EX-99.1 2 a23q2exhibit991.htm EX-99.1 Document

Exhibit 99.1
bsylogoa.jpg

Press Release

BSY Investor Contact:
Eric Boyer
Investor Relations Officer
ir@bentley.com


Bentley Systems Announces Operating Results for the Second Quarter of 2023
EXTON, Pa. – August 8, 2023 – Bentley Systems, Incorporated (Nasdaq: BSY), the infrastructure engineering software company, today announced operating results for its second quarter and six months ended June 30, 2023.

Second Quarter 2023 Operating Results

•Total revenues were $296.7 million, up 10.6% or 10.1% on a constant currency basis, year-over-year;
•Subscriptions revenues were $259.2 million, up 11.7% or 10.9% on a constant currency basis, year-over-year;
•Annualized Recurring Revenues (“ARR”) was $1,105.9 million as of June 30, 2023, compared to $971.9 million as of June 30, 2022, representing a constant currency ARR growth rate of 13%;
•Last twelve-month recurring revenues dollar-based net retention rate was 110%, compared to 109% for the same period last year;
•Operating income margin was 18.0%, compared to 20.8% for the same period last year;
•Adjusted operating income inclusive of stock-based compensation expense (“Adjusted OI w/SBC”) margin was 24.7%, compared to 24.0% for the same period last year;
•Net income per diluted share was $0.15, compared to $0.17 for the same period last year;
•Adjusted net income per diluted share (“Adjusted EPS”) was $0.24, compared to $0.23 for the same period last year; and
•Cash flow from operations was $80.6 million, compared to $67.0 million for the same period last year.


Six Months Ended June 30, 2023 Operating Results

•Total revenues were $611.2 million, up 12.4% or 13.6% on a constant currency basis, year-over-year;
•Subscriptions revenues were $537.1 million, up 13.4% or 14.5% on a constant currency basis, year-over-year;
•Operating income margin was 19.5%, compared to 20.7% for the same period last year;
•Adjusted OI w/SBC margin was 26.8%, compared to 26.2% for the same period last year;
•Net income per diluted share was $0.29, compared to $0.35 for the same period last year;
•Adjusted EPS was $0.49, compared to $0.47 for the same period last year; and
•Cash flow from operations was $256.8 million, compared to $168.7 million for the same period last year.

CEO Greg Bentley said, “I am pleased to again report strong operating results this quarter, driven perhaps equally by 2023’s favorable end market conditions and by our teams’ strong operational execution. We are sustaining robust ARR growth of 13% (year-over-year constant currency business performance) with directionally broader balance across the board. Our E365 growth initiative for enterprise accounts, and our Virtuosity growth initiative for SMB accounts and prospects, are each contributing at continuously greater levels.

“We are narrowing our 2023 ARR growth outlook (constant currency business performance) to a range of 12% to 13% by virtue of the momentum underlying our strong first half, offset by lower expectations for programmatic acquisition contributions this year, and particularly by the business model shift in China (from ARR) due to prevailing geopolitical concerns.”

COO Nicholas Cumins commented, “Our 23Q2 operating results reflect our strong performance across the board. ARR growth by region was led by continued very solid growth in North America and Asia-Pacific and steady growth in Europe. By sector, growth in Public Works / Utilities remained strong while growth in Industrial improved, offset somewhat by growth in Resources normalizing from record levels and continued softness in Commercial / Facilities. We believe we are strongly positioned to benefit from the long-term investments in civil infrastructure globally, and the increasing priority our accounts are placing on going digital.”

CFO Werner Andre said, “In 23Q2 BSY delivered financial results that met or surpassed our expectations in all key metrics, including ARR growth, revenues, recurring revenues dollar-based net retention rate, Adjusted operating income inclusive of stock-based compensation expense margin, and operating cash flows. Although we have narrowed our range of expectations for the year’s ARR growth (constant currency business performance), we are maintaining our financial outlook for the other metrics.

“Along with relatively light acquisition and investment expenditures, during the first half of 2023 we paid $29 million in dividends, effectively repurchased $51 million of shares to offset dilution from stock-based compensation, and repaid $147 million of net bank borrowings.”

Operating Results Call Details

Bentley Systems will host a live Zoom video webinar on August 8, 2023 at 8:15 a.m. Eastern time to discuss operating results for its second quarter ended June 30, 2023.

Those wishing to participate should access the live Zoom video webinar of the event through a direct registration link at https://us06web.zoom.us/webinar/register/WN_vGAVc0NyRy-CbB4PTe33Gg#/registration. Alternatively, the event can be accessed from the Events & Presentations page on Bentley Systems’ Investor Relations website at
https://investors.bentley.com. In addition, a replay and transcript will be available after the conclusion of the live event on Bentley Systems’ Investor Relations website for one year.


Non-GAAP Financial Measures

In this operating results press release, we sometimes refer to financial measures that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these measures are considered non-GAAP financial measures under the United States Securities and Exchange Commission (“SEC”) regulations. Those rules require the supplemental explanations and reconciliations that are in Bentley Systems’ Form 8-K (Quarterly Earnings Release) furnished to the SEC.

Forward-Looking Statements

This press release 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 this press release, other than statements of historical facts, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations, projections, and assumptions about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, and there are a significant number of factors that could cause actual results to differ materially from statements made in this press release including: adverse changes in global economic and/or political conditions; the impact of current and future sanctions, embargoes and other similar laws at the state and/or federal level that impose restrictions on our counterparties or upon our ability to operate our business within the subject jurisdictions; political, economic, regulatory and public health and safety risks and uncertainties in the countries and regions in which we operate; failure to retain personnel necessary for the operation of our business or those that we acquire; changes in the industries in which our accounts operate; the competitive environment in which we operate; the quality of our products; our ability to develop and market new products to address our accounts’ rapidly changing technological needs; changes in capital markets and our ability to access financing on terms satisfactory to us or at all; the impact of changing or uncertain interest rates on us and on the industries we serve; our ability to integrate acquired businesses successfully; and our ability to identify and consummate future investments on terms satisfactory to us or at all.

Further information on potential factors that could affect the financial results of the Company are included in the Company’s Form 10‑K and subsequent Form 10‑Qs, which are on file with the SEC. The Company disclaims any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

About Bentley Systems

Bentley Systems (Nasdaq: BSY) is the infrastructure engineering software company. We provide innovative software to advance the world’s infrastructure – sustaining both the global economy and environment. Our industry-leading software solutions are used by professionals, and organizations of every size, for the design, construction, and operations of roads and bridges, rail and transit, water and wastewater, public works and utilities, buildings and campuses, mining, and industrial facilities. Our offerings, powered by the iTwin Platform for infrastructure digital twins, include MicroStation and Bentley Open applications for modeling and simulation, Seequent’s software for geoprofessionals, and Bentley Infrastructure Cloud encompassing ProjectWise for project delivery, SYNCHRO for construction management, and AssetWise for asset operations. Bentley Systems’ 5,000 colleagues generate annual revenues of more than $1 billion in 194 countries.
www.bentley.com

© 2023 Bentley Systems, Incorporated. Bentley, the Bentley logo, AssetWise, Bentley Infrastructure Cloud, Bentley Open, iTwin, MicroStation, ProjectWise, Seequent, SYNCHRO, and Virtuosity are either registered or unregistered trademarks or service marks of Bentley Systems, Incorporated or one of its direct or indirect wholly owned subsidiaries. All other brands and product names are trademarks of their respective owners.


BENTLEY SYSTEMS, INCORPORATED
Consolidated Balance Sheets
(in thousands)
(unaudited)

June 30, 2023December 31, 2022
Assets
Current assets:
Cash and cash equivalents$82,716 $71,684 
Accounts receivable252,863 296,376 
Allowance for doubtful accounts(8,656)(9,303)
Prepaid income taxes20,491 18,406 
Prepaid and other current assets44,043 38,732 
Total current assets391,457 415,895 
Property and equipment, net35,520 32,251 
Operating lease right-of-use assets43,248 40,249 
Intangible assets, net271,639 292,271 
Goodwill2,252,832 2,237,184 
Investments26,997 22,270 
Deferred income taxes68,681 52,636 
Other assets73,553 72,249 
Total assets$3,163,927 $3,165,005 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$37,423 $15,176 
Accruals and other current liabilities398,883 362,048 
Deferred revenues231,473 226,955 
Operating lease liabilities12,533 14,672 
Income taxes payable21,383 4,507 
Current portion of long-term debt7,500 5,000 
Total current liabilities709,195 628,358 
Long-term debt1,629,483 1,775,696 
Deferred compensation plan liabilities82,641 77,014 
Long-term operating lease liabilities32,273 27,670 
Deferred revenues16,282 16,118 
Deferred income taxes37,773 51,235 
Income taxes payable7,316 8,105 
Other liabilities5,192 7,355 
Total liabilities2,520,155 2,591,551 
Stockholders’ equity:
Common stock
2,947 2,890 
Additional paid-in capital1,085,066 1,030,466 
Accumulated other comprehensive loss
(87,828)(89,740)
Accumulated deficit(357,117)(370,866)
Non-controlling interest704 704 
Total stockholders’ equity643,772 573,454 
Total liabilities and stockholders’ equity
$3,163,927 $3,165,005 


BENTLEY SYSTEMS, INCORPORATED
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)

Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
Revenues:
Subscriptions$259,243 $232,191 $537,088 $473,424 
Perpetual licenses11,718 11,548 21,265 21,753 
Subscriptions and licenses270,961 243,739 558,353 495,177 
Services25,788 24,546 52,807 48,625 
Total revenues296,749 268,285 611,160 543,802 
Cost of revenues:
Cost of subscriptions and licenses41,156 36,806 82,087 70,533 
Cost of services25,270 22,888 51,523 44,946 
Total cost of revenues66,426 59,694 133,610 115,479 
Gross profit230,323 208,591 477,550 428,323 
Operating expense (income):
Research and development70,117 64,866 137,917 126,139 
Selling and marketing54,364 49,617 106,505 95,562 
General and administrative39,258 40,033 86,065 91,187 
Deferred compensation plan3,777 (12,159)7,923 (17,297)
Amortization of purchased intangibles9,502 10,517 20,050 20,423 
Total operating expenses177,018 152,874 358,460 316,014 
Income from operations
53,305 55,717 119,090 112,309 
Interest expense, net(9,484)(7,639)(20,576)(14,387)
Other income, net
965 3,514 1,254 13,861 
Income before income taxes
44,786 51,592 99,768 111,783 
Benefit (provision) for income taxes
3,899 4,674 (5,593)1,443 
Loss from investments accounted for using the equity method, net of tax
— (593)— (1,165)
Net income
$48,685 $55,673 $94,175 $112,061 
Per share information:
Net income per share, basic
$0.16 $0.18 $0.30 $0.36 
Net income per share, diluted
$0.15 $0.17 $0.29 $0.35 
Weighted average shares, basic311,914,602 308,244,778 311,366,371 308,512,924 
Weighted average shares, diluted332,352,725 332,275,216 331,831,973 332,208,435 



BENTLEY SYSTEMS, INCORPORATED
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

Six Months Ended
June 30,
20232022
Cash flows from operating activities:
Net income
$94,175 $112,061 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization35,304 35,730 
Deferred income taxes(28,935)(16,806)
Stock-based compensation expense37,588 32,568 
Deferred compensation plan7,923 (17,297)
Amortization of deferred debt issuance costs3,646 3,646 
Change in fair value of derivative663 (19,490)
Foreign currency remeasurement (gain) loss
(144)5,748 
Other non-cash items, net3,530 3,315 
Changes in assets and liabilities, net of effect from acquisitions:
Accounts receivable49,171 15,581 
Prepaid and other assets(364)3,325 
Accounts payable, accruals, and other liabilities41,969 25,683 
Deferred revenues(1,792)(20,292)
Income taxes payable, net of prepaid income taxes14,085 4,958 
Net cash provided by operating activities
256,819 168,730 
Cash flows from investing activities:
Purchases of property and equipment and investment in capitalized software(11,253)(6,589)
Proceeds from sale of aircraft— 2,380 
Acquisitions, net of cash acquired (10,299)(714,197)
Purchases of investments(8,200)(5,561)
Net cash used in investing activities
(29,752)(723,967)
Cash flows from financing activities:
Proceeds from credit facilities288,387 657,981 
Payments of credit facilities(432,739)(264,107)
Repayments of term loan(2,500)(2,500)
Payments of contingent and non-contingent consideration(2,860)(5,059)
Payments of dividends(29,224)(17,163)
Proceeds from stock purchases under employee stock purchase plan4,557 4,611 
Proceeds from exercise of stock options9,700 5,861 
Payments for shares acquired including shares withheld for taxes(51,202)(40,520)
Repurchase of Class B Common Stock under approved program— (13,242)
Other financing activities(95)(89)
Net cash (used in) provided by financing activities
(215,976)325,773 
Effect of exchange rate changes on cash and cash equivalents(59)(6,462)
Increase (decrease) in cash and cash equivalents
11,032 (235,926)
Cash and cash equivalents, beginning of year71,684 329,337 
Cash and cash equivalents, end of period
$82,716 $93,411 


BENTLEY SYSTEMS, INCORPORATED
Reconciliation of GAAP to Non-GAAP Measures
(in thousands, except share and per share data)
(unaudited)

Reconciliation of operating income to Adjusted OI w/SBC and to Adjusted operating income:

Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
Operating income
$53,305 $55,717 $119,090 $112,309 
Amortization of purchased intangibles12,625 13,671 26,360 26,599 
Deferred compensation plan3,777 (12,159)7,923 (17,297)
Acquisition expenses3,521 3,856 12,298 17,853 
Realignment expenses (income)29 3,194 (1,950)3,194 
Adjusted OI w/SBC73,257 64,279 163,721 142,658 
Stock-based compensation expense17,670 17,395 36,868 32,348 
Adjusted operating income$90,927 $81,674 $200,589 $175,006 



Reconciliation of net income to Adjusted net income:

Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
$
EPS(1)
$
EPS(1)
$
EPS(1)
$
EPS(1)
Net income
$48,685 $0.15 $55,673 $0.17 $94,175 $0.29 $112,061 $0.35 
Non-GAAP adjustments, prior to income taxes:
Amortization of purchased intangibles
12,625 0.04 13,671 0.04 26,360 0.08 26,599 0.08 
Stock-based compensation expense
17,670 0.05 17,395 0.05 36,868 0.11 32,348 0.10 
Deferred compensation plan
3,777 0.01 (12,159)(0.04)7,923 0.02 (17,297)(0.05)
Acquisition expenses
3,521 0.01 3,856 0.01 12,298 0.04 17,853 0.05 
Realignment expenses (income)
29 — 3,194 0.01 (1,950)(0.01)3,194 0.01 
Other income, net
(965)— (3,514)(0.01)(1,254)— (13,861)(0.04)
Total non-GAAP adjustments, prior to income taxes36,657 0.11 22,443 0.07 80,245 0.24 48,836 0.15 
Income tax effect of non-GAAP adjustments(6,608)(0.02)(4,913)(0.01)(13,997)(0.04)(8,490)(0.03)
Loss from investments accounted for using the equity method, net of tax
— — 593 — — — 1,165 — 
Adjusted net income(2)(3)
$78,734 $0.24 $73,796 $0.23 $160,423 $0.49 $153,572 $0.47 
Adjusted weighted average shares, diluted332,352,725332,275,216331,831,973332,208,435
(1)Adjusted EPS was computed independently for each reconciling item presented; therefore, the sum of Adjusted EPS for each line item may not equal total Adjusted EPS due to rounding.
(2)Total Adjusted EPS for the three and six months ended June 30, 2022 have been corrected to reflect the dilutive effect of convertible senior notes.
(3)Adjusted EPS numerator includes $1,723 and $1,705 for the three months ended June 30, 2023 and 2022, respectively, and $3,440 and $3,400 for the six months ended June 30, 2023 and 2022, respectively, related to interest expense, net of tax, attributable to the convertible senior notes using the if‑converted method.


Reconciliation of cash flow from operations to Adjusted EBITDA:

Three Months EndedSix Months Ended
June 30,June 30,
2023202220232022
Cash flow from operations$80,596 $66,999 $256,819 $168,730 
Cash interest8,909 5,232 19,382 10,528 
Cash taxes11,966 4,562 17,999 10,530 
Cash deferred compensation plan distributions
1,704 7,336 2,125 7,336 
Cash acquisition expenses4,237 5,283 15,290 22,749 
Changes in operating assets and liabilities(9,699)(2,874)(97,998)(36,013)
Other(1)
(2,164)(17)(4,084)277 
Adjusted EBITDA$95,549 $86,521 $209,533 $184,137 
(1) Includes (receipts) payments related to interest rate swap.