Bentley(US:BSY)2021-05-11 18:13Financial Data and Key Metrics Changes - The company's Q1 2021 revenues reached $222 million, representing a 14% increase compared to the same quarter last year, primarily driven by subscription growth [65][66]. - Subscription revenues, which account for 85% of total revenues, grew by 10.5% year-over-year, with minimal contribution from acquisitions and a 4% boost from currency fluctuations [65][66]. - GAAP operating income for Q1 2021 was $55.6 million, up 21% from the previous year, while adjusted EBITDA grew by 43% to $82.8 million, yielding a margin of slightly better than 37% [75][76]. Business Line Data and Key Metrics Changes - Subscription growth was led by ProjectWise, asset and network performance, civil design applications, and PLAXIS geotechnical offerings [27][65]. - Professional Services revenues increased by $10.1 million or 74% year-over-year, largely due to acquisitions made in 2020 [66][68]. - Perpetual licenses revenues declined by approximately $700,000, now constituting less than 5% of total revenues [66]. Market Data and Key Metrics Changes - The company noted a slight decline in application usage in the commercial facility sector and a greater decline in the industrial resources sector, while public works and utilities showed slight increases [18][19]. - New accounts contributed 3% to year-over-year quarterly revenue growth, indicating a modest decline in existing account growth due to the pandemic's impact on the previous year's metrics [72][73]. Company Strategy and Development Direction - The company is focused on transitioning from ELS to E365 subscription models, which are expected to provide more predictable revenue streams and align costs with workload [10][106]. - Initiatives to enhance infrastructure digital twins are seen as a way to improve global economies and environments, aligning with UN sustainable development goals [29][30]. - The company is investing in self-service fulfillment and educational initiatives to attract future infrastructure professionals, which is expected to enhance brand recognition and recruitment [25][26]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting the full-year 2021 operating margin outlook, despite the ongoing pandemic-related cost savings [9][76]. - The anticipated economic recovery and return to in-person work environments are expected to drive new business growth, particularly in enterprise-level opportunities [10][11]. - The company maintains its full-year revenue outlook of $895 million to $920 million, reflecting growth of 11.7% to 14.8% [69][98]. Other Important Information - The company successfully executed substantial financing transactions, securing an $850 million credit facility and $690 million in convertible notes to enhance its capital structure for growth [82][84]. - The acquisition of Seequent is expected to close in Q2 2021, with anticipated contributions to the company's financial outlook [99]. Q&A Session Summary Question: Will mandates help the adoption of digital twins in infrastructure? - Management believes that government mandates for digital twins in public infrastructure could enhance ROI and safety, especially for government-funded projects [102][103]. Question: What is the ideal future model for transitioning from ELS to E365? - Management anticipates that all ELS licenses will eventually convert to E365, with a cautious approach taken initially due to market volatility concerns [105][106]. Question: How durable is the strength in the SMB market? - Management is encouraged by the rapid addition of 1,000 new SMB accounts, viewing this segment as a significant growth opportunity, similar to competitors like Autodesk [110][112]. Question: How should investors measure progress in digital twins? - Management suggests using case studies from the company's Year in Infrastructure awards to assess the qualitative progress of digital twin adoption [113].