EXTON, Pa. — (BUSINESS WIRE) — November 8, 2022 — Bentley Systems, Incorporated (Nasdaq: BSY) (“Bentley Systems” or the “Company”), the infrastructure engineering software company, today announced operating results for its third quarter and nine months ended September 30, 2022.

Third Quarter 2022 Financial Results

• Total revenues were $268.3 million, up 6.7% or 14.7% on a constant currency basis, year-over-year;
• Subscriptions revenues were $235.3 million, up 9.4% or 17.6% on a constant currency basis, year-over-year;
• Last twelve-month recurring revenues were $950.4 million, up 20.3% year-over-year;
• Last twelve-month recurring revenues dollar-based net retention rate was 110%, compared to 106% for the same period last year;
• Last twelve-month account retention rate was 99%, compared to 98% for the same period last year;
• Annualized Recurring Revenue (“ARR”) was $983.7 million as of September 30, 2022, representing a constant currency ARR growth rate of 14% from September 30, 2021;
• GAAP operating income was $55.5 million, compared to GAAP operating loss of $37.5 million for the same period last year. The third quarter of 2021 GAAP operating loss was due to a one-time compensation charge of $90.7 million resulting from a modification of our deferred compensation plan;
• GAAP net income was $37.0 million, compared to GAAP net loss of $48.0 million for the same period last year. GAAP net income per diluted share was $0.12, compared to GAAP net loss per diluted share of $0.16 for the same period last year. The third quarter of 2021 GAAP net loss was due to a one-time compensation charge of $83.4 million, net of tax, resulting from a modification of our deferred compensation plan. GAAP net income margin was 13.8%, compared to GAAP net loss margin of 19.1% for the same period last year;
• Adjusted Net Income was $61.8 million, compared to $56.3 million for the same period last year. Adjusted Net Income per diluted share was $0.19 compared to $0.17 for the same period last year;
• Adjusted EBITDA was $89.7 million, compared to $84.5 million for the same period last year. Adjusted EBITDA margin was 33.4%, compared to 33.6% for the same period last year; and
• Cash flow from operations was $69.5 million, compared to $58.4 million for the same period last year. 

Nine Months Ended September 30, 2022 Financial Results

• Total revenues were $812.1 million, up 16.5% or 22.6% on a constant currency basis, year-over-year;
• Subscriptions revenues were $708.7 million, up 20.2% or 26.6% on a constant currency basis, year-over-year;
• GAAP operating income was $167.9 million, compared to $51.3 million for the same period last year. The nine months ended September 30, 2021 GAAP operating income includes a one-time compensation charge of $90.7 million resulting from a modification of our deferred compensation plan;
• GAAP net income was $149.1 million, compared to $54.6 million for the same period last year. GAAP net income per diluted share was $0.46, compared to $0.17 for the same period last year. The nine months ended September 30, 2021 GAAP net income includes a one-time compensation charge of $83.4 million, net of tax, resulting from a modification of our deferred compensation plan. GAAP net income margin was 18.4%, compared to 7.8% for the same period last year;
• Adjusted Net Income was $215.2 million, compared to $195.0 million for the same period last year. Adjusted Net Income per diluted share was $0.66 compared to $0.62 for the same period last year;
• Adjusted EBITDA was $273.9 million, compared to $236.8 million for the same period last year. Adjusted EBITDA margin was 33.7%, compared to 34.0% for the same period last year; and
• Cash flow from operations was $238.2 million, compared to $207.4 million for the same period last year.

Definitions of the nonâ�‘GAAP financial measures used in this press release and reconciliations of such measures to the most comparable GAAP financial measures are included below under the heading “Use and Reconciliation of Nonâ�‘GAAP Financial Measures.”

CEO Greg Bentley said, “We are pleased to report that Bentley Systems’ operating performance continues dependably toward our established financial outlook range for fullâ�‘year 2022, albeit with reported revenues subject to this year’s foreign exchange gyrations. In constant currency, our yearâ�‘overâ�‘year business performance ARR growth rate remained 11.5%, which includes the firstâ�‘half writeâ�‘down (1%) of our ARR in Russia, but does not include 2.5% from our 22Q1 acquisition of Power Line Systems. This reflects new business accelerating noticeably in the U.S., and for civil engineering organizations globally, consistent with multiple public infrastructure investment programs.

Significantly, each of our primary growth initiatives is bearing fruit as intended in terms of business performance ARR growth, serving to make up for circumstantially fewer programmatic acquisitions during 2022 to date. Our enterprise success teams are increasing ARR accretion within our consumptionâ�‘based E365 program. Our Virtuoso subscriptions are growing exponentially in SMB accounts and newâ�‘name prospects. Our Seequent and Power Line Systems platform acquisitions continue their paceâ�‘setting growth. Finally, our Year in Infrastructure 2022 conference next week in London will showcase, through the Finalists’ Going Digital Awards presentations, notable digital twin advancements within our accounts.”

CFO Werner Andre said, “As the net favorable directions of business performance that Greg enumerated are serving to offset losses from Russia, we continue to reaffirm the range of our 2022 full year annual financial outlook in constant currency metrics. This includes total revenues growth of 16.9% to 20.1% in constant currency, as well as constant currency ARR growth rate of 14% to 16%.

To quantify the ongoing impact of the year’s volatile exchange rates on our annual outlook metrics, which are denominated in reported currency:

• our 22Q3 GAAP total revenues of $268.3 million would have been $283.3 million, if the exchange rates used in our annual financial outlook had remained in effect; and
• if recent exchange rates would prevail for the remainder of the year, our 2022 full year total revenues as reported would be negatively impacted on the order of $40 million, relative to the revenues based on the exchange rates in effect when we determined our full year 2022 outlook.

By virtue of our operating expense natural hedge, we continue to expect that exchange rates will have minimal effect on our full year outlook for 2022 adjusted EBITDA margin of 33%.”

Operating Results Call Details

Bentley Systems will host a live Zoom video webinar on November 8, 2022 at 8:15 a.m. EST to discuss operating results for its third quarter and nine months ended September 30, 2022.

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_xfiQCdeSRZishWDpJPAwfA. 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.

Definitions of Certain Key Business Metrics

Definitions of the nonâ�‘GAAP financial measures used in this operating results press release and reconciliations of such measures to their nearest GAAP equivalents are included below under “Use and Reconciliation of Nonâ�‘GAAP Financial Measures.”

• Last twelve-month recurring revenues are calculated as recurring revenues recognized over the preceding twelveâ�‘month period. We define recurring revenues as subscription revenues that recur monthly, quarterly, or annually with specific or automatic renewal clauses and professional services revenues in which the underlying contract is based on a fixed fee and contains automatic annual renewal provisions;
• ARR is defined as the sum of the annualized value of our portfolio of contracts that produce recurring revenues as of the last day of the reporting period, and the annualized value of the last three months of recognized revenues for our contractually recurring consumptionâ�‘based software subscriptions with consumption measurement durations of less than one year, calculated using the spot foreign exchange rates;
• Business performance is defined as organic growth results inclusive of the impact from the ARR onboarding of certain programmatic acquisitions , which generally are immaterial, individually and in the aggregate, and is exclusive of the ARR onboarding of our Seequent and Power Line Systems platform acquisitions ;
• GAAP net income (loss) margin is determined by dividing GAAP net income (loss) by total revenues;
• Adjusted EBITDA margin is determined by dividing Adjusted EBITDA by total revenues; and
• Adjusted Net Income per diluted share is determined by dividing Adjusted Net Income by the weighted average diluted shares.