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Altair Announces Third Quarter 2022 Financial Results

Altair Beats Third Quarter Expectations, Raises Full Year Guidance in Constant Currency

TROY, Mich., Nov. 03, 2022 (GLOBE NEWSWIRE) — Altair (Nasdaq: ALTR), a global leader in computational science and artificial intelligence (AI), today released its financial results for the third quarter ended September 30, 2022.

“Altair had a solid third quarter, showing exceptional momentum despite significant macro-economic uncertainty, led by double digit growth in billings on a constant currency basis and strong demand across all geographies,” said James Scapa, founder, chairman and chief executive officer of Altair. “Our dedicated global teams continue to push forward with outstanding technology developments and applications.”

“We’re very pleased with the third quarter, continuing the success we had in the first half of the year,” said Matt Brown, chief financial officer of Altair. “Our third quarter revenue was at the high end of our guidance range, despite significant currency headwinds, while our profitability exceeded our expectations. These strong results give us the confidence to raise our full year 2022 guidance in constant currency.”

Third Quarter 2022 Financial Highlights

  • Software product revenue was $103.8 million compared to $102.3 million for the third quarter of 2021, an increase of 1.4% in reported currency and 10.1% in constant currency
  • Total revenue was $119.4 million compared to $121.3 million for the third quarter of 2021, a decrease of 1.6% in reported currency and an increase of 6.3% in constant currency
  • Net loss was $(33.2) million compared to $(8.1) million for the third quarter of 2021. Diluted net loss per share was $(0.42) based on 79.2 million diluted weighted average common shares outstanding, compared to diluted net loss per share of $(0.11) for the third quarter of 2021, based on 75.8 million diluted weighted average common shares outstanding. Net loss margin was -27.9% compared to -6.7% for the third quarter of 2021
  • Non-GAAP net income was $4.3 million, compared to non-GAAP net income of $9.6 million for the third quarter of 2021, a decrease of 55.7%. Non-GAAP diluted net income per share was $0.05 based on 88.1 million non-GAAP diluted common shares outstanding, compared to non-GAAP diluted net income per share of $0.12 for the third quarter of 2021, based on 81.1 million non-GAAP diluted common shares outstanding
  • Adjusted EBITDA was $6.8 million compared to $14.8 million for the third quarter of 2021, a decrease of 54.0%. Adjusted EBITDA margin was 5.7% compared to 12.2% for the third quarter of 2021
  • Cash provided by operating activities was $8.5 million, compared to $0.9 million for the third quarter of 2021
  • Free cash flow was $5.2 million, compared to $(0.5) million for the third quarter of 2021.

Business Outlook

Based on information available as of today, Altair is issuing the following guidance for the fourth quarter and full year 2022:

(in millions) Fourth Quarter 2022   Full Year 2022  
Software Product Revenue   $ 126.0   to $ 131.0     $ 488.0   to $ 493.0  
Total Revenue   $ 143.0     $ 148.0     $ 555.0     $ 560.0  
Net Loss   $ (15.0 )   $ (12.1 )   $ (70.3 )   $ (67.4 )
Non-GAAP Net Income   $ 15.5     $ 17.8     $ 63.8     $ 66.0  
Adjusted EBITDA   $ 22.0     $ 25.0     $ 92.0     $ 95.0  
Net Cash Provided by Operating Activities               $ 23.0     $ 27.0  
Free Cash Flow               $ 14.0     $ 18.0  
                             

The following table provides a reconciliation of 2022 Full Year guidance to the last guidance provided in August:

    (Unaudited)  
    Full Year 2022  
(in millions)   Midpoint of
Guidance in
August
    Increase/
(Decrease)
    Currency
Fluctuations
from Prior
Guidance
    Midpoint of
Guidance in
November
 
Software Product Revenue   $ 492.5     $ 4.2     $ (6.2 )   $ 490.5  
Total Revenue   $ 560.5     $ 3.7     $ (6.7 )   $ 557.5  
Adjusted EBITDA   $ 94.0     $ 1.0     $ (1.5 )   $ 93.5  
                                 

Conference Call Information

What:   Altair’s Third Quarter 2022 Financial Results Conference Call
When:   Thursday, November 3, 2022
Time:   5 p.m. ET
Webcast:   http://investor.altair.com (live & replay)
     

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: Non-GAAP Net Income, Non-GAAP Net Income Per Share, Adjusted EBITDA, Free Cash Flow, Non-GAAP Gross Profit and Non-GAAP Operating Expense.

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.

Non-GAAP net income excludes stock-based compensation, amortization of intangible assets related to acquisitions, restructuring charges, asset impairment charges, non-cash interest expense, other special items as identified by management and described elsewhere in this press release, and the impact of non-GAAP tax rate to income tax expense, which approximates our tax rate excluding discrete items and other specific events that can fluctuate from period to period.

Non-GAAP diluted common shares as defined starting with Q1 2022, includes the diluted weighted average shares outstanding per GAAP regardless of whether the Company is in a loss position. All periods presented will be adjusted to align with this new definition.

Adjusted EBITDA represents net income 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 identified by management and described elsewhere in this press release.

Free cash flow consists of cash flow from operations less capital expenditures.

Non-GAAP gross profit represents gross profit adjusted for stock-based compensation expense, restructuring expense and other special items as identified by management and described elsewhere in this press release.

Non-GAAP operating expense represents operating expense excluding stock-based compensation expense, amortization, restructuring charges, asset impairment charges and other special items as identified by management and described elsewhere in this press release.

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 leader in computational science and artificial intelligence (AI) that provides software and cloud solutions in simulation, high-performance computing (HPC), data analytics and AI. Altair enables organizations across all industries to compete more effectively and drive smarter decisions in an increasingly connected world – all while creating a greener, 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, our guidance for the fourth quarter and full year 2022, our statements regarding our expectations for 2022, 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 our forward-looking statements due to a number of factors, including but not limited to, the 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.

Media Relations
Altair
Dave Simon
248-614-2400 ext. 332
[email protected]

Investor Relations
The Blueshirt Group
Monica Gould
212-871-3927
[email protected]

 
ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
    September 30, 2022     December 31, 2021  
(In thousands)   (Unaudited)        
ASSETS            
CURRENT ASSETS:            
Cash and cash equivalents   $ 311,853     $ 413,743  
Accounts receivable, net     119,921       137,561  
Income tax receivable     10,465       9,388  
Prepaid expenses and other current assets     23,492       27,529  
Total current assets     465,731       588,221  
Property and equipment, net     38,938       40,478  
Operating lease right of use assets     32,627       28,494  
Goodwill     455,211       370,178  
Other intangible assets, net     86,080       99,057  
Deferred tax assets     7,605       8,495  
Other long-term assets     38,736       28,352  
TOTAL ASSETS   $ 1,124,928     $ 1,163,275  
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY  
CURRENT LIABILITIES:            
Accounts payable   $ 6,235     $ 6,647  
Accrued compensation and benefits     37,036       42,307  
Current portion of operating lease liabilities     9,996       9,933  
Other accrued expenses and current liabilities     50,686       122,226  
Deferred revenue     94,523       93,160  
Convertible senior notes, net           199,705  
Total current liabilities     198,476       473,978  
Operating lease liabilities, net of current portion     23,466       19,550  
Deferred revenue, non-current     22,017       12,872  
Convertible senior notes, net     305,158        
Other long-term liabilities     40,282       42,894  
TOTAL LIABILITIES     589,399       549,294  
Commitments and contingencies            
MEZZANINE EQUITY           784  
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 52,377 and 51,524 shares as of September 30, 2022, and December 31, 2021, respectively     5       5  
Class B common stock, authorized 41,203 shares, issued and outstanding 27,745 shares as of September 30, 2022, and December 31, 2021     3       3  
Additional paid-in capital     715,736       724,226  
Accumulated deficit     (133,642 )     (102,087 )
Accumulated other comprehensive loss     (46,573 )     (8,950 )
TOTAL STOCKHOLDERS’ EQUITY     535,529       613,197  
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY   $ 1,124,928     $ 1,163,275  

 
ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
(in thousands, except per share data)   2022     2021     2022     2021  
Revenue                        
License   $ 67,245     $ 67,603     $ 256,102     $ 230,630  
Maintenance and other services     36,520       34,686       105,453       100,758  
Total software     103,765       102,289       361,555       331,388  
Software related services     6,706       7,650       23,143       23,229  
Total software and related services     110,471       109,939       384,698       354,617  
Client engineering services     7,355       10,060       22,414       31,005  
Other     1,525       1,308       4,676       5,760  
Total revenue     119,351       121,307       411,788       391,382  
Cost of revenue                        
License     2,579       4,694       11,386       13,706  
Maintenance and other services     13,025       11,770       38,628       35,368  
Total software *     15,604       16,464       50,014       49,074  
Software related services     5,240       5,707       16,739       17,560  
Total software and related services     20,844       22,171       66,753       66,634  
Client engineering services     5,835       7,982       18,390       25,163  
Other     1,230       1,348       3,892       5,072  
Total cost of revenue     27,909       31,501       89,035       96,869  
Gross profit     91,442       89,806       322,753       294,513  
Operating expenses:                        
Research and development *     48,781       35,839       138,352       112,872  
Sales and marketing *     39,244       30,589       114,042       94,568  
General and administrative *     24,677       22,196       72,613       67,983  
Amortization of intangible assets     6,571       4,432       18,682       13,924  
Other operating income, net     (2,835 )     (1,324 )     (9,383 )     (2,526 )
Total operating expenses     116,438       91,732       334,306       286,821  
Operating (loss) income     (24,996 )     (1,926 )     (11,553 )     7,692  
Interest expense     1,566       3,037       2,851       8,998  
Other expense, net     2,107       124       26,082       1,667  
Loss before income taxes     (28,669 )     (5,087 )     (40,486 )     (2,973 )
Income tax expense     4,579       3,022       15,008       4,424  
Net loss   $ (33,248 )   $ (8,109 )   $ (55,494 )   $ (7,397 )
Loss per share:                        
Net loss per share attributable to common stockholders, basic   $ (0.42 )   $ (0.11 )   $ (0.70 )   $ (0.10 )
Net loss per share attributable to common stockholders, diluted   $ (0.42 )   $ (0.11 )   $ (0.70 )   $ (0.10 )
Weighted average shares outstanding:                        
Weighted average number of shares used in computing net loss per share, basic     79,207       75,750       79,205       75,226  
Weighted average number of shares used in computing net loss per share, diluted     79,207       75,750       79,205       75,226  
                                 

*   Amounts include stock-based compensation expense as follows (in thousands):

    (Unaudited)  
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
(in thousands)   2022     2021     2022     2021  
Cost of revenue – software   $ 2,332     $ 1,411     $ 6,265     $ 3,791  
Research and development     10,243       3,894       26,580       11,223  
Sales and marketing     7,806       3,673       22,505       10,800  
General and administrative     2,329       1,955       7,174       5,415  
Total stock-based compensation expense   $ 22,710     $ 10,933     $ 62,524     $ 31,229  

    (Unaudited)  
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
(in thousands)   2022     2021     2022     2021  
Employee stock-based compensation plans   $ 15,490     $ 10,194     $ 43,622     $ 29,009  
Equity issued in connection with acquisitions     7,220       739       18,902       2,220  
Total stock-based compensation expense   $ 22,710     $ 10,933     $ 62,524     $ 31,229  

 
ALTAIR ENGINEERING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
 
    Nine Months Ended September 30,  
(In thousands)   2022     2021  
OPERATING ACTIVITIES:            
Net loss   $ (55,494 )   $ (7,397 )
Adjustments to reconcile net loss to net cash provided by operating activities:            
Depreciation and amortization     24,092       19,355  
Provision for credit loss     183       330  
Amortization of debt discount and issuance costs     1,330       8,513  
Stock-based compensation expense     62,524       31,229  
Deferred income taxes     4       (510 )
Gain on mark-to-market adjustment of contingent consideration     (7,482 )      
Expense on repurchase of convertible senior notes     16,621        
Other, net     153       40  
Changes in assets and liabilities:            
Accounts receivable     13,859       26,770  
Prepaid expenses and other current assets     1,906       (7,612 )
Other long-term assets     3,134       (5,018 )
Accounts payable     (270 )     (2,432 )
Accrued compensation and benefits     (3,639 )     481  
Other accrued expenses and current liabilities     (48,698 )     483  
Deferred revenue     18,311       (8,638 )
Net cash provided by operating activities     26,534       55,594  
INVESTING ACTIVITIES:            
Payments for acquisition of businesses, net of cash acquired     (134,130 )     (5,472 )
Capital expenditures     (6,721 )     (6,811 )
Other investing activities, net     (10,322 )     (628 )
Net cash used in investing activities     (151,173 )     (12,911 )
FINANCING ACTIVITIES:            
Proceeds from issuance of convertible senior notes, net of discounts and commissions     224,265        
Repurchase of convertible senior notes     (192,422 )      
Proceeds from employee stock purchase plan contributions     6,549       2,110  
Repurchase and retirement of common stock     (4,387 )      
Proceeds from the exercise of common stock options     2,840       2,059  
Payments of debt issuance costs     (1,523 )      
Proceeds from private placement of common stock           200,000  
Payments on revolving commitment           (30,000 )
Other financing activities     (170 )     (434 )
Net cash provided by financing activities     35,152       173,735  
Effect of exchange rate changes on cash, cash equivalents and restricted cash     (12,142 )     (1,951 )
Net (decrease) increase in cash, cash equivalents and restricted cash     (101,629 )     214,467  
Cash, cash equivalents and restricted cash at beginning of year     414,012       241,547  
Cash, cash equivalents and restricted cash at end of period   $ 312,383     $ 456,014  
Supplemental disclosure of cash flow:            
Interest paid   $ 296     $ 344  
Income taxes paid   $ 6,818     $ 8,077  
Supplemental disclosure of non-cash investing and financing activities:            
Property and equipment in accounts payable, other current liabilities and other liabilities   $ 707     $ 480  
                 

Financial Results

The following table provides a reconciliation of Non-GAAP net income and Non-GAAP net income per share – diluted, to net loss and net loss per share – diluted, the most comparable GAAP financial measures:

    (Unaudited)  
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
(in thousands, except per share amounts)   2022     2021     2022     2021  
Net loss   $ (33,248 )   $ (8,109 )   $ (55,494 )   $ (7,397 )
Stock-based compensation expense     22,710       10,933       62,524       31,229  
Amortization of intangible assets     6,571       4,432       18,682       13,924  
Non-cash interest expense     501       2,876       1,339       8,513  
Restructuring expense           (124 )           4,954  
Impact of non-GAAP tax rate (1)     3,079       (366 )     (1,878 )     (10,044 )
Special adjustments and other (2)     4,657             22,886        
Non-GAAP net income   $ 4,270     $ 9,642     $ 48,059     $ 41,179  
                         
Net loss per share, diluted   $ (0.42 )   $ (0.11 )   $ (0.70 )   $ (0.10 )
Non-GAAP net income per share, diluted   $ 0.05     $ 0.12     $ 0.55     $ 0.51  
                         
GAAP diluted shares outstanding     79,207       75,750       79,205       75,226  
Non-GAAP diluted shares outstanding (3)     88,100       81,063       86,708       80,345  

(1)  The Company uses a non-GAAP effective tax rate of 26%.

(2)  The three months ended September 30, 2022, includes $6.8 million currency losses on acquisition-related intercompany loans and a $2.2 million gain from a mark-to-market adjustment of contingent consideration associated with the World Programming acquisition. The nine months ended September 30, 2022, includes $16.6 million expense on the repurchase of convertible senior notes, $13.7 million currency losses on acquisition-related intercompany loans and a $7.5 million gain from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition.

(3)  The Non-GAAP diluted shares outstanding for the three and nine months ended September 30, 2021, has been changed to align with the current definition.

The following table provides a reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP financial measure:

    (Unaudited)  
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
(in thousands)   2022     2021     2022     2021  
Net loss   $ (33,248 )   $ (8,109 )   $ (55,494 )   $ (7,397 )
Income tax expense     4,579       3,022       15,008       4,424  
Stock-based compensation expense     22,710       10,933       62,524       31,229  
Interest expense     1,566       3,037       2,851       8,998  
Depreciation and amortization     8,273       6,175       24,092       19,355  
Restructuring expense           (124 )           4,954  
Special adjustments, interest income and other (1)     2,949       (102 )     20,878       (275 )
Adjusted EBITDA   $ 6,829     $ 14,832     $ 69,859     $ 61,288  

(1)  The three months ended September 30, 2022, includes $6.8 million currency losses on acquisition-related intercompany loans and a $2.2 million gain from a mark-to-market adjustment of contingent consideration associated with the World Programming acquisition. The nine months ended September 30, 2022, includes $16.6 million expense on the repurchase of convertible senior notes, $13.7 million currency losses on acquisition-related intercompany loans and a $7.5 million gain from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition.

The following table provides a reconciliation of Free Cash Flow to net cash provided by operating activities, the most comparable GAAP financial measure:

    (Unaudited)  
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
(in thousands)   2022     2021     2022     2021  
Net cash provided by operating activities (1)   $ 8,493     $ 872     $ 26,534     $ 55,594  
Capital expenditures     (3,264 )     (1,420 )     (6,721 )     (6,811 )
Free cash flow (1)   $ 5,229     $ (548 )   $ 19,813     $ 48,783  

(1)   The nine months ended September 30, 2022, includes a $65.9 million payment in January 2022 for a legal judgement acquired in December 2021.

The following table provides a reconciliation of Non-GAAP gross profit to gross profit, the most comparable GAAP financial measure:

    (Unaudited)  
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
(in thousands)   2022     2021     2022     2021  
Gross profit   $ 91,442     $ 89,806     $ 322,753     $ 294,513  
Stock-based compensation expense     2,332       1,411       6,265       3,791  
Restructuring expense           (10 )           926  
Non-GAAP gross profit   $ 93,774     $ 91,207     $ 329,018     $ 299,230  
Non-GAAP gross margin     78.6 %     75.2 %     79.9 %     76.5 %

The following table provides a reconciliation of Non-GAAP operating expense to Total operating expense, the most comparable GAAP financial measure:

    (Unaudited)  
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
(in thousands)   2022     2021     2022     2021  
Total operating expense   $ 116,438     $ 91,732     $ 334,306     $ 286,821  
Stock-based compensation expense     (20,378 )     (9,522 )     (56,259 )     (27,438 )
Amortization     (6,571 )     (4,432 )     (18,682 )     (13,924 )
Gain on mark-to-market adjustment of contingent consideration     2,178             7,482        
Restructuring expense           114             (4,028 )
Non-GAAP operating expense   $ 91,667     $ 77,892     $ 266,847     $ 241,431  

The following table provides our revenue and Adjusted EBITDA on a constant currency basis:

    (Unaudited)  
    Three Months Ended
September 30, 2022
    Three Months
Ended
September 30, 2021
    Increase/
(Decrease) %
 
(in thousands)   As reported     Currency
changes
    As adjusted for
constant currency
    As reported     As reported     As adjusted for
constant
currency
 
Software revenue   $ 103.8     $ 8.8     $ 112.6     $ 102.3       1.4 %     10.1 %
Total revenue   $ 119.4     $ 9.6     $ 129.0     $ 121.3       -1.6 %     6.3 %
Adjusted EBITDA   $ 6.8     $ 2.0     $ 8.8     $ 14.8       -53.9 %     -40.5 %
                                     
                                     
    (Unaudited)  
    Nine Months Ended
September 30, 2022
    Nine Months
Ended
September 30, 2021
    Increase/
(Decrease) %
 
(in thousands)   As reported     Currency
changes
    As adjusted for
constant currency
    As reported     As reported     As adjusted for
constant
currency
 
Software revenue   $ 361.6     $ 18.3     $ 379.9     $ 331.4       9.1 %     14.7 %
Total revenue   $ 411.8     $ 20.2     $ 432.0     $ 391.4       5.2 %     10.4 %
Adjusted EBITDA   $ 69.9     $ 4.2     $ 74.1     $ 61.3       14.0 %     20.9 %
                                                 

Business Outlook
The following table provides a reconciliation of projected Non-GAAP net income to projected net loss, the most comparable GAAP financial measure:

    (Unaudited)  
    Three Months Ending
December 31, 2022
    Year Ending
December 31, 2022
 
(in thousands)   Low     High     Low     High  
Net loss   $ (15,000 )   $ (12,100 )   $ (70,300 )   $ (67,400 )
Stock-based compensation expense     21,600       21,600       84,100       84,100  
Amortization of intangible assets     10,100       10,100       28,800       28,800  
Non-cash interest expense     400       400       1,800       1,800  
Impact of non-GAAP tax rate     (1,600 )     (2,200 )     (3,500 )     (4,200 )
Special adjustments and other(1)                 22,900       22,900  
Non-GAAP net income   $ 15,500     $ 17,800     $ 63,800     $ 66,000  

(1)   Year ending December 31, 2022, includes $16.6 million expense on the repurchase of convertible senior notes, $13.7 million currency losses on acquisition-related intercompany loans and $7.5 million gain from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition.

The following table provides a reconciliation of projected Adjusted EBITDA to projected net loss, the most comparable GAAP financial measure:

    (Unaudited)  
    Three Months Ending
December 31, 2022
    Year Ending
December 31, 2022
 
(in thousands)   Low     High     Low     High  
Net loss   $ (15,000 )   $ (12,100 )   $ (70,300 )   $ (67,400 )
Income tax expense     3,900       4,000       18,900       19,000  
Stock-based compensation expense     21,600       21,600       84,100       84,100  
Interest (income) expense     (300 )     (300 )     500       500  
Depreciation and amortization     11,800       11,800       35,900       35,900  
Special adjustments and other(1)                 22,900       22,900  
Adjusted EBITDA   $ 22,000     $ 25,000     $ 92,000     $ 95,000  

(1)   Year ending December 31, 2022, includes $16.6 million expense on the repurchase of convertible senior notes, $13.7 million currency losses on acquisition-related intercompany loans and $7.5 million gain from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition.

The following table provides a reconciliation of projected Free Cash Flow to projected net cash provided by operating activities, the most comparable GAAP financial measure:

    (Unaudited)  
    Year Ending
December 31, 2022
 
(in thousands)   Low     High  
Net cash provided by operating activities (1)   $ 23,000     $ 27,000  
Capital expenditures     (9,000 )     (9,000 )
Free cash flow (1)   $ 14,000     $ 18,000  

(1)   Includes $65.9 million payment in January 2022 for legal judgement acquired in December 2021.

Disclaimer: The above press release comes to you under an arrangement with GlobeNewswire. TheTechOutlook.com takes no editorial responsibility for the same.



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