Often during the project delivery lifecycle, key data are constantly changing, with inputs received from multiple sources, resulting in the need for a single source of information that is used to collect, manage, and disseminate information for the whole project team. Our software assures that the rapidly-changing data are managed in a common data environment ("CDE") such that only the correct milestone versions can be shared and referenced across the project, while embedded digital twin workflows, powered ...

Financial Data and Key Metrics Changes - Total revenues for Q3 2022 were $268 million, growing 7% year-over-year or 15% on a constant currency basis [62] - Year-to-date total revenues grew 17% or 23% on a constant currency basis, with almost all revenue growth coming from subscriptions, which represented 88% of total revenues during Q3 2022 [62] - Adjusted EBITDA for Q3 grew approximately 6% over Q3 2021, with a year-to-date adjusted EBITDA margin of 33.7% [71] Business Line Data and Key Metrics Changes - Subscription revenue grew approximately 18% year-over-year on a constant currency basis, supported by the E365 program and Virtuosity subscriptions [62][63] - The account retention rate rounded up to 99%, with a net retention rate of 110% driven by the E365 consumption-based commercial model [64] Market Data and Key Metrics Changes - Constant currency revenue growth was 12% in the Americas, 14% in EMEA, and 23% in APAC for Q3 2022 [62] - The U.S. civil engineering firms showed accelerating new business momentum, correlating with funding from the Infrastructure Investment and Jobs Act [15][32] Company Strategy and Development Direction - The company is focusing on enhancing its E365 program, which is becoming increasingly important for enterprise accounts, providing tailored solutions and real-time support [40][42] - A strategic alliance was announced with Fukui in Japan to leverage local expertise and accelerate digital transformation in infrastructure engineering [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fourth quarter, citing strong conditions and enthusiasm from quota carriers, although concerns remain regarding geopolitical issues in China [78] - The company reaffirmed its full-year constant currency ARR growth outlook despite challenges from exiting Russia and associated impacts in China [14][65] Other Important Information - The company reported a significant year-over-year currency headwind, with GAAP revenues negatively impacted by approximately $40 million due to the strengthening U.S. dollar [67] - Insider ownership remains strong, with the Bentley family holding a total economic ownership interest of 59% [50] Q&A Session Summary Question: What was the incremental FX headwind to ARR during the quarter? - Management indicated that calculating the FX headwind for ARR was complicated and did not provide a specific figure [76] Question: Does new business acceleration serve as a leading indicator for renewals? - Management noted that while renewals are still significant, the E365 program has reduced the relative importance of renewals in Q4 [82] Question: What was the magnitude of the EPC headwind absorbed in ARR? - Management quantified the EPC work subsidence at about 20%, but noted optimism for recovery in 2023 [84] Question: How material can the new growth engine Virtuosity be for long-term ARR growth? - Management believes that the SMB segment represents a significant untapped market, with potential for substantial growth in the coming years [85] Question: How are various regions in Europe performing? - Management highlighted that Northern Europe has improved, while Southern Europe is lagging, with India showing exceptional growth [88]

Revenue Performance - The company's total revenues for 2021 were diversified by account type, size, and geography, with subscriptions representing 84% of total revenues and recurring revenues accounting for 86% of total revenues [220]. - The annualized recurring revenues (ARR) for 2022 reached $983,656, an increase from $903,845 in 2021, reflecting a growth rate of 14% [237]. - For the twelve months ended September 30, 2022, 88% of the company's revenues were recurring revenues, highlighting the stability of its revenue model [242]. - Recurring revenues represented 88% of total revenues for the twelve months ended September 30, 2022, highlighting the importance of existing accounts for revenue growth [247]. - Total revenues for the three months ended September 30, 2022, were $268,332, an increase of 6.4% from $251,388 in the same period in 2021 [273]. - Total revenues for the three months ended September 30, 2022, increased by 6.7% to $268,332 compared to $251,388 in the same period of 2021 [276]. - For the nine months ended September 30, 2022, total revenues increased by 16.5% to $812,134, with subscription revenues growing by 20.2% to $708,731 [278]. Customer Retention and Growth - The account retention rate improved to 99% in 2022, up from 98% in 2021, indicating strong customer loyalty [237]. - The recurring revenues dollar-based net retention rate rose to 110% in 2022, compared to 106% in 2021, showcasing effective revenue growth from existing accounts [237]. - The account retention rate is a key indicator of long-term account relationships, reflecting the company's ability to retain its account base [246]. - The recurring revenues dollar-based net retention rate is a critical metric for assessing revenue growth within existing accounts, excluding new account contributions [247]. - The improvements in business performance were primarily driven by expansion within existing accounts and a 3% growth from new accounts, particularly in smaller- and medium-sized segments [281]. Financial Metrics - Adjusted EBITDA for the three months ended September 30, 2022, was $89.74 million, compared to $84.47 million for the same period in 2021, representing a year-over-year increase of approximately 3.8% [250]. - Adjusted Net Income for the three months ended September 30, 2022, was $61.83 million, up from $56.29 million in the same period of 2021, indicating a year-over-year growth of about 9% [251]. - Net income for the three months ended September 30, 2022, was $36,997, a recovery from a net loss of $48,022 in the same period of 2021 [273]. - The company reported a net income as a percentage of total revenues of 18.4% for the nine months ended September 30, 2022, compared to 7.8% for the same period in 2021 [319]. - Adjusted EBITDA for the three months ended September 30, 2022, increased by $5,272 to $89,740, representing 33.4% of total revenues, compared to 33.6% in the same period of 2021 [321]. - Adjusted Net Income for the three months ended September 30, 2022, increased by $5,536 to $61,825, accounting for 23.0% of total revenues, up from 22.4% in the same period of 2021 [322]. Expenses and Costs - Operating expenses decreased significantly to $153,605 for the three months ended September 30, 2022, from $234,696 in the same period of 2021 [273]. - Cost of subscriptions and licenses for the three months ended September 30, 2022, increased by 20.3% to $37,371, mainly due to headcount-related costs and cloud-related expenses [297]. - Research and development expenses increased to $63,827 for the three months ended September 30, 2022, from $57,334 in the same period of 2021, indicating a focus on innovation [273]. - Selling and marketing expenses for the nine months ended September 30, 2022, rose by $26,830, or 23.4%, driven by increases in salaries and promotional costs [302]. - General and administrative expenses increased by $18,748, or 17.0%, for the nine months ended September 30, 2022, mainly due to headcount-related costs [302]. Acquisitions and Investments - The company completed four acquisitions in the nine months ended September 30, 2022, compared to 12 acquisitions in the same period of 2021 [266]. - The acquisition of Power Line Systems on January 31, 2022, cost $695,968 in cash, significantly impacting the financial results for the nine months ended September 30, 2022 [266]. - The company expects to invest up to $100 million over five years in iTwin Ventures for technology companies focused on infrastructure digital twin solutions [323]. - The company repatriated $150,000 of undistributed previously taxed earnings from foreign subsidiaries to fund the acquisition of Power Line Systems [327]. Market and Currency Impact - The company paused sales in Russia and Belarus due to the Russia-Ukraine war, resulting in a reduction of ARR by approximately $11,190 [240]. - 47% of total revenues in 2021 were denominated in various foreign currencies, which affects financial results due to currency fluctuations [270]. - The company recorded a foreign exchange loss of $(18,815) for the nine months ended September 30, 2022, primarily from U.S. Dollar denominated transactions [315]. Financing and Capital Structure - The company has a Credit Facility providing for an $850,000 senior secured revolving loan and a $200,000 senior secured term loan, with $505,189 available as of September 30, 2022 [331][333]. - The weighted average interest rate under the Credit Facility was 4.34% for the three months ended September 30, 2022, compared to 2.33% in the same period of 2021 [336]. - The company completed a private offering of $575,000 of 0.375% convertible senior notes due 2027, with interest payable semi-annually [337]. - The effective interest rate for the 2027 Notes is 0.864% and for the 2026 Notes is 0.658% [353][353]. - As of September 30, 2022, the company was in compliance with all covenants in both the 2026 and 2027 Notes [344][354].

Bentley Systems, Incorporated (NASDAQ:BSY) Q2 2022 Earnings Conference Call August 9, 2022 8:15 AM ET Company Participants Michael Fischette - Vice President, Deputy General Counsel Greg Bentley - Chief Executive Officer Claire Rutkowski - Chief Information Officer Nicholas Cumins - Chief Operating Officer David Hollister - Chief Investment Officer Werner Andre - Chief Financial Officer Conference Call Participants Matt Hedberg - RBC Joe Vruwink - Baird Matthew Broome - Mizuho Kristen Owen - Oppenheimer And ...

Revenue and Growth - Total revenues for 2021 were diversified by account type, size, and geography, with subscriptions representing 84% of total revenues and recurring revenues accounting for 86%[210] - Annualized recurring revenues (ARR) for 2022 reached $971,876, up from $882,415 in 2021, reflecting a growth rate of 14%[227] - The last twelve months recurring revenues increased by $183,639 compared to the previous period, primarily due to growth in ARR and new account additions[232] - Over 70% of total revenues in 2021 came from organizations that have been accounts for over ten years, indicating a loyal customer base[210] - Recurring revenues represented 88% of total revenues for the twelve months ended June 30, 2022, highlighting the importance of the recurring revenues dollar-based net retention rate as a measure of revenue growth within existing accounts[237] - The company's ARR growth rate was positively impacted by 2.5% due to the onboarding from the acquisition of Power Line Systems during the twelve months ended June 30, 2022[234] - The company anticipates continued growth in subscription revenues as it transitions historically classified services revenues into subscriptions for accounts converting to the E365 offering[271] Financial Performance - Adjusted EBITDA for the three months ended June 30, 2022, was $86,521, compared to $69,334 for the same period in 2021, reflecting a significant increase[240] - Adjusted Net Income for the three months ended June 30, 2022, was $73,808, slightly down from $74,463 in the same period of 2021[247] - The company reported a net income of $55,673 for the three months ended June 30, 2022, compared to $45,627 for the same period in 2021[245] - For the three months ended June 30, 2022, total revenues increased to $268,285, representing a 19.8% growth compared to $223,921 in the same period of 2021[262] - Net income for the three months ended June 30, 2022 was $55,673, compared to $45,627 in the same period of 2021, indicating a 21.9% increase[262] - For the six months ended June 30, 2022, net income increased by $9,428, or 9.2%, compared to the same period in 2021, totaling $112,061[305] Expenses and Costs - Operating expenses for the three months ended June 30, 2022 totaled $152,874, an increase from $137,257 in the prior year, driven by higher research and development costs[262] - The cost of subscriptions and licenses for the three months ended June 30, 2022, increased by 23.2% to $36,806 million, primarily due to headcount-related costs and amortization expenses[284] - Research and development expenses for the three months ended June 30, 2022, increased by 22.9% to $64,866 million, mainly due to headcount-related costs from the Seequent acquisition[289] - Selling and marketing expenses for the three months ended June 30, 2022, increased by 30.5% to $49,617 million, driven by headcount-related costs and promotional expenses[292] - The total operating expenses for the three months ended June 30, 2022, increased by 11.4% to $152,874 million compared to $137,257 million in the same period of 2021[289] Market and Geographic Performance - The Americas region saw a revenue increase of 27.9% to $144,359 million for the three months ended June 30, 2022, driven by subscription revenues from acquisitions of approximately $17,600 million[275] - The EMEA region experienced an 8.2% revenue increase to $74,800 million for the three months ended June 30, 2022, with subscription revenues from the Seequent acquisition contributing approximately $4,300 million[277] - Approximately 47% of total revenues in 2021 were denominated in foreign currencies, impacting financial results due to fluctuations in exchange rates[259] - The company reported a foreign exchange loss of $4,717 for the three months ended June 30, 2022, compared to a gain of $(1,406) in the same period of 2021[254] Acquisitions and Investments - The company completed two acquisitions in the first half of 2022, including Power Line Systems for $695,968, which significantly impacted financial results[257] - The company has a high account retention rate of 98% and a recurring revenues dollar-based net retention rate of 109%[227] - The company continues to invest significantly in research and development to enhance existing offerings and develop new technologies[208] - The company expects to invest up to $100 million in corporate venture capital funding over five years for technology companies relevant to infrastructure digital twin solutions[308] Debt and Financing - The company has cash and cash equivalents totaling $93,411 million as of June 30, 2022, down from $329,337 million on December 31, 2021[315] - The company has an $850,000 million senior secured revolving loan facility and a $200,000 million senior secured term loan, both maturing on November 15, 2025[316] - The weighted average interest rate under the Credit Facility was 2.89% for the three months ended June 30, 2022, compared to 2.11% for the same period in 2021[322] - The company incurred $540 million in debt issuance costs related to the 2021 Term Loan[317] - As of June 30, 2022, the company had $455,976 million available under the Credit Facility, down from $849,850 million on December 31, 2021[318] - The company completed a private offering of $575,000 million of 0.375% convertible senior notes due 2027, with an effective interest rate of 0.864%[323][329] Other Financial Metrics - The effective tax rate for the three months ended June 30, 2022, was (9.1)%, compared to (75.9)% in the same period of 2021[303] - The company reported a total other income (expense), net of $3,497 for the three months ended June 30, 2022, compared to $(3,777) in the same period of 2021[302] - The company incurred acquisition expenses of $3,856 for the three months ended June 30, 2022, related to the acquisition of Power Line Systems[251] - The company recorded a swap related asset at fair value of $29,607 million as of June 30, 2022, compared to $10,117 million on December 31, 2021[320]

Financial Performance Highlights - Total revenues reached $275.5 million, a 24.1% increase year-over-year, or 27.7% on a constant currency basis[7] - Subscription revenues amounted to $241.2 million, reflecting a 28.2% increase, or 32.0% on a constant currency basis, year-over-year[7] - Last twelve-month recurring revenues totaled $885.9 million, up 23.6% year-over-year[7] - Adjusted EBITDA was $97.6 million, compared to $83.0 million in the same period last year[7] The Adjusted EBITDA margin was 35.4%, compared to 37.4% for the same period last year[7] - Cash flow from operations was $101.7 million, compared to $132.8 million for the same period last year[7] Key Business Metrics - Annualized Recurring Revenue (ARR) reached $962.6 million as of March 31, 2022, representing a constant currency ARR growth rate of 27% from March 31, 2021[7] - The last twelve-month recurring revenues dollar-based net retention rate was 108%, compared to 107% for the same period last year[7] - The last twelve-month account retention rate was 98%, consistent with the same period last year[7] Strategic Initiatives and Acquisitions - Bentley Systems completed the acquisition of Power Line Systems for $696.0 million in cash on January 31, 2022[9] - BSY Investments announced a joint venture in China to develop software and cloud service offerings tailored to Chinese government requirements[8, 76] - Bentley Systems acquired ADINA R & D Inc to enhance nonlinear simulation capabilities for infrastructure engineering[83]

Financial Data and Key Metrics Changes - Total revenues for Q1 2022 were $275.5 million, representing a 24% increase year-over-year, primarily driven by subscription growth which accounted for approximately 88% of total revenues and grew by 28% [45][46] - Last 12 months recurring revenues increased by 25%, now comprising 87% of total revenues, with a 98% account retention rate and a net recurring revenue retention rate of 108% [50][51] - GAAP operating income for Q1 2022 was $56.6 million, up 2% from Q1 2021, with adjusted EBITDA growth of 18% reflecting a margin of 35% [51][52] Business Line Data and Key Metrics Changes - The acquisition of Seequent and Power Line Systems contributed significantly to growth, with PLS showing a 25% ARR growth over the prior year within just two months of acquisition [36][45] - Professional Services revenues increased by 3% year-over-year, while perpetual license revenues remained flat, indicating a shift in preference towards subscription offerings [46][48] Market Data and Key Metrics Changes - New business accelerated in the Middle East, Australia, New Zealand, and India, while Europe saw a decline due to lower consumption growth in E365 accounts [12][13] - The impact of geopolitical tensions, particularly the war in Ukraine, led to a pause in marketing efforts in Russia, which represented about 1% of global ARR, resulting in a reduction of $5 million in ARR [12][49] Company Strategy and Development Direction - The company is focusing on enhancing its digital offerings and expanding its presence in the SMB segment, which has shown significant growth potential [18][19] - Strategic acquisitions, such as ADINA and PLS, are aimed at strengthening the product portfolio and enhancing R&D capabilities [14][28] - The company is adapting to local market conditions in China through joint ventures to better align with local preferences and regulations [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business despite geopolitical challenges and economic uncertainties, maintaining the full-year 2022 financial outlook [27][49] - The company anticipates that the rebound in industrial CapEx driven by energy security imperatives will positively impact ARR and revenue growth [9][24] Other Important Information - The company reported a cash conversion ratio from adjusted EBITDA of 104%, indicating strong cash flow efficiency [56] - The net debt senior leverage was 1.4 times as of March 31, 2022, reflecting a decrease from the previous quarter [58][59] Q&A Session Summary Question: How to interpret performance in the quarter regarding organic business? - Management clarified that the impact from Russia and China was less than 200 basis points, with a more significant effect on ARR than on revenue [61][62] Question: Insights on the strength of PLS and its implications for infrastructure investment? - Management noted that while PLS showed strong growth, it is too early to extrapolate broader trends from just two months of performance [65][66] Question: How did Bentley perform during prior economic downturns? - Historical performance showed resilience, with revenues declining only slightly during past crises, indicating a shift towards more stable revenue streams [70][71] Question: Outlook for the business pipeline and demand? - Management expressed optimism about the demand for digital solutions among civil and structural engineers, despite geopolitical disruptions [81][82]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited financial statements, management's analysis of financial condition and operations, market risk disclosures, and internal controls for the period [Unaudited Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Consolidated%20Financial%20Statements) This section presents Bentley Systems' unaudited consolidated financial statements for Q1 2022, including balance sheets, statements of operations, cash flows, and related accounting notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The balance sheets show an increase in total assets and liabilities, primarily driven by goodwill and long-term debt from acquisitions - Total assets increased to **$3.16 billion** as of March 31, 2022, from **$2.66 billion** at December 31, 2021, primarily driven by a significant increase in Goodwill and Intangible assets, reflecting recent acquisition activity[9](index=9&type=chunk) - Total liabilities rose to **$2.70 billion** from **$2.25 billion**, largely due to an increase in long-term debt to **$1.87 billion**[9](index=9&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total current assets** | $414,061 | $615,831 | | **Goodwill** | $2,217,578 | $1,588,477 | | **Total assets** | **$3,158,303** | **$2,659,243** | | **Total current liabilities** | $612,790 | $593,874 | | **Long-term debt** | $1,871,527 | $1,430,992 | | **Total liabilities** | **$2,700,650** | **$2,250,021** | | **Total stockholders' equity** | $457,653 | $409,222 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) The statements show a 24.1% increase in total revenues for Q1 2022, while net income remained relatively flat due to higher operating expenses - Total revenues for the three months ended March 31, 2022, increased by **24.1%** year-over-year to **$275.5 million**, driven by strong growth in subscription revenues[13](index=13&type=chunk) - Net income remained relatively flat at **$56.4 million** for Q1 2022 compared to **$57.0 million** in Q1 2021, as higher revenues were offset by increased operating expenses, particularly in R&D, Selling & marketing, and General & administrative categories[13](index=13&type=chunk) Q1 2022 vs Q1 2021 Statement of Operations (in thousands) | Metric | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :--- | :--- | :--- | | **Total revenues** | **$275,517** | **$222,005** | | Subscriptions | $241,233 | $188,125 | | Gross profit | $219,732 | $172,716 | | Income from operations | $56,592 | $55,647 | | **Net income** | **$56,388** | **$57,006** | | Net income per share, diluted | $0.18 | $0.18 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements indicate decreased operating cash, significantly increased investing cash due to acquisitions, and substantial financing activities - Net cash provided by operating activities decreased to **$101.7 million** in Q1 2022 from **$132.8 million** in Q1 2021[22](index=22&type=chunk) - Net cash used in investing activities significantly increased to **$700.6 million** in Q1 2022, primarily due to **$696.0 million** spent on acquisitions, compared to **$60.6 million** in the prior year period[22](index=22&type=chunk) - Net cash provided by financing activities was **$399.9 million**, mainly from proceeds from credit facilities of **$563.9 million**, which were used to fund acquisitions[22](index=22&type=chunk) - Cash and cash equivalents decreased by **$199.7 million** during the quarter, ending at **$129.6 million**[22](index=22&type=chunk) [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the Power Line Systems acquisition, revenue disaggregation by type and geography, and significant long-term debt obligations - On January 31, 2022, the Company completed the acquisition of Power Line Systems for **$696.0 million** in cash, net of cash acquired[30](index=30&type=chunk) - Total revenues are disaggregated by type (Subscriptions, Perpetual licenses, Services) and geography (Americas, EMEA, APAC); subscription revenues form the largest component[52](index=52&type=chunk)[56](index=56&type=chunk) - The company has significant long-term debt, including a bank credit facility and convertible senior notes due in 2026 and 2027[96](index=96&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2022 financial performance, highlighting revenue growth, key business metrics, operational results, and liquidity, including the impact of acquisitions [Overview](index=45&type=section&id=Overview) This overview describes Bentley Systems as a global software provider for infrastructure engineering, emphasizing its recurring revenue model and diversified client base - Bentley Systems is a global provider of software for infrastructure engineering, serving sectors such as public works/utilities (**52%**), industrial/resources (**34%**), and commercial/facilities (**14%**)[204](index=204&type=chunk)[205](index=205&type=chunk) - The company's revenue model is heavily reliant on recurring revenues, which constituted **86% of total revenues in 2021** (**84% from subscriptions** and **2% from recurring services**)[210](index=210&type=chunk) - The business is diversified with no single account representing more than **2.5% of total revenues in 2021**, and over **70% of 2021 revenues** came from accounts with a tenure of over ten years[210](index=210&type=chunk) [Key Business Metrics](index=48&type=section&id=Key%20Business%20Metrics) This section presents key business metrics, including strong Annualized Recurring Revenues (ARR) growth and high recurring revenue retention rates Key Business Metrics Comparison (in thousands, except percentages) | Metric | As of March 31, 2022 | As of March 31, 2021 | | :--- | :--- | :--- | | Last twelve-months recurring revenues | $885,882 | $716,902 | | ARR growth rate (Constant Currency) | 27% | 10% | | Account retention rate (Constant Currency) | 98% | 98% | | Recurring revenues dollar-based net retention rate (Constant Currency) | 108% | 107% | - The Annualized Recurring Revenues (ARR) growth rate of **27%** for the twelve months ended March 31, 2022, was favorably impacted by **15%** from the platform acquisitions of Power Line Systems and Seequent[232](index=232&type=chunk) - In response to the Russia-Ukraine war, the company paused sales in Russia and Belarus and reduced its related ARR by **$5.2 million**; as of March 31, 2022, total ARR was **$962.6 million**[233](index=233&type=chunk) [Non-GAAP Financial Measures](index=50&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures, including Adjusted EBITDA and Adjusted Net Income, used for evaluating ongoing operations - The company uses Adjusted EBITDA and Adjusted Net Income to evaluate ongoing operations; Adjusted EBITDA is net income adjusted for items like interest, taxes, D&A, stock-based compensation, and acquisition expenses[238](index=238&type=chunk)[239](index=239&type=chunk) Non-GAAP Financial Measures (in thousands) | Measure | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Adjusted EBITDA | $97,616 | $82,976 | | Adjusted Net Income | $79,556 | $64,130 | Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net income | $56,388 | $57,006 | | Interest expense, net | $7,042 | $2,319 | | Provision for income taxes | $3,231 | $10,358 | | Depreciation and amortization | $17,212 | $8,993 | | Stock-based compensation | $14,953 | $8,913 | | Deferred compensation plan | $(5,138) | $167 | | Acquisition expenses | $13,997 | $9,256 | | Other income, net | $(10,641) | $(14,482) | | Loss from equity method investment | $572 | $446 | | **Adjusted EBITDA** | **$97,616** | **$82,976** | [Results of Operations](index=54&type=section&id=Results%20of%20Operations) This section details the results of operations, including revenue breakdown by type, changes in operating expenses, and the effective income tax rate Revenue Comparison (in thousands) | Revenue Type | Q1 2022 | Q1 2021 | Change ($) | Change (%) | Constant Currency Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Subscriptions | $241,233 | $188,125 | $53,108 | 28.2% | 32.0% | | Perpetual licenses | $10,205 | $10,116 | $89 | 0.9% | 5.9% | | Services | $24,079 | $23,764 | $315 | 1.3% | 2.8% | | **Total revenues** | **$275,517** | **$222,005** | **$53,512** | **24.1%** | **27.7%** | - On a constant currency basis, the **$60.2 million** increase in subscriptions revenue was driven by acquisitions (**$42.7 million**) and improvements in business performance (**$17.5 million**), primarily from expansion within existing accounts[263](index=263&type=chunk)[264](index=264&type=chunk) - Total operating expenses increased **39.4%** to **$163.1 million**, driven by higher R&D, Selling & marketing, and General & administrative costs, largely due to increased headcount and expenses from acquisitions[272](index=272&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) - The effective income tax rate for Q1 2022 was **5.4%**, significantly lower than **15.3%** in Q1 2021, primarily due to a **$5.2 million** increase in discrete tax benefits from stock-based compensation[283](index=283&type=chunk) [Liquidity and Capital Resources](index=60&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity, capital resources, and debt obligations, highlighting cash usage for acquisitions and available credit facilities - The primary use of cash during the quarter was to fund the acquisition of Power Line Systems, using available cash and borrowings under the Credit Facility[288](index=288&type=chunk) - As of March 31, 2022, **95%** (**$122.5 million**) of the company's total cash and cash equivalents were held outside the U.S.; **$100 million** was repatriated during Q1 2022 and another **$50 million** after quarter-end to fund the Power Line Systems acquisition[289](index=289&type=chunk)[291](index=291&type=chunk) Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net Cash Provided By Operating activities | $101,731 | $132,798 | | Net Cash Used In Investing activities | $(700,575) | $(60,630) | | Net Cash Provided By Financing activities | $399,931 | $372,137 | - As of March 31, 2022, the company had **$409.6 million** available under its **$850 million** revolving credit facility[296](index=296&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no significant changes in its market risk exposure from what was described in its 2021 Annual Report on Form 10-K - There have been no significant changes in the company's market risk exposure as described in the 2021 Annual Report on Form 10-K[329](index=329&type=chunk) [Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of March 31, 2022 - 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 the reasonable assurance level[331](index=331&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2022, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[333](index=333&type=chunk) [PART II. OTHER INFORMATION](index=67&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides other information, including legal proceedings, risk factors, unregistered equity sales, and a list of exhibits filed with the report [Legal Proceedings](index=67&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings in the ordinary course of business but does not believe the outcome will have a material adverse effect on its financials - The company is not currently involved in any material litigation and does not expect the outcome of ordinary course legal actions to have a material adverse effect on its financials[336](index=336&type=chunk) [Risk Factors](index=67&type=section&id=Item%201A.%20Risk%20Factors) This section refers the reader to the risk factors described in the company's 2021 Annual Report on Form 10-K, stating they could materially affect the business - The report directs investors to consider the risk factors previously disclosed in the company's 2021 Annual Report on Form 10-K[337](index=337&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2022, the company issued shares of its Class B Common Stock in several unregistered transactions, including for vested RSUs and deferred compensation - From January 1, 2022, to March 31, 2022, the company issued unregistered Class B Common Stock for three main purposes: **10,881 shares** for vested RSUs, **809,751 shares** for deferred compensation plan distributions, and **735,000 shares** for exercised acquisition-related options[338](index=338&type=chunk)[339](index=339&type=chunk) - These security issuances were exempt from registration under the Securities Act, relying on Rule 701 for compensatory plans and Section 4(a)(2) for transactions not involving a public offering[340](index=340&type=chunk) [Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - The exhibits filed with this report include CEO and CFO certifications pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act, as well as various Inline XBRL documents[342](index=342&type=chunk)

Bentley Systems, Incorporated (NASDAQ:BSY) Q4 2021 Earnings Conference Call March 1, 2022 8:15 AM ET Company Participants Carey Mann - Vice President, Investor Relations Greg Bentley - Chief Executive Officer Werner Andre - Chief Financial Officer Nicholas Cumins - Chief Operating Officer David Hollister - Chief Investment Officer Conference Call Participants Jason Celino - KeyBanc Capital Markets Matthew Broome - Mizuho Securities Matthew Hedberg - RBC Capital Markets Joe Vruwink - Robert W. Baird Sophie L ...

| --- | --- | --- | --- | --- | |-----------------------------------------|-------|--------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | Bentley Systems' 21Q4 Operating Results | | | | | | Greg Bentley Nicholas Cumins | | Werner Andre | | | Chief Executive Officer Chief Operating Officer Chief Investment Officer Chief Financial Officer 1 | © 2022 Bentley Systems, Incorporated © 2022 Bentley Systems, Incorporated Disclaimer • This presentation includes forward-looking statements r ...