7% over the previous year, with the core Software revenue growing even faster at 11.3%. This growth was driven by strong retention and expansion within existing accounts, particularly in the aerospace and defense vertical. That's a solid, double-digit growth rate in the core business.

The company also maintained a balanced global presence, which is a sign of a diversified customer base, not relying too heavily on any single market. The software billings in 2024 were geographically distributed like this:

• Americas: 32%
• EMEA (Europe, Middle East, and Africa): 31%
• APAC (Asia-Pacific): 37%

The most significant change in Altair Engineering Inc.'s financial structure for the 2025 fiscal year is not an organic one, but a definitive corporate action: the completion of its acquisition by Siemens Industry Software Inc. on March 26, 2025. This $9.7 billion transaction fundamentally changes the investment thesis. The company is no longer an independent, publicly traded entity, and its shares ceased trading on NASDAQ. This means the revenue streams you are analyzing now are historical, mapping to a successful exit for shareholders, who received $113.00 in cash per share. If you want to dive deeper into the players behind this move, you can check out Exploring Altair Engineering Inc. (ALTR) Investor Profile: Who's Buying and Why?

Profitability Metrics

The profitability picture for Altair Engineering Inc. (ALTR) is a tale of two distinct stories: a high-performing gross margin that reflects its software-centric model, and a much tighter operating and net margin, which was the reality right before its acquisition by Siemens Industry Software Inc. on March 26, 2025. Since the company ceased trading on NASDAQ after this date, we must look at the most recent Trailing Twelve Months (TTM) data extending into 2025 to gauge its final standalone financial health.

Honestly, the numbers show a company with a premium product but a high cost structure below the gross profit line. For the last reported full fiscal year of 2024, Altair Engineering Inc. reported Total Revenue of $665.8 million, which translated into a Gross Profit of $541.0 million. The bottom line was a Net Income of $14.2 million.

Margin Analysis: High Gross, Low Net

You need to see where your money is going, and for Altair Engineering Inc., the cost of goods sold (COGS) is low, but operating expenses are high. The key profitability margins for the company, based on the latest available TTM data extending into 2025, tell a clear story:

• Gross Profit Margin: The TTM Gross Margin is an impressive 81.3%. This is defintely a world-class margin for a software company, showing excellent pricing power and minimal direct costs for its core product.
• Operating Profit Margin: The TTM Operating Margin, as of October 2025, was only 5.77%. This gap between gross and operating margin highlights significant spending on research and development (R&D) and selling, general, and administrative (SG&A) expenses.
• Net Profit Margin: The TTM Net Profit Margin was a slim 2.13%. This is the ultimate number for investors, and it shows that for every dollar of revenue, only about two cents made it to net income.

Industry Comparison and Operational Efficiency

The operational efficiency (or lack thereof) is most evident when you compare Altair Engineering Inc.'s ratios to the industry average for the software sector. Here's the quick math on how they stacked up right before the acquisition:

Altair Engineering Inc. was a gross margin superstar, outperforming the industry average Gross Margin of 62.69% by a wide margin. But, its Operating Margin of 5.77% lagged the industry average of 21.06% significantly. This tells you that the company's cost management-specifically in its operating expenses-was a major drag on overall profitability. The high gross margin trend, which increased from 74.2% in 2020 to 81.3% in 2024, showed consistent pricing power and efficient COGS management. Still, the low operating margin indicated that the company was prioritizing growth and R&D spending over near-term profit maximization, a common trade-off in the technology sector. This kind of financial profile often makes a company an attractive acquisition target for a larger entity like Siemens, which can integrate the high-margin revenue stream into a more efficient corporate structure. You can read more about the context of its final public reporting period in Breaking Down Altair Engineering Inc. (ALTR) Financial Health: Key Insights for Investors.

The clear action here is to understand that the investment thesis for the stock shifted entirely to the acquisition price of $113.00 per share in cash, finalized in March 2025, rather than its standalone profitability metrics.

Debt vs. Equity Structure

When you look at how Altair Engineering Inc. (ALTR) chose to fund its operations right before the March 2025 acquisition by Siemens Industry Software Inc., you see a company that leaned heavily on equity and maintained a very clean balance sheet. This capital structure signaled a low-risk profile, which defintely made the company an attractive target.

The core of the company's financing was its stockholders' equity, which stood at a robust $857.189 million as of the end of the 2024 fiscal year. Compared to this, the company's financial debt was minimal. Altair Engineering Inc. (ALTR) had effectively zero long-term debt on its balance sheet, with the entirety of its financial debt reclassified as short-term.

Here's the quick math on the debt breakdown as of December 31, 2024:

• Short-Term Debt (Current portion of convertible senior notes): $227.106 million
• Long-Term Debt: $0

This structure gave Altair Engineering Inc. (ALTR) a financial debt-to-equity ratio (D/E) of approximately 0.27 ($227.106 million in debt divided by $857.189 million in equity). This is a very conservative figure. For context, the industry average for Software-Application companies sits around 0.32, and for Software-Infrastructure, it's about 0.36 as of November 2025. Altair Engineering Inc. (ALTR) was clearly less leveraged than its peers. A low debt load means more financial flexibility, and that's a great position to be in.

The low debt profile was a deliberate strategy, but the recent debt activity was driven by the acquisition itself. The company's primary debt instrument, the 1.750% Convertible Senior Notes due 2027, was effectively called to the table in March 2025. The acquisition triggered a Fundamental Change clause in the note indenture, which required Altair Engineering Inc. (ALTR) to offer to repurchase all outstanding notes for cash. This is why you saw the entire balance of the notes-$227.106 million-move to the current liabilities section of the balance sheet, as the company prepared to settle this obligation.

This move is a classic example of how a company balances debt financing (a low-interest convertible note) with equity funding (retaining a large equity base). The convertible notes were a cheap way to raise capital without immediately diluting shareholders, but the acquisition forced a clean-up of the balance sheet. For more on the shareholder side of this transaction, you should be Exploring Altair Engineering Inc. (ALTR) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know if Altair Engineering Inc. (ALTR) can cover its near-term obligations, especially with the Siemens acquisition now complete. The short answer is yes, the company's liquidity position is strong, but you have to look past the headline numbers impacted by debt reclassification to see the real picture.

The core of Altair Engineering Inc.'s financial health is its ability to generate cash and maintain a healthy working capital (current assets minus current liabilities). For the fiscal year ending December 31, 2024, the company's liquidity ratios, which measure its capacity to pay short-term debts, tell a story of careful management, even with a major debt maturity looming.

Current and Quick Ratios: A Deeper Look

On the surface, a low current ratio (current assets / current liabilities) can signal trouble, but for Altair Engineering Inc., the numbers are robust. Our calculation, based on the latest 2024 fiscal year-end data, shows a strong liquidity position.

• Current Ratio: The ratio stood at approximately 1.61 ($784,978 thousand in Current Assets / $487,769 thousand in Current Liabilities).
• Quick Ratio: The Quick Ratio (or acid-test ratio), which excludes less liquid assets like prepaid expenses, was also healthy at about 1.51. This is a very clean ratio, meaning the company can cover its immediate debts with cash and receivables alone.

Here's the quick math: Current Assets were $784,978 thousand, and Current Liabilities were $487,769 thousand as of December 31, 2024. What this estimate hides is the significant $227,106 thousand current portion of convertible senior notes that was reclassified to current liabilities. If you back that out, the operational liquidity is defintely solid, indicating a strong buffer for everyday operations.

Working Capital and Cash Flow Trends

The working capital trend confirms this strength. Altair Engineering Inc.'s working capital-the capital available for day-to-day operations-was a positive $297,209 thousand at the end of 2024. This cushion is crucial for a growth-focused software company. Also, a significant portion of current liabilities, $139,085 thousand, is deferred revenue (money paid upfront for future services). This isn't a cash drain; it's a future revenue commitment, which is a key strength for a subscription-based business model.

Looking at the cash flow statement provides a clearer view of how the company generates and uses its cash:

The OCF of $154.1 million for 2024 is a solid jump from the previous year. This organic cash generation powers the business. The Free Cash Flow (FCF) of $140.0 million is also excellent, demonstrating that after paying for capital expenditures (CapEx), the company retained substantial cash. This robust cash generation is what ultimately supported the company's financial flexibility right up to the acquisition announcement.

Potential Liquidity Strengths

The biggest strength is the high percentage of current assets held in cash and cash equivalents, which was $561,898 thousand at year-end 2024. This massive cash reserve provides significant operational flexibility and was a key factor in the company's ability to manage its debt obligations and pursue its strategic goals. The company's liquidity was not in question, even with the convertible notes maturing, a situation now resolved by the acquisition. For more on the long-term strategy that drove this, check out our analysis on the Mission Statement, Vision, & Core Values of Altair Engineering Inc. (ALTR).

Valuation Analysis

The short answer to whether Altair Engineering Inc. (ALTR) was overvalued or undervalued is that the market largely settled on an appropriate value, which was then validated by a strategic buyer. The company was acquired by Siemens for a definitive price of $113.00 per share in cash, finalizing the deal on March 26, 2025, and effectively capping the public market valuation.

For investors holding shares near the final trading price of $111.85, the acquisition offered a small but defintely certain premium. The key takeaway, though, is that traditional valuation metrics suggested an extremely rich price, but the strategic value of the company's computational intelligence platform to a larger entity like Siemens proved to be the ultimate driver of its value.

Here's the quick math on where Altair Engineering Inc. stood just before the acquisition closed, based on trailing twelve-month (TTM) data closest to the end of the 2025 fiscal year:

• Price-to-Earnings (P/E) Ratio: A staggering 658.
• Price-to-Book (P/B) Ratio: A high 11.11.
• Enterprise Value-to-EBITDA (EV/EBITDA): An even more extreme 154.7.

Honestly, those multiples are astronomical for a standalone public company; a P/E of 658 means it would take 658 years of current earnings to justify the price, which is why a forward-looking metric was essential. The high P/B of 11.11 signals investors were paying for intangible assets-like its intellectual property and future growth in simulation and AI-not just the book value on its balance sheet.

The stock price trend over the 12 months leading up to the acquisition was strong, showing a gain of approximately +28.74%. This momentum, plus the analyst consensus of a 'Hold' rating with a target price that converged on the eventual $113.00 acquisition price, tells you the market was pricing in a high-growth, high-multiple software story that was becoming a prime acquisition target.

Since Altair Engineering Inc. is a growth company focused on reinvesting capital, it had a 0% dividend yield and did not pay a dividend, so payout ratios were not a factor for income investors. The entire investment thesis was capital appreciation, which the Siemens deal delivered. The total equity value of the acquisition was approximately $10.6 billion.

What this estimate hides is the strategic premium (synergy) Siemens was willing to pay to integrate Altair's simulation and AI capabilities into its own portfolio. For a deep dive into the company's strategic positioning that drove this value, check out the Mission Statement, Vision, & Core Values of Altair Engineering Inc. (ALTR).

Risk Factors

You need to know the risks for Altair Engineering Inc. (ALTR) are now fundamentally different, given the company's acquisition by Siemens Industry Software Inc. (Siemens) for a cash consideration of $113.00 per share, which closed on March 26, 2025. The stock is no longer publicly traded on the NASDAQ Global Select Market, so the immediate investment risk of stock price volatility is gone.

Still, for those who want to understand the underlying business now operating as a Siemens subsidiary, the core operational and strategic risks remain. The pre-merger risks, which dominated the start of the 2025 fiscal year, have simply morphed into post-merger integration challenges.

The Overriding Merger Risk (Now an Integration Risk)

Before the March 2025 closing, the biggest risk was the merger itself. Any delay or termination of the transaction would have caused a substantial decline in the market price of Altair Engineering Inc.'s Class A common stock. Litigation related to the deal was also a significant cost risk. Since the merger is complete, the risk shifts to a successful integration into the Siemens ecosystem.

• Key Personnel Retention: Retaining Altair's key engineers and management is crucial, especially during the integration of the computational science and AI platforms like HyperWorks and RapidMiner.
• Customer Disruption: The merger announcement and subsequent integration can disrupt relationships with existing customers and suppliers, a risk that was highlighted in the lead-up to the transaction.
• Operational Alignment: Integrating two massive corporate cultures and distinct software platforms is defintely a complex, multi-year strategic risk.

External and Industry-Specific Exposure

Altair Engineering Inc. operates in a highly competitive and rapidly evolving market, and these external pressures don't disappear under new ownership. The company's financial health is tied to its ability to expand its customer base and increase software usage, which is a constant challenge.

A major industry-specific risk is Altair Engineering Inc.'s reliance on the automotive industry, which makes the company susceptible to industry-specific downturns that could impact revenue. For the full year 2024, the company reported Total Revenue of $665.8 million and a Gross Profit of $541.0 million, a solid performance, but one that is still exposed to global economic shifts.

• Foreign Currency Volatility: A lack of currency hedging activities leaves the business vulnerable to exchange rate fluctuations, which can adversely affect financial results since the company has a balanced global presence with significant billings across the Americas, EMEA, and APAC.
• Technological Obsolescence: The company must constantly adapt to technological changes, particularly in the areas of artificial intelligence (AI), machine learning (ML), and physics-based digital twins, or risk its software becoming obsolete.

Financial and Regulatory Risks

The company faces complex regulatory risks across various jurisdictions, which could adversely affect operations. Changes in laws-especially those related to data privacy, export controls, and tax regulations-are an ongoing concern.

On the operational front, there is a constant risk of defects or errors in the software, which could harm the company's reputation and financial results. The global cybercrime cost is expected to surpass $10.5 trillion by the end of 2025, making cybersecurity and AI-powered threats a top-tier operational risk. Altair Engineering Inc. has implemented security corporate practices and frameworks, plus third-party services, to manage these risks.

Here's a quick look at the latest full-year financials before the merger closed in Q1 2025:

The strategic mitigation for many of these risks was the merger itself, which is expected to enhance Altair Engineering Inc.'s market position and operational capabilities by integrating with Siemens. For a deeper dive into the company's long-term direction, you can review the Mission Statement, Vision, & Core Values of Altair Engineering Inc. (ALTR).

Growth Opportunities

The future growth prospects for Altair Engineering Inc. (ALTR) are no longer tied to its performance as an independent, publicly traded entity; they are now fully integrated into the strategic vision of Siemens, which completed its acquisition of the company on March 26, 2025. This transaction, valued at approximately $10.6 billion, is the single most important financial event of the 2025 fiscal year for Altair, effectively translating its standalone growth potential into a substantial cash return of $113.00 per share for its stockholders. The growth story now pivots to how Altair's technology will accelerate Siemens' industrial software portfolio.

Here's the quick math: Altair's total revenue for the full year 2024 was $665.8 million, with software revenue growing 11.3% to $611.9 million. The acquisition price represents a significant premium, underscoring the high value placed on its computational intelligence platform and future potential within the industrial technology sector. The company's financial guidance for the full 2025 fiscal year was suspended due to the merger, so you won't find traditional standalone revenue projections.

Key Growth Drivers and Product Innovations

The core drivers of Altair's value-and its future growth within Siemens-lie in its mastery of converging technologies. The company's focus on computational science, high-performance computing (HPC), and Artificial Intelligence (AI) positions it at the center of the industrial digital transformation push. The growth will come from embedding these capabilities deeper into a wider customer base.

• AI and Simulation Integration: Altair's strength is integrating AI with simulation technology, which is crucial for the development of physics-based digital twins (virtual replicas of physical systems).
• Acquisition-Enhanced Portfolio: Strategic acquisitions in 2024, like Metrics Design Automation Inc. and Research in Flight, expanded its capabilities in semiconductor simulation and computational fluid dynamics, broadening the addressable market before the Siemens deal.
• Subscription Model Expansion: The unique, units-based subscription licensing model is a powerful driver, as approximately 60% of new software revenue in 2024 came from expansion within existing customers, showing strong retention and upselling potential.

Strategic Synergy with Siemens

The merger transforms Altair's strategic landscape from a standalone growth path to a synergistic one. Siemens' motivation for the $10.6 billion acquisition was to enhance its own industrial software offerings. This immediately provides Altair's technology with massive global scale and resources, defintely boosting its market reach.

• Market Expansion: Altair's software, including its HyperWorks and RapidMiner platforms, gains immediate access to Siemens' extensive global customer base across industry, infrastructure, and mobility.
• Digital Thread Leadership: The combined entity is better positioned to deliver a comprehensive digital thread (a connected view of a product's lifecycle data) solution, which is a major spending priority for large enterprises.
• Resource Injection: As a wholly owned subsidiary of a major technology company, Altair will benefit from increased investment in Research and Development (R&D) and a more robust operational framework.

Competitive Advantages Post-Acquisition

Altair's competitive edge was its 'One Source of Truth' approach, which centralizes data to boost collaboration and traceability. Now, under Siemens, this advantage is amplified. The combination creates a formidable competitor in the Computer-Aided Engineering (CAE) and data analytics space, directly challenging other major industrial software providers.

The company's ability to offer a seamless convergence of simulation, HPC, and AI is its key differentiator. This technological depth, coupled with Siemens' market power, positions the former Altair business unit to capitalize on the growing demand for smart product development and operational efficiency. For more on the foundational principles driving this technology, you can review the Mission Statement, Vision, & Core Values of Altair Engineering Inc. (ALTR).