ALTR - Earnings call transcript Q3 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Altair Third Quarter 2018 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Howard Morof, Chief Financial Officer. begin. may you Sir,

Howard Morof

me at afternoon, close call thank XXXX. for Financial and and Morof, Good Scapa, is Altair's Founder, we is Investor third can be which recorded, a our I'm release Relations of for replay earnings available issued section performance, Chief Chairman will press with Altair, of call conference conclusion the After Officer with website the welcome, you. on call quarter details you the investor.altair.com. our Jim a and market our website on and CEO. call. attending Howard on being today, following Thank regarding the third quarter This of our be accessed the IR

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

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

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

business in quarterly future. the this not that that to or offer may the times our our prepared Jim your the we insight may results. dynamics our advised provide greater into we that, incremental his responses or to to are me or presentation With prepared to metrics continue turn questions, Please of in for over remarks. at provide comments our detail let to be Finally, additional call may usual

James Scapa

Howard, you today. call you, joining and for all Thank thank our

quarterly will of recent talk customer We about remainder some the outlook our year. and and Datawatch, for acquisitions our our results, of SIMSOLID stories the

Our we continue year quarter to forward expectations third million, upper of had We revenue of EBITDA We increase a our million, adjusted XX% an nicely exceeded range. and year-on-year which was of above excellent produced with total move from $X.X of the profitability growth. $XX.X ago. guidance end

recognition Our exchange rate which quarterly and revenue the revenue discuss impacted by later will timing, fluctuations on was Howard call.

The Large approximations. laptop profound breakthrough, on based unpublished technological engine meshing. be to assemblies or is to grew QX momentum constant XX% product and fast, on software, basis. SIMSOLID, extremely acquisition strong traditional a and in analysis which Unlike solved and theory structural which extensions of we be engineers. cleanup without on requiring year-to-date complex October design. a On of and continues the rapidly, on Our calculated and revolutionary XX% believe mathematics will SIMSOLID with is year-to-date accurate commercial geometry SIMSOLID software growth a even technology, targeting simulation computers. novel of simplification, external our impact billings design truly we a game-changing provides currency designers SIMSOLID can XX% implementation XX, robust and is computational the We believe announced have

units of marketing new Paris, CAD added We can X ago, weeks material, also the ready other X, be to excitement webinar These We've are will XXXX. X,XXX extended trial and of and X,XXX have X conference Altair and numbers. new version. stage. this HyperWorks in SIMSOLID is X.X licensing weeks video Since expect market and around technology software next developed exceeded big likely deliver on views there training been a release We at XXX,XXX commercial impressions. Since we disrupt the physics introductory announcement years for regimes. technology SIMSOLID's almost are aggressively meaningful free our at downloads the the the just January our palpable. making readers few this more the design had current ago introductory and over acquisitions the and believe for revenue we've is than stimulation million to for almost yesterday's media for social Registration

color a spend publicly like regarding best-in-class additional few of the company XX preparation, with real-time XXX customers, including traded analytics products. visual a providing Fortune established our this I acquisition some the and earlier of thousands and data data Now well announcement to week minutes of would Datawatch, of science

science We substantially and Altair to our are accelerate addressable our of market Datawatch believe it'll incredibly of quality for Datawatch's general. portfolio of data vision and addition excited increases the simulation CAE Innovation. by product how and convergence of the in the Simulation-Driven We

a base. data Datawatch existing represent many drive significant offering. in Altair's X,XXX interested customers, technology be our We product value Specifically, opportunities in who offers. design highly capabilities and the simulation we and Having significant with capabilities Datawatch and believe revenue of adoption new will value-added for with differentiated can we existing see offering brings revenue for that will complete customer a products increased our together Datawatch's

Our competitors. licensing for creates model customers our reason also tools the to a versus explore compelling

significant and see most product real-time data in and it data and engineering is opportunity believe is life Capital IoT open integrates critical and streaming technology in applicability as Panopticon's the is the technology unparalleled. the around is clean in analysis which versus real-time and solutions for from science technology commercial ways, energy used exciting streaming, to Panopticon data to brings and known operational Panopticon. and Many product business. provides learning design with engineering used traditional primarily this it unstructured target Panopticon SmartWorks we IoT with Panopticon core nondevelopers. design opportunity data from the partnering leveraging many We market to CAE see today dealing world. with management and health fastest-growing such Datawatch learning, reporting primary our markets last most in data cycle the we of their integrating for for couple functionality with for revenue import, for also as a organize is to Its into in of also by is is solution unified proven systems. live best-in-class retail for solutions other for of the primarily of products. be has optimize Datawatch will in in is product care data data machine Monarch Monarch, three a need Kafka, enormous visualization in-service future streaming the There markets, use and the with technology visualization science, which data for customers this integrate technology foundational has a Today, years. and in serve. strategic groups finance, the sensor also assets greater an consumer We our owning preparation. it Angoss Altair's machine future of markets. the families: Angoss science twin, test and product by which field. performance. asking in and have idea accessible data dashboarding physical The stimulation is with and focus. Markets and solutions, and sourced in traders and today digital expertise used making coming and broad been Angoss is,

able being in confident to ambitions. feel we Now address their

Angoss Just CAE. developing in also external relevant everyone driving case within regional for was for was One call, opportunities shape example used this autonomous to platforms. the morning for apply changes about for be our the technology Angoss will extremely manager aerodynamics. excited

Datawatch's executed a HyperWorks its expect years global go-to-market limited organization large products opportunity usage. significantly are we Datawatch. leveraging We central a our by positive with theme our make results in material stand-alone growth to have financial Datawatch constrained installed acquisitions While This were drive sales drive a each over can we reach. similar in licensing successfully base our traditional model investments believe in international we also and Simulation drive markets. drive strategy to in be scale into our fastest-growing in see the usage and their and to To is products industries. planning the results greater is clear, focus, opportunity is believe to the remains greater our incremental is our Markets lack platform and segment an not there putting services its we and primary and we Capital this of PLM. as for of company and

the margins of above - margin our have as expansion We projected our adjusted does not or Datawatch improvement. to change EBITDA we timing driving XX% the adjusted margins. profitability XX%-plus EBITDA of target progress thesis committed toward

adjusted day, other for the be operational expect we we've we neutral put our identified transaction in to As after available of standpoint, solely to near model the result flat revenue From modestly perspective, a its efficiencies HyperWorks our recognition dollars model. place to EBITDA the cost term. XXXX a via making million closes. and licensing expectation noted in plan From ratable to several the very the revenue Datawatch in for shortly transitioning products is transaction growth the of a revenue accretive

strong by that to XXXX end demonstrate We will transition complete XXXX. in expect of and the products this substantially Datawatch's starting growth

third review. quarter our Turning back to

expansion third the of a of expanding similar continue Runtime Computing with in aerospace aerospace we to related made them generation Our us business European A build expansion one UAV We quarter, quarter American September manufacturer signed nice story to North largest European telecom had strong as a issued software. products part to these structures. their In date. High-Performance major awarded of software centered a following. substantial who our our business. In order addition next XXXX, efforts, electromagnetic acquired to in structural around both electromagnetic of their a Altair's part and the company licensing agreements a and use electromagnetics analysis solutions a company

worked of has customers expansion technologies combined then the agreed an deliver of integration report for team solutions hard contract and to Xx to nearly a Altair. to pleased part I'm Runtime's acquisition. the has chip-making strength of complete, products to to With the that customer important Runtime's organization related as

up. antennas, across ramp a the bringing attracted exciting over game-changing HPC quickly world our pricing consulting for we their by new in no-cost to footprint disrupt including cloud the at in strong place announced our the see preferential We to boating, in of us start-up products several A new the program the opportunity unmanned visitors to accelerator excellent is lot We for global thousand and expand and to machinery, relatively opportunities FinTech our products orthotics. see expert Datawatch. acquisition end HPC has multiple vehicles, web EDA, page new business of the to dozen meaningful also by markets future. a customers. and and the gotten global very of with emerging start-up over entrepreneurs. Its continue getting entrepreneurial initiative July these a to e-mobility and customers tech In behind outlook customers applicants, electric is Participating and truly already the third agreement optimistic program grow look had long-term for see way range acquire the a have This The markets to support recreational to become has new for helping sectors, diverse of companies followed remain revenue inventors Altair for economy and ourselves from get exciting about us traction. to opportunity program who summary, entrepreneurs. partnerships quarter We and SIMSOLID and forward and these Altair. companies to XXX

will guidance. update the during an performance quarter on our I turn as third as for financial Now Howard? on the Howard to over details financial our call well

Howard Morof

Thanks, Jim.

constant Our quarter strong growth. demonstrated and continued flow cash revenue operating and leverage currency solid software third results generation

total was first as revenue with same first XXXX million, to of XX% quarters, of nine third XX% $XX.X from XX% the and the a of for the product from million, year quarter $XX.X in of representing our Software months the growth two period increase reached ago, XXXX. Combined an compared XXXX. increased revenue revenue

two by impacted third items. Our was quarter revenue

moved exchange clear revenue we reported. momentum are would in been revenue us. of and and and total the constant software against respectively. a On rates the business. during total seeing underlying currency the basis, We foreign On First, this quarter $XXX,XXX performance XX%, higher is a a approximately basis, reflection XX% and strong grew currency constant believe have than software

recognize period to top on the Second, were million due software revenue impact, currency revenue of the of unable we approximately requirements. recognition to in $X.X

of services We have recognized revenue periods. with will timing, have that certain a and which associated begin bundled multiple begin for commenced. in contracts we is are this elements matter being the This recognizing until cannot ratably future software revenue

year $X.X which our adjusted strong guidance for EBITDA in the also favorably quarter, a and XX% to to as quarter the million compares grew by $X ago. profitability We had exceeded million

with business, attractive mix returns increased are our software on We are making and which the we pleased the business. investments leverage the our reflects in in growing

positively continues shift mix revenue the in quarter. Our current

of Software exhibit XX% year-to-date XX% from quarter growth, product revenue XXXX total to very to XX.X% period. year strong On in same a QX momentum equaling the continues year. software last revenue grew in the compared prior to basis,

we have revenues over expenses, we when the longer Changes note variations deferred is associated software occur currency time changes currencies on certain impact relatively more momentum quarter-to-quarter As revenue. as or that predominantly pronounced can periods our those both over the and our believe the I FX shorter time. are impacts occur. can revenue mentioned an that would our on when especially viewed previously, software periods changes have time over best in also and business impact

we meaningful such, measure aspects of basis. is As currency performance a it constant to think on our

For of first the from nine calculated billings months months of million, an the year. increase last nine were XX% XXXX, $XXX.X of first

on for growth basis Our X-month period. the XX% constant equaled a calculated billings currency

billings a software of continued As [indiscernible]. year product quarter, today. from been calculated with million momentum in the the P&L. the expansions improved are from deferred an which products. a timing $X.X to impact quarter were impact billings will of our a calculated earlier basis. arrangements revenue revenue basis, increase foreign a would on exchange transaction periods a to increase XX% a billings previously on Runtime margin longer from of at end metrics, can above, demonstrating on over further impact variations ago, release mix a year year renewals, time in discussing ago, discussed measures software-related of rate and some 'XX. quarter-to-quarter. changes for billings the I to the reconciliation of deferred from customer our in income have a adjusted deferred quarter. A coupled due constant impact new the turn strong the to mentioned, balance of to like and view FX I XX% statement GAAP the On the revenue million, grew provided reflects currency our X QX from to non-GAAP relates the product revenue, non-GAAP primarily higher from of We to software negative ago, XX%, the has $XX.X In prior tend earnings of activities. points calculated revenue growth was Calculated due of third we gross margins an Non-GAAP in of with issued services percentage software coupled be third

continuing our momentum operating year-to-date. coupled for in as continuing a the scale year realizing X.X% The grows. year million XX.X% year compared prior $XX.X to emerging adjusted basis, Adjusted with amortization operating software margins, EBITDA with certain revenues expenses, other For of an strong excludes On million activities, of benefits X.X% for & to and $X.X third $XX.X year-over-year the beneficial increase in EBITDA marketing EBITDA million EBITDA to our stock-based non-GAAP Adjusted the to expenses improvement and to supporting of objectives. increase intangible we quarter accelerated compensation, believe, expenses a income quarter quarter, in compared driving on reflects had operating margin were which a assets our coupled we related onetime ago. X.X% compared ago. our the business ago. R&D SOX XXX of the compared million margin gross was includes to of growth $X investments adjusted sales year-to-date was the a adoption and This

see are performance pleased adjusted We the first and the will expect healthy for that year. our very with the full growth year months of in EBITDA in nine margins we

share a or loss net share GAAP our of per net continue million to greater. We million $X.XX a XX% diluted of quarter year a income achieving $XX.X On or $X.XX was compared or targets EBITDA margin our ago. long-term focus per on $X.X basis, third adjusted

current expense, stock. and loss common of value reminder, quarter ago a a the year reflects of the one-time As the stock-based primarily our to due shares net $X.X gain sale building compensation increased the a million on a reflects of

Turning million end we quarter, the of balance quarter facility to revolving commitment. $XXX $XXX.X our credit in million with end ended third the generally second to sheet. our and expanded our a We position to the cash quarter. equivalents, cash Subsequent at line with $XX million the by the in of

down million balance U.S. transaction the facility, along resides the expect in with drawing most and no cash cash our the sheet, currently our as $XX Datawatch more fund We cash with our credit to of than on equivalents on

Turning decrease million cash of to third outflow capital significant flow was impact statement. reflects $XXX,XXX strong very quarter, improvement Free our cash an compared flow a cash in for the from free to from of momentum. flow in consist cash approximately from of our 'XX. at a million quarter cash the quarter in operations $X.X for increase the The million third operations third clearly $X.X less which our flow, the flow of Cash of XXXX. $XX.X expenditures, QX positive was

of any guidance the Turning our does include outlook Note XXXX. of the impact to for not our Datawatch. that proposed from balance acquisition

we our XXXX. additional software our adjusting software $X product basis, constant reflect revenue modestly On call. by earnings revenue are foreign approximately are to product exchange $X outlook a for We our increasing for outlook headwinds since million August of currency million

expectation our for fourth in increasing which outlook first in the positive XXXX months the year, performance in quarter. our of for EBITDA We further first our - the adjusted reflects and the impact are the of also nine improvements

follows: growth between income revenue $XX a $XX.X are be EBITDA estimated XXXX; and balance $XX.X in to million, million million. representing upon and net guidance to $XX to we be XXXX, $XXX shares; expense to free $XXX in to million and software GAAP as million. the For total fully and and compensation $XX.X million, million to product revenue count guidance non-GAAP stock representing be approximately $X.X our we net of XX% current approximately XXXX; $XXX million million towards between that of and delivering from from our providing be representing share to updated expect the income XX% million, adjusted million; million growth flow excludes of between XX be improvement perspective, This year expectations and with be XX% XX% operating over to $XX.X adjusted XXXX; cash EBITDA margin in diluted based business steady million notable between investments a of $XXX finally, between $XX we targets. profitability From between of $XX achievement profitability million improvements long-term and full

in We the are confident in increases continuing for will these growth future. position profitability investments us both and

the and from representing that adjusted $XXX,XXX and we consideration million, XX%, $XX.X excludes quarter between be are income count $X.X This $XX currency $XX.X to be approximately estimated EBITDA fourth the income be growth XXXX, between fully as of and otherwise For to XX of impacts; expect of taking of be to fourth of the million between compensation GAAP $X.X and and be X% between quarter expense shares. and to $XX million be million. million net XX% XX% of $XX $X.X fourth expectations diluted quarter non-GAAP million million; growth to approximately million; net stock-based revenue product guidance to XX% follows: and million share from into of $X.X XXXX; would between XXXX, million XX% to our software which revenue million, to $XX total representing

comment to I from about Datawatch thoughts Before the transaction a our initial wanted specifically financial on perspective. finish, I

level integrated able planned that we'll expected realize of of significant top operational to This growth into after combination, long-term to efficiencies our supportive is as the to of We the operations. organic continuing our expected business, synergies the recurring expect is a be timeline. our on with Datawatch coupled business our achieve particularly targets operating commitment in conversion margin accelerating within revenues, the

are substantial upon across earlier, the the capitalize significant mentioned around impressive opportunities believe Datawatch's As elements Jim to globe, base customer there technology. us cross-sell for our of we with

have these a our we integrated over of our in first depth have experience business pleased the to history, and value licensing conversions be model diligently to from array of with nine of solid summarize, track as Just prior a revenue units-based and of acquisitions the the continue realizing the XXXX. types third we To record the wide performance quarter investments. model for of months of we

executing With well up our questions? priorities We of cash increasing can and and the we to now and open that, an operator, growth profitability are generating strategic attractive flow. on combination call

Operator

from [Operator Suri Instructions]. And William from our Bhavan Blair. first question comes

Bhavanmit Suri

has how business of couple a I'd to of first, sort a as crossover viral-based into too I that started with the you've early? sort questions. business. b, sort for sort what going and it solidThinking, yet had been HyperWorks so guess, color of of drilling the sort to model of Have to uptick you just then, or products, I transitioned the see is get the see of like that is unit-based happening inflection we little on

James Scapa

higher be was which met one a months as well, includes seem saw U.S. and it's solidThinking with a a lot And of solution structures, is, They the we fluid And of pretty SIMSOLID. all our ago. Inspire manufacturing analysts model. for It's our too integrated excited resellers. competitors, simulation, solutions actually end. early, the you. but part products in that's is we just their expanded integrated where a the positive inspired, other does they environment getting CAD platform, what much one these we the pure capabilities we at very in which the founder and and really - if have that largest HyperWorks think, out with simulation of guys now level, industrial honest be instances, multidisciplinary. acclimated included personally all run big solution has the there's to though. into I opportunities, of also sell, he with electromagnetics basic to higher-end which honestly you in solutions design And X.X will. run solution greatly And win. that mid-market to are did the be can in whole new because SIMSOLID higher call simulation It's platform, for is simulation particularly also excited actually. certain solution, but They two you really We're resellers where to I to can't the

So the SIMSOLID strong product environments. extremely just those in is

So he was excited. very

Bhavanmit Suri

great. of with And Great, sort growth of rate follow or that up rate I'd helpful. then follow-up, it just a just But vis-à-vis business. question. of more the sort was That's want a I love solidThinking then, little the but of I as expectations, growth guess, know to to also philosophical where business

As sort of of base sort you've love split versus that about of sort a solver to being the investment make carriage, cross-sell existing that you part of customer in Datawatch so got of between et separated we How again and do you stuff sort balance electromagnetics, a solutions, philosophy. by of sort more areas new for for that it's computational acquisition that P&L hemodynamics, how can cetera. whether versus investment understand core R&D, I'd of bunch that that sort the is analytics to acquisition do mind, [indiscernible] into or you got [indiscernible] you looking base do engineering directly either obviously, data the Datawatch's where stuff other of you've prep, sort you think analytics, there some can

James Scapa

Sure.

name Every of with doing customers. Datawatch vast So address management, we're machine CAE. they're in this not The SIMSOLID is. is okay. automotive majority are doing But of my we product with names, into and trying first what what me solutions, visit, to are going asking but us what integrate are to where won't business we're data about solutions is every their learning, senior you line I mid-market with science enterprise-level when visit business how our is, the there, I with the most excited doing the companies, specifically you my it's and more and for I the is company aerospace question new customer around

think, in has deliver of customers, and them. to something coming very I integrated So really who is my the ability all, be solutions of enterprise to first to knowledge attractive going expertise with lot

uptake think, to lot it's see you're going I actually. of a -

Operator

And our question JPMorgan. next comes with Sterling from Auty

Sterling Auty

what and Jim, the there. or in products I we're you on global more just given happening sector release given more environment currently? in seeing the a what's lot of users more terms kind bit of the into dive are investors additional the to wanted of asking the comments environment, solutions take auto little the in press eagerness in their for willingness products either to that or a

James Scapa

right EV X expanding So now the we ton all, first is you companies. actually, exist whole cars. to XX that We the because develop environment, cars, along don't And West have Coast didn't right. sell like market sell companies years technology in this of a ago. new of is There

all look automotive my even pretty which fast if at - maybe as is automotive sectors, faster sectors, So growing than growing different all the are I other and nicely.

a cost we the seeing is very, very, for engineering really all worthwhile think hunger hot is in going to and very their for spend guys I overall actually it this be these for of cost a and spend, market. what is very So small right automotive now. is a is do think still in there I competitive percentage many The all ways, extremely well, very and still they're

Sterling Auty

I understand the the could Okay. better. a in I Am contract you was bundled me the that And bundled sure recognize so that want then make hit that software contract. I to understand recognition Howard. component? it the just milestone you understood Or didn't a one to help revenue follow-up, just delivery bit little services

Howard Morof

revenue Sterling, the criteria. nutshell, deliver under is which Until revenue deferred, yes, a elements, all the - software side. that's of in service we So, deliver is essentially the start to including our is recognition

their the simplistically, and we it, software side. the on recognize software we training don't So until delivered portion to training commence start

timing, we and up picked into it's forward all QX will look get and the beyond. $X.X So as million about

Operator

Needham with Company. Valera And our from Rich next & question comes

Richard Valera

I Jim, a seen hesitation the Just of pulling question. version sort seen here? current changes receptiveness choppiness you of any broader putting customers purchase macro you Have to seen in kind of solutions have the any just of given aside or auto? macro your wanted the we've given from customers, ask to Sterling's outlook, back

James Scapa

business I'm would cautious say. time CEO, I've seen long of fairly been I've and a a So around I like a lot climates.

So honest strong, with continue things perfectly pretty you. to to far, be be

but, So things geopolitical about detected haven't worry really issues, the my where all I that. with macro honestly, also certainly and up go now, I until

Richard Valera

just to follow-up Datawatch on you could then and existing thought And that specifically, your customers a maybe prep market kind that it. Monarch, CAE it saying you tools data their sell like your prep into there of at thinking? Is Got customers, that a what base, your you were to some do to sounded regarding comments the data sell think? you Is CAE core you're point.

James Scapa

what piece to and natural some data of Data element kind think you're market, And do you about can't very if won't science of familiar essential I of data data I data very that what prep unless because are the coming with data the mention data an So is you're of together prep do prep there. sort is, players well. science. - able prep it's science

to so be that I Does going is for that reason, pretty strong need both. there sense? think, And make for a

Richard Valera

that the like, will data prep as have been - with it I'm data of it base, science, to merging this trying out, you're customers. essentially into I just figure has and sold past, those be sounds but the of forward fair? it you guess, market a in Yes. kind there hasn't Is been that thinking

James Scapa

I think, is true. that

some little bit delivered the see may you think, differently. of tools and capabilities I a

prep see to may it our example, units model, to But data integrated we start and doing with make easy customer Angoss data do for to their data science is in units platform. or capabilities For prep. more able because use the their of data Monarch you to a Swarm science immediately use be who

Richard Valera

deferred acquisition. us Is the the for you - you Got for one to it. prior what I can adjustment year was Runtime follow-up, made it And tell one think, it last Howard. the that the acquisition? revenue was quickly

Howard Morof

The adjustment?

Richard Valera

Yes.

Howard Morof

was that yes, $X.X revenue, For about the million. acquired deferred

Operator

our [Operator Alex And from with comes question Instructions]. Berenberg. next Frankiewicz

Alexander Frankiewicz

around acquisition. just Datawatch couple had I a the

mainly customers you first making simulation, is, could longer do see given churn Datawatch you'll think given other base investments some there? in of that core and be one financial The are industries in outside that no you services

James Scapa

investments I will, not we're make there. not to going make, you going to didn't I is, if investments there. said we're What incremental say significant

So team time. which that I focuses deliver I think, the focus do on a more trying going think that will more to have still do, accounts, and substantial Altair love to we customer what over on model to of meaningful grow convert And to sort subscription in to particular, is those we're of more substantive that market. are we a make to certainly accounts accounts. more support that that XX-XX bit them a those luxury accounts, tends in businesses and the important It's them little have rule. And and

Alexander Frankiewicz

are how within than accounts Okay. And just R&D then those Datawatch's given stand-alone sales products, traditional different typical sold divisions That's that reps departments? engineering also that typically and to about helpful. the products your penetrating you will given talk thinking your Datawatch into

James Scapa

we'll need engineering on and there's to and and think the calls run have going that we groups a which explore play and a and team we R&D test some a that side, identify first customers into that the all, them overlay and we're those the can tools these existing customers of licensing for customers do under of basically obviously, an So know these existing model. basically in

Operator

Bank. with Alex Tout comes And our from question next Deutsche

Alexander Tout

the might I heard to I shortfall delayed in but, like a release it. question guidance the FX referring of relative another then and press that to this, to you start the the missed I something services think, that contract was that, due I driving have you think, explained said call where the been

So was just to FX? fully contract factors been of how and And how by that be might your the much expectations by clear, services shortfall any relative to that other have that? driving driven much

James Scapa

timing the just that FX two then recognition, another $XXX,XXX $X.X Alex. revenue and on attributed million. Really the Thanks, factors: was

No a there. quarter. overall quarter, from really So Obviously, other just that's just momentum it. software factors nice an

Alexander Tout

projects that genuine sorry, Or the And kinds overall was issue? of these projects just XXX a specific I'm are recognition revenue? significant was overrun? in it a

Howard Morof

and - to trigger a because elements under had begin operate arrangement an elements revenue XXX a it's recognition. or And our you to customer it XXX. No, to issue have such recognition to we contracts to still criteria within have multiple deliver with where do not revenue started order needing services all

Alexander Tout

that that sorry, I'm the or don't FX Okay, end contract and explanation kind full does then year complete you year? that the just slight And of contracts? fully it to trim Is the finally, expect to by Just is the of guidance, what the imply there. that?

Howard Morof

the that absolutely that $X.X over FX recognized over be contributor. arrangement. had XXX, will under we million, duration ratably time as so on essentially And So a the remaining of

you So are correct.

Operator

questions back turn would call am CEO, founder this any for remarks. I to James to closing over and now I any at not further Scapa, the showing Mr. time. And like

James Scapa

you. of I call look questions everybody want the Okay. just have. interest answering and you Thank the might I your to joining Thank any Altair, for to thank rest in forward for you. that

Operator

This thank in conference. and today's wonderful your a Ladies have you conclude disconnect. program day. may for and participation Everyone, does gentlemen, you all today's

Altair Engineering (ALTR) 8 Nov 182018 Q3 Earnings call transcript