Bentley Systems, Inc. (NASDAQ:BSY) Q2 2021 Earnings Conference Call August 10, 2021 8:15 AM ET Company Participants Carey Mann – Vice President-Investor Relations Greg Bentley – Chief Executive Officer Nicholas Cumins – Chief Product Officer David Hollister – Chief Financial Officer Conference Call Participants Matt Hedberg – RBC Jason Celino – KeyBanc Matthew Broome – Mizuho Kash Rangan – Goldman Sachs Joe Vruwink – Baird Jay Vleeschhouwer – Griffin Carey Mann Good morning, everyone. And thank you for join ...

Press Release Investor Contact: Ankit Hira or Ed Yuen Solebury Trout for Bentley Systems ir@bentley.com 1-610-458-2777 Media Contact: Carey Mann carey.mann@bentley.com 1-610-458-3170 Bentley Systems Announces Operating Results for the Second Quarter of 2021 and Updates Its 2021 Financial Outlook EXTON, Pa. – August 10, 2021 – Bentley Systems, Incorporated (Nasdaq: BSY) ("Bentley Systems" or the "Company"), the infrastructure engineering software company, today announced operating results for its second quar ...

PART I. FINANCIAL INFORMATION [Item 1. Unaudited Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Consolidated%20Financial%20Statements) This section presents Bentley Systems, Incorporated's unaudited consolidated financial statements as of June 30, 2021, and for the three and six-month periods then ended [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2021, total assets increased to $2.45 billion from $1.13 billion, primarily due to acquisitions, while total liabilities rose to $1.98 billion from $784 million due to new long-term debt Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$2,454,115** | **$1,126,035** | | Goodwill | $1,593,670 | $581,174 | | Intangible assets, net | $262,234 | $45,627 | | **Total Liabilities** | **$1,982,301** | **$784,436** | | Long-term debt | $1,269,842 | $246,000 | | **Total Stockholders' Equity** | **$471,814** | **$341,599** | - The significant increase in Goodwill and Intangible assets is primarily attributable to the acquisition of Seequent Holdings Limited in June 2021[33](index=33&type=chunk)[73](index=73&type=chunk) - The increase in long-term debt is due to the private offerings of **$690 million** in 0.125% convertible senior notes due 2026 and **$575 million** in 0.375% convertible senior notes due 2027[34](index=34&type=chunk)[35](index=35&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2021, total revenues grew 21.0% year-over-year to $222.9 million, with net income increasing to $44.9 million, primarily driven by subscription revenues despite increased operating expenses Key Operating Results (in thousands, except per share data) | Metric | Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$222,931** | **$184,290** | **$444,936** | **$378,980** | | Subscriptions Revenue | $185,452 | $157,655 | $373,577 | $327,837 | | Gross Profit | $169,480 | $147,585 | $342,196 | $305,016 | | Income from Operations | $32,223 | $44,591 | $87,870 | $90,552 | | **Net Income** | **$44,910** | **$39,076** | **$101,916** | **$68,745** | | Diluted EPS | $0.14 | $0.13 | $0.32 | $0.23 | [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2021, net cash from operations was $149.0 million, while investing activities used $1.01 billion primarily for acquisitions, funded by $866.5 million from financing activities Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $149,022 | $136,182 | | Net cash used in investing activities | ($1,008,001) | ($78,979) | | Net cash provided by (used in) financing activities | $866,510 | ($52,556) | | **Increase in cash and cash equivalents** | **$9,148** | **$4,415** | - Investing activities were dominated by **$1.0 billion** used for acquisitions, net of cash acquired, a substantial increase from **$67.6 million** in the prior year period[26](index=26&type=chunk) - Financing activities were primarily driven by **$1.23 billion** in proceeds from convertible senior notes, partially offset by repayments of credit facilities (**$790.8 million**) and the purchase of capped call options (**$51.6 million**)[26](index=26&type=chunk) [Notes to Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section details accounting policies and significant events, including the Seequent acquisition, new convertible notes, and the early adoption of ASU 2020-06 for convertible instruments - On June 17, 2021, the Company completed the acquisition of Seequent Holdings Limited for **$911.0 million** in cash (net of cash acquired) plus 3,141,342 shares of Class B Common Stock[33](index=33&type=chunk) - In 2021, the Company completed two private offerings of convertible senior notes: **$690 million** of 0.125% notes due 2026 in January, and **$575 million** of 0.375% notes due 2027 in June[34](index=34&type=chunk)[35](index=35&type=chunk) - The Company early adopted ASU 2020-06, which simplifies the accounting for convertible instruments and requires the use of the if-converted method for calculating diluted EPS[45](index=45&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance for the three and six months ended June 30, 2021, highlighting strong revenue growth, the Seequent acquisition's impact, and new debt financing [Key Business Metrics](index=54&type=section&id=Key%20Business%20Metrics) As of June 30, 2021, constant currency Annualized Recurring Revenues (ARR) grew 23%, significantly impacted by the Seequent acquisition, while account retention remained high at 98% Key Business Metrics as of June 30 | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Last twelve-months recurring revenues | $746,168 thousand | $665,659 thousand | | ARR growth rate (Constant Currency) | 23% | 11% | | Account retention rate | 98% | 98% | | Recurring revenues dollar-based net retention rate | 106% | 110% | - The ARR growth rate for the twelve months ended June 30, 2021, was favorably impacted by **13%** from the Seequent acquisition[263](index=263&type=chunk) [Results of Operations](index=66&type=section&id=Results%20of%20Operations) For Q2 2021, total revenues increased 21.0% to $222.9 million, driven by subscriptions, while operating expenses rose significantly due to acquisition costs, and net income benefited from a tax benefit Revenue Growth Comparison (Q2 2021 vs Q2 2020) | Revenue Type | Q2 2021 (in thousands) | Q2 2020 (in thousands) | % Change | Constant Currency % Change | | :--- | :--- | :--- | :--- | :--- | | Subscriptions | $185,452 | $157,655 | 17.6% | 13.5% | | Perpetual licenses | $11,391 | $12,379 | (8.0)% | (12.7)% | | Services | $26,088 | $14,256 | 83.0% | 75.1% | | **Total Revenues** | **$222,931** | **$184,290** | **21.0%** | **16.5%** | - General and administrative expenses for Q2 2021 increased by **64.5%** (**61.4%** in constant currency) compared to Q2 2020, primarily due to a **$9.2 million** increase in acquisition and integration costs related to the Seequent acquisition[351](index=351&type=chunk)[356](index=356&type=chunk) - The effective income tax rate was **(79.8)%** for Q2 2021, compared to **9.7%** for Q2 2020, primarily due to a discrete tax benefit of **$29.0 million** associated with stock-based compensation in Q2 2021[367](index=367&type=chunk) [Liquidity and Capital Resources](index=78&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity sources include cash from operations and its credit facility, with significant financing activities in H1 2021 through convertible notes to fund the Seequent acquisition and repay debt - The company completed two major financing activities in H1 2021: a **$690 million** convertible note offering due 2026 and a **$575 million** offering due 2027[283](index=283&type=chunk) - The credit facility was amended to increase the senior secured revolving loan facility from **$500 million** to **$850 million** and extend the maturity to November 2025[379](index=379&type=chunk) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Operating activities | $149,022 | $136,182 | | Investing activities | ($1,008,001) | ($78,979) | | Financing activities | $866,510 | ($52,556) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=86&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposure has not changed significantly from its 2020 Annual Report, with the exception of new risks associated with its convertible senior notes - The fair value of the newly issued 2026 and 2027 Convertible Notes is subject to interest rate risk and market risk related to the company's Class B Common Stock price[428](index=428&type=chunk) - Capped call options were purchased concurrently with the issuance of the convertible notes to reduce potential shareholder dilution upon conversion[428](index=428&type=chunk) [Item 4. Controls and Procedures](index=87&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of the end of the period, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[432](index=432&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2021, that have materially affected, or are reasonably likely to materially affect, internal controls[433](index=433&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=88&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings in the ordinary course of business but does not anticipate any material adverse effects on its financial condition or results of operations - The company is not currently involved in any material legal proceedings[437](index=437&type=chunk) [Item 1A. Risk Factors](index=88&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors detailed in the company's 2020 Annual Report on Form 10-K, which could materially affect the business - The company directs investors to review the risk factors detailed in its 2020 Annual Report on Form 10-K for potential risks that could materially affect the business[439](index=439&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=88&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2021, the company issued Class B Common Stock for the Seequent acquisition and its deferred compensation plan, exempt from registration under the Securities Act - Issued **3,141,342** shares of Class B Common Stock for the acquisition of Seequent Holdings Limited[440](index=440&type=chunk) - Issued **1,862,576** shares of Class B Common Stock related to distributions from the company's nonqualified deferred compensation plan[440](index=440&type=chunk) [Item 6. Exhibits](index=89&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including legal documents related to new convertible notes, the amended credit agreement, and officer certifications - Key exhibits filed include legal documents related to the new 2027 convertible notes, the amended credit agreement, and required officer certifications[443](index=443&type=chunk)

Financial Data and Key Metrics Changes - The company's Q1 2021 revenues reached $222 million, representing a 14% increase compared to the same quarter last year, primarily driven by subscription growth [65][66]. - Subscription revenues, which account for 85% of total revenues, grew by 10.5% year-over-year, with minimal contribution from acquisitions and a 4% boost from currency fluctuations [65][66]. - GAAP operating income for Q1 2021 was $55.6 million, up 21% from the previous year, while adjusted EBITDA grew by 43% to $82.8 million, yielding a margin of slightly better than 37% [75][76]. Business Line Data and Key Metrics Changes - Subscription growth was led by ProjectWise, asset and network performance, civil design applications, and PLAXIS geotechnical offerings [27][65]. - Professional Services revenues increased by $10.1 million or 74% year-over-year, largely due to acquisitions made in 2020 [66][68]. - Perpetual licenses revenues declined by approximately $700,000, now constituting less than 5% of total revenues [66]. Market Data and Key Metrics Changes - The company noted a slight decline in application usage in the commercial facility sector and a greater decline in the industrial resources sector, while public works and utilities showed slight increases [18][19]. - New accounts contributed 3% to year-over-year quarterly revenue growth, indicating a modest decline in existing account growth due to the pandemic's impact on the previous year's metrics [72][73]. Company Strategy and Development Direction - The company is focused on transitioning from ELS to E365 subscription models, which are expected to provide more predictable revenue streams and align costs with workload [10][106]. - Initiatives to enhance infrastructure digital twins are seen as a way to improve global economies and environments, aligning with UN sustainable development goals [29][30]. - The company is investing in self-service fulfillment and educational initiatives to attract future infrastructure professionals, which is expected to enhance brand recognition and recruitment [25][26]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting the full-year 2021 operating margin outlook, despite the ongoing pandemic-related cost savings [9][76]. - The anticipated economic recovery and return to in-person work environments are expected to drive new business growth, particularly in enterprise-level opportunities [10][11]. - The company maintains its full-year revenue outlook of $895 million to $920 million, reflecting growth of 11.7% to 14.8% [69][98]. Other Important Information - The company successfully executed substantial financing transactions, securing an $850 million credit facility and $690 million in convertible notes to enhance its capital structure for growth [82][84]. - The acquisition of Seequent is expected to close in Q2 2021, with anticipated contributions to the company's financial outlook [99]. Q&A Session Summary Question: Will mandates help the adoption of digital twins in infrastructure? - Management believes that government mandates for digital twins in public infrastructure could enhance ROI and safety, especially for government-funded projects [102][103]. Question: What is the ideal future model for transitioning from ELS to E365? - Management anticipates that all ELS licenses will eventually convert to E365, with a cautious approach taken initially due to market volatility concerns [105][106]. Question: How durable is the strength in the SMB market? - Management is encouraged by the rapid addition of 1,000 new SMB accounts, viewing this segment as a significant growth opportunity, similar to competitors like Autodesk [110][112]. Question: How should investors measure progress in digital twins? - Management suggests using case studies from the company's Year in Infrastructure awards to assess the qualitative progress of digital twin adoption [113].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________ FORM 10-Q ___________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39548 ___________________________________ BENTLEY SYSTE ...

Bentley Systems Incorporated (NASDAQ:BSY) Q4 2020 Earnings Conference Call March 2, 2021 8:30 AM ET Company Participants Carey Mann – Vice President-Investor Relations Greg Bentley – Chief Executive Officer David Hollister – Chief Financial Officer Conference Call Participants Jason Celino – KeyBank Matt Hedberg – RBC Joe Vruwink – Baird Brian Essex – Goldman Sachs Brad Sills – Bank f America Merrill Lynch Gal Munda – Berenberg Capital Markets Matt Broome – Mizuho Carey Mann Good morning, everyone, and than ...

Bentley Systems (Nasdaq: BSY) Fourth Quarter and Full Year 2020 Results, and 2021 Financial Outlook | --- | --- | --- | --- | |--------------------------------------------------------|---------------------------------------------------------------------|----------------------------------------------------|-------| | | | | | | | | | | | | | | | | CORPORATE DEVELOPMENTS | FINANCIAL OPERATING RESULTS FOR 2020 AND FINANCIAL OUTLOOK FOR 2021 | | | | eg Bentley, CEO. Bentley Systems investors.bentley.com | | Chie ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________ FORM 10-K ___________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39548 ___________________________________ BENTLEY SYSTEMS, I ...

Bentley Systems Incorporated (NASDAQ:BSY) Q3 2020 Earnings Conference Call November 10, 2020 8:30 AM ET Company Participants Carey Mann – Investor Relations Officer Greg Bentley – Chief Executive Officer David Hollister – Chief Financial Officer Conference Call Participants Joe Vruwink – Baird Brian Essex – Goldman Sachs Brad Sills – Bank of America Matt Hedberg – RBC Matt Broome – Mizuho Jason Celino – KeyBanc Gal Munda – Berenberg Carey Mann Good morning everyone. And thank you for joining us for Bentley ...

CONFIDENTIAL The Infrastructure Engineering Software Company Introducing Bentley Systems Introducing "BSY": Greg Bentley, CEO, and David Hollister, CFO Fall 2020 BSY: The Infrastructure Engineering Software Company Dependable Growth (through Q2 2020 to Date) $768M Revenues (20H1 LTM) 87% Recurring Revenues1 Founder-Led for 36 Years ~30% Adjusted EBITDA Margin 53% of Revenues from accounts > $250K/yr2 Global Maturity Comprehensive Portfolio 1 See Appendix, Footnote 1. 2 Figure as of December 31, 2019 Note: A ...