Bentley Systems Announces First Quarter 2021 Operating Results

EXTON, Pa. — (BUSINESS WIRE) — May 11, 2021 — Bentley Systems, Incorporated (Nasdaq: BSY) (“Bentley Systems” or the “Company”), the infrastructure engineering software company, today announced operating results for its quarter ended March 31, 2021.

First Quarter 2021 Financial Results:

  • Total revenues were $222.0 million, up 14.0% year-over-year;
  • Subscriptions revenues were $188.1 million, up 10.5% year-over-year;
  • Last twelve-month recurring revenues were $716.9 million, up 10.7% year-over-year;
  • Last twelve-month recurring revenues dollar-based net retention rate was 107% (calculated under Topic 606), compared to 109% (calculated under Topic 605) for the same period last year;
  • Last twelve-month account retention rate was 98% (calculated under Topic 606), compared to 98% (calculated under Topic 605) for the same period last year;
  • Annualized Recurring Revenue (“ARR”) was $760.2 million as of March 31, 2021, representing a constant currency ARR growth rate of 10% from March 31, 2020;
  • GAAP operating income was $55.6 million, compared to $46.0 million for the same period last year;
  • GAAP net income was $57.0 million, compared to $29.7 million for the same period last year. GAAP net income per diluted share was $0.18, compared to $0.10 for the same period last year;
  • Adjusted Net Income was $64.0 million, compared to $43.2 million for the same period last year. Adjusted Net Income per diluted share was $0.20 compared to $0.15 for the same period last year;
  • Adjusted EBITDA was $82.8 million, compared to $57.9 million for the same period last year. Adjusted EBITDA margin was 37.3%, compared to 29.8% for the same period last year;
  • Cash flow from operations was $132.8 million, compared to $72.6 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.”

“Our first quarter operating results were broadly consistent with the progression of the same mildly improving application usage trends we reported earlier this year, with our established quarterly seasonalization, and with the outlook we have previously expressed for the unfolding of full-year 2021. On the other hand, the quarter’s unprecedented operating margins and operating cash flows benefited from circumstances likely unique to this unusual year. Of note, we are pleased by the indicated market demand for our applications within our newly-targeted ‘SMB’ prospects— our Virtuosity subscriptions have attracted over a thousand accounts new to Bentley Systems, since inception less than a year ago,” said Greg Bentley, CEO.

“I believe the long-term potential of infrastructure digital twins will be accelerated by the ‘programmatic’ acquisitions we announced last month, of INRO to add multi-modal and dynamic simulation capabilities for mobility digital twins, and of sensemetrics and Vista Data Vision to extend our iTwin platform for infrastructure IoT. Anticipating the closing later in this quarter of our largest acquisition to date, Seequent, subject to the completion of regulatory review, when we announce our second quarter operating results we will update our financial outlook for 2021 to reflect acquisition impacts,” concluded Mr. Bentley.

First Quarter 2021 Financial Developments:

  • In January 2021, we entered into the Second Amendment to the Amended and Restated Credit Agreement dated December 19, 2017, which increased the senior secured revolving loan facility from $500.0 million to $850.0 million and extended the maturity date from December 18, 2022 to November 15, 2025.
  • In January 2021, we completed a private offering of $690.0 million of 0.125% convertible senior notes due 2026 (the “2026 Notes”). We incurred $18.1 million of expenses in connection with the 2026 Notes offering consisting of the payment of initial purchasers’ discounts and commissions, professional fees, and other expenses (“transaction costs”). Transaction costs were recorded as a direct deduction from the related debt liability in the consolidated balance sheet and are amortized to interest expense using the effective interest method over the term of the 2026 Notes.
  • In connection with the pricing of the 2026 Notes, we entered into capped call options with certain of the initial purchasers or their respective affiliates and certain other financial institutions. The capped call options are expected to reduce potential dilution to our Class B Common Stock upon any conversion of 2026 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap. We paid premiums of $25.5 million in connection with the capped call options and they have been included as a net reduction to Additional paid-in capital in the consolidated balance sheet.
  • On March 11, 2021, we entered into a definitive agreement to acquire Seequent, a leader in software for geological and geophysical modeling, geotechnical stability, and cloud services for geodata management and collaboration, for approximately $900.0 million in cash, net of cash acquired and subject to customary adjustments, including for working capital, plus 3,141,361 shares of our Class B Common Stock. Seequent is expected to deepen the potential of our infrastructure digital twins offerings to help understand and mitigate environmental risks, advancing resilience, and sustainability. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close during the second quarter of 2021. We expect to use readily available cash, including a portion of the net proceeds from the 2026 Notes, and borrowings under our Credit Facility to fund the cash component of the transaction. For the three months ended March 31, 2021, we incurred $6.7 million of expenses related to entering into the definitive agreement to acquire Seequent.
  • For the three months ended March 31, 2021, the Company reported an effective tax rate of 15.3%. The unusually low effective tax rate was primarily due to the tax benefit associated with stock-based compensation, partially offset by the impact from officer compensation limitation provisions.

Operating Results Call Details

Bentley Systems will host a live Zoom Video Webinar on May 11, 2021 at 8:30 a.m. Eastern Time to discuss financial and operating results for its first quarter ended March 31, 2021.

Those wishing to participate should access the live Zoom Video Webinar of the event through a direct registration link at https://zoom.us/webinar/register/WN_XcHUVJklTrCeRvyQUGNxNg. Alternatively, the event can be accessed from the Events & Presentations page on Bentley Systems’ Investor Relations website at https://investors.bentley.com. Presentation materials will be posted prior to the webinar on Bentley Systems’ Investor Relations website. 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 earnings release and reconciliations of such measures to their nearest GAAP equivalents are included below under “Use and Reconciliation of Nonâ�‘GAAP Financial Measures.” Certain nonâ�‘GAAP measures included in our financial outlook are not being reconciled to the comparable GAAP financial measures because the GAAP measures are not accessible on a forward-looking basis. The Company is unable to reconcile these forward-looking nonâ�‘GAAP financial measures to the most directly comparable GAAP measures without unreasonable efforts because the Company is currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected for these periods not to impact the nonâ�‘GAAP measures, but would impact GAAP measures. Such unavailable information, which could have a significant impact on the Company’s GAAP financial results, may include stockâ�‘based compensation charges, depreciation and amortization of capitalized software costs and of acquired intangible assets, realignment expenses, and other items.

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