Altair Engineering Inc.

And thank you for standing by. Welcome to Altair's first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Dave Simon, Chief Administration Officer. Please go ahead.

Good afternoon. Welcome, and thank you for attending Altair's earnings conference call for the first quarter of 2021, ended March 31, 2021. I'm Dave Simon, Chief Administrative Officer of Altair, and with me on the call are Jim Scappa, Founder, Chairman, and CEO, and Matt Brown, Chief Financial Officer. After market close today, we issued a press release with details regarding our first quarter performance and guidance for the second quarter and the full year 2021, which can be accessed on the investor relations section of our website at investor.altair.com. This call is being recorded, and a replay will be available on the IR section of our website following the conclusion of this call. During today's call, we will make statements related to our business, that may be considered forward-looking under federal securities laws. These statements reflect our views only as of today and should not be considered representative of our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. These statements are subject to a variety of risks and uncertainties that could cause factual results to differ materially from our expectations. These risks are summarized in the press release that we issued earlier today. For a further discussion of the material risks and other important factors that could affect our actual results, please refer to those contained in our quarterly and annual reports filed with the SEC, as well as other documents that we have filed or may file from time to time. During the course of today's call, we will refer to certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our press release. Finally, at times in our prepared comments or responses to your questions, we may offer metrics that are incremental to our usual presentation to provide greater insight into the dynamics of our business or our quarterly results. Please be advised that we may or may not continue to provide this additional detail in the future. With that, let me turn the call over to Jim for his prepared remarks. Jim?

Thank you, Dave, and welcome to everyone on the call. Altair had an excellent first quarter 2021. Our vision of the convergence of simulation, HPC, and AI driving enterprise decisions is emerging as a clear imperative embraced by customers. This technical direction, which we identified early and have invested in significantly, is important and manifest in all of the markets we serve. AI is becoming pervasive in our lives. Altair is integrating AI into all of our software applications, and we are rapidly evolving our solution platforms to allow customers to implement this technology to benefit from the latest knowledge and algorithms throughout their organizations. We are pleased to report record quarterly results with total Q1 revenue of $150.2 million. Software product revenue for the quarter was $129.5 million. versus 108.4 million in Q1 of 2020, reflecting year-on-year growth of 19.5 percent. Adjusted EBITDA was 37 million compared to 21.7 million in Q1 of 2020, an increase of more than 70 percent from the first quarter of 2020. All were well above our guidance ranges. Our business continues to shift toward a very high proportion of software versus services, expanding our gross margins and strength to invest for the future. Our modified Altair Units business model, along with a more structured go-to-market process, is delivering better revenue for value in our major accounts and enhancing our ability to more effectively compete in the middle markets. Software product revenue was 86.3% of total revenue for the first quarter compared to 82.5% in the prior year period. Our recurring software license rate was 94% for the first quarter of 2021 versus 93% in the first quarter of 2020. We are excited about our results from Q1, and we are looking forward to the balance of the year. While the coming months continue to hold some uncertainty related to the challenges with COVID-19, especially in India and other parts of APAC and EMEA, we are seeing many signs of a robust economy with customers investing to develop new products and looking to Altair experience, products, and solutions to accelerate their innovation and help them be competitive. Our results show continued strong momentum due in large measure to the strength of our constantly growing software portfolio. In 2020, we made enormous progress with broad multidisciplinary product releases for simulation, HPC, and data analytics. SimSolid, which we acquired two years ago, is clearly emerging as the leading technology for structural simulation for designers. We had 10 major releases of SimSolid since the acquisition, and the number of users and customers for this technology is growing daily. As the technology continues to mature, its performance and accuracy, especially when dealing with more complex structures and assemblies, is unparalleled. Many of the hundreds of customers using SimSolid have presented technical papers or otherwise spoken publicly about their use of SimSolid, including from the automotive, heavy equipment, electronics, architecture, oil and gas, and other industries. SimSolid now has a broad solution offering, including statics, modal, dynamics, thermal, thermal stress, fatigue, linear superposition, and linearized stresses. The code has been enhanced with an industry-best design connections library including spot welds, laser welds, 3D seam welds, bushings, adhesives, joints, and rivets. We've also improved the workflow integration of SimSolid, notably within our Inspire design platform, but also by more seamlessly connecting to a number of third-party codes. In the first quarter, we won a strategically important account for SimSolid in the aerospace and defense industry. where we believe there is significant room for expansion, both in this account and in the aerospace industry as a whole. We recently published a case study from a General Motors division. Their design teams desire to perform structural analysis to evaluate their own designs. The non-altair simulation software initially utilized proved problematic. SimSolid provided them with an alternative which dramatically decreased modeling time and allowed the designers to evaluate complex components and large assemblies, which was not possible with the previously used software. For modal analysis at the component level, GM found a correlation factor of 97% with SimSolid compared to traditional simulation methods. This was combined with a 75% reduction in time taken to complete the analysis. We believe the accuracy, time savings, and workflow efficiencies of SimSolid, combined with all of the capabilities added since the acquisition, will help continue its momentum as the product with the fastest growing usage in our software portfolio. Altair has been a pioneer in engineering simulation and MCAD simulation driven design for more than 30 years. More recently, we are bringing a simulation driven design philosophy to the electronics industry with an end-to-end solution. Delivering electronics that delight consumers requires more than just linking the ECAD and MCAD worlds. It requires physics analysis at the speed of design and collaboration across disciplines throughout development. Altair Pollux offers solutions for printed circuit board design review, verification, analysis, and even rule-based design for manufacturing, design for assembly, and design for electrical. It introduces a simulation-driven methodology for signal integrity, power integrity, and thermal for printed circuit board design, and importantly, integrates with all major ECAD and simulation tools. In an interconnected world, most devices are wireless with several antennas. Altair's 5G simulation tools uniquely combine antenna design with radio coverage and planning analysis and provide the broadest set of scenarios for 5G applications. Using Pollux and Altair's electromagnetic tools, combined with Altair's other physics-based simulation tools and machine learning, and to reduce modeling time, helps users achieve improved connectivity and functionality. For smart product development, performance optimization, sensors, actuators, and motors also provide challenges for architecture integration. They often need to be miniaturized and integrated into the PCB without sacrificing reliability or adding to manufacturing costs. Altair's model-based development tools can help drive faster assessment of system performance by enabling the flexible configuration of sensor systems and simulating the subsystems and control strategies for each function of the device. Circuit simulation plays a strategic role in the schematic capture phase of EDA workflows. Altair offers electronic circuit simulation tools and an open integration platform for modeling, simulating, and optimizing multidisciplinary systems of systems. Altair's enhanced proprietary version of SPICE based on an open source industry standard with access to the library of digital component suppliers delivers a more interactive schematic in which easy changes of component values, tolerances, frequency response, or time periods, enable an accurate verification of the electronic circuit performance. And finally, to develop complex embedded systems like sensor and actuator controls, vision systems, and IoT devices, design engineers need software for model-based firmware development. Altair's tools let you design, analyze, and simulate your embedded system using block diagrams and state charts, then automatically generate compact and optimized code to run on an extensive selection of microcontrollers. The breadth and depth of technology Altair is offering for modern simulation-driven design of electronics is being embraced by our existing customers, especially in automotive. We believe this will lead to increased business opportunities for us. The first quarter brought many new expansion wins in the area of high-frequency electromagnetics across industries, including aerospace, defense, railway, 5G technology, automotive, and others. Applications range from antenna placement and design to radio and radar coverage. Altair has a complete solution for electric drive systems, coupling e-motor concept design, multiphysics simulation, system integration and control design, and PCB verification and analysis. We had two interesting wins in the first quarter that demonstrated our value toward electric drive system development. One was with a global manufacturer of industrial pumps, and the other with a manufacturer of ventilation systems. In both cases, the ability of Altair software to simultaneously address electric motor, sensor, control, and power converter development was key to building the business. On the data analytics front, we are continuing to promote and see acceptance of the Altair Units model, especially at large enterprise customers. We launched an early access release of the SmartWorks platform to a limited customer base with strong positive initial responses. SmartWorks combines capabilities necessary to develop apps, and orchestrate edge devices for IoT and smart product development with end-to-end capabilities for data analytics from data ingestion to live system deployment. We are excited about the opportunities SmartWorks brings to Altair to serve a very large and growing addressable market. Matt Brown is fully on board as our CFO and doing a great job to help Altair grow into a substantially larger revenue and EBITDA Profile Company. Our 2021 Investor Day is Thursday, May 27, and we look forward to sharing some insights around our technology, addressable markets, and long-term outlook with you then. Now I will turn the call over to Matt to provide more details on our financial performance and our guidance for the second quarter and remainder of 2021. Matt? Thanks, Jim.