TROY, Mich. - Altair (NASDAQ:ALTR), known for its computational intelligence software, has announced a definitive agreement to acquire Metrics Design Automation Inc., a Canadian firm specializing in electronic design automation (EDA) simulation as a service for the semiconductor industry. The completion of this acquisition is pending customary closing conditions.
The deal will integrate Metrics' digital simulator, DSim, with Altair's Silicon Debug Tools, aiming to provide an advanced simulation environment for EDA and semiconductor clients. DSim is touted as a first-of-its-kind solution in the market, offering cloud-based EDA design tools intended to reduce costs and increase accessibility for companies scaling out simulations to hasten design processes.
Today, the cost of integrated circuit design verification is high, often necessitating a large number of licenses to simulate a single chip. These tools typically run on desktop systems and are not inherently designed for cloud deployment. The collaboration between Altair and Metrics proposes a more flexible solution, allowing simulations to be run on desktops, private servers, or in the cloud, with customers only paying for actual usage. This could potentially streamline the design cycle by enabling concurrent, scalable simulations.
James R. Scapa, founder and CEO of Altair, expressed enthusiasm about merging their software with Metrics' cloud-based service to deliver "groundbreaking technology" to their customers. He highlighted Altair's unique position in combining simulation with workload and workflow optimization technology.
DSim will be accessible through Altair One, the company's cloud innovation platform, and will also be available for desktop download. The tool is optimized for speed, capacity, and accuracy, aiming to assist customers in the semiconductor, automotive, aerospace, and defense industries in identifying design issues and advancing complex device production with greater confidence.
Joe Costello, executive chairman at Metrics and a notable figure in the EDA industry, remarked on the significance of their product and business model for the semiconductor sector, and the growth opportunities provided by joining Altair.
In other recent news, Altair Engineering Inc. reported strong first quarter results in 2024, with total revenue reaching $172.9 million, a 6.9% increase from the previous year, and software revenue accounting for $158.4 million. The adjusted EBITDA for the same period was reported at $45.8 million. In addition to its financial performance, Altair has also entered into a partnership with HP Inc (NYSE:HPQ). to enhance its Material Data Center, aiming to streamline the design and production processes for 3D-printed parts. This collaboration is expected to benefit users of Altair's Inspire Print3D and expand the adoption of 3D printing technology across various industries.
Altair's recent developments also include its inclusion in the S&P MidCap 400 Index, a notable benchmark for mid-sized companies, reflecting its consistent growth and established position in various fields. Despite some underperformance in Q2 due to external factors, Altair remains optimistic about strong software revenue growth and adjusted EBITDA for the rest of 2024.
InvestingPro Insights
As Altair (NASDAQ:ALTR) gears up to enhance its portfolio with the acquisition of Metrics Design Automation Inc., the company's financial health and market performance provide a backdrop to the significance of this strategic move. With a robust market capitalization of $8.14 billion, Altair demonstrates substantial market confidence, which could further solidify with the successful integration of Metrics' technology.
InvestingPro data shows that Altair has maintained a high price-to-earnings (P/E) ratio of 827.97, which adjusts to 772.82 when considering the last twelve months as of Q1 2024. This high P/E ratio may reflect the market's optimism about Altair's future earnings growth, particularly in light of the new acquisition's potential to unlock additional revenue streams in the EDA space. Furthermore, the company's revenue growth has been positive, with a 7.11% increase over the last twelve months as of Q1 2024, indicating a steady upward trajectory in its financial performance.
Investors may also take note of Altair's gross profit margin, which stands at an impressive 80.64% for the same period, underscoring the company's ability to manage its cost of goods sold effectively. This financial efficiency could be a key advantage as Altair integrates Metrics' cloud-based EDA tools, potentially leading to cost savings and improved margins.
For those considering adding Altair to their portfolio, PRONEWS24 can be used to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro, which includes further insights such as the 259.85% EBITDA growth over the last twelve months as of Q1 2024. Subscribers can also explore an array of additional InvestingPro Tips, with 15 more tips available to help make informed investment decisions.
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