EX-99.1 2 a23q3exhibit991.htm EX-99.1 Document

Exhibit 99.1
bentleylogo_blkxcompletea.jpg

Press Release

BSY Investor Contact:
Eric Boyer
Investor Relations Officer
ir@bentley.com


Bentley Systems Announces Operating Results for the Third Quarter of 2023
EXTON, Pa. – November 7, 2023 – Bentley Systems, Incorporated (Nasdaq: BSY), the infrastructure engineering software company, today announced operating results for its third quarter and nine months ended September 30, 2023.

Third Quarter 2023 Operating Results

•Total revenues were $306.6 million, up 14.3% or 11.0% on a constant currency basis, year-over-year;
•Subscriptions revenues were $270.8 million, up 15.1% or 11.7% on a constant currency basis, year-over-year;
•Annualized Recurring Revenues (“ARR”) was $1,124.8 million as of September 30, 2023, compared to $983.7 million as of September 30, 2022, representing a constant currency ARR growth rate of 12.5%;
•Last twelve-month recurring revenues dollar-based net retention rate was 110%, consistent with the same period last year;
•Operating income margin was 24.0%, compared to 20.7% for the same period last year;
•Adjusted operating income inclusive of stock-based compensation expense (“Adjusted OI w/SBC”) margin was 28.2%, compared to 24.9% for the same period last year;
•Net income per diluted share was $0.16, compared to $0.12 for the same period last year;
•Adjusted net income per diluted share (“Adjusted EPS”) was $0.22, compared to $0.19 for the same period last year; and
•Cash flow from operations was $72.8 million, compared to $69.5 million for the same period last year.


Nine Months Ended September 30, 2023 Operating Results

•Total revenues were $917.8 million, up 13.0% or 12.8% on a constant currency basis, year-over-year;
•Subscriptions revenues were $807.8 million, up 14.0% or 13.6% on a constant currency basis, year-over-year;
•Operating income margin was 21.0%, compared to 20.7% for the same period last year;
•Adjusted OI w/SBC margin was 27.2%, compared to 25.8% for the same period last year;
•Net income per diluted share was $0.46, consistent with the same period last year;
•Adjusted EPS was $0.72, compared to $0.66 for the same period last year; and
•Cash flow from operations was $329.6 million, compared to $238.2 million for the same period last year.

CEO Greg Bentley said, “Our operating results this quarter demonstrate the sustainability of our more broadly balanced growth contributors. Year-over-year ARR growth (business performance in constant currency) remained strong at 12.5% despite fewer calendar workdays and an upsurge in perpetual license purchases. Continuing growth drivers include the Infrastructure Investment and Jobs Act in the U.S., expansion of E365 as our enterprise accounts accelerate going digital, and Virtuosity’s momentum in penetrating small and medium-sized business prospects.

“At our Year in Infrastructure Conference in Singapore last month, Going Digital Award finalists showcased advancements that enabled a reported median of 18% in project engineering savings. This reinforces our sustaining opportunity to help our accounts surmount the increasing capacity gap in infrastructure engineering resources, both through more specialized modeling and simulation applications and through iTwin-powered Bentley Infrastructure Cloud, to compound for them the ‘infrastructure intelligence’ value of their data.”

COO Nicholas Cumins commented, “Our 23Q3 operating results reflect continued strong performance, with trends generally in line with the previous quarter. ARR growth by sector was once again led by Public Works / Utilities; Resources remained above the company average, including Seequent despite the slowdown in new mine exploration projects, while Industrial was somewhat below average; and Commercial / Facilities remained flat. ARR growth by region was led by Americas, followed by Asia Pacific, then EMEA. In particular, we are pleased by the momentum we are seeing with the US DOTs and their ecosystem.”

CFO Werner Andre said, “In 23Q3 BSY’s financial results met or surpassed our expectations in revenues, recurring revenues dollar-based net retention rate, Adjusted operating income inclusive of stock-based compensation expense margin, and operating cash flows. Our constant currency ARR growth momentum and seasonality reflects the E365 consumption impact from this quarter’s fewer working days when compared to historic norm, and the increasing preferences for perpetual licenses especially in China. After de facto share repurchases, and this year’s higher dividends, we have primarily applied our strong operating cash flows to de-lever by 1.0x on a net debt to Adjusted EBITDA basis since the beginning of the year, and will look to further de-lever in the coming quarters as conditions permit in order to provide increasing capital structure strength and flexibility.”

Operating Results Call Details

Bentley Systems will host a live Zoom video webinar on November 7, 2023 at 8:15 a.m. EST to discuss operating results for its third quarter ended September 30, 2023.

Those wishing to participate should access the live Zoom video webinar of the event through a direct registration link at https://us06web.zoom.us/webinar/register/WN_VO5w_MjXT8CLW7nrIClg3A#/registration. Alternatively, the event can be accessed from the Events & Presentations page on Bentley Systems’ Investor Relations website at https://investors.bentley.com. In addition, a replay and transcript will be available after the conclusion of the live event on Bentley Systems’ Investor Relations website for one year.



Non-GAAP Financial Measures

In this operating results press release, we sometimes refer to financial measures that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these measures are considered non-GAAP financial measures under the United States Securities and Exchange Commission (“SEC”) regulations. Those rules require the supplemental explanations and reconciliations that are in Bentley Systems’ Form 8-K (Quarterly Earnings Release) furnished to the SEC.

Forward-Looking Statements

This press release includes forward-looking statements regarding the future results of operations and financial position, business strategy, and plans and objectives for future operations of Bentley Systems, Incorporated (the “Company,” “we,” “us,” and words of similar import). All such statements contained in this press release, other than statements of historical facts, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations, projections, and assumptions about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, and there are a significant number of factors that could cause actual results to differ materially from statements made in this press release including: adverse changes in global economic and/or political conditions; the impact of current and future sanctions, embargoes and other similar laws at the state and/or federal level that impose restrictions on our counterparties or upon our ability to operate our business within the subject jurisdictions; political, economic, regulatory and public health and safety risks and uncertainties in the countries and regions in which we operate; failure to retain personnel necessary for the operation of our business or those that we acquire; changes in the industries in which our accounts operate; the competitive environment in which we operate; the quality of our products; our ability to develop and market new products to address our accounts’ rapidly changing technological needs; changes in capital markets and our ability to access financing on terms satisfactory to us or at all; the impact of changing or uncertain interest rates on us and on the industries we serve; our ability to integrate acquired businesses successfully; and our ability to identify and consummate future investments on terms satisfactory to us or at all.

Further information on potential factors that could affect the financial results of the Company are included in the Company’s Form 10‑K and subsequent Form 10‑Qs, which are on file with the SEC. The Company disclaims any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

About Bentley Systems

Bentley Systems (Nasdaq: BSY) is the infrastructure engineering software company. We provide innovative software to advance the world’s infrastructure – sustaining both the global economy and environment. Our industry-leading software solutions are used by professionals, and organizations of every size, for the design, construction, and operations of roads and bridges, rail and transit, water and wastewater, public works and utilities, buildings and campuses, mining, and industrial facilities. Our offerings, powered by the iTwin Platform for infrastructure digital twins, include MicroStation and Bentley Open applications for modeling and simulation, Seequent’s software for geoprofessionals, and Bentley Infrastructure Cloud encompassing ProjectWise for project delivery, SYNCHRO for construction management, and AssetWise for asset operations. Bentley Systems’ 5,000 colleagues generate annual revenues of more than $1 billion in 194 countries.
www.bentley.com

© 2023 Bentley Systems, Incorporated. Bentley, the Bentley logo, AssetWise, Bentley Infrastructure Cloud, Bentley Open, iTwin, MicroStation, ProjectWise, Seequent, SYNCHRO, and Virtuosity are either registered or unregistered trademarks or service marks of Bentley Systems, Incorporated or one of its direct or indirect wholly owned subsidiaries. All other brands and product names are trademarks of their respective owners.


BENTLEY SYSTEMS, INCORPORATED
Consolidated Balance Sheets
(in thousands)
(unaudited)

September 30, 2023December 31, 2022
Assets
Current assets:
Cash and cash equivalents$66,963 $71,684 
Accounts receivable243,488 296,376 
Allowance for doubtful accounts(8,312)(9,303)
Prepaid income taxes25,972 18,406 
Prepaid and other current assets46,128 38,732 
Total current assets374,239 415,895 
Property and equipment, net38,309 32,251 
Operating lease right-of-use assets41,434 40,249 
Intangible assets, net259,979 292,271 
Goodwill2,251,312 2,237,184 
Investments30,332 22,270 
Deferred income taxes61,664 52,636 
Other assets77,574 72,249 
Total assets$3,134,843 $3,165,005 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$26,389 $15,176 
Accruals and other current liabilities403,428 362,048 
Deferred revenues211,815 226,955 
Operating lease liabilities11,430 14,672 
Income taxes payable18,879 4,507 
Current portion of long-term debt8,750 5,000 
Total current liabilities680,691 628,358 
Long-term debt1,580,752 1,775,696 
Deferred compensation plan liabilities79,537 77,014 
Long-term operating lease liabilities31,355 27,670 
Deferred revenues15,189 16,118 
Deferred income taxes43,530 51,235 
Income taxes payable7,317 8,105 
Other liabilities4,311 7,355 
Total liabilities2,442,682 2,591,551 
Stockholders’ equity:
Common stock
2,952 2,890 
Additional paid-in capital1,108,816 1,030,466 
Accumulated other comprehensive loss
(95,128)(89,740)
Accumulated deficit(325,183)(370,866)
Non-controlling interest704 704 
Total stockholders’ equity692,161 573,454 
Total liabilities and stockholders’ equity
$3,134,843 $3,165,005 


BENTLEY SYSTEMS, INCORPORATED
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)

Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Revenues:
Subscriptions$270,751 $235,307 $807,839 $708,731 
Perpetual licenses11,887 9,460 33,152 31,213 
Subscriptions and licenses282,638 244,767 840,991 739,944 
Services23,974 23,565 76,781 72,190 
Total revenues306,612 268,332 917,772 812,134 
Cost of revenues:
Cost of subscriptions and licenses42,088 37,371 124,175 107,904 
Cost of services22,588 21,812 74,111 66,758 
Total cost of revenues64,676 59,183 198,286 174,662 
Gross profit241,936 209,149 719,486 637,472 
Operating expense (income):
Research and development65,465 63,827 203,382 189,966 
Selling and marketing53,757 46,114 160,262 141,676 
General and administrative42,678 37,794 128,743 128,981 
Deferred compensation plan(3,160)(4,576)4,763 (21,873)
Amortization of purchased intangibles9,517 10,446 29,567 30,869 
Total operating expenses168,257 153,605 526,717 469,619 
Income from operations
73,679 55,544 192,769 167,853 
Interest expense, net(10,047)(9,134)(30,623)(23,521)
Other income, net
5,953 932 7,207 14,793 
Income before income taxes
69,585 47,342 169,353 159,125 
Provision for income taxes
(16,514)(9,664)(22,107)(8,221)
Loss from investments accounted for using the equity method, net of tax
(44)(681)(44)(1,846)
Net income
$53,027 $36,997 $147,202 $149,058 
Per share information:
Net income per share, basic
$0.17 $0.12 $0.47 $0.48 
Net income per share, diluted
$0.16 $0.12 $0.46 $0.46 
Weighted average shares, basic313,069,132 310,116,104 311,915,808 308,959,801 
Weighted average shares, diluted332,825,186 325,170,383 332,144,893 332,077,834 



BENTLEY SYSTEMS, INCORPORATED
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

Nine Months Ended
September 30,
20232022
Cash flows from operating activities:
Net income
$147,202 $149,058 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization52,787 53,644 
Deferred income taxes(14,632)(13,670)
Stock-based compensation expense56,092 51,359 
Deferred compensation plan4,763 (21,873)
Amortization of deferred debt issuance costs5,469 5,468 
Change in fair value of derivative(4,102)(29,318)
Foreign currency remeasurement loss
3,198 14,445 
Other2,464 4,193 
Changes in assets and liabilities, net of effect from acquisitions:
Accounts receivable56,065 12,550 
Prepaid and other assets(1,246)7,779 
Accounts payable, accruals, and other liabilities33,437 28,765 
Deferred revenues(17,688)(26,725)
Income taxes payable, net of prepaid income taxes5,834 2,523 
Net cash provided by operating activities
329,643 238,198 
Cash flows from investing activities:
Purchases of property and equipment and investment in capitalized software(18,906)(12,982)
Proceeds from sale of aircraft— 2,380 
Acquisitions, net of cash acquired (23,110)(719,539)
Purchases of investments(11,352)(10,304)
Proceeds from investments2,123 — 
Net cash used in investing activities
(51,245)(740,445)
Cash flows from financing activities:
Proceeds from credit facilities442,566 753,376 
Payments of credit facilities(634,718)(408,714)
Repayments of term loan(3,750)(3,750)
Payments of contingent and non-contingent consideration(3,039)(6,996)
Payments of dividends(43,992)(25,828)
Proceeds from stock purchases under employee stock purchase plan9,988 10,335 
Proceeds from exercise of stock options10,590 6,855 
Payments for shares acquired including shares withheld for taxes(57,527)(42,213)
Repurchases of Class B Common Stock under approved program— (28,250)
Other(137)(123)
Net cash (used in) provided by financing activities
(280,019)254,692 
Effect of exchange rate changes on cash and cash equivalents(3,100)(8,926)
Decrease in cash and cash equivalents
(4,721)(256,481)
Cash and cash equivalents, beginning of year71,684 329,337 
Cash and cash equivalents, end of period
$66,963 $72,856 


BENTLEY SYSTEMS, INCORPORATED
Reconciliation of GAAP to Non-GAAP Measures
(in thousands, except share and per share data)
(unaudited)

Reconciliation of operating income to Adjusted OI w/SBC and to Adjusted operating income:

Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Operating income
$73,679 $55,544 $192,769 $167,853 
Amortization of purchased intangibles12,678 13,575 39,038 40,174 
Deferred compensation plan(3,160)(4,576)4,763 (21,873)
Acquisition expenses2,980 3,203 15,278 21,056 
Realignment expenses (income)150 (971)(1,800)2,223 
Adjusted OI w/SBC86,327 66,775 250,048 209,433 
Stock-based compensation expense18,039 18,626 54,907 50,974 
Adjusted operating income$104,366 $85,401 $304,955 $260,407 



Reconciliation of net income to Adjusted net income:

Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
$
EPS(1)
$
EPS(1)
$
EPS(1)
$
EPS(1)
Net income
$53,027 $0.16 $36,997 $0.12 $147,202 $0.46 $149,058 $0.46 
Non-GAAP adjustments, prior to income taxes:
Amortization of purchased intangibles
12,678 0.04 13,575 0.04 39,038 0.12 40,174 0.12 
Stock-based compensation expense
18,039 0.05 18,626 0.06 54,907 0.17 50,974 0.15 
Deferred compensation plan
(3,160)(0.01)(4,576)(0.01)4,763 0.01 (21,873)(0.07)
Acquisition expenses
2,980 0.01 3,203 0.01 15,278 0.05 21,056 0.06 
Realignment expenses (income)
150 — (971)— (1,800)(0.01)2,223 0.01 
Other income, net
(5,953)(0.02)(932)— (7,207)(0.02)(14,793)(0.04)
Total non-GAAP adjustments, prior to income taxes24,734 0.07 28,925 0.09 104,979 0.32 77,761 0.23 
Income tax effect of non-GAAP adjustments(5,306)(0.02)(5,342)(0.02)(19,303)(0.06)(13,832)(0.04)
Loss from investments accounted for using the equity method, net of tax
44 — 681 — 44 — 1,846 0.01 
Adjusted net income(2)
$72,499 $0.22 $61,261 $0.19 $232,922 $0.72 $214,833 $0.66 
Adjusted weighted average shares, diluted(3)
332,825,186332,079,181332,144,893332,077,834
(1)Adjusted EPS was computed independently for each reconciling item presented; therefore, the sum of Adjusted EPS for each line item may not equal total Adjusted EPS due to rounding.
(2)Adjusted EPS numerator includes $1,716 for both the three months ended September 30, 2023 and 2022, and $5,157 and $5,116 for the nine months ended September 30, 2023 and 2022, respectively, related to interest expense, net of tax, attributable to the convertible senior notes using the if‑converted method.
(3)Adjusted weighted average shares, diluted includes incremental shares, which were considered anti-dilutive on a GAAP basis, of 6,908,798 shares for the three months ended September 30, 2022 related to the dilutive effect of convertible senior notes using the if‑converted method.


Reconciliation of cash flow from operations to Adjusted EBITDA:

Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Cash flow from operations$72,824 $69,468 $329,643 $238,198 
Cash interest9,988 7,119 29,370 17,647 
Cash taxes10,704 7,972 28,703 18,502 
Cash deferred compensation plan distributions
— — 2,125 7,336 
Cash acquisition expenses4,487 420 19,777 23,169 
Changes in operating assets and liabilities13,504 5,513 (84,494)(30,500)
Other(1)
(2,336)(752)(6,420)(475)
Adjusted EBITDA$109,171 $89,740 $318,704 $273,877 
(1) Includes receipts related to interest rate swap.