Q1 2021 Altair Engineering Inc Earnings Call
And then electronics architecture oil and gas and other industries.
Some solid now is a broad solution offering, including statics modal dynamics thermal thermal stress fatigue linear superposition of and.
And Linearize stresses.
The code has been enhanced with an industry best designed connections library, including spot welds laser wells three of these seem welds bushings and he's of joints and ribbons.
We've also improved the workflow integration of some solid notably, notably within our inspire design platform, but also by more seamlessly connecting to a number of third party codes.
And the first quarter, we want a strategically important account for some solid and the aerospace and defense industry, where we believe there is significant room for expansion. Both on this account and in the aerospace industry as a whole.
We recently published a case study from General Motors Division.
Their design teams desire to perform structural analysis to evaluate their own designs and <unk>.
Non Altair simulation software initially utilized proved problematic some.
Some solid provided them with an alternative which dramatically decreased model and time and allowed the designers to evaluate complex components and large assemblies, which was not possible with the previously used software.
For modal analysis of the component level GM found of correlation factor of 97% of some solid compared to traditional simulation methods.
This was combined with the 75% reduction and time taken to complete the analysis.
We believe the accuracy time savings and workflow efficiencies of some solid combined with all of the capabilities of added since the acquisition will help continue its momentum as the product with the fastest growing usage and our software portfolio.
Altair has been a pioneer and engineering simulation and M cat simulation driven design for more than 30 years.
More recently, we are bringing of simulation driven design philosophy towards the electronics industry.
With an end to end solution.
Delivering electronics that the light consumers requires more than just linking the EQECAT and M CAD worlds.
It requires physics analysis at the speed of design and collaboration across disciplines throughout development.
Altair Pollux offer solutions for printed Circuit Board design review verification analysis, and even rule based design for manufacturing designed for assembly and design for electrical.
It introduces the simulation driven methodology for signal integrity power integrity and thermal for printed circuit Board design, and importantly, integrates with all major EQECAT and simulation tools.
And and interconnected world most devices, our wireless with several antennas Altair.
Altair is five G simulation tools uniquely combined antenna design with radio coverage and planning analysis and provide the broadest set of scenarios for five G applications.
Using Pollock and Altair is electromagnetic tools combined with the Altair is other physics space simulation tools and machine learning.
And to reduce modeling time helps users achieve improved connectivity and functionality.
For smart product development performance performance optimization sensors actuators and motors also provide challenges for architecture integration.
Software for model based firmware development and.
Altair stools, let your design analyze and simulate you're embedded system using block diagrams and state charts and automatically generate compact and optimize code to run on and 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 and automotive.
We believe this will lead to increased business opportunities for us.
The first quarter brought many new and expansion wins and the area of high frequency electromagnetic across industries, including Aerospace Defense Railway five G technology automotive and others.
Implications 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 multi physics simulation system integration and control design and P. C b verification and analysis.
We had two interesting wins and the first quarter the demonstrated our valued for electric drive system development.
One was with the global manufacturer of industrial pumps and the other with the manufacturer of ventilation systems and.
And both cases, the ability of Altair software for simultaneously address electric motor censor control and power converter development was cute of building the business.
On the day to analytics from we're continuing to promote and see acceptance of the Altair of units model, especially at large enterprise customers.
The launched and early access release of the Smart works platform to of limited customer base with strong positive initial responses.
Smart works continue combines capabilities necessary to develop apps and orchestrate edge devices for I O T and smart product development.
With and the and capabilities for data analytics from data and ingestion to life system deployment.
We are excited about the opportunity smart words springs 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 of substantially larger revenue and EBIT of profile company.
Or 2021 Investor Day is Thursday may 27, and we look forward to sharing some insights around our technology addressable markets and longterm outlook with you then.
Now I will turn the call over the map to provide more details on our financial performance and our guidance for the second quarter and remainder of 2021.
Matt.
Thanks, and we're thrilled with our first quarter of 2021 results coming in and above the high end of the range on every metric we guided too for the quarter.
We delivered record software product revenue of $129.5 million and increase of 19.5% compared to Q1 2020.
He also achieved record total revenue of 152 million and increase of 14.2 per cent compared to Q1 2020.
And we had record high adjusted EBITDA of 37 million for 24.6% of total revenue and increase of 70.5 per cent compared to Q1 2020.
Total billings for the quarter 145.8 million and increase of 14 per cent compared to Q1 2020.
I results relative to prior year, we're primarily driven by strong software product billings, where we saw solid new and expansion results as well as healthy retention on a renewal base.
We saw of year over year increases balanced across all three geographic region as well as the cross our product offerings.
A recurring software and license rate, which is the percentage of software product revenue that is recovery.
<unk> to be strong and approximately 94% of the for the quarter and.
We continue to emphasize growth and a recurring revenue streams.
Relative to our expectations for the quarter, we saw some of our software transaction, which were originally expected to close and the second quarter close earlier than originally anticipated driving some of the upside relative to the Q1 guidance.
And as anticipated the year of of your strength and software product billions was partially offset by the declines and client engineering services and other billing.
It's worth reminding you of the seasonal nature of our business, where our first and fourth quarters have higher software billings and revenue and we expect that pattern to continue.
In addition of significant portion of our billing and revenues are billed and currencies other than the U S. Dollar and are therefore impacted by changes and F X rays.
Relative to Q1 2020 R. Billington revenues were favorably impacted by changes and ethics rate of approximately $5 million during the quarter.
Non-GAAP gross margin, which excludes stock based compensation and restructuring expense and prove to 79% and the first quarter compared to 74% and Q1 2020 and increase of 500 basis points, primarily as a result of the favorable trend and our <unk>.
Software of revenue and neck, which carries higher gross margin.
Software product revenue as a percentage of total revenue increased the 86.3 per cent.
Compared to 82.5 per cent in the year ago period.
And increase of 380 basis points.
This increase and soccer of related revenue mix was expected and we saw an increase and software product revenue combined with the expected year over year decline and our services and other revenue.
The expect this mix shift towards software product revenue to continue.
Non-GAAP operating expenses, which exclude stock based compensation amortization of intangible assets and restructuring charges were 82.6 million compared to 78.2 million and the year ago period.
Hey, Jess and EBITDA was 37 million and the first quarter for 24 six per cent of total revenue and Q1, 2021 and increase of 75% compared to Q1 2020.
This increase compared to the prior year quarter as well as relative to our expectation was driven by the increase and software of revenue and and the quarter combined with discipline spending and accelerated employee of related cost reduction.
Turning to our balance sheet.
We end of the first quarter, with 243 million and cash and cash equivalents and.
And increase of about $2 million from the prior quarter.
The quarter over quarter increase reflect strong free free cash flow during the quarter of approximately 33.5 million.
Partially offset by repayment of the $39 and we had drawn on a revolver.
Our free cash flow of 33.5 million and the quarter is and increase of 7.1 million for 27.1 per cent compared to Q1 2020.
As a reminder, Q1 is our seasonally no significant cash flow quarter due to collections on queue for and Q1 billion.
Looking to head to Q too and for your 2021, we're looking to continue the great momentum we began the year with.
We are expecting software product revenue for Q2 in the range of 92 to 95 million or year over year growth of 12 point for to 16.1 per cent.
And we're raising our full year of 2021 software product revenue range to 425 to 433 million for year over year growth of 8.5 to 10.5 per cent.
We continue to expect services and other revenue to be approximately flat year over year consistent with our previous guidance.
As a result, we are forecasting total revenue for Q2 21 in the range of 111, and two 114 million or year over year growth of 12.6% to 15.7% and.
And we're raising our full year 2021 total revenue guidance to arrange a 504 to 512 million or year of her gear growth of 7.3% to 9.0% for.
Reflecting are increased software revenue guidance.
Or $2 million inquiry on the full year revenue guidance reflects our over achievement and Q1, which as I mentioned, a moment ago was partially impacted by the timing of some key one software transaction that were originally expected the clothes and cute too.
Along with the negative currency impact of 5 million relative to our prior quarters full year guidance.
From a cost perspective, we moved faster than expected and the first quarter unemployed related reduction and realized some benefits and the corner.
As I mentioned and our last earnings call.
These reductions are free and up capacity to reinvest and product technology and sales capacity, which we are also moving forward with it of fast pace.
In addition, and as I also mentioned and our last earnings call, we expect marketing costs and traveling the entertainment costs, which were significantly impacted by COVID-19, and last year, particularly and cute chew through for you for.
And will return to higher levels and it's more normal activity returned.
We're seeing some of that happening already.
So for Q2, 21, and we expect adjusted EBITDA and the range of two to 4 million or 1.8% to 3.5% of total revenue.
Per to 5.8 million for five eight per cent of total revenue in the year ago period.
Again, reflecting expectation of increased marketing and traveling entertainment center as well as the impact of the temporary salary reductions that impacted Q2 and Q3 last year.
For for year 2021, we're raising our adjusted EBITDA range for 59 to 67 million.
Or 11.7 to 13.1 per cent of total revenue compared to 57.3 million or 12.2% of total revenue and 2020.
We are also raising our full year 2021 free cash flow guidance to a range of 30 to 38 million.
As a reminder, our cash flow expectations are sensitive to billing and collection patterns, which fluctuate seasonally.
And you've provided detailed guidance tables, and our earnings press release, including reconciliations to comparable GAAP amount, which was issued after close of market today.
In summary, we were pleased with our quarterly results and Q1, but even more excited about the products and technologies and we're offering to our customers and driving and forward and our mission to transform enterprise decision, making.
With that we'd be happy to take your questions.
Operator.
Thank you as a reminder to ask the question did pay star one on your telephone two of <unk>.
All of your question press the pound key our first question comes from five and sorry with William Blur. The line is open.
Agent. Thanks for taking my question and congrats that was the fantastic Uhm set of numbers and results. There I guess I wanted to talk to the high level and maybe Jim for you initially.
No you've commented on the adoption of data and a I towards the roles voice was of great deep die and I think.
David the time and did with US what did you think about the broad of trends of and to and a I M. L. And then you see the sort of Digitization and industries and things like five G. I O T. E V. I'll give you the current product set being able to capture that market share. What do you think there's more stuff you need to add sort of truly capitalize on those opportunities.
So [noise].
First of all of them, Thank you and and lies.
I was talking to the today call and I'm I'm speaking out of the hotel room by the way it that day.
I have a new granddaughter and where.
Okay and a visit.
So it's been sort of a long wait you know it's it's a good question I I think the we obviously have a lot of work to do to to bring these technologies.
To bear and and and all of these different places and so we're working we're working and small ways every single product that we have as sort of under the covers elements of of neural net some you know the sort of technology embedded within it at this point.
More so than you might realize and then we're also you know working on sort of generalized tools. The customers can use on the wrong to to be applying the the sort of technology and the wrong work and as we go and I think we're gonna, we're gonna keep learning and.
And and and one of them together with customers quite frankly, and finding more and more applications, where we come just accelerate the work that we're doing much from answering your question, but but that is.
And the answer the way I think about it.
No. That's that's helpful.
And and and at least the components seem to be there I guess, let's turn to the sales force because obviously you've had a great corner and you saw somebody else come and early but you and I talked about restructuring methods around the sales to drive efficiency and in the past and <unk>.
Kind of stand sort of of what profit you've been placed how of those efforts progress of this interest for the spike and dawn well Spike and the positive fashion talk with any of also come and I think uhm method in terms of hiring.
And increase in the past and so how do you think about some of the restructuring of it has capacity played out and for the one of the hiring kind of looked like thank you.
Sure. So you know what we're doing is where for.
Organizing for first of all of a huge amount of trainings gone on with with our sales organization.
Lots of of new methodologies of and brought in and and brought across the team over the last two years and we've also brought more tools and the.
The sort of help us to mechanize and.
Just be more and more processed sound truck.
And and all of that is starting to pay dividends at the same time, we're we're.
We're doing a better job of of sort of dividing and conquering the the market space. So the direct sales force.
Is much more clarity around and which accounts and we're going after where we see growth opportunities and they're typically the larger enterprise type type of accounts.
And we have a lot of focus on the indirect channels and and you know that's really starting to come together for US and then we have.
A lot of mechanization between our marketing and all of the marketing activities that we're doing I currently of generation moving that through the pipeline a lot of inside sales activity that we've rolled out for cross the world. So I mean, I I think you're beginning to see the the results of all of that Mechanisation.
And and sort of creating the same lame day about that everybody knows talked to operate and.
And I know, it's very helpful. Thanks.
Thanks, Jim Congrats again, and and I'll talk to you too and you guys. Thank you.
I appreciate it.
Thank you. Our next question comes from Jackson of day.
With J P. Morgan your line is open.
Great. Thanks for taking my questions guys, Jim really nice too well first of all congratulations on the on the new granddaughter I should start off saying that.
This number of advice for you ma'am.
Yeah, Wow excellent growing family and go ahead for the record.
Yeah [laughter], okay. So deep dive on the Pollywog products that was great you know I I don't.
We'd really huh dug into those and a while maybe even for that you guys required of them a couple of years ago, but the the question is the how easy is it to sell.
Ah cross of products into the semiconductor space for Ya.
And you are selling something like the you know like pollex that might be a little bit more like E V. A.
Is it a completely different buyer or user of who you're trying to then sell your electronic medics solvers and HM.
It is for sure. It's it's different it's different groups of different departments and these are departments that we've done sort of you know walking the halls, making our way across too you know we first got into all of the electromagnetics just sort of one layer outside of what we did.
Historically and.
And we've been doing that for about seven years, now and we have pretty significant success coming into the groups that are designing and all of the printed circuit boards and and and and on the electronic systems.
Is in fact, new departments and customers that we have.
Quite a bit of credibility and sign of I mean, when we go to one of the guys of we've and working with a lot of time, they tend to trust us and so the introductions are getting married and I have to be honest I wasn't sure how and all the customers would respond and so what we're we're bringing and but but the response has been.
Quite pauses for.
And it's not you know the reality when you get into these department and there's a lot of the there's just a whole and that's why I laid it out a little bit there and not just doing the printed circuit board, but there's the packaging there's therm all of their CFT. There's you know the.
There is of the electromagnetic there's there's the system system modeling the system of systems and the embedded stuff and we I think they've been quite surprised at the breadth and depth of them are offering and and so we're getting a good response, there so I'm I'm really optimistic.
And it's the whole get additional set of customers within our existing accounts.
Mhm, Yeah, that's great that's really helpful color not for just the.
Modeling question, how much was actually pulled forward and.
You said some deals came and one too that you weren't expecting.
Yeah, Thanks, Jack Jack and hear the question.
First of all we were Super happy with the way the this quarter worked out for us.
See and that's come in high above the you know the the high end of the range was was nice to see and you know again records on on revenue and profitability front.
In terms of of amounts that we saw closed and Q1 that you know originally we're we're taking with and Q2. It's it's in a few million dollar range, it's not it's not the entire amount by any.
The stretch so we saw a nice nice healthy upside and Q1 above and beyond what was called then.
And one thing I would add to us.
Yeah, it's and encouraging thing when we see some of the deals closing of really because you know it really speaks to the the health.
The health of the pipeline there so.
Yeah, we were happy to see that as well.
Yeah.
Alright, thank you.
Thank you. Our next question comes from Ken Wong with Guggenheim. The line is open.
Ken Long your line is open.
Sorry about that and you've got me.
Jim and I, just wanted to check in and just some of the the the drivers of growth and it sounds like a fairly broad base, but perhaps if we dive and a little just wondering what the.
What new activity look like versus expansion.
Are you seeing on retention trends any color of their you know kind of deal sides of those kicking up a relative to 10 total expectations of day it would be helpful.
Sure so retention and of last year retention.
There was a little more attrition and last year, then and we're used to this year very very little attrition and I actually it's it's just very clear of this is this is a much more robust of your even even is.
As good as we've ever seen so very very strong and and the retention side of this year and we weren't sure if that was gonna be the case, but and in fact, the that does appear that way.
And it is very broad based of it's coming across and.
All of the vertical is are actually very healthy and and and this year.
All regions are growing very very helpful and you as well.
And what was your last question and I forgot what you were asking me at the on there yeah.
And the and then I get just in terms of just new business activity of are you finding that that top of funnel is it's kind of track and the plan is it may be coming in a little better with the opening up I, just love of sense of kind of what that the.
The the the the net new run right starting to look like [noise].
Yeah, I mean of it it's it's looking like I mean, the the macro picture I think this year is is generally very very positive as I said and my prepared remarks.
There's still you know look at what's happening in India. The that's that's a bit crazy and you do have the strip shortage that is happening and and you know and the market and and it affects the number of our customers, but thus far and that does not seem to be having and neither one of those seems to be having much impact for us.
So in general pipelines are very healthy and and and.
You know, we we feel.
Oh, you're very calm and about this year.
Got it so super helpful. And then the mat for you just kind of a bit of of follow up on what you're actually was asking but maybe looking at it from a full year of basis of just wanted to make sure I heard you correctly. It sounds like so this quarter yet of 5 million tailwind and is it for the for you it sounds like it's potentially reversing to be.
5 million headwind I want I want to clarify that and then in terms of just how we think about.
The guidance upwards of it sounds like you know a.
A few million B, a few million and pull forward and the quarter, but kind of net net if we factor and all of the effects of it feels like it's still kind of of mid single digit raises is that the the rough math that I should be thinking.
Yeah, and that's not quite so the FX picture is uhm and understandably confusing, but the the five mainly and tail.
Tailwind that we realized and and can you wanted this year is relative to the last year.
Not not relative to the guide alright, So you have to separate those two those two concepts. The the 5 million full year FX headwind is relative to prior quarters Guy the full year.
Right so that that.
That makes sense.
Yes. It does okay perfect. So in terms of the for your guide Yeah, and we're we're feeling really really good about the year and.
And.
And we took so we took for year revenue died up by 2 million.
That is inclusive of that 5 million dollar headwind and so you know sort of when I think about.
Our guidance relative to the full year guide that we gave last quarter.
We're up 7 million when you exclude that that FX difference.
And.
So yeah.
We continue to feel good about cute you through to you for.
We're excited about the opportunities that we have and and pipeline looks good and healthy and and as Jim just mentioned a moment ago, the macro and Matt.
Macroeconomic trends and.
It seems to be seems to be holding no of course, where we've got our eye on.
And the types of things that are happening and India and elsewhere, but generally feel feel really good about the year.
Okay got it and a quick clarification on that on the first quarter I guess was there any meaningful headwind tailwind relative to what you guys were thinking of from and ethics perspective at the at the start of the quarter no. Yeah. So important clarification, they're not and meaningful FX impact so when we think about.
The over performance and Q1 relative to the Guy that we gave him and Q1.
That and a couple couple of a few million dollars and that that we originally thought it was gonna close and Q Q that that ultimately clothes and Q1 and everything else is just true outside to the quarter and and no meaningful FX and pack relative to the guide so just sort of of really solid quarter, we were.
Hitting on off and on or.
Great. Thanks for the clarification.
Thank you. Our next question comes from <unk> Bamberg Your line is open.
Hi, Thank you for taking my questions and congrats and the results. The first one is just a little bit of clarification of of the guidance, obviously and especially with the software side I'm thinking <unk>, if I think about the outperformance that you delivered and Q1.
Balancing back with the little bit of the worst thing I think.
Look for the rest of the year and a few million of full forward and there's still a big chunk of kind of left of their and based on what your race is that just kind of feeling a little bit more conservative, especially because as you mentioned, we're still and very uncertain of environment and we don't know how it's going to be like or any other factors that I'm going to I'm not aware of that.
<unk> the potentially it makes it a little bit more.
Cautious for the right.
No. So that we can make sure the the.
Math is coming across clearly but.
Our outlook for the rest of the year is still very positive and when we take and there's a lot of different factors that you just mentioned there but.
And then you can sort of some of them up like the.
FX neutral and.
And you get to a $7 million of increased relative to the prior guide.
We came and over the top end of the guide on revenue by about 10 million for your left with the.
Three and essentially that's kind of what I signaled that the total and so so we basically have a situation where we're guiding up based on the over performance and Q1, and we're still really feeling very good about the rest of the year, so like the amount of.
It works out pretty well.
And just to add that I I think you did some of it up correctly the.
Of that balance is just a little bit of of conservatism.
You know around some of the things that are happening and and some of the uncertainty.
So for the.
For the most of all I think what Matt saying is.
And we we went up by more than two because of the F X piece, but we didn't go all the way to the town and.
And there's a little bit of conservatism there.
Gotcha, that's really helpful and and just as a follow up Jim and.
The last two pretty much of the same for most of you took the little bit about the and market weakness and the fact that people are still focused on the on the old programs and the kind of.
Bold tag the they're working on and today it was the market.
Different the way you talked about bold and use cases.
I'm wondering this acceleration and gross how much of it has to do with the fact that there's.
Here's the activity happening or in the activity and the new stuff for like the electric vehicles, and and things like that and that really has helped too and greet the usage and and and you just know generates and that growth that you're seeing versus kind of just doing more more of the same what happened over the last decade and stuff.
Yeah, No I mean, I think there's a lot of activity and the and the Orange the world in General and you know, we're coming off of of COVID-19, obviously, and and sort of of weird year, but in general and all of the customers are hiring people are are designing.
Much more complex you know connected devices.
Lots of activity and the automotive industry, because it's so competitive lots of activities.
So the new aircraft company and I don't know if you've been paying attention.
And there's a lot of really interest and try and currently.
[laughter].
Yeah, I mean, it's it's it's a fun times and and I think we have the right tools for for the right moment.
I I did one of my prepared remarks went a little deeper and and to the electronics offering because I I think that sometimes you know the.
Community may not recognize that we've been investing for almost 10 years to build basically the sometimes solution portfolio, where and we're not doing integrated circuit design, but we are very focused on you know these electronics systems and the.
Just the perfect fit with.
Everything that we do as an organization and sort of that next lay around and and the breath of of the offering that we have and we've reported investment into it and the last three years specially.
And.
And we feel great about.
That's great and helpful. Thank you so much and the regrets again.
Thank you.
Our next question comes from that Hedberg with our B C capital markets. The line is open.
Yeah, Hi, Stenberg Superman hedberg, thanks for taking of our questions. Jimmy just you just mentioned ship shortages and the Q&A here not much and patterns and then maybe the connect that with the last question. You've also talked about headwinds and the automotive industry for most of last year recently and the news here, we're hearing stories about.
The automotive makers seeing some disruption due to trouble sourcing chips I guess the question is.
Are you seeing that at all with automotive customers and does it even impact you or is that just part of the headwinds you're seeing and that sector overall.
So we are we are actually not seeing headwind related to that I I will be honest and I have some concerns and how would that affect us, but you know I've done a lot of pulse checking and.
And it doesn't seem to be affecting us us at all so it is certainly affecting our customers and.
But from what we see it's just not have any impact on on the design design side of things.
Alright very helpful. And then maybe the question on return of work and what you're seeing and touched on that and the prepared remarks and.
Kind of talk to a high blood work model for yourself, just curious what you're hearing and customers on the topic.
It sounds like it sounds like you're expecting some increased travel here based on the prepared remarks.
I think we're going to see a little bit of of the increased travel depends region by region you know.
Some of the APEC regions.
And Ah relied.
Even more heavily than other regions on sort of face to face contact.
Little more and certain certain other markets like Germany.
I'm not seeing huge international travel coming back this year I think it will start to come back next year.
Mainly.
Mainly because there's.
There's such a difference and in terms of where Israel is you know and it's completely vaccinate of of the U S has been doing really well, but starting to slow down and.
And other markets and it's very very hard to get and vaccine at this point and India is just really.
Really and and dire Straits, So I don't see a lot of international travel I think the.
And you seemed like and banking <unk>, Jamie dime, and the same ever and I was going to come back to the office and I need.
It's a little bit old school I think the most of the automotive companies or aerospace companies I'd take the aren't going to have some level of hybrid.
For their for the engineering, they'll they'll come back a lot more certain activities have to be done and on site I think eventually again.
I think it's gonna be relatively hybrid not a big impact for us if anything it just pushes more and more to the virtual world with which is good for us.
Great. Thank you.
Yep.
Thank you. Our next question comes from try and ethic, let's Goldman Sachs. Your line is open.
Great. Thank you for taking the question and congratulations on the results of not great quarter, and Jim <unk>, maybe maybe for you I mean, the the sales motion that you that you walk through and of previous questions seem very familiar where you're penetrating of division or you're penetrating of business unit.
And and the question I have is you know as you improve your channel presence Uhm do you see or do you anticipate seeing that sales.
Penetration point, changing where maybe you can come in and get different rebel of maybe the sea level or slightly the load that where you sell the vision of of the Altair.
The platform and more efficient consumption of cross the platform just just wondering if that might you know.
Really accelerate sales of fishing see I'm at fun.
We we do need to sell and higher levels, and we are selling and higher levels for sure and we used to.
And I'm sure you for of this before you have to sell the top down and bottom up to be successful and I think just calling top down a lot of companies are are very top down and sellers, but if the products aren't really.
For for thing if you will.
Non chili the rank and file or are going to throw it out or is just going to sit on the shop and not get used so we historically to go way back we're very much.
Bottom of sellers.
Through the years, we've been getting better and better of Upselling of more senior levels, and and I think we're getting more and more proficient down and now yes.
Got it and then and then maybe for Matt to beat you over the head with the guidance again on the profitability side. So you of EBITDA bye, thank over and over 10 million and you're you're raising a full year of guy by about a million, but you also talked about and.
Investment initiatives so.
Maybe maybe if you could point us and the direction of of where you might be investing how much he might be reinvesting and how much of course, you might be and that number given at.
Obviously, you can control, where you spend more than <unk>.
And perhaps you can control what what your customers by so and maybe a little bit more certainty there.
Yeah. So what do we think about the profitability and how that played out and Q1, obviously super happy with the result much of that.
The over achieving the form of revenue and makes its way down the EBITDA.
And the.
You know are expensive expectations.
Were slightly better than expected based on just the speed with which we moved thirties, the restructuring activities that and we began and.
About midway through the quarter so.
Real happy about the results there.
And really the way the that that we're thinking about it is.
And we're now looking at them and raising the full year revenue guide by 2 million.
Raising the full year eat the day guide by a million.
And what that really means the sort of the outlook from the from and expense picture has not changed much based on our prior guide.
There's kind of a tiny movement between Reinvestments and the restructuring activities that were that were undertaken.
But big picture, we're we're really just saying we had roughly.
Roughly 12.3 per cent adjusted EBITDA margin at the midpoint and our last guide, we're taking that up now and at 12 and four per cent.
Of the mid point and so in other words not seen the big change and the form of of our expense picture versus what we had guided to last quarter.
Got it that's helpful. Thank you very much.
Yep.
Thank you as a reminder, if you would like to ask a question parts of the star than the one key on your Touchtone telephone.
The next question comes from the <unk> benchmark your line of something.
Hi, Thank you for taking my questions and and congratulations on the quarter and and Jim Congratulations on your new Grandaughter.
But the so Jim question for you. It was good to hear the positive commentary around and some solid and your prepared remarks and the.
The the idea of introducing engineering simulation and the upfront design process has been something that's been talked about for decades, now, but really has been followed through with it sounds like that's changing and.
According to your comments it sounds like some solids a good part of the change was one of of you just talk a little bit more about what you're seeing with organization parked development organizations embraced the front design and.
Are you seeing it more and certain industries and others and what what kind of I'll just let you talk about that.
Okay and thanks for the thing for the congratulations.
All the way around.
Yeah. So you are right. So you've obviously been around this this industry.
Because people of talked about simulation upfront for a long time and people of trying to do it for a long time.
I think there's a great desire for for simulation to to be.
Part of of the design groups and and I think some solid is actually kind of a catalyst because you don't have to do all of the song complex modeling and order to to to do this work and handled for you the assemblies amazingly and it's very answer and and it's just blazing fast.
But it's not just fast cause there's other things that do things fast, but you know you get chunky results, you're getting very very accurate results and so it's the sort of transform and of.
And we have all of a lot of large large.
Large customer organizations, who are.
Intending to really roll this across their design teams and a way that I've not seen before so I and and this is part of why I decided to.
Put that on my chalk track today I I think we are we are beginning to see.
Some pain on movement of you will some of them.
So it's it's exciting.
Great. Thank you that's all for me.
Yep. Thank you.
Thank you and and there's no other questions from the queue I'd like to turn the call back to Scotland for any closing remarks.
That's all the questions we have I'd like to send the call back to Jim Scanlon for closing remarks.
Okay, well, thanks, everybody for joining the call really really appreciate it and have the look forward to the awesome.
This concludes today's conference call. Thank you for participating in and now disconnect everyone have a great day.
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