[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 ...

Revenue Growth - Total recurring revenues for the last twelve months reached $834,150,000, an increase of 31% from $696,662,000 in the previous year[330]. - The annualized recurring revenues (ARR) growth rate was 26%, compared to 8% in the prior year[330]. - The recurring revenues dollar-based net retention rate improved to 109%, up from 107% in the previous year[330]. - Subscriptions accounted for 84% of total revenues, with recurring revenues making up 86% of total revenues[313]. - Total revenues increased by $163,502, or 20.4%, to $965,046 for the year ended December 31, 2021, primarily driven by improvements in business performance and acquisitions[400]. - Subscription revenues reached $812,807, an increase of $133,534 or 19.7% compared to the previous year[400]. - Service revenues grew by 52.8% to $99,159, reflecting strong demand and positive foreign currency effects[400]. Account Retention and Diversification - The account retention rate remained high at 98% for the last twelve months[330]. - The company has a highly diversified account base, with the largest account contributing no more than 2.5% of total revenues[313]. - The recurring revenues dollar-based net retention rate for the year ended December 31, 2021, was 86%, highlighting the company's success in growing revenues within existing accounts[338]. Research and Development - The company continues to invest significantly in research and development to enhance existing offerings and develop new technologies[310]. - Research and development expenses increased to $220,915, up from $185,515 in 2020, indicating continued investment in innovation[397]. - Research and development expenses increased by $35,400, or 19.1%, for the year ended December 31, 2021, with a constant currency increase of 16.5%[418]. Financial Performance - Adjusted EBITDA for the year ended December 31, 2021, was $324.948 million, an increase of 22% from $266.376 million in 2020[342]. - Adjusted Net Income for the year ended December 31, 2021, was $266.940 million, compared to $192.812 million in 2020, reflecting a significant increase[343]. - For the year ended December 31, 2021, net income decreased by $33,329 to $93,192 compared to $126,521 in 2020[433]. - Adjusted EBITDA for the year ended December 31, 2021 increased by $58,572 to $324,948, representing 33.7% of total revenues[434]. - Adjusted Net Income for the year ended December 31, 2021 increased by $74,128 to $266,940, accounting for 27.7% of total revenues[435]. Acquisitions - The company completed the acquisition of Seequent for approximately $883.336 million in cash and stock, incurring $16.557 million in related expenses[358]. - The company completed 13 acquisitions in 2021, compared to six in 2020, indicating a strategy of growth through acquisitions[364]. - The company plans to selectively acquire adjacent software solutions and new technologies to enhance its existing portfolio[364]. Expenses and Costs - Total cost of revenues was $216,539, up from $167,155 in 2020, with costs of subscriptions and licenses at $124,321 and costs of services at $92,218[397]. - Selling and marketing expenses rose to $162,240, reflecting strategic investments in global business systems[397]. - General and administrative expenses increased to $150,116, with expectations of continued growth as a public company[387]. - Total operating expenses for the year ended December 31, 2021, were $653,918, an increase of $169,679, or 35.0%[418]. - Cost of revenues increased by $49,384, or 29.5%, for the year ended December 31, 2021, with a constant currency increase of 26.1%[414]. Cash and Financing - As of December 31, 2021, total cash and cash equivalents amounted to $329,337 million, a significant increase from $122,006 million in 2020[477]. - The Credit Facility was increased from $500,000 million to $850,000 million, with a maturity date extended to November 15, 2025[478]. - A new $200,000 million senior secured term loan was established with a maturity of November 15, 2025, requiring quarterly principal repayments starting at $1,250[480]. - The company incurred $15,065 million in expenses related to the 2027 Notes offering, using $536,062 million to repay outstanding indebtedness under the Credit Facility[492]. - As of December 31, 2021, the company had $849,850 million available under the Credit Facility[484]. Currency Impact - In 2021, 47% of total revenues and 42% of total operating expenses were denominated in various foreign currencies, impacting financial results due to exchange rate fluctuations[361].

Bentley Systems, Incorporated (BSY) Q3 2021 Earnings Conference Call November 9, 2021 8:15 AM ET Company Participants Carey Mann - Vice President-Investor Relations Greg Bentley - Chief Executive Officer David Hollister - Chief Financial Officer Conference Call Participants Matthew Broome - Mizuho Securities Jason Celino - KeyBanc Capital Markets Matt Swanson - RBC Capital Markets Gal Munda - Berenberg Capital Markets Joe Vruwink - Baird Kash Rangan - Goldman Sachs Carey Mann Good morning, everyone and than ...

Bentley Systems' 21Q3 Operating Results Greg Bentley, CEO David Hollister, CFO 1 | © 2021 Bentley Systems, Incorporated © 2021 Bentley Systems, Incorporated Disclaimer • This presentation 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 or made during this presentation, ...

Revenue Growth - The last twelve months recurring revenues increased by $103,362, reaching $786,074, primarily due to growth in annual recurring revenues (ARR) and new accounts [278]. - For the year ended December 31, 2020, subscriptions represented 85% of total revenues, with recurring revenues accounting for 87% of total revenues [258]. - The annualized recurring revenues (ARR) growth rate for 2021 was 26%, compared to 9% for the previous year [275]. - For the twelve months ended September 30, 2021, 86% of the company's revenues were recurring revenues [278]. - Recurring revenues represented 86% of total revenues for the twelve months ended September 30, 2021, highlighting the importance of existing accounts for revenue growth [284]. - The continuous uptake of the E365 subscription offering contributed to 28% of total ARR as of September 30, 2021 [280]. Account Retention - The account retention rate remained stable at 98% for both 2021 and 2020 [275]. - The recurring revenues dollar-based net retention rate was 106% for the last twelve months, down from 110% in the previous year [275]. - The account retention rate for the twelve-month period indicates the company's ability to maintain long-term relationships, reflecting a consistent and high retention rate [282]. - The company’s recurring revenues dollar-based net retention rate is a key indicator of success in growing revenues within existing accounts [284]. Acquisitions and Investments - The acquisition of Seequent Holdings Limited was completed for approximately $910.997 million in cash, net of cash acquired, plus 3,141,342 shares of Class B Common Stock, with $16.285 million of related expenses incurred for the nine months ended September 30, 2021 [304]. - The company completed 12 acquisitions in the nine months ended September 30, 2021, compared to four acquisitions in the same period of 2020 [310]. - The company plans to selectively acquire adjacent software solutions and new technologies to enhance its existing portfolio [310]. - The company continues to invest significantly in research and development to enhance existing offerings and develop new technologies [255]. Financial Performance - Adjusted EBITDA for the three months ended September 30, 2021, was $84,468, compared to $73,655 for the same period in 2020, showing a year-over-year increase [287]. - Adjusted Net Income for the three months ended September 30, 2021, was $56,289, up from $51,424 in the prior year [288]. - Total revenues increased by $45,483, or 22.4%, to $248,480 for the three months ended September 30, 2021, and by $111,439, or 19.1%, to $693,416 for the nine months ended September 30, 2021 [345]. - The company reported a net loss of $50,128 compared to a net income of $5,844 for the same period in 2020, indicating a significant decline in performance [399]. Expenses and Costs - Total operating expenses increased to $234,696 for the three months ended September 30, 2021, from $155,046 for the same period in 2020 [345]. - Research and development expenses for the three months ended September 30, 2021, increased by $7,117, or 14.2%, to $57,334 compared to the same period in 2020 [375]. - General and administrative expenses for the three months ended September 30, 2021, increased by 7.2%, or 5.2% in constant currency, primarily due to an increase in costs of computer equipment and facilities of approximately $2,000 [383]. - Selling and marketing expenses for the three months ended September 30, 2021, increased by 6.1%, or 5.3% in constant currency, mainly due to an increase in promotional costs of approximately $1,000 [380]. Cash and Debt Management - Cash and cash equivalents totaled $155,755 as of September 30, 2021, an increase from $122,006 as of December 31, 2020, reflecting a growth of 27.6% [407]. - The company utilized $536,062 of the net proceeds from the sale of the 2027 Notes to repay outstanding indebtedness under the Credit Facility, indicating a strategic focus on debt management [418]. - The weighted average interest rate under the Credit Facility was 2.33% for the three months ended September 30, 2021, compared to 1.59% for the same period in 2020, showing an increase in borrowing costs [415]. - The effective interest rate for the 2027 Notes is 0.864% [425]. Foreign Exchange Exposure - 43% of revenues and 47% of operating expenses were denominated in various foreign currencies in 2020, indicating significant exposure to foreign exchange rate fluctuations [307]. - For the three months ended September 30, 2021, foreign exchange losses amounted to $2.446 million, while for the nine months, losses were $0.248 million [302]. Taxation - The effective income tax rate for the three months ended September 30, 2021, was (9.3)% on a loss before income taxes of $45,241 million, compared to 62.5% on income before income taxes of $17,130 million in the same period of 2020 [396]. - The effective income tax rate for the nine months ended September 30, 2021, was (12.7)% on income before income taxes of $48,562, significantly lower than the 22.6% effective rate on income before income taxes of $98,181 for the same period in 2020 [397].

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)