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Bentley Systems Announces Operating Results for the Third Quarter of 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 non‑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 Non‑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 full‑year 2022, albeit with reported revenues subject to this year’s foreign exchange gyrations. In constant currency, our year‑over‑year business performance ARR growth rate remained 11.5%, which includes the first‑half write‑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 consumption‑based E365 program. Our Virtuoso subscriptions are growing exponentially in SMB accounts and new‑name prospects. Our Seequent and Power Line Systems platform acquisitions continue their pace‑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 non‑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 Non‑GAAP Financial Measures.”

  • Last twelve-month recurring revenues are calculated as recurring revenues recognized over the preceding twelve‑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 consumption‑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.

Constant Currency Metrics

In reporting period‑over‑period results, we calculate the effects of foreign currency fluctuations and constant currency information by translating current period results using prior period average foreign currency exchange rates. Our definition of constant currency may differ from other companies reporting similarly named measures, and these constant currency performance measures should be viewed in addition to, and not as a substitute for, our operating performance measures calculated in accordance with GAAP.

  • Our last twelvemonth recurring revenues dollarbased net retention rate is calculated, using the average exchange rates for the prior period, as follows: the recurring revenues for the current period, including any growth or reductions from accounts with recurring revenues in the prior period (“existing accounts”), but excluding recurring revenues from any new accounts added during the current period, divided by the total recurring revenues from all accounts during the prior period. A period is defined as any trailing twelve months. Related to our platform acquisitions, recurring revenues into new accounts will be captured as existing accounts starting with the second anniversary of the acquisition when such data conforms to the calculation methodology. This may cause variability in the comparison;
  • Our last twelve-month account retention rate for any given twelve‑month period is calculated using the average currency exchange rates for the prior period, as follows: the prior period recurring revenues from all accounts with recurring revenues in the current and prior period, divided by total recurring revenues from all accounts during the prior period; and
  • Our constant currency ARR growth rate is the growth rate of our ARR, measured on a constant currency basis.

Use and Reconciliation of Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we have calculated Adjusted cost of subscriptions and licenses, Adjusted cost of services, Adjusted research and development, Adjusted selling and marketing, Adjusted general and administrative, Adjusted income from operations, Adjusted Net Income, and Adjusted EBITDA, each of which are non‑GAAP financial measures. We have provided tabular reconciliations of each of these non‑GAAP financial measures to such measure’s most directly comparable GAAP financial measure.

Management uses these non‑GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate financial performance. Our non‑GAAP financial measures are presented as supplemental disclosure as we believe they provide useful information to investors and others in understanding and evaluating our results and prospects period‑over‑period without the impact of certain items that do not directly correlate to our operating performance and that may vary significantly from period to period for reasons unrelated to our operating performance, as well as to compare our financial results to those of other companies. Our definitions of these non‑GAAP financial measures may differ from similarly titled measures presented by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, our non‑GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, the financial information prepared in accordance with GAAP, and should be read in conjunction with the financial statements included in our Quarterly Report on Form 10‑Q to be filed with the United States Securities and Exchange Commission.

We calculate these non‑GAAP financial measures as follows:

  • Adjusted cost of subscriptions and licenses is determined by adding back to GAAP cost of subscriptions and licenses, amortization of purchased intangibles and developed technologies, stock‑based compensation, acquisition expenses, and realignment expenses (income), for the respective periods;
  • Adjusted cost of services is determined by adding back to GAAP cost of services, stock‑based compensation, acquisition expenses, and realignment expenses (income), for the respective periods;
  • Adjusted research and development is determined by adding back to GAAP research and development, stock‑based compensation and acquisition expenses, for the respective periods;
  • Adjusted selling and marketing is determined by adding back to GAAP selling and marketing, stock‑based compensation, acquisition expenses, and realignment expenses (income), for the respective periods;
  • Adjusted general and administrative is determined by adding back to GAAP general and administrative, stock‑based compensation, acquisition expenses, and realignment expenses (income), for the respective periods;
  • Adjusted income from operations is determined by adding back to GAAP operating income (loss), amortization of purchased intangibles and developed technologies, stock‑based compensation, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, and realignment expenses (income), for the respective periods;
  • Adjusted Net Income is defined as net income (loss) adjusted for the following: amortization of purchased intangibles and developed technologies, stock‑based compensation, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, realignment expenses (income), other non‑operating (income) expense, net, the tax effect of the above adjustments to net income (loss), and (income) loss from investment accounted for using the equity method, net of tax. The income tax effect of non‑GAAP adjustments was determined using the applicable rates in the taxing jurisdictions in which income or expense occurred, and represent both current and deferred income tax expense or benefit based on the nature of the non‑GAAP adjustments, including the tax effects of non‑cash stock‑based compensation expense; and
  • Adjusted EBITDA is defined as net income (loss) adjusted for interest expense, net, provision (benefit) for income taxes, depreciation and amortization, stock‑based compensation, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, realignment expenses (income), other non‑operating (income) expense, net, and (income) loss from investment accounted for using the equity method, net of tax.

We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure, and to view these non‑GAAP financial measures in conjunction with the related GAAP financial measures. During the second quarter of 2022, we modified our definitions of Adjusted EBITDA and Adjusted Net Income to adjust for realignment expenses (income) relating to our wind down of business in, and exit from, the Russian market, which were subsequently adjusted during the third quarter of 2022 for our change in estimates. These realignment expenses (income) are comprised of termination benefits for colleagues whose positions were eliminated and corresponding asset impairments. Amounts for all periods herein reflect application of the aforementioned definitions modification.

During the fourth quarter of 2021, we early adopted Accounting Standards Update No. 2021‑08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, effective January 1, 2021 and retrospectively recasted interim prior period amounts presented in this press release.

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: current and potential future impacts of the COVID‑19 pandemic on the global economy and our business, and consolidated financial statements; 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; and our ability to integrate acquired businesses successfully.

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 Forms 10‑Q, which are on file with the United States Securities and Exchange Commission. 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 include MicroStation-based applications for modeling and simulation, ProjectWise for project delivery, AssetWise for asset and network performance, Seequent’s leading geoprofessional software portfolio, and the iTwin platform for infrastructure digital twins. Bentley Systems employs more than 4,500 colleagues and generates annual revenues of approximately $1 billion in 186 countries.

www.bentley.com

© 2022 Bentley Systems, Incorporated. Bentley, the Bentley logo, AssetWise, iTwin, MicroStation, Power Line Systems, ProjectWise, and Seequent 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 AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

September 30, 2022

 

December 31, 2021

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

72,856

 

 

$

329,337

 

Accounts receivable

 

 

214,459

 

 

 

241,807

 

Allowance for doubtful accounts

 

 

(10,802

)

 

 

(6,541

)

Prepaid income taxes

 

 

17,414

 

 

 

16,880

 

Prepaid and other current assets

 

 

32,224

 

 

 

34,348

 

Total current assets

 

 

326,151

 

 

 

615,831

 

Property and equipment, net

 

 

30,753

 

 

 

31,823

 

Operating lease right-of-use assets

 

 

41,499

 

 

 

50,818

 

Intangible assets, net

 

 

301,173

 

 

 

245,834

 

Goodwill

 

 

2,193,053

 

 

 

1,588,477

 

Investments

 

 

21,690

 

 

 

6,438

 

Deferred income taxes

 

 

52,751

 

 

 

71,376

 

Other assets

 

 

74,367

 

 

 

48,646

 

Total assets

 

$

3,041,437

 

 

$

2,659,243

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

16,860

 

 

$

16,483

 

Accruals and other current liabilities

 

 

337,442

 

 

 

323,603

 

Deferred revenues

 

 

186,358

 

 

 

224,610

 

Operating lease liabilities

 

 

15,078

 

 

 

17,482

 

Income taxes payable

 

 

8,405

 

 

 

6,696

 

Current portion of long-term debt

 

 

5,000

 

 

 

5,000

 

Total current liabilities

 

 

569,143

 

 

 

593,874

 

Long-term debt

 

 

1,776,610

 

 

 

1,430,992

 

Deferred compensation plan liabilities

 

 

71,013

 

 

 

94,890

 

Long-term operating lease liabilities

 

 

28,776

 

 

 

35,274

 

Deferred revenues

 

 

15,252

 

 

 

7,983

 

Deferred income taxes

 

 

43,817

 

 

 

65,014

 

Income taxes payable

 

 

8,893

 

 

 

7,725

 

Other liabilities

 

 

7,734

 

 

 

14,269

 

Total liabilities

 

 

2,521,238

 

 

 

2,250,021

 

Stockholders’ equity:

 

 

 

 

Common stock

 

 

2,884

 

 

 

2,825

 

Additional paid-in capital

 

 

1,005,075

 

 

 

937,805

 

Accumulated other comprehensive loss

 

 

(101,929

)

 

 

(91,774

)

Accumulated deficit

 

 

(385,831

)

 

 

(439,634

)

Total stockholders’ equity

 

 

520,199

 

 

 

409,222

 

Total liabilities and stockholders’ equity

 

$

3,041,437

 

 

$

2,659,243

 

BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

Subscriptions

 

$

235,307

 

 

$

215,135

 

 

$

708,731

 

 

$

589,702

 

Perpetual licenses

 

 

9,460

 

 

 

11,866

 

 

 

31,213

 

 

 

33,373

 

Subscriptions and licenses

 

 

244,767

 

 

 

227,001

 

 

 

739,944

 

 

 

623,075

 

Services

 

 

23,565

 

 

 

24,387

 

 

 

72,190

 

 

 

74,239

 

Total revenues

 

 

268,332

 

 

 

251,388

 

 

 

812,134

 

 

 

697,314

 

Cost of revenues:

 

 

 

 

 

 

 

 

Cost of subscriptions and licenses

 

 

37,371

 

 

 

31,056

 

 

 

107,904

 

 

 

89,882

 

Cost of services

 

 

21,812

 

 

 

23,176

 

 

 

66,758

 

 

 

67,090

 

Total cost of revenues

 

 

59,183

 

 

 

54,232

 

 

 

174,662

 

 

 

156,972

 

Gross profit

 

 

209,149

 

 

 

197,156

 

 

 

637,472

 

 

 

540,342

 

Operating expense (income):

 

 

 

 

 

 

 

 

Research and development

 

 

63,827

 

 

 

57,334

 

 

 

189,966

 

 

 

157,913

 

Selling and marketing

 

 

46,114

 

 

 

44,392

 

 

 

141,676

 

 

 

114,846

 

General and administrative

 

 

37,794

 

 

 

35,329

 

 

 

128,981

 

 

 

110,233

 

Deferred compensation plan

 

 

(4,576

)

 

 

88,965

 

 

 

(21,873

)

 

 

89,327

 

Amortization of purchased intangibles

 

 

10,446

 

 

 

8,676

 

 

 

30,869

 

 

 

16,703

 

Total operating expenses

 

 

153,605

 

 

 

234,696

 

 

 

469,619

 

 

 

489,022

 

Income (loss) from operations

 

 

55,544

 

 

 

(37,540

)

 

 

167,853

 

 

 

51,320

 

Interest expense, net

 

 

(8,382

)

 

 

(3,836

)

 

 

(23,046

)

 

 

(8,608

)

Other income (expense), net

 

 

180

 

 

 

(957

)

 

 

14,318

 

 

 

9,748

 

Income (loss) before income taxes

 

 

47,342

 

 

 

(42,333

)

 

 

159,125

 

 

 

52,460

 

(Provision) benefit for income taxes

 

 

(9,664

)

 

 

(5,025

)

 

 

(8,221

)

 

 

5,090

 

Loss from investment accounted for using the equity method, net of tax

 

 

(681

)

 

 

(664

)

 

 

(1,846

)

 

 

(2,939

)

Net income (loss)

 

 

36,997

 

 

 

(48,022

)

 

 

149,058

 

 

 

54,611

 

Less: Net income (loss) attributable to participating securities

 

 

(11

)

 

 

(3

)

 

 

(31

)

 

 

(6

)

Net income (loss) attributable to Class A and Class B common stockholders

 

$

36,986

 

 

$

(48,025

)

 

$

149,027

 

 

$

54,605

 

Per share information:

 

 

 

 

 

 

 

 

Net income (loss) per share, basic

 

$

0.12

 

 

$

(0.16

)

 

$

0.48

 

 

$

0.18

 

Net income (loss) per share, diluted

 

$

0.12

 

 

$

(0.16

)

 

$

0.46

 

 

$

0.17

 

Weighted average shares, basic

 

 

310,116,104

 

 

 

308,195,379

 

 

 

308,959,801

 

 

 

305,119,985

 

Weighted average shares, diluted

 

 

325,170,383

 

 

 

308,195,379

 

 

 

332,077,834

 

 

 

314,658,136

 

BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Nine Months Ended

 

 

September 30,

 

 

 

2022

 

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

Net income

 

$

149,058

 

 

$

54,611

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

53,644

 

 

 

35,946

 

Bad debt allowance

 

 

5,199

 

 

 

466

 

Deferred income taxes

 

 

(13,670

)

 

 

(17,788

)

Stock-based compensation expense

 

 

51,359

 

 

 

32,853

 

Deferred compensation plan

 

 

(21,873

)

 

 

89,327

 

Amortization and write-off of deferred debt issuance costs

 

 

5,468

 

 

 

4,160

 

Change in fair value of derivative

 

 

(29,318

)

 

 

(9,198

)

Foreign currency remeasurement loss

 

 

14,445

 

 

 

103

 

Other non-cash items, net

 

 

(1,006

)

 

 

2,939

 

Changes in assets and liabilities, net of effect from acquisitions:

 

 

 

 

Accounts receivable

 

 

12,550

 

 

 

26,305

 

Prepaid and other assets

 

 

7,779

 

 

 

11,310

 

Accounts payable, accruals, and other liabilities

 

 

28,765

 

 

 

29,047

 

Deferred revenues

 

 

(26,725

)

 

 

(40,496

)

Income taxes payable, net of prepaid income taxes

 

 

2,523

 

 

 

(12,168

)

Net cash provided by operating activities

 

 

238,198

 

 

 

207,417

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment and investment in capitalized software

 

 

(12,982

)

 

 

(11,152

)

Proceeds from sale of aircraft

 

 

2,380

 

 

 

 

Acquisitions, net of cash acquired

 

 

(719,539

)

 

 

(1,033,695

)

Other investing activities

 

 

(10,304

)

 

 

(3,000

)

Net cash used in investing activities

 

 

(740,445

)

 

 

(1,047,847

)

Cash flows from financing activities:

 

 

 

 

Proceeds from credit facilities

 

 

753,376

 

 

 

682,083

 

Payments of credit facilities

 

 

(408,714

)

 

 

(860,228

)

Proceeds from convertible senior notes, net of discounts and commissions

 

 

 

 

 

1,233,377

 

Payments of debt issuance costs

 

 

 

 

 

(5,643

)

Purchase of capped call options

 

 

 

 

 

(51,555

)

Repayment of term loan

 

 

(3,750

)

 

 

 

Payments of financing leases

 

 

(123

)

 

 

(147

)

Payments of acquisition debt and other consideration

 

 

(6,996

)

 

 

(741

)

Payments of dividends

 

 

(25,828

)

 

 

(25,076

)

Proceeds from stock purchases under employee stock purchase plan

 

 

10,335

 

 

 

3,846

 

Proceeds from exercise of stock options

 

 

6,855

 

 

 

5,039

 

Payments for shares acquired including shares withheld for taxes

 

 

(42,213

)

 

 

(111,306

)

Repurchase of Class B Common Stock under approved program

 

 

(28,250

)

 

 

 

Net cash provided by financing activities

 

 

254,692

 

 

 

869,649

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(8,926

)

 

 

4,530

 

(Decrease) increase in cash and cash equivalents

 

 

(256,481

)

 

 

33,749

 

Cash and cash equivalents, beginning of year

 

 

329,337

 

 

 

122,006

 

Cash and cash equivalents, end of period

 

$

72,856

 

 

$

155,755

 

BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Measures

For the Three and Nine Months Ended September 30, 2022 and 2021

(in thousands)

(unaudited)

 

Reconciliation of net income (loss) to Adjusted EBITDA:

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net income (loss)

$

36,997

 

 

$

(48,022

)

 

$

149,058

 

 

$

54,611

 

Interest expense, net

 

8,382

 

 

 

3,836

 

 

 

23,046

 

 

 

8,608

 

Provision (benefit) for income taxes

 

9,664

 

 

 

5,025

 

 

 

8,221

 

 

 

(5,090

)

Depreciation and amortization

 

17,914

 

 

 

16,666

 

 

 

53,644

 

 

 

35,946

 

Stock-based compensation

 

18,626

 

 

 

11,588

 

 

 

50,974

 

 

 

32,186

 

Deferred compensation plan

 

(4,576

)

 

 

88,965

 

 

 

(21,873

)

 

 

89,327

 

Acquisition expenses

 

3,203

 

 

 

4,789

 

 

 

21,056

 

 

 

27,999

 

Realignment (income) expenses

 

(971

)

 

 

 

 

 

2,223

 

 

 

 

Other (income) expense, net

 

(180

)

 

 

957

 

 

 

(14,318

)

 

 

(9,748

)

Loss from investment accounted for using the equity method, net of tax

 

681

 

 

 

664

 

 

 

1,846

 

 

 

2,939

 

Adjusted EBITDA

$

89,740

 

 

$

84,468

 

 

$

273,877

 

 

$

236,778

 

Reconciliation of net income (loss) to Adjusted Net Income:

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net income (loss)

$

36,997

 

 

$

(48,022

)

 

$

149,058

 

 

$

54,611

 

Non-GAAP adjustments, prior to income taxes:

 

 

 

 

 

 

 

Amortization of purchased intangibles and developed technologies

 

13,575

 

 

 

11,539

 

 

 

40,174

 

 

 

22,003

 

Stock-based compensation

 

18,626

 

 

 

11,588

 

 

 

50,974

 

 

 

32,186

 

Deferred compensation plan

 

(4,576

)

 

 

88,965

 

 

 

(21,873

)

 

 

89,327

 

Acquisition expenses

 

3,203

 

 

 

4,789

 

 

 

21,056

 

 

 

27,999

 

Realignment (income) expenses

 

(971

)

 

 

 

 

 

2,223

 

 

 

 

Other (income) expense, net

 

(180

)

 

 

957

 

 

 

(14,318

)

 

 

(9,748

)

Total non-GAAP adjustments, prior to income taxes

 

29,677

 

 

 

117,838

 

 

 

78,236

 

 

 

161,767

 

Income tax effect of non-GAAP adjustments

 

(5,530

)

 

 

(14,191

)

 

 

(13,951

)

 

 

(24,346

)

Loss from investment accounted for using the equity method, net of tax

 

681

 

 

 

664

 

 

 

1,846

 

 

 

2,939

 

Adjusted Net Income

$

61,825

 

 

$

56,289

 

 

$

215,189

 

 

$

194,971

 

Reconciliation of GAAP Financial Statement Line Items to Non-GAAP Adjusted Financial Statement Line Items:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Cost of subscriptions and licenses

 

$

37,371

 

 

$

31,056

 

 

$

107,904

 

 

$

89,882

 

Amortization of purchased intangibles and developed technologies

 

 

(3,129

)

 

 

(2,863

)

 

 

(9,305

)

 

 

(5,300

)

Stock-based compensation

 

 

(752

)

 

 

(320

)

 

 

(1,913

)

 

 

(809

)

Acquisition expenses

 

 

(63

)

 

 

(7

)

 

 

(63

)

 

 

(7

)

Realignment expenses

 

 

 

 

 

 

 

 

(39

)

 

 

 

Adjusted cost of subscriptions and licenses

 

$

33,427

 

 

$

27,866

 

 

$

96,584

 

 

$

83,766

 

 

 

 

 

 

 

 

 

 

Cost of services

 

$

21,812

 

 

$

23,176

 

 

$

66,758

 

 

$

67,090

 

Stock-based compensation

 

 

(428

)

 

 

(227

)

 

 

(1,347

)

 

 

(615

)

Acquisition expenses

 

 

(1,370

)

 

 

(1,835

)

 

 

(3,987

)

 

 

(4,380

)

Realignment expenses

 

 

(19

)

 

 

 

 

 

(52

)

 

 

 

Adjusted cost of services

 

$

19,995

 

 

$

21,114

 

 

$

61,372

 

 

$

62,095

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

63,827

 

 

$

57,334

 

 

$

189,966

 

 

$

157,913

 

Stock-based compensation

 

 

(6,703

)

 

 

(5,178

)

 

 

(17,572

)

 

 

(13,893

)

Acquisition expenses

 

 

(1,898

)

 

 

(1,537

)

 

 

(5,094

)

 

 

(4,882

)

Adjusted research and development

 

$

55,226

 

 

$

50,619

 

 

$

167,300

 

 

$

139,138

 

 

 

 

 

 

 

 

 

 

Selling and marketing

 

$

46,114

 

 

$

44,392

 

 

$

141,676

 

 

$

114,846

 

Stock-based compensation

 

 

(1,939

)

 

 

(1,481

)

 

 

(5,470

)

 

 

(3,484

)

Acquisition expenses

 

 

(276

)

 

 

(421

)

 

 

(1,021

)

 

 

(603

)

Realignment income (expenses)

 

 

753

 

 

 

 

 

 

(1,196

)

 

 

 

Adjusted selling and marketing

 

$

44,652

 

 

$

42,490

 

 

$

133,989

 

 

$

110,759

 

 

 

 

 

 

 

 

 

 

General and administrative

 

$

37,794

 

 

$

35,329

 

 

$

128,981

 

 

$

110,233

 

Stock-based compensation

 

 

(8,804

)

 

 

(4,382

)

 

 

(24,672

)

 

 

(13,385

)

Acquisition expenses

 

 

404

 

 

 

(983

)

 

 

(10,891

)

 

 

(18,101

)

Realignment income (expenses)

 

 

237

 

 

 

 

 

 

(936

)

 

 

 

Adjusted general and administrative

 

$

29,631

 

 

$

29,964

 

 

$

92,482

 

 

$

78,747

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

55,544

 

 

$

(37,540

)

 

$

167,853

 

 

$

51,320

 

Amortization of purchased intangibles and developed technologies

 

 

13,575

 

 

 

11,539

 

 

 

40,174

 

 

 

22,003

 

Stock-based compensation

 

 

18,626

 

 

 

11,588

 

 

 

50,974

 

 

 

32,186

 

Deferred compensation plan

 

 

(4,576

)

 

 

88,965

 

 

 

(21,873

)

 

 

89,327

 

Acquisition expenses

 

 

3,203

 

 

 

4,789

 

 

 

21,056

 

 

 

27,999

 

Realignment (income) expenses

 

 

(971

)

 

 

 

 

 

2,223

 

 

 

 

Adjusted income from operations

 

$

85,401

 

 

$

79,341

 

 

$

260,407

 

 

$

222,835

 

 

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