Bentley(US:BSY)2022-11-07 16:00Revenue 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].