Executive Summary

Q4 2024 delivered strong top-line growth: total revenue $192.6M (+12.3% y/y; constant currency +13.8%) and software revenue $179.4M (+15.0% y/y; constant currency +16.5%). Adjusted EBITDA rose to $61.0M (31.7% margin) with free cash flow of $33.2M .
GAAP profitability compressed as Altair incurred $22.3M of merger-related expenses and currency losses; GAAP net income was $1.0M ($0.01 diluted EPS) vs. $19.7M ($0.22) in Q4’23; non-GAAP net income was $47.4M ($0.52) .
Guidance and earnings calls are suspended due to the pending Siemens acquisition; Altair now anticipates closing in 1H 2025 (stockholder approval obtained Jan 22, 2025, $113/share cash consideration) .
Q4 catalysts centered on the deal timeline and continued product momentum in AI/HPC (RapidMiner AI agent framework; NVIDIA Grace/Grace Hopper support), which reinforce the medium-term strategic narrative despite lack of near‑term guidance .

What Went Well and What Went Wrong

What Went Well

Double-digit growth: Software revenue $179.4M (+15.0% y/y) and total revenue $192.6M (+12.3% y/y), with adjusted EBITDA up 13.9% to $61.0M (31.7% margin) .
Non-GAAP profitability expanded: non-GAAP net income $47.4M ($0.52) vs. $41.1M ($0.47) in Q4’23; non-GAAP gross margin 84.4% vs. 84.3% in Q4’23 .
Product/AI momentum: RapidMiner now supports advanced AI agents; CTO: “enabling users to build autonomous AI agents...” integrating graph intelligence, ML, simulations and rules . NVIDIA Grace/Grace Hopper support drove “up to 2x” simulation speedups on Hopper vs prior gen; CTO highlighted performance and sustainability gains .

What Went Wrong

GAAP earnings pressure: Q4 GAAP net income $1.0M ($0.01) as special items included $22.3M merger-related expenses and FX losses, versus $19.7M ($0.22) in Q4’23 .
Investor visibility limited: Altair suspended conference calls and withdrew quarterly/annual guidance due to the Siemens transaction, reducing near-term fundamental catalysts and transparency .
Engineering services softness continued: engineering services and other revenue $13.3M in Q4 (down vs. Q4’23), continuing a multi-quarter trend of services lagging software growth .

Financial Results

Quarterly performance summary (Q2–Q4 2024)

Metric	Q2 2024	Q3 2024	Q4 2024
Total Revenue ($M)	$148.8	$151.5	$192.6
Software Revenue ($M)	$135.4	$138.7	$179.4
Engineering Services & Other ($M)	$13.4	$12.8	$13.3
GAAP Net Income ($M)	$(5.1)	$1.8	$1.0
Diluted EPS ($)	$(0.06)	$0.02	$0.01
Adjusted EBITDA ($M)	$17.3	$25.7	$61.0
Adjusted EBITDA Margin (%)	11.7%	17.0%	31.7%
Cash from Operations ($M)	$28.6	$14.5	$37.5
Free Cash Flow ($M)	$26.3	$9.8	$33.2
Gross Profit Margin (%)	79.5%	80.2%	82.7%

Notes:

Q4 special items impacted GAAP earnings: $22.3M merger-related expenses; $4.7M FX losses; non-GAAP adjustments detailed in reconciliation .
Q4 FCF commentary: full-year FCF impacted by ~$13.2M of merger cash costs .

Q4 2024 revenue composition (detail)

Revenue Line	Q4 2024 ($M)
License	$131.9
Maintenance & Other Services	$47.4
Total Software	$179.4
Engineering Services & Other	$13.3
Total Revenue	$192.6

Balance sheet and billings (select)

Cash and cash equivalents: $561.9M at 12/31/24 .
Current portion of convertible senior notes, net: $227.1M at 12/31/24; no non-current convertible notes outstanding, indicating near-term maturity profile .
Billings: $219.4M in Q4; ending deferred revenue $167.6M .

Guidance Changes

Metric	Period	Previous Guidance	Current (Q4 2024)	Change
Total Revenue	FY 2024	$648–$658M (Aug 1, 2024)	Guidance suspended due to Siemens transaction	Withdrawn
Software Revenue	FY 2024	$590–$600M (Aug 1, 2024)	Guidance suspended	Withdrawn
Adjusted EBITDA	FY 2024	$136–$144M (Aug 1, 2024)	Guidance suspended	Withdrawn
Non-GAAP Net Income	FY 2024	$108.4–$114.4M (Aug 1, 2024)	Guidance suspended	Withdrawn
Net Cash from Ops	FY 2024	$133–$141M (Aug 1, 2024)	Guidance suspended	Withdrawn
Free Cash Flow	FY 2024	$122–$130M (Aug 1, 2024)	Guidance suspended	Withdrawn

Note: Altair suspended quarterly and annual guidance beginning Q3 2024 in light of the proposed Siemens merger, reiterated in Q4 2024 .

Earnings Call Themes & Trends

Altair suspended quarterly financial results conference calls beginning with Q3 2024 due to the Siemens transaction, and continued the suspension in Q4 2024; thus no formal Q&A or call themes for Q4 .

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
AI/data analytics	Management emphasized strong software momentum and “industry-leading computational intelligence” in Q2 remarks .	No call; press release focused on merger announcement and results .	RapidMiner unveiled advanced AI agent framework integrating graphs, ML, simulations; CTO highlighted autonomous agents and operational intelligence .	Building capability; expanding AI platform features
HPC/simulation performance	Not a focus in Q2 remarks .	No call; no mention .	HyperWorks products now support NVIDIA Grace/Grace Hopper; internal benchmarks: up to 2x speed vs prior gen Hopper GPUs; CTO emphasized performance/sustainability .	Strengthening HPC leadership and performance narrative
Guidance/Investor comms	Provided Q3 and FY24 guidance on Aug 1 .	Guidance and calls suspended due to Siemens deal .	Guidance and calls remain suspended; anticipate transaction close 1H 2025 .	Visibility reduced; focus shifts to transaction
Corporate actions	None in Q2 .	Merger agreement with Siemens announced; results furnished .	Stockholders approved $113/share cash merger; pending customary conditions ; reiterated suspension .	Deal progress toward close

Management Commentary

Q2 CEO commentary (performance context): “Altair maintained its strong trajectory during the second quarter, with software revenue and total revenue above the high end of guidance.” — James R. Scapa, CEO .
Q2 CFO commentary: “Our quarterly revenues exceeded expectations… which gives us confidence in our path to meet our financial targets for the year.” — Matt Brown, CFO .
Q4 AI strategy (RapidMiner): “By enabling users to build autonomous AI agents that seamlessly integrate graph-based intelligence, machine learning, simulations, and business rules, we're unlocking new possibilities.” — Sam Mahalingam, CTO .
Q4 HPC/NVIDIA partnership: “Altair's solutions achieving peak performance on Grace and Grace Hopper marks a pivotal moment… poised to drive AI innovation and deliver substantial performance and sustainability gains.” — Sam Mahalingam, CTO .
Corporate update: “Altair now anticipates that this transaction may close in the first half of 2025. In light of the pending transaction with Siemens, Altair is suspending quarterly financial results conference calls and its quarterly and annual guidance.” .

Q&A Highlights

No Q&A — Altair suspended quarterly earnings calls due to the pending Siemens transaction; therefore, there was no Q4 2024 analyst Q&A to report .

Estimates Context

S&P Global (Capital IQ) consensus estimates for Q4 2024 were not retrievable via our tool due to a mapping issue; as such, we cannot provide a definitive comparison vs. consensus for revenue or EPS this quarter. We will anchor estimate comparisons to S&P Global when tool access is restored (unavailable this cycle) [GetEstimates error].

Key Takeaways for Investors

Solid finish to FY24: Q4 revenue accelerated with strong software growth; non-GAAP profitability improved, and gross margin expanded to 82.7% .
GAAP compression driven by special items: Merger-related expenses and FX reduced GAAP EPS to $0.01; non-GAAP EPS was $0.52, highlighting underlying operating strength .
Strong liquidity and near-term obligations: $561.9M cash; current portion of convertible notes $227.1M at year-end 2024, with no non-current notes outstanding .
Visibility constrained: With guidance and calls suspended, near-term fundamental catalysts are limited; primary stock driver is Siemens transaction timing and approvals (target close 1H 2025) .
Strategic momentum intact: RapidMiner AI agents and NVIDIA Grace/Grace Hopper support bolster computational intelligence and HPC narratives, potentially aiding medium-term cross-sell and retention .
Cash generation remains healthy: Q4 cash from operations $37.5M and FCF $33.2M despite ~$13.2M merger-related cash outflow for the year .
Modeling note: In absence of consensus data and company guidance, focus on software revenue trajectory, sustained high gross margins, and non-GAAP operating leverage as key inputs for scenario analysis .

Altair Engineering Inc. (ALTR)·Q4 2024 Earnings Summary