Altair Engineering Inc.

Good day and thank you for standing by. Welcome to the Altair Engineering third quarter 2021 earnings conference call. At this time, all participants are in listen-only mode. After the presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star then one on your telephone keypad. Please be advised that today's conference may be recorded. If you require operator assistance during the call, please press star then zero I'll now hand the conference over to your host today, Dave Simon, Chief Administrative Officer.

Good afternoon, welcome, and thank you for attending Altair's earnings conference call for the third quarter of 2021, ended September 30th, 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 closed today, we issued a press release with details regarding our third quarter performance and guidance for the fourth quarter and the full year 2021, which can be accessed in 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 actual 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 a strong third quarter 2021 with across-the-board momentum as customers invest for growth. Altair's products, services, and business models are clearly providing value, and we continue to increase our market share. We are pleased to report Q3 results with total revenue of 121.3 million. Software product revenue for the quarter was 102.3 million versus 87.8 million in Q3 of 2020, resulting in year-on-year software product revenue growth of 16.5%. Adjusted EBITDA was 14.8 million, compared to 8.2 million in Q3 of 2020, an increase of more than 81 percent from the third quarter of 2020. All were above our guidance ranges. Software product revenue for the first nine months of 2021 continued a strong positive trend at 84.7 percent of total revenue, compared to 82.6 percent during the first nine months of 2020. Our recurring software license rate remained high at 90% for the third quarter of 2021 and 91% year-to-date. To build awareness for our products throughout our target markets globally, we launched a series of virtual conferences. Registration and engagement numbers have been impressive, with more than 30,000 people signing up to attend. Attendees learned about technical trends and innovative use cases, employing our solutions from a number of leading industry and academic guest speakers. Our response to these events has been overwhelmingly positive, and we are excited about the opportunities created. Positive growth trends for our business persist across verticals, technologies, and regions. Today I will talk about new product releases, including an exciting new offering for electronics designers, our acquisition of S-Frame in the AEC vertical, our just-released corporate social responsibility report, and some customer successes. One area of ongoing customer success is the conversion of data analytics customers from traditional named user licensing to Altair units. a long-term, perpetually licensed data preparation customer in the financial industry, was recently converted to a six-figure annual subscription contract to deploy data analytics and visualization throughout their organization via Knowledge Studio and Panopticon. We continue to evolve our product portfolio with a combination of sustaining and disruptive innovations. and recently announced the 2021.2 product update. The 2021.2 release of Inspire, our simulation-driven design platform, includes a large number of features, including a Python API, new geometry tools, and optimization algorithms for minimizing 3D printing time. SmartWorks 21.2 is a modern evolution of our desktop tools to harness the power of AI, analytics, and the Internet of Things in a cloud-native platform built on the experience we have gained in data analytics and smart product development. It's built from the ground up using the latest in open-source technologies to be performant, scalable, collaborative, and secure, We've been able to build on top of today's best component technologies, including Kubernetes and an event-driven microservices architecture. We leverage robust, standardized interfaces like REST, OpenAPI, and GraphQL. Security is inherent in the platform design, and we provide native support for big data engines, GPUs, and open-source data processing. The SmartWorks platform is edge-optimized to accelerate development at the edge and includes tools that help build, manage, and scale automation and intelligence. The management console helps to assemble, deploy, monitor, and continuously improve applications at the edge. SmartWorks enables a contextual digital twin of entities in the applications universe to and automatically gives internal automation and external applications secure interfaces to access those entities. As an example of the power of our IoT solutions, we announced the launch of Toggled IQ. This offering leverages the SmartWorks platform and stems from our experience in LED lighting and is part of the transformation of that business toward a software focus. Toggled IQ helps businesses optimize their building environments by streamlining operations, improving energy efficiency, saving money, and reducing their carbon footprint through the connection of smart connected lighting with wireless sensors, controls, and intuitive analytics. Last month, Altair announced an offering of a free edition of Altair Pollux, our electronic system design software tool for the Altium user community to allow printed circuit board designers on-demand access to all the tools they need in one workspace. This unique addition of Altair Pollux makes board-level simulation and design verification features seamlessly accessible to Altium designer users. We are excited to provide Altium users the ability to identify and correct errors before circuit boards receive sign-off and enter production, and we plan to explore similar versions for other eCab vendors. The power of Pollux is gaining excellent momentum, including a recent six-figure win in aerospace, in addition to driving important growth in the semiconductor and automotive industries. Applications in automotive include power electronics, sensors, and ADAS systems. The 2021.2 update of flux motor, an exciting solution for electronic motor design across transportation and other industries, includes added transient thermal computation abilities and improved representation of solid conductors to simulate winding AC power losses. We believe the breadth of our manufacturing simulation offering continues to distinguish Altair as the leading player for modeling and simulation of production processes. Among the many new capabilities added, we recently launched a new solver and environment to simulate binder jet additive manufacturing and a new release of Inspire Cast where users can now predict thermomechanical stresses and warpage during solidification. Altair recently announced the acquisition of S-Frame, an innovator for more than 30 years with integrated solutions to analyze, design, and detail architectural and civil structures constructed from steel, concrete, composites, and timber. S-Frame's structural analysis and support for civil engineering codes across many countries and regions, together with Altair's state-of-the-art simulation and optimization technology, will allow architects and civil engineers to innovate and bring their visions to life while adhering to local code requirements. In addition to S-Frame's technology, we brought on board a great technical team They have quickly integrated into Altair and are making an impact on how we package, position, and develop solutions for the architecture, engineering, construction, or AEC market, which according to some data will be one of the fastest growing segments of the PLM market with a 14.7% CAGR to $11 billion in 2025. In the third quarter, Altair was awarded a significant contract in EMEA for the optimization of railway stations and other infrastructure. This project requires multiple material families to be addressed, including steel, concrete, and soil, and we believe it can be a significant driver toward more innovation and sustainable building practices. Last month, we published our first Corporate Social Responsibility, or CSR, report. At Altair, we have always worked hard to do the right things, which has created a unique workplace. For over 30 years, we have defined Altair's culture as one of innovation, where we envision the future, communicate honestly and broadly, seek technology and business firsts, and embrace diversity and risk-taking. We achieved much success by staying true to who we are, and this has translated to success for our employees, customers, partners, and shareholders, while also helping us contribute to a more sustainable future. We look at our CSR report as a living document and will update it regularly. Aligned with our CSR focus, we are delighted to have been recently named one of Newsweek's top 100 most loved workplaces, 2021. We are humbled by this award, but also accept the challenge to get better. We are at an exciting time in our history for our technology, software products, and people. Our ability to have a positive impact on global issues like sustainability, diversity, and increased opportunity for underrepresented groups will continue to grow as we do. We are determined and committed to help the world be a better place. In addition to the Most Loved Workplaces Award from Newsweek, a few days ago, Altair was named to Inc.' 's first annual list of best-led companies. The selection algorithm included four key areas, performance and value creation, market penetration and customer engagement, talent, and leadership team. Our senior leadership team is intent on achieving success for the company by upholding our core cultural values, and this recognition of their focus, effort, and achievement is a great team win. Our software technology and consulting services are key to designing a healthier and more sustainable future for humanity. Optus Truck usage increased tenfold between 2013 and 2020. As the world's leading tool for material optimization and weight reduction, this continuing trend bodes well for reductions of material usage, fuel consumption, and CO2 emissions, all aligned with the goals of the International Energy Agency and other global organizations. I am truly grateful to the entire Altair team but working so hard to sustain the type of company we can feel proud about being a part of. One newly published customer case study exemplifies that pride. Johnson & Johnson, the world's largest healthcare business and a Fortune 50 company, produces pharmaceuticals, medical devices, and consumer goods that benefit a billion people worldwide. Johnson & Johnson owns Janssen Pharmaceuticals, a company fighting sickness with science. Janssen created the one-dose Johnson & Johnson COVID-19 vaccine that the World Health Organization approved to prevent infection and save lives. This research-driven organization relies on high-performance computing or HPC to power the discovery and production of effective, broadly available pharmaceuticals. Their HPC solution, including Altered Grid Engine and NavOps, enabled them to scale in the cloud and grow their HPC infrastructure to support critical science and research, including COVID-19 vaccine development. NavOps creates and scales Altered Grid Engine clusters dynamically, allowing Johnson & Johnson to continue innovating Scalability limits from Janssen's previous configuration were removed with the Altra solution, and their clusters are now running at three times the size of the previous implementation. With increased scalability and improved agility, operations, deployment, and management of HPC infrastructure, the team can perform science on demand with the flexibility to tackle events like COVID-19 at an enterprise level. This is the sort of technology application that keeps us truly excited to keep innovating forward. Altair performed well in the third quarter, and we believe we can carry good momentum through the remainder of the year. Global challenges, including COVID-19 and supply chain issues, remain as negative effects on the macro economy. but we remain positive about our ability to help our customers drive more innovation into their products and services. Now I will turn the call over to Matt to provide more details on our financial performance and our guidance for the fourth quarter and full year of 2021. Matt?