Altair Engineering (ALTR) 3 Nov 222022 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to Altair’s Third Quarter 2022 Earnings Conference Call. After the speaker’s presentation, there will be a question-and-answer session. To ask a question [Operator Instructions] Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your speaker today, Dave Simon, Senior Vice President, Investor Relations. ahead. go Please

Relations. and and fourth performance with Investor call full Welcome, the a quarter September a the for Altair’s After regarding Founder, today, for on website IR attending XXXX. available call the closed on of Good James third market call guidance Brown, are the release and call. be thank Relations the being Chief will third press conference This is following Scapa, Investor SVP Altair’s our for Dave and and ended issued conclusion with this quarter earnings quarter XXXX, me on and I’m section the CEO; can details of which afternoon. Chairman at Simon, of year investor.altair.com. be you website And Matt of replay we XX, recorded, for Officer. our accessed section XXXX Financial our

today. variety to forward-looking These disclaim During cause in any the business our today’s statements call, uncertainties of our We and and statements These as federal laws. views of any be summarized under are should differ release expectations. may or risks only results reflect considered as forward-looking subsequent to of any that These materially a press obligation we we to our to could statements of be representative actual are update outlook. will earlier today issued risks subject that date. securities make statements not from related views considered that our

from those as that the to actual reports factors time. material results, other SEC quarterly and with file our annual that time we or affect discussion as contained further the our of important a and may filed documents well in For please have other refer to filed could risks

A press financial the GAAP certain today’s in release. reconciliation is included our will of measures. call, refer measures During non-GAAP course non-GAAP of we to to

or the insight we business comments our may metrics to not of or additional may to this in responses greater offer to incremental the perfection, our that usual that quarterly be Finally, into future. prepared in our are dynamics detail provide advised may provide at times our to Please we results. continue or presentation

me over to Jim let the Jim? prepared turn that, remarks. With his call for

Thank period constant momentum strong X on to year-to-date Dave, for you, and everyone months Total in call. uncertainty XXXX. the over year. currency grew had welcome XX.X% the macroeconomic for throughout significant showing basis sales same first by on Altair of the the a exceptional despite revenue a software quarter XXXX

as compared revenue continued X revenue XX.X% remained product at a And total our trend percentage Software of for to of positive year-to-date. XXXX for XX% XXXX, strong license period same XX.X% in high XXXX. the first months recurring software during the rate a of

impressively, by quarter constant Software strong billings grew of the the in in approximately Americas, EMEA to than product constant the adding and third year-over-year year. XX% a by on more more most first of months this billings the XX% basis first at than on Through basis, grew software currency product XXXX, and X APAC. a the currency half rate

significantly to gross continues higher services margins. and Client software on towards shift business, trended software has Altair driving our growing mix focus down engineering year. our this

slightly However, software-related in The to we business fourth beginning services do see quarter. this the entering abate trend XXXX. declined has

year-over-year the the to $X revenue growth revenue months more months Adjusted XXXX, dramatically $XX.X first of adjusted or than constant headwind a million. XX% our reflecting in versus EBITDA revenue for XXXX rates expand also same of X EBITDA or was of of of The million year in reduced X in which first exchange XXXX numbers. currency in the $XX.X XX.X% continue for period our We profitability. to million was XX%

times provide levels of strengthens In to low-code in the cloud, skill This our more the to cloud a from SLC. including scale data best-in-class data and used quickly from people offering multi-tenant products of and noncoders platform highly pipelines ML Altair’s users develop X levels, completed production users through Minor, and been has to same thousands Altair’s acquisition models delivery flexible analytics language Knowledge scorecards software. blocks all and a RapidMiner’s data models. from able million other and user RapidMiner’s of the will learn hundreds end-to-end learning and September, analytics is downloaded leader science, automatic unique quickly. new feature RapidMiner’s Altair ML enterprises the visual with than easily all greatly the Rapid need plans analytics and we acquisition and decision machine migrate platform advanced our be by tools, cloud-native soon on-premise environment, pioneered desktop a their secure access work easily was of significantly Ops SmartWorks of provides more. data platform model. to and of compiler drag-and-drop to service concept and and solution. It’s Altair leverages engineering, Customers portfolio hundreds cloud. user’s accelerating analytics, RapidMiner It and rated for of application the augment and users coders to trees Altair integrate units gives several data, automatic Studio, licensing and learning SaaS to introduce explainable first transform and powerful of deep science Alter building data best-in-class development the text desktop experience existing can to alike. scale they of to existing

the Datawatch as and previously of our market analytics acquired and across data analytics any of portfolio, vertical. of addition and RapidMiner clients Altera’s depth us reach, technical programming, and leader data deeply passionate market units science requirements team our World worldwide the We breadth the believe in the model positions from and supporting technology the business to a

technology combined OSIsoft simulation, and connections, Altair product many we Braincube manufacturing. in source When Specifically, RapidMiner data clear experience, techniques brings and for leader including on and becomes and engineering including manufacturing, pie, believe deep science and more. learning engineering and knowledge Altair’s the technology machine data and industry-specific with

acquisition advanced made by with we’re and with to important innovation other also around this drive so applying the new this excited we While open to cloud-based to In for of many sustainable and enable computing and meet continuing optimization brings Simulation simulation, design XXXX.X cleaner, efficient innovative cycles. push simulation we’ve world. products powerful social companies more objectives, acquisitions released helps organically. decisions technology far updates year, power XXXX.X source we users QX, the life are responsibility product corporate better

improved and optimization capabilities, updates reduced introduced creation early Altair experience model been new new design. many have for well SIMSOLID of streamlines as to a order a as optimization. to conceptual addition workflow In enhancements the an building Quick to process HyperWorks for simulation-driven Altair lightning Inspire design And

ever-increasing during downloads forks Along innovation share release. after develop the with global visitors enthusiasm the of announced models and drive the innovations, with the the everyone address on architecture accelerate experiment by met Staying GitHub over pace OpenRadioss release code. challenges their we open all simulation of XXX significant weeks XXXX.X, own XX,XXX philosophy, their openradioss.org, was and and XX,XXX With the The executable the and of with by to Altair’s inside contribute, release true industries. to source community to X first getting faced aims OpenRadioss. Altair multidisciplinary allows OpenRadioss, to

like dynamic has around product electronics phone Radioss globe For major a drops. simulate rated cell XX software X-star to the hard been scalability. develop events vehicles. robustness, accuracy automotive than years, successful utilized events strikes analyze crash Aerospace impact transient more leading landings technology manufacturers and consumer solving and commercial outstanding is performance a bird help Radioss for companies with OEMs and

Additionally, this highly We for software complex read move, and on advances dynamic be harmonize contribute syntax, engaged technology events. multiphysics dyna the OpenRadioss will ls simulation this challenges. building. community accessible, up open With can make in the and with community complex is of speed written focused positioned OpenRadioss believe to model most faster solving powerful today’s run models source and a enabling to to accurate most research enable

Solution, of and tool look our to this announced for Bringing sets and successes These together post dynamic science, technologies, Digital seeing applications. simulation and we sets we in preproduction, production Twin tool forward leverage arena. the offering customer broad elements further convergence in-service data many Altair’s of

power many recognition conducted by study excited ranked to been of technology, I’m we engineering generative intersection #X great our has were that on this technology, simulation ranking disruptive setting we Research scope the design. based leadership ago, design, our the the years the Altair that competitive a share supplier ABI powerful in within of a of generative is for Reaffirming noting design OptiStruct path a introduced This of and software innovation domain. when and

the some the the trackers, on optimization. of largest it product our grids. services solar our impact increase development is gratifying technology and in next Simulation market in at with and fields us notable and with the solar simulation It has our over as A And years a solutions. through as many wind, distribution will an moves to other by and customers we maker forward ESG clearly gains QX, one few to of and European sustainability pace related in and world. of more engineering companies energy customer simulation our chosen in Altair’s solar about often such new the of Suite especially chosen is saw successes. believe made companies We renewable enabling manufacturing speak for We accelerated their the sustainable customers forefront impact related positive application

a nations to quarter, activity Providing the deals micro, is we of for livelihoods and the intelligent business in services I key efficient would related sector, such to like financing, to analytics which data development. represents India This Leveraging equitable lending economic access of type approach and in closed to uplift. in enterprises. highlight enterprises to our medium short-term to healthy data disadvantaged small financial social working and positive an sustainable areas. analytics nurturing banking, to X past developing in in localized increase power some factor insurance and capital smart different a

lines, to rural housing small areas, QX, where scale. housing has cities support to efficiently analytics previously we areas on data provided deploy small Along for focused in the at lender been to technology capital it difficult peripheral same and relatively family towns a in

major real-time market, analytics streaming trading the major a and a our bank increase units is a licensing families are of disadvantaged help services resulting a analytics substantially dashboards. that And their through a renewal model, visualization with us, of Also European tools increased dreams signed ownership. in large Altair. usage that of home percentage lifelong for data usage agreement its U.S. data bank in has for XX% year-on-year noting its and financial realize will We their proud and data expansion economies

working is with improve to for engineering AI and improve its and successes also manufacturing, build customer data using tools a tools a manufacturing performance manufacturer digital analytics to base. our our blade APAC, and manufacturer AI now data Application product in in with leading major Altair’s A to helicopter strategy. electronics twin continue is momentum analytics aerospace

Turning a very companies have to chip growth. well, That contract grow especially computing. X-figure healthy Altair pipeline. over player business continues to engaged awarded manufacturing XXX% a related in to major representing we year-on-year technology where high-performance One

inked deal We growth company. design a representing X-figure chip also significant in European a

France. our Flow the Nordic goals Inflection to partners, AmdoSoft Simutron Numeric our new VirtualCAE increasing attributable several in Symmetry in recent including in of We of continue in Brazil, sales region, One long-term South channels. in and sales Switzerland, announcements Consulting Africa, to the the is about made Germany, in indirect U.K. percentage channel

As we we together. support to high-quality build look as accelerated organizations, bright these our future we forward growth

we positive truly remain are outstanding with worldwide of uncertainty while continued the XXXX headwinds. technology a source and exchange doing foreign we despite right forward about push the dedicated as our things and and applications. continue Altair’s remainder of We for rate customers our global developments inspiration teams the currency world

more to provide XXXX. full over the Now and financial performance year on our fourth details will guidance call the quarter and Matt? our I turn for Matt to

revenue midpoint the year. quarter, our us. had an environment, had a Jim, range success products all uncertain range of we our third first increased you, all and remained call. the for reported Calculated at enabling software currency high, the product increase headwinds meaningful quarter. quarter demand the continuing were demand metric aerospace deliver increase increasingly in in particular cash for the Altair leading a the constant in billings we to revenue strong guided the technology and by and verticals, billings and was growth Thank flow, strength you Despite our in joining every total third guidance of in half significant for to year-over-year everyone for for year-over-year and software across high and a currency million, XX.X% geographies above hello on especially driving Thank quarter. to economic the billings and strength in The X.X% us $XXX.X of in results BFSI the to on total and supported currency. end of the

X.X% a Software QX product $XXX.X Total to in reported includes currencies. decrease an of increase revenue other compared in revenue or was to services currency. reported QX of million or $XXX.X million XXXX and was revenue, XXXX compared X.X% which

rate, Our approximately recurring the which XX% months software recurring, X billings of to be strong software first year. license the that of is percentage are for at product the continues

X a quarter stock-based of currencies. which growth revenue to compensation other of product changes XXXX, XX.X% U.S. as increased Non-GAAP in XX.X% saw and XX.X% rates impacted changes and respectively. As year, in a total XXXX, other and and points, revenue basis in billed currency in and as in gross reminder, software million the software portion $X.X QX therefore, particularly third the approximately which revenues quarter the rates. product of was growth of compared total carries of was revenue. past XXX Relative on restructuring respectively. significant margin, revenue the as year-over-year major the third mix, we an than percentage to the increase expense, currencies FX total This our a excludes Therefore, million, revenues we margins, by a impacted revenues are months were significantly dollar are, constant saw our unfavorably X.X%, strengthened software gross higher and prior $X.X FX dollar our against basis, by in true

improve continued our down. support costs gross our to revenue addition, non-GAAP In trended to margin product specific software as

Software the revenue to in prior compared revenue was year. XX.X% of in total XX.X% QX XXXX

stock-based a software will charges, assets Over amortization restructuring million continue and expect in compared there year revenue were $XX.X general million to as revenue. ago expenses, excludes period. outpace compensation, towards product the services Non-GAAP of long operating intangible other shift we mix growth term, which $XX.X to and the

in slightly Adjusted total the than XX.X% was million with or EBITDA compared EBITDA revenue, disciplined prior $X.X higher year spending. quarter. combined expected in the QX was or XXXX of our in to quarter Adjusted to X.X% higher-than-expected $XX.X revenue million due

revenue from or XXXX. the For of $XX.X ended of months to XX.X% XXXX, EBITDA $XX.X for QX months adjusted total QX or ended X million million grew XX.X% XX% revenue total the X

first million the Turning decrease in quarter in by quarter-over-quarter other cash acquisition strategic generated flow third Programming settlement We $XX.X RapidMiner months $XXX.X increase and compared X to The XXXX, balance third the with million to payment quarter, quarter months a excluding in the prior the of decrease our due $XX.X the We of $X.X cash ended generated million the part and first of X the and generated XXXX for partially of flow is equivalents, free in flow than ended million sheet. investments, more used World the to cash from quarter. year-over-year. of in of XX% legal when offset the an approximately primarily of cash in cash free million the quarter. acquisition, as assumed $XXX.X free we cash our ended

Turning for XXXX. and to guidance year QX full

continued has are U.S. several year guidance. see FX on a previous our past a has against other in months, the currency. relative and which meaningfully impact the to dollar impact We our currencies, significant In results major prior continuing reported to significant to strengthen

of to pipeline QX revenue a model. With backdrop, of basis, software encouraged that increase range percentage of of in year-over-year our being X.X% we is expecting to $XXX The X.X%. the than by are business to on However, or are million $XXX impacted and negatively by increase rates. points due resilience the for currency product our a we exchange constant percentage currency more XX changes foreign year-over-year strength million in

constant year revenue, XXXX full currency. For the are raising midpoint product in the at software guidance we

currency being impacted year the X year-over-year full revenue of or to year-over-year $XXX million are to be increase XXXX X.X% approximately We to increase increase of by rates midpoint, The expecting million we a of this to guidance currency in changes is points changes decrease million compared rates. represents At to by $X.X due when software to negatively over foreign of the percentage an a the exchange now in percentage $XXX exchange product quarter, X.X%. million, $X.X the range due foreign last offset last months. X gave in

to other XXXX services previous with and We in continue our compared be consistent down guidance. expect to to XXXX, revenue

As for or X.X%. percentage negatively to in percentage of increase rates. million a by to due increase approximately being The year-over-year XX range exchange $XXX points currency the QX million impacted XXXX expect result, is X.X% we foreign changes $XXX of in a total year-over-year revenue to

at For full midpoint are revenue, currency. XXXX in we constant the guidance year also raising total the

exchange in are gave impacted $X.X foreign We decrease of range a $XXX the The X currency to due $XXX expecting of rates X year to due compared At guidance or by year-over-year full foreign by increase approximately to negatively to being X.X%. revenue our percentage rates. last we last months. the million year-over-year million the the is of now this changes million total points percentage over X.X% represents million $X.X growth changes exchange XXXX to be quarter, in to an of offset when midpoint, currency increase in

and to From year. a disciplined cost the are be mindful perspective, especially next uncertainty into in economic our of we approach continue heading

While revenue department, which as forward, to areas helping we’re adjusted increases the in reducing of administrative that a we’re drive EBITDA. is business our in driving in spend investing are percentage

or revenue period. $XX.X in million total to for of $XX the are in we revenue year currency. of XXXX, XXXX, we year of million to ago also And for total EBITDA million range raising at full in or QX guidance expect compared adjusted EBITDA XX.X% the XX.X% constant midpoint adjusted to $XX For the XX.X%

currency to range prior or total midpoint, million of increase than now EBITDA the expecting over in by At XX.X% changes offset $X.X an the due the adjusted XXXX. expected in currency to impacted compared rates. by to Compared $X.X guidance We gave to represents foreign to changes of negatively a million the revenue in million to months. last XXXX to adjusted EBITDA $XX $XX.X of compared exchange XX.X% rates to this or $XX are being foreign revenue million our last million decrease total million, is due when of XX.X% be of we year, X $X more exchange in quarter,

finally, And for as full midpoint the cash paid payment acquisition for we litigation $XX that $XX.X free which World guidance against to million we assumed was the also XXXX are existing the raising of January. by a year $X of range million, million the to $XX Programming flow part judgment in million and includes at our

free flow compared year expecting midpoint an Excluding the for increase in approximately cash XX%. to $XX.X this of $XX we’re payment, million the million at representing of XXXX,

half As collection in inflow shown free from has seasonally. in cash and from expectations are our free pattern and particular, first cash second billings a sensitive fluctuate patterns year. the QX flow QX historical year, billings collections primarily to smaller a In on cash our the of outflow reminder, and which of the the half

after foreign impact your exchange pattern continue detailed which happy With to to our in of was expecting that, today. including earnings we’d amount We’re We’ve of rates close market comparable press and guidance take the questions. year. currency in GAAP tables, this that Operator? changes to issued be provided reconciliations release,

compile stand Q&A while Instructions] by we Please roster. [Operator the

of from Blair. Dylan comes question Becker first line the with Our William

with Maybe Nice you, job Jim. starting off here.

outlook QX on. as sounds think hearing you well, customer you despite going it the like for and healthy fairly demand that’s As core environment pretty perception you’re QX, everything from remains But seasonal the typically the about kind still of guys too. and base, important

types as needs efficiency tools of to prioritizing those to a can aligning how address. you support of budget, customers they’re how kind allocation sense So hearing, operational to and trying are budgetary the love of that help you’re simulation get they’re what

it’s that Hi just let Dylan, and you know to first [indiscernible]. of all, late want I

here for team the hotel traveling a So you voice visiting room, speaking I’m my hear little season. may a my from here. here, raspy

honest, as my this of managers I’m delayed my surprisingly question people of that, So as or I that down so asking all Chief just indirect to business out imagine, run much you competitive Officer, put can there’s all I’m or country science somewhat who because Revenue long being like to data products the not continues newspapers of it like surprising is day the somewhat the reading deals And hint twin be help think customers like just to slowed of strong or feel cost pipeline actually pressure It’s are. applying move to any we’re the remains but sense, guys if you taken me, extremely the and seeing and to really any continue digital or any just technology rationale robust. and towards whole them we fairly back this reduce well. I’m

that’s a giving renaissance we so us kind And that almost see. really of

continues very for it be So to us. actually very, strong

encouraging hear. and That’s to good

round there and broader that the your the conversion are maybe suite, and in in you towards remarks. can to and prepared but analytics out that what into it acquisition value unit as sounds the It well, help maybe touched data piece of analytics do about how coalescing maybe really of I dig the well? customers how the analytics to proposition the data How You vision. about fitting incentivize kind too. as there think data highlighted functionality of the helps saying the kind like wanted there on thinking RapidMiner you’re model

really available you model of have of the for a to are customer sufficient works when number their use with all. that units, unit products first the Yes,

connectors manufacturing we sector, what very, their before, of also is a where had think had we The in customers. the lot for but a important your use years for across we’re RapidMiner XX lot manufacturing interest of areas a of you, of lot And manufacturing nice frankly. threshold all of sector, us they’ve superior, space. think different is well as sort that crossed what I but of that smaller us. lots built with relevant They of sort manufacturing, course, have major are with in cement overlap a some experience trying the cases to of helps which, in the technology lots the finally a so to array just, really of and And of technology we brings very we and very in base really that do, connectors deep acquisition these installed very,

very, in very strong So direction. that

the we cloud working last we that Then were piece frankly really on our building. just own But is what speaking, were what platform. world-class is better they’ve built, than think, we frankly, and

And just This really fit so the we team, decision. great just going made is a products, well. great really to

That SmartWorks platform just And best-in-class we’re the going really couple really data technology. traction. data and of of well the great our now. also position digital have science, RapidMiner through some twin IoT starting of because during prepared just move for a product. products now it’s mean, example, prep from a our us whole call, for tools. we’re But absolutely for the I this us. And to we strong best-in-class all visualization array I mentioned is in decision our it side just see just a technology, revolution way We’re gives to great. lot tree sunset Panopticon is the very very,

Ahmad of comes the with question next line Oppenheimer. from Our Khalil

they’re among the Congrats I your environment? in different to Would customer Dylan’s terms on nuanced are question, follow-up a macro differences you of guess more how there viewing quarter. verticals the just say Jim.

for the numbers, asking you’ve board. business, all honest, the not if it frankly robust to then or our numbers, I’m auto data solid strength now getting numbers very renewals, business question. I’m strong. HPC the further be all to seems and be simulation, good example, lot business. aero, our a so not very, expansion input And tech that of look our getting To across analytics to it’s probably asked need they’re across at But not the the I’m So, a new right and seeing, account just and perhaps really questions, speaking, you pretty I’m this. our dig and going the

of the frankly, things right never now. pipeline feels now, there, kinds just fairly out can right it’s macro of solid. board, So all very know there’s across But the one course. very,

And great. RapidMiner Matt. year? I it in one the didn’t revenue then release, if know I adding don’t to was this any That’s disclosed, press but see for is this

we’re adding nothing very in year, a to couple It’s QX. little come QX, expecting Yes. this in, of but million almost in

comes line of Abernethy Our next Blair with question from the Rosenblatt.

quarter. you Can okay? off Nice me was getting hear just Sorry, there. cut

a where another I could. the down on years is can Jim, Kind various X or RapidMiner, sort question you Just road, look all analytics offerings? your the this and road as down if X of of, data potentially platform you consolidate of

The answer simply is yes.

developing. bringing want right, it So we market and customers, to especially platform yes, move already that’s customers, gives in, and enterprise exactly the for especially were to everything as cloud, just really us fantastic a

I developed the just that was as SmartWorks it’s such ML analytics, everything to going minor plug in whole apps rapid cloud solution. into our mean we’ve So capability right

And here RapidMiner’s see Difficulty] the well other [Technical that thing by mention, where things a students, Greece and RapidMiner. other with brand. didn’t great So actually. at in known. of earlier all a had way, exactly the was going It’s one one mention other a question. Dylan’s science extremely lot thing I with going the in we just and is fact, and departments pretty was heard university to quickly data I day one just they I’m of the in

have nice it help us. I strong that’s a it’s to think because a really So will really, brand just

what a the Altair’s sort move plan Excellent. And today? it of And Excellent. say, go-to-market what’s with the the let’s stage the just few the units at Okay. quarters, just in next, sort, what’s next next do the product you RapidMiner year model? into or

all going the with basically pushing analytics. data units And across customers to board very here. It’s we’re quickly into units the now very, model the move for

to any from It’s trying much the business. grow have way, named away them to make see, model well. renewals, begin us In units we’re going easier forward. user to a moving that grabbing much Most of you’ll access going accelerate the have basically, pretty of just they opportunities that easier We’re other move and we increase for to as share. all business dramatically to And to applications. couple the that, the it’s we’re which to for And throughout XXXX. to adjustments making the that think over I

Great. Okay.

shifting any called prepared change because elsewhere. of cloudy you’ve seeing are analytics the a you few are change given out Like your the of size got remarks, here are guys in data more just Just you In deals larger in happening a large wondering, more side gears you terms and I’m you booking? things seeing deals of offer? little. sort of macro And things at to environment, Or the all? product a

simulation mean it’s sort entire unnoticed, but you will, more, to higher have whole offering really products to as been a everything attractive to selling up, bottom-up, been are we and that data natural down lot a if do we that are business into we is transition combined making now of modernizing individual rearchitecting And we’re portfolio customers. more level, do and I into analytics tools science the selling else top everything. our more and and data that a solutions And a accounts. everything little selling, the We really still of portfolio. very goes advancing. accounts. It from And bottom we’ve company with selling top-down, think really, we very, it’s but as a

portfolio. strength real the a just across there’s product So

from Capital comes with line question RBC Matthew next the of Markets. Murakami Our

in what organically major Murakami to This We or Hedberg. in looking do out is your and themes on you market just when that feel the ask, invest emphasis to for Matt wanted from Matt areas customers seeing inorganically? you’re either of market, an the at some a

of headroom, most well So across where in But well, accounts, RapidMiner really of it’s Those really really, all is at very, headroom in as opportunity in accounts, we’re to three. But technology we’re architectural of seeing the lot beginning those data because sectors a banking. a we really there’s X if X lot a lot had very those. of in as see side headroom we’re asking growing technology in are aerospace me to a win seeing just a penetrate. automotive in if has lot seeing The the and of manufacturing board. we’re first attractive analytics new and interesting the a on new the lot and engineering still you’re customers. I just We just all Automotive look of customers Europe. business

to macro, in Perfect. opportunity Or past think few M&A the approach create some perspective, that. And kind a With creating more some more strategy? or follow just is pause you uncertain an as I’m from going the of a does years, this value this in your M&A part this we M&A? up strategy of opportunity on guys’ do being

moves more think I we’re no general, huge there’s like as it feeling XXXX. going really In I’m may create that some opportunity make goes on. time to in

we it’s But of We things digest And we’re just of to fill There’s data smaller, now some looking we that there. the and heads have our frankly, at. analytics. grow need needed still of the digest obviously out particularly to things a I solution think to we’ve and, these put work now. done do down I frankly. to a think some moves business. good quite in set, lot And pipeline

next Research. Our question from of line Gal Wolfe with Munda comes the

you. maybe Matt, for the one, So first

to thinking Just to RapidMiner I you How targets top or introduced, in contribute are Jim brings you digestion base. into, either the thinking the cost that in light a the next are feeling the but base little and look guess? also fact cost about of year that mentioned in will terms of the ‘XX when how about especially you the bit the period line,

Yes, for question. the thanks

we’re I now a of very that together really great to it talented do positions and there’s of synergies not the we really, But are it now acquire some of a And the obviously in. terms contributes in is cost and of. line, such and positions some But bring within that talent teams we a bring fold technology that bit would now opportunity for fill to we a just can quite hired team. at with technical that maybe cost business. able we lot. RapidMiner, were open of looking is top that that at in at the already existing one the we’re other And piece before, there’s think exists some when synergies that looking So things have for benefit RapidMiner get doing

is, way see significantly actually. other, our And I sort XXXX of materially the impacting don’t answer one RapidMiner target or alone, so, short the

and we can a I from think our that such it bring portfolio it’s not work into EBITDA target. make it cost on structure a drag our

offers the I of good maybe you And to that the and question it kind becomes of something a overarching do inclusion talked with. suite you’ve a contract clear. has sales normal to also product you new when trying what force SimSolid, products you’re mainstream bit what So focusing something out your progress. that? maybe or stage think, past, of types part at the customers on at happened maybe becomes introduce. about of that little SimSolid talk the And kind really you the about kind a rather can mentioned is, of of stage than physics And a novelty to wow already, can a it more That’s of question, Jim, of just In discussion? have more the then, goes continued show

and well. we’re the is and community all basis. traditional year, Well, capabilities, poke it’s design extremely impressive X the is tool. analyst stand-alone standpoint this just it’s SimSolid beginning portfolio as with at do just continues of a start chockful novelty the And releases really to one is the an in every fastest-growing product or of of into and run. it a the just on to by usage from the we’re of not Most community, we to and a having point, in success a far coupled really product Inspire

mainstream, sort It’s bring units but very to the great So is language look The at this to capability. SaaS at it’s And discussion pipeline of they us well. portfolio, also then entire those the a compile starter. model. as the use it’s similar point, robust discussions for

generating answered question. I funnel. those your the nice I hope of both for to really fill activity so products And are

from comes Capital. question next Our the line of Mark Loop with Schappel

new you If I at your any on this building Jim, innovations product meaningful Did portfolio, prepared radios around particularly something SimSolid release SimSolid. around remarks, Just recall were that innovations simulation significant product. earlier and quarter? correctly, your noted simulation the that looked new or in around we’re for you XXXX. multiphysics being in capabilities question

that in there’s So arena. nothing

particularly had release we’re year will, of At constantly probably, have and the see. space we the same electronics, some around We lab, going that breakthroughs if you market releasing a the going something new so for to or nonlinear is the to time, in contact all example. take, that. though, in But capabilities, it’s before and

to adding to go So SimSolid developers continues really we’re fast, it. and

We’re things developers electronics some on really adding going now just doing interesting forward. focused and to it really

spend more you’re Great. And you was Matt, you some some that. remarks, wondering color if to a areas. administrative in your could then, looking that noted prepared I around little provide in reduce bit

really that’s back more about plan revenue. just where as of plan we to cut And Yes. much we percentage to invest and to where a talk

us. as capacity, And to And so percentage that’s of important to for us. to just as continue to future, invest continue to down. development. revenue, also a come for that expect need the sales That’s about But we important just look in very product like the G&A, ahead we’re we mindful areas in

at faster increase our we’re of So sales in to down of we a least -- than expecting or but course, absolute spend, percentage that in say capacity. revenue, dollar continue come terms development would bit, increase to of will a in

typical of legal, those can when that to departments, use I’m And just finance, scale. back start nature thinking HR, of office about things our we you would where yes. really make that expect, So I about functions think the so

with from Our next of Berenberg. comes question Andrew the DeGasperi line

for This on Andrew Stephanie is Diggisberry.

to concerned ago China? imposed impact weeks for any that U.S. about from So a are export few indirect rules you control were check transfer

rules. mean, to and have I the Stephanie. paying we attention, obviously follow we’re Thanks,

For to of let’s say, automotive oriented of of our those business. Altair, a other, heavy equipment, smaller like our companies, And in a the relatively business some enterprise is of EDA commercial is lot more things. sorts percentage China and relative the such,

for we restrictions. with or number but grow see as the impact, those there even been us, we will So to impact of out to some cannot of sell continues doubt, can certainly to decline. China has customers continue There’s no business that

like remarks. That to concludes I’d call question-and-answer today’s back to the session. Scapa for turn closing Jim

to you attention thanks want and great to say the my for interest quarter. everyone’s just and preparing thank I work another Altair having in team all everything for and

conference today’s call. concludes This

disconnect. You may now