Altair (ALTR) Intends to Buy Metrics, Expands in the EDA Market

Core Insights - Altair Engineering Inc. has entered into an acquisition deal for Metrics Design Automation Inc., enhancing its capabilities in semiconductor electronic functional simulation and design verification [1] - The acquisition aims to create a superior simulation environment in the EDA and semiconductor space, leveraging Metrics' DSim and Altair's Silicon Debug Tools [1][3] - The cloud-based business model introduced by Metrics is expected to make EDA design tools more affordable and accessible, facilitating faster design cycles for companies [1][2] Company Strategy - Altair's strategy includes accretive acquisitions to supplement organic growth and diversify its product portfolio, having acquired 51 companies or strategic technologies since 1996 [4] - The acquisition of Cambridge Semantics in April 2024 further enhances Altair's platform with advanced knowledge graph technology, critical for generative AI applications [5] - Altair's product portfolio is evolving with a focus on sustainable and disruptive innovations, supported by strategic investments in engineering AI [4] Financial Performance - In Q1 2024, Altair's non-GAAP gross margin expanded by 140 basis points year over year to 83.3%, driven by a higher mix of software revenue [5] - The adjusted EBITDA margin for Q1 2024 was 26.5%, an increase of 60 basis points from the previous year, with expectations for a margin range of 21.2-22.1% for the full year [5] - Altair's shares have gained 16.9% over the past three months, outperforming the Zacks Engineering - R and D Services industry's growth of 2.3% [6]