He also leads the investing group IPO Edge , which offers actionable information on growth stocks through first-look IPO filings, previews on upcoming IPOs, an IPO calendar for tracking what’s on the horizon, a database of U.S. IPOs, and a guide to IPO investing to walk you through the entire IPO lifecycle - from filing to listing to quiet period and lockup expiration dates.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to init ...

Revenue Performance - Total revenues for the year ended December 31, 2024, were $1,353,095, representing a 10.1% increase compared to the prior year[188]. - Subscription revenues increased to $1,223,362 for the year ended December 31, 2024, up 13.2% from the previous year[188]. - Annual Recurring Revenue (ARR) reached $1,283,256 as of December 31, 2024, reflecting a constant currency ARR growth rate of 12%[188]. - Revenues from the Americas increased to $717,002 for the year ended December 31, 2024, a growth of 10.2% compared to the prior year[199]. - EMEA revenues rose to $388,384 for the year ended December 31, 2024, reflecting a 9.9% increase from the previous year[199]. - APAC revenues reached $247,709 for the year ended December 31, 2024, marking a 10.6% increase compared to the prior year[199]. - Recurring revenues represented 91% of total revenues for the twelve months ended December 31, 2024[248]. Operating Income and Expenses - Operating income for the year ended December 31, 2024, was $302,150, compared to $230,542 for the prior year[188]. - Cash flows from operations amounted to $435,292 for the year ended December 31, 2024, compared to $416,696 for the prior year[188]. - Total cost of revenues decreased by 3.1% to $257,767 million compared to $266,083 million in 2023, with a constant currency growth of 12.3%[207]. - Cost of subscriptions and licenses increased by 2.3% to $173,340 million in 2024, primarily due to a rise in cloud-related costs of $10,859 million[209]. - Research and development expenses rose by 2.4% to $281,247 million in 2024, driven by an increase in headcount-related costs of $9,513 million[215]. - Selling and marketing expenses increased by 13.7% to $255,177 million in 2024, mainly due to higher headcount-related costs of $23,408 million and promotional costs of $5,449 million[218]. - General and administrative expenses grew by 16.4% to $210,374 million in 2024, influenced by an increase in headcount-related costs of $11,048 million and higher charitable contributions of $4,143 million[220]. Net Income and Taxation - Income before income taxes for 2024 was $293,055 million, significantly higher than $183,527 million in 2023[229]. - The effective tax rate for 2024 was 20.0%, up from a negative 78.0% in 2023, primarily due to a discrete tax benefit recognized from internal legal entity restructuring[229]. Cash Flow and Financing - Total cash and cash equivalents decreased to $64,009 in 2024 from $68,412 in 2023[261]. - Net cash provided by operating activities for the year ended December 31, 2024, was $435,292, an increase of $18,596 compared to $416,696 in 2023[265]. - Net cash used in investing activities increased to $(143,267) in 2024, primarily due to higher acquisition-related payments of $104,384[267]. - Net cash used in financing activities decreased to $(289,850) in 2024, with lower net paydowns of credit facilities by $111,856[268]. - Long-term debt as of December 31, 2024, was $1,388,088, down from $1,518,403 in 2023[269]. - The company entered into a new Credit Facility on October 18, 2024, providing a $1,300,000 revolving credit facility[270]. - As of December 31, 2024, the company had $1,164,535 available under the Credit Facility and was in compliance with all covenants[271]. Shareholder Returns - The company repurchased 1,292,733 shares for $64,359 under the Stock Repurchase Program during the year ended December 31, 2024[274]. - Quarterly dividends increased to $0.06 per share in 2024 from $0.05 per share in 2023[277]. Market and Currency Exposure - Approximately 58% of total revenues for the year ended December 31, 2024, were derived from outside the U.S., with 34% denominated in currencies other than the U.S. dollar[295]. - A 10% strengthening of the U.S. dollar against other currencies would have lowered the 2024 annual operating income by approximately $1.5 million[295]. - Approximately 66% of total revenues in 2024 were denominated in U.S. dollars, with the remaining in euros, British pounds, Canadian dollars, and other currencies[295]. Future Outlook and Strategic Focus - The company anticipates continued substantial investments in research and development to leverage opportunities in the infrastructure engineering software market[214]. - The company plans to continue focusing on account retention and growth in recurring revenues through new accounts and acquisitions[241].

Financial Data and Key Metrics Changes - Total revenues for Q4 2024 were $350 million, up 13% year-over-year, while full-year revenues reached $1.353 billion, also up 10% [52] - Subscription revenues now represent 90% of total revenues, an increase of over 2 percentage points from 2023, with subscription revenues growing 16% year-over-year for the quarter and 13% for the full year [53] - Adjusted operating income with stock-based compensation for Q4 was $75 million, flat year-over-year, with a margin of 21.5% [59] Business Line Data and Key Metrics Changes - The E365 program contributed significantly, representing 42% of 2024 subscription revenues, up from 38% in 2023 [53] - Perpetual license revenues grew 11% year-over-year for Q4, while service revenues declined 21% for the quarter and 18% for the year [54] - Last 12 months recurring revenues increased by 13% year-over-year, now representing 91% of total revenues [54] Market Data and Key Metrics Changes - ARR growth was 12% year-over-year, and 12.5% excluding China, with a trailing 12 months ARR growth rate of 12% [28][55] - EMEA showed strong performance, while the Americas also delivered strong growth despite uncertainties in federal spending [33][34] - Asia Pacific was led by India and Southeast Asia, but China faced significant headwinds, now representing less than 2.5% of total ARR [36][37] Company Strategy and Development Direction - The company aims for low double-digit ARR growth, 100 basis points of margin expansion, and strong cash flow generation in 2025 [27][63] - A strategic acquisition of Cesium broadened the platform ecosystem for geospatial digital twin developments [8] - Organizational changes were made to accelerate innovation, including the appointment of a new COO [49][50] Management's Comments on Operating Environment and Future Outlook - The global demand environment remains robust across most sectors, with optimism about end market conditions [27] - The company expects continued favorable market conditions and momentum in growth initiatives [63] - Management expressed concerns about the ongoing decline in ARR in China due to soft economic conditions and a shift in preferences [36][128] Other Important Information - The company plans to allocate free cash flow towards acquisitions, debt repayment, share repurchases, and dividends [62] - The 2025 financial outlook anticipates total GAAP revenues between $1.461 billion and $1.490 billion, reflecting a 1.5% headwind to revenue growth in constant currency [64] Q&A Session Summary Question: What could propel the company to the higher end of the ARR range in 2025? - Management noted that improvements in permitting reform in the U.S. could lead to new mine explorations, providing additional tailwinds [76][77] Question: Have there been any signs of permitting reform being introduced? - Management acknowledged an executive order calling for permitting reform but indicated it is still early to see any impact [81] Question: How does the macro environment compare to last year, especially in the U.S.? - Management highlighted strong alignment for infrastructure investments globally, despite political volatility in Europe and a slowdown in China [86][89] Question: What are the principal objectives for the new COO? - The COO will focus on cross-functional alignment, industry solutions, and portfolio development, particularly in asset analytics [110] Question: How is the competitive environment evolving? - Management stated that they are not losing market share and that competitors are struggling to gain traction in infrastructure [120][121] Question: Is the demand environment more or less favorable in 2025 compared to 2024? - Management indicated that the demand environment remains consistent and favorable, with the exception of challenges in China [129]

Bentley Systems, Incorporated (BSY) reported $349.82 million in revenue for the quarter ended December 2024, representing a year-over-year increase of 12.6%. EPS of $0.21 for the same period compares to $0.20 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $350.66 million, representing a surprise of -0.24%. The company delivered an EPS surprise of -8.70%, with the consensus EPS estimate being $0.23.While investors scrutinize revenue and earnings changes year-over-year and how the ...

Bentley Systems, Incorporated (BSY) came out with quarterly earnings of $0.21 per share, missing the Zacks Consensus Estimate of $0.23 per share. This compares to earnings of $0.20 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -8.70%. A quarter ago, it was expected that this company would post earnings of $0.25 per share when it actually produced earnings of $0.24, delivering a surprise of -4%.Over the last four quarters, th ...

Financial Performance - Total revenues for Q4 2024 were $349.8 million, representing a year-over-year increase of 12.6%[3] - Subscription revenues for Q4 2024 reached $315.6 million, up 15.8% year-over-year[3] - Annualized Recurring Revenues (ARR) as of December 31, 2024, were $1,283.3 million, reflecting a constant currency growth rate of 12%[3] - Total revenues for the year ended December 31, 2024, increased to $1,353,095, up 10.2% from $1,228,413 in 2023[24] - Subscription revenues for the year ended December 31, 2024, amounted to $1,223,362 million, up from $1,080,307 million in 2023[32] - For the three months ended December 31, 2024, total revenues were $349,822 million, compared to $310,641 million in the same period of 2023[32] - Subscription revenues for the three months ended December 31, 2024, were $315,590 million, an increase from $272,468 million in 2023[32] Income and Profitability - The net income per diluted share for Q4 2024 was $0.16, compared to $0.54 for the same period last year[3] - Net income attributable to Bentley Systems for the year ended December 31, 2024, was $234,787, down 28.2% from $326,787 in 2023[30] - The company reported a diluted net income per share of $0.72 for the year ended December 31, 2024, compared to $1.00 in 2023[30] - Adjusted operating income for the year ended December 31, 2024, was $445,727, an increase of 12.5% from $396,147 in 2023[28] - Adjusted EBITDA for the year ended December 31, 2024, was $465,368, compared to $416,789 in 2023, indicating a growth of 11.6%[31] Expenses and Investments - Total operating expenses for the year ended December 31, 2024, were $793,178, an increase from $731,788 in 2023[24] - Research and development expenses for the year ended December 31, 2024, totaled $281,247, up from $274,619 in 2023[24] - The company utilized $130,407 for acquisitions in 2024, significantly higher than $26,023 in 2023[26] Cash Flow and Dividends - Cash flows from operations for 2025 are anticipated to be between $415 million and $455 million[12] - Cash flow from operations for the year ended December 31, 2024, was $435,292, compared to $416,696 in 2023, reflecting a 4.4% increase[26] - The company plans to increase its quarterly dividend to $0.07 per share starting from Q1 2025[11] Future Projections - For the full year 2025, total revenues are projected to be in the range of $1,461 million to $1,490 million, with subscription revenues growth rate of 10.5% to 12.5% in constant currency[12] - The adjusted operating income margin for 2025 is expected to be approximately 28.5%, representing an annual improvement of 100 basis points[12] Foreign Exchange Impact - The impact of foreign exchange on total revenues for the year ended December 31, 2024, was a decrease of $846 million[32] - The impact of foreign exchange on subscription revenues for the year ended December 31, 2024, was a decrease of $814 million[32] - The constant currency total revenues for the year ended December 31, 2024, adjusted for foreign exchange, were $1,353,941 million[32] - The constant currency subscription revenues for the year ended December 31, 2024, adjusted for foreign exchange, were $1,224,176 million[32] - The total revenues for the three months ended December 31, 2024, in constant currency were $351,559 million[32] - The subscription revenues for the three months ended December 31, 2024, in constant currency were $317,188 million[32]

Analyst Background - The analyst has a mathematics education background and a career in the financial industry, including experience as an investment analyst in a family office and currently as a finance professional in a boutique investment bank [1] - The analyst focuses on small to mid-cap companies with market capitalizations of less than $20 billion, which are significant in their industries and poised to attract capital market attention [1] - The investment approach targets high-quality yet undervalued companies with robust cash flow, strong moats, consistent earnings growth, and potential for growth through innovation, expansion, or market recovery [1] Disclosure and Editorial Notes - The analyst has no current stock, option, or derivative positions in the mentioned companies but may initiate a long position in BSY within the next 72 hours [2] - The article expresses the analyst's personal opinions and is not compensated by any company mentioned [2] - Seeking Alpha welcomes the analyst as a new contributing analyst and encourages others to share investment ideas for potential publication and earnings [3]

Group 1 - The article discusses the author's perspective on Bentley Systems (NASDAQ: BSY), maintaining a hold rating due to uncertainty about near-term earnings performance and concerns regarding high valuation [1] - The author emphasizes a fundamentals-based approach to value investing, focusing on companies with long-term durability, steady growth, and strong balance sheets [1] - There is a belief that while investing in successful companies carries risks, the potential for significant development can make immediate price less critical [1]

Core Viewpoint - Investors in Bentley Systems, Incorporated (BSY) should closely monitor the stock due to significant movements in the options market, particularly the high implied volatility of the Dec 20, 2024 $70.00 Call option [1] Company Analysis - Bentley Systems currently holds a Zacks Rank 3 (Hold) in the Internet - Software industry, which is positioned in the top 16% of the Zacks Industry Rank [3] - Over the past 60 days, no analysts have raised their earnings estimates for the current quarter, while three analysts have lowered their estimates, resulting in a decrease of the Zacks Consensus Estimate from earnings of 25 cents per share to 23 cents per share [3] Options Market Insights - The high implied volatility surrounding Bentley Systems shares suggests that options traders are anticipating a significant price movement, which could indicate an upcoming event that may lead to a substantial rally or sell-off [2][4] - Options traders often seek to sell premium on options with high implied volatility, aiming to benefit from the decay of the option's value if the underlying stock does not move as much as expected by expiration [4]

Financial Data and Key Metrics Changes - In Q3 2024, the company reported a 12% year-over-year growth in Annual Recurring Revenue (ARR), reaching $1.271 billion, with a constant currency growth rate of 12.5% excluding China [45][59]. - Subscription revenues grew 12% year-over-year, now representing 91% of total revenues, up from 88% in the prior year [53][54]. - Total revenues increased by 9% year-over-year, driven by strong subscription performance despite a decline in professional services revenues [57][75]. - Adjusted operating income with stock-based compensation was $90 million for the quarter, up 4% year-over-year, with a margin of 26.7% [64]. Business Line Data and Key Metrics Changes - The E365 programs were highlighted as a major growth driver, contributing significantly to ARR growth through upgrades and new accounts [46][59]. - The professional services segment saw a decline of 14% year-over-year, primarily due to delays in IBM Maximo related implementations [55][75]. - The asset analytics business is expected to add incremental revenue opportunities, although it currently contributes less than 50 basis points to ARR growth [60][94]. Market Data and Key Metrics Changes - The Americas region delivered strong growth, particularly in North America, while Asia Pacific also showed robust performance, especially in Southeast Asia and India [50][51]. - China’s contribution to ARR has decreased to approximately 2.5%, down from 3% a year ago, due to soft economic conditions and geopolitical tensions [45][59]. - The public works/utilities sector remains a key growth driver, benefiting from global infrastructure spending [49]. Company Strategy and Development Direction - The company is focusing on enhancing its digital twin capabilities and integrating AI into its product offerings, which is expected to open new monetization opportunities [39][41]. - The acquisition of Cesium is seen as a strategic move to enhance 3D geospatial capabilities and expand the customer base [36][26]. - The company aims to maintain a consistent annual margin improvement of 100 basis points while investing in long-term initiatives [66][74]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing visibility and linearity of ARR growth, with expectations for continued strong performance in Q4 [9][74]. - The sentiment in the U.S. engineering sector remains positive, with firms expecting higher backlogs and optimistic financial outlooks [48]. - The company anticipates that the upcoming U.S. elections may not significantly disrupt infrastructure investment priorities, which are expected to remain bipartisan [90][91]. Other Important Information - The company has entered into a new five-year senior secured credit agreement, providing increased flexibility for capital allocation and debt management [71][72]. - The company is raising its cash flow conversion expectations for the year from 80% to 85% due to strong cash collections and profitability [75][68]. Q&A Session Summary Question: About the Year in Infrastructure Conference and AI capabilities - Management indicated that the asset analytics portfolio represents an incremental opportunity for AI-enabled digital twins, while existing products will also benefit from enhanced interoperability and new features [80][82]. Question: Growth drivers for next year - Management expects next year to be consistent with this year, driven by project backlogs and the asset analytics business, with a focus on maintaining low double-digit ARR growth [85][86]. Question: Impact of U.S. elections on project sentiment - Management noted that the IIJA provides visibility for infrastructure spending, and there is optimism about bipartisan support for infrastructure investment [89][90]. Question: Contribution of Cesium to ARR - Management clarified that while Cesium's financial impact is currently minimal, its strategic importance and user engagement are significant [94][96]. Question: Drivers of SMB growth - Management highlighted the success of Virtuosity subscriptions in attracting new SMB accounts, indicating a deep market for these services [97][100]. Question: Water infrastructure demand - Management acknowledged a long-term growth trend in water infrastructure, with a global uptick in orders, although it is not concentrated in the U.S. [102]. Question: Changes in customer selection criteria - Management noted that customers are increasingly prioritizing data management and interoperability, which aligns with the company's open approach [106][108].