UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________ Title of each class Trading Symbol Name of each exchange on which registered Class B Common Stock, par value $0.01 per share BSY The Nasdaq Stock Market LLC FORM 10-Q ___________________________________ Commission File Number: 001-39548 ___________________________________ Securities registered pursuant to Section 12(b) of the Act: Indicate by check mark whether the registrant has submitted electronica ...

Bentley Systems, Incorporated (NASDAQ:BSY) Q4 2022 Earnings Conference Call February 28, 2023 8:15 AM ET Company Participants Eric Boyer – Investor Relations Officer Greg Bentley – Chief Executive Officer Keith Bentley – Chief Technology Officer David Hollister – Chief Investment Officer Werner Andre – Chief Financial Officer Nicholas Cumins – Chief Operating Officer Conference Call Participants Joe Vruwink – Baird Matt Hedberg – RBC Kristen Owen – Oppenheimer Andrew DeGasperi – Berenberg Matthew Broome – ...

Bentley Systems Announces Retirement of Founder Keith Bentley and Promotion of Julien Moutte to Chief Technology Officer Former CFO David Hollister Retiring as Chief Investment Officer EXTON, Pa. – Feb 28, 2023 – Bentley Systems, Incorporated (Nasdaq: BSY) ("Bentley Systems" or the "Company"), the infrastructure engineering software company, today announced forthcoming retirements: • As of April 2023 founder Keith Bentley will step down as Chief Technology Officer to assume the role of Technology Advisor th ...

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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]