Bentley Systems Announces Operating Results for Third Quarter 2020

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.

BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)

         
   

September 30,

 

December 31,

   

2020

 

2019

Assets

 

 

 

 

Current assets:

       

Cash and cash equivalents

 

$

137,598

 

 

$

121,101

 

Accounts receivable

 

 

172,600

 

 

 

211,775

 

Allowance for doubtful accounts

 

 

(6,492

)

 

 

(7,274

)

Prepaid income taxes

 

 

7,307

 

 

 

4,543

 

Prepaid and other current assets

 

 

27,897

 

 

 

23,413

 

Total current assets

 

 

338,910

 

 

 

353,558

 

Property and equipment, net

 

 

29,332

 

 

 

29,632

 

Operating lease right-of-use assets

 

 

46,006

 

 

 

 

Intangible assets, net

 

 

46,560

 

 

 

46,313

 

Goodwill

 

 

542,239

 

 

 

480,065

 

Investments

 

 

5,218

 

 

 

1,725

 

Deferred income taxes

 

 

44,543

 

 

 

51,068

 

Other assets

 

 

37,689

 

 

 

32,238

 

Total assets

 

$

1,090,497

 

 

$

994,599

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

       

Accounts payable

 

$

15,086

 

 

$

17,669

 

Accruals and other current liabilities

 

 

212,866

 

 

 

167,517

 

Deferred revenues

 

 

173,578

 

 

 

204,991

 

Operating lease liabilities

 

 

15,629

 

 

 

 

Income taxes payable

 

 

5,100

 

 

 

2,236

 

Total current liabilities

 

 

422,259

 

 

 

392,413

 

Long-term debt

 

 

589,583

 

 

 

233,750

 

Long-term operating lease liabilities

 

 

32,555

 

 

 

 

Deferred revenues

 

 

6,322

 

 

 

8,154

 

Deferred income taxes

 

 

9,502

 

 

 

8,260

 

Income taxes payable

 

 

7,874

 

 

 

8,140

 

Other liabilities

 

 

15,229

 

 

 

9,263

 

Total liabilities

 

 

1,083,324

 

 

 

659,980

 

Stockholders’ equity:

 

 

 

 

Common stock

 

 

2,622

 

 

 

2,548

 

Additional paid-in capital

 

 

441,723

 

 

 

408,667

 

Accumulated other comprehensive loss

 

 

(29,211

)

 

 

(23,927

)

Accumulated deficit

 

 

(407,961

)

 

 

(52,669

)

Total stockholders’ equity

 

 

7,173

 

 

 

334,619

 

Total liabilities and stockholders’ equity

 

$

1,090,497

 

 

$

994,599

 

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,

     

2020

 

2019

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

 

Subscriptions  

$

173,174

 

 

$

155,191

 

 

$

501,011

 

 

$

445,338

 

Perpetual licenses

 

 

12,827

 

 

 

13,787

 

 

 

36,020

 

 

 

38,255

 

Subscriptions and licenses  

 

186,001

 

 

 

168,978

 

 

 

537,031

 

 

 

483,593

 

Services

 

 

16,996

 

 

 

17,610

 

 

 

44,946

 

 

 

50,139

 

Total revenues  

 

202,997

 

 

 

186,588

 

 

 

581,977

 

 

 

533,732

 

Cost of revenues:

 

 

 

 

 

 

 

 

Cost of subscriptions and licenses  

 

23,338

 

 

 

17,370

 

 

 

66,466

 

 

 

48,201

 

Cost of services

 

 

19,290

 

 

 

17,681

 

 

 

50,126

 

 

 

56,048

 

Total cost of revenues  

 

42,628

 

 

 

35,051

 

 

 

116,592

 

 

 

104,249

 

Gross profit

 

 

160,369

 

 

 

151,537

 

 

 

465,385

 

 

 

429,483

 

Operating expenses:

               

Research and development

 

 

50,217

 

 

 

44,756

 

 

 

139,570

 

 

 

136,617

 

Selling and marketing  

 

41,824

 

 

 

36,721

 

 

 

107,551

 

 

 

111,889

 

General and administrative

 

 

33,006

 

 

 

25,108

 

 

 

85,275

 

 

 

71,415

 

Amortization of purchased intangibles  

 

3,869

 

 

 

3,550

 

 

 

10,984

 

 

 

10,402

 

Expenses associated with initial public offering

 

 

26,130

 

 

 

 

 

 

26,130

 

 

 

 

Total operating expenses  

 

155,046

 

 

 

110,135

 

 

 

369,510

 

 

 

330,323

 

Income from operations

 

 

5,323

 

 

 

41,402

 

 

 

95,875

 

 

 

99,160

 

Interest expense, net

 

 

(1,934

)

 

 

(2,029

)

 

 

(4,450

)

 

 

(6,503

)

Other income (expense), net

 

 

13,741

 

 

 

(12,306

)

 

 

6,756

 

 

 

(14,053

)

Income before income taxes  

 

17,130

 

 

 

27,067

 

 

 

98,181

 

 

 

78,604

 

Provision for income taxes

 

 

(10,705

)

 

 

(6,640

)

 

 

(22,145

)

 

 

(11,759

)

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

 

 

(581

)

 

 

 

 

 

(1,447

)

 

 

 

Net income

 

 

5,844

 

 

 

20,427

 

 

 

74,589

 

 

 

66,845

 

Less: Net income attributable to participating securities

 

 

(4

)

 

 

(10

)

 

 

(4

)

 

 

(10

)

Net income attributable to Class A and Class B common stockholders

 

$

5,840

 

 

$

20,417

 

 

$

74,585

 

 

$

66,835

 

Per share information:

               

Net income per share, basic

 

$

0.02

 

 

$

0.07

 

 

$

0.26

 

 

$

0.23

 

Net income per share, diluted  

$

0.02

 

 

$

0.07

 

 

$

0.25

 

 

$

0.23

 

Weighted average shares outstanding, basic

 

 

289,318,391

 

 

 

286,075,323

 

 

 

287,063,892

 

 

 

286,024,263

 

Weighted average shares outstanding, diluted  

 

299,634,961

 

 

 

289,629,555

 

 

 

297,251,349

 

 

 

294,586,354

 

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

   
 

Nine Months Ended

 

September 30,

 

2020

 

2019

Cash flows from operating activities:

 

 

 

Net income

$

74,589

 

 

$

66,845

 

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

 

 

 

Depreciation and amortization

 

25,836

 

 

 

23,334

 

Provision for accounts receivable allowance

 

(541

)

 

 

2,109

 

Deferred income taxes

 

7,853

 

 

 

833

 

Deferred compensation plan activity

 

2,487

 

 

 

2,968

 

Stock-based compensation expense

 

23,617

 

 

 

6,046

 

Amortization of deferred debt issuance costs

 

430

 

 

 

415

 

Change in fair value of derivative

 

3,365

 

 

 

159

 

Change in fair value of contingent consideration

 

(1,340

)

 

 

62

 

Foreign currency remeasurement (gain) loss

 

(9,067

)

 

 

13,956

 

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

 

1,447

 

 

 

 

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

     

Accounts receivable

 

46,661

 

 

 

40,847

 

Prepaid and other assets

 

8,907

 

 

 

(6,505

)

Accounts payable, accruals and other liabilities

 

31,486

 

 

 

18,545

 

Deferred revenues

 

(35,134

)

 

 

(39,655

)

Income taxes payable

 

(4,571

)

 

 

(11,710

)

Net cash provided by operating activities

 

176,025

 

 

 

118,249

 

Cash flows from investing activities:

 

 

 

Purchases of property and equipment and investment in capitalized software

 

(12,805

)

 

 

(11,622

)

Capitalization of costs to translate software products into foreign languages

 

(728

)

 

 

(553

)

Acquisitions, net of cash acquired of $2,064 and $980, respectively

 

(68,920

)

 

 

(9,662

)

Other investing activities

 

(6,355

)

 

 

 

Net cash used in investing activities

 

(88,808

)

 

 

(21,837

)

Cash flows from financing activities:

 

 

 

Proceeds from credit facilities

 

432,375

 

 

 

136,750

 

Payments of credit facilities

 

(201,125

)

 

 

(147,500

)

Proceeds from term loan

 

125,000

 

 

 

 

Payments of debt issuance costs

 

(432

)

 

 

 

Payments of financing leases

 

(141

)

 

 

 

Payments of acquisition debt and other consideration

 

(2,034

)

 

 

(9,878

)

Payments of dividends

 

(412,852

)

 

 

(18,830

)

Payments for shares acquired including shares withheld for taxes

 

(72,476

)

 

 

(18,417

)

Proceeds from Common Stock Purchase Agreement

 

58,349

 

 

 

4,510

 

Net proceeds from exercise of common stock options and restricted stock

 

3,206

 

 

 

3,039

 

Net cash used in financing activities

 

(70,130

)

 

 

(50,326

)

Effect of exchange rate changes on cash and cash equivalents

 

(590

)

 

 

(1,272

)

Increase in cash and cash equivalents

 

16,497

 

 

 

44,814

 

Cash and cash equivalents, beginning of year

 

121,101

 

 

 

81,183

 

Cash and cash equivalents, end of period

$

137,598

 

 

$

125,997

 

BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Measures
For the Three and Nine Months Ended September 30, 2020 and 2019
(in thousands)
(unaudited)

Reconciliation of net income to Adjusted EBITDA:

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2020

 

2019

 

2020

 

2019

Net income

$

5,844

 

 

$

20,427

 

 

$

74,589

 

 

$

66,845

 

Interest expense, net

1,934

 

 

2,029

 

 

4,450

 

 

6,503

 

Provision for income taxes

10,705

 

 

6,640

 

 

22,145

 

 

11,759

 

Depreciation and amortization

9,172

 

 

7,968

 

 

25,836

 

 

23,334

 

Equity-based compensation

19,548

 

 

2,026

 

 

22,760

 

 

6,051

 

Acquisition expenses

3,489

 

 

1,425

 

 

8,498

 

 

4,103

 

Realignment expenses

9,943

 

 

(49

)

 

10,012

 

 

(492

)

Expenses associated with IPO

26,130

 

 

 

 

26,130

 

 

 

Other (income) expense, net

(13,741

)

 

12,306

 

 

(6,756

)

 

14,053

 

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

581

 

 

 

 

1,447

 

 

 

Adjusted EBITDA

$

73,605

 

 

$

52,772

 

 

$

189,111

 

 

$

132,156

 

Reconciliation of net income to Adjusted Net Income:

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2020

 

2019

 

2020

 

2019

Net income

$

5,844

 

 

$

20,427

 

 

$

74,589

 

 

 

$

66,845

 

Non-GAAP adjustments, prior to income taxes:

 

 

 

 

 

 

 

Amortization of purchased intangibles and developed technologies

5,236

 

 

4,638

 

 

14,694

 

 

 

13,699

 

Equity-based compensation

19,548

 

 

2,026

 

 

22,760

 

 

 

6,051

 

Acquisition expenses

3,489

 

 

1,425

 

 

8,498

 

 

 

4,103

 

Realignment expenses

9,943

 

 

(49

)

 

10,012

 

 

 

(492

)

Expenses associated with IPO

26,130

 

 

 

 

26,130

 

 

 

 

Other (income) expense, net

(13,741

)

 

12,306

 

 

(6,756

)

 

 

14,053

 

Total non-GAAP adjustments, prior to income taxes

50,605

 

 

20,346

 

 

75,338

 

 

 

37,414

 

Income tax effect of non-GAAP adjustments

(5,644

)

 

(1,473

)

 

(10,785

)

 

 

(4,981

)

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

581

 

 

 

 

1,447

 

 

 

 

Adjusted Net Income

$

51,386

 

 

$

39,300

 

 

$

140,589

 

 

 

$

99,278

 

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,

       

2020

 

2019

 

2020

 

2019

Cost of subscriptions and licenses

 

$

23,338

 

 

$

17,370

 

 

$

66,466

 

 

$

48,201

 

Amortization of purchased intangibles and developed technologies

 

 

(1,367

)

 

 

(1,088

)

 

 

(3,710

)

 

 

(3,297

)

Equity-based compensation

 

 

(861

)

 

 

(27

)

 

 

(908

)

 

 

(60

)

Realignment expenses

 

 

(50

)

 

 

 

 

 

(50

)

 

 

51

 

Adjusted cost of subscriptions and licenses

 

$

21,060

 

 

$

16,255

 

 

$

61,798

 

 

$

44,895

 

                     

Cost of services

 

$

19,290

 

 

$

17,681

 

 

$

50,126

 

 

$

56,048

 

Equity-based compensation

 

 

(2,526

)

 

 

(84

)

 

 

(2,701

)

 

 

(363

)

Acquisition expenses

 

 

(615

)

 

 

 

 

 

(1,050

)

 

 

 

Realignment expenses

 

 

(1,548

)

 

 

12

 

 

 

(1,548

)

 

 

185

 

Adjusted cost of services

 

$

14,602

 

 

$

17,609

 

 

$

44,827

 

 

$

55,870

 

       

 

           

Research and development

 

$

50,217

 

 

$

44,756

 

 

$

139,570

 

 

$

136,617

 

Equity-based compensation

 

 

(6,661

)

 

 

(749

)

 

 

(7,817

)

 

 

(2,306

)

Acquisition expenses

 

 

(1,969

)

 

 

(1,129

)

 

 

(5,113

)

 

 

(3,083

)

Realignment expenses

 

 

(841

)

 

 

37

 

 

 

(910

)

 

 

79

 

Adjusted research and development

 

$

40,746

 

 

$

42,915

 

 

$

125,731

 

 

$

131,308

 

                     

Selling and marketing

 

$

41,824

 

 

$

36,721

 

 

$

107,551

 

 

$

111,889

 

Equity-based compensation

 

 

(4,803

)

 

 

(632

)

 

 

(5,607

)

 

 

(1,757

)

Acquisition expenses

 

 

(86

)

 

 

(61

)

 

 

(243

)

 

 

(164

)

Realignment expenses

 

 

(5,183

)

 

 

 

 

 

(5,183

)

 

 

263

 

Adjusted selling and marketing

 

$

31,752

 

 

$

36,027

 

 

$

96,518

 

 

$

110,231

 

                     

General and administrative

 

$

33,006

 

 

$

25,108

 

 

$

85,275

 

 

$

71,415

 

Equity-based compensation

 

 

(4,696

)

 

 

(535

)

 

 

(5,726

)

 

 

(1,565

)

Acquisition expenses

 

 

(532

)

 

 

(199

)

 

 

(1,611

)

 

 

(546

)

Realignment expenses

 

 

(2,321

)

 

 

 

 

 

(2,321

)

 

 

(86

)

Adjusted general and administrative

 

$

25,456

 

 

$

24,374

 

 

$

75,617

 

 

$

69,217

 

                     

Income from operations

 

$

5,323

 

 

$

41,402

 

 

$

95,875

 

 

$

99,160

 

Amortization of purchased intangibles and developed technologies

 

 

5,236

 

 

 

4,638

 

 

 

14,694

 

 

 

13,699

 

Equity-based compensation

 

 

19,548

 

 

 

2,026

 

 

 

22,760

 

 

 

6,051

 

Acquisition expenses

 

 

3,489

 

 

 

1,425

 

 

 

8,498

 

 

 

4,103

 

Realignment expenses

 

 

9,943

 

 

 

(49

)

 

 

10,012

 

 

 

(492

)

Expenses associated with IPO

 

 

26,130

 

 

 

 

 

 

26,130

 

 

 

 

Adjusted income from operations

 

$

69,669

 

 

$

49,443

 

 

$

177,968

 

 

$

122,520

 


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