EXTON, Pa.  Bentley Systems, Incorporated (Nasdaq: BSY) (Bentley Systems or the Company), the infrastructure engineering software company, today announced operating results for its first quarter ended March 31, 2023.
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First Quarter 2023 Financial Results

• Total revenues were $314.4 million, up 14.1% or 17.1% on a constant currency basis, year-over-year;
• Subscriptions revenues were $277.8 million, up 15.2% or 18.0% on a constant currency basis, year-overyear;
• Annualized Recurring Revenues (ARR) was $1,071.0 million as of March 31, 2023, representing a constant currency ARR growth rate of 13% from March 31, 2022;
• Last twelve-month recurring revenues dollar-based net retention rate was 110%, compared to 108% for the same period last year;
• Operating income margin was 20.9%, compared to 20.5% for the same period last year;
• Adjusted operating income inclusive of stock-based compensation expense (Adjusted OI w/SBC) margin was 28.8%, compared to 28.4% for the same period last year;
• Net income per diluted share was $0.14, compared to $0.18 for the same period last year; Adjusted net income per diluted share (Adjusted EPS) was $0.25, consistent with the same period last year; and
• Cash flow from operations was $176.2 million, compared to $101.7 million for the same period last year.

CEO Greg Bentley said, Our robust operating results for 23Q1 continue to demonstrate the resilience of our endmarkets, the predictability of our accretive business model, and the consistency of our execution. Most notably, ARR growth (year-over-year business performance, in constant currency) accelerated to 13%. Among infrastructure sectors, the trends were consistent with the previous quarter, with very strong growth in resources, strong growth in public works / utilities, solid growth in industrial, and commercial / facilities flat. Application consumption seasonally regained growth momentum, and our E365 and Virtuosity initiatives continue their upward inflection.

For the most part regions performed as expected, with continued strong growth in India and continued solid growth in Europe, as well as solid growth in the Americas. In China this first quarter was better than in recent years, but our strategic shift there towards more localized indirect go-to-market structure, and to on-premise perpetual licenses, will lead to an increasing ARR headwind.

In sum, our strong start to 2023 serves to enhance confidence in our annual financial outlook.

CFO Werner Andre said, We believe our 2023 financial outlook is appropriately balanced between our favorable business momentum and a cautious approach towards China and the commercial / facilities sector, due to geopolitical and macro uncertainties. In our initial quarter with this as a key profitability metric, we met our expectations for Adjusted operating income inclusive of stock-based compensation expense margin. Moreover, 22Q4 timing shortfalls in our operating cash flows were fully offset in early 2023, resulting in 23Q1 being a strong cash flow quarter. However, given the current interest rate and tax environment, on a trailing twelve-month basis we anticipate cash flow from operations at an approximately 80% conversion rate from Adjusted EBITDA, consistent with prior guidance.

Recent Financial Developments

For the three months ended March 31, 2023, to offset dilution from stock-based compensation, we spent approximately $20.9 million on de-facto share repurchases associated mainly with deferred compensation plan distributions. 

Operating Results Call Details

Bentley Systems will host a live Zoom video webinar on May 9, 2023 at 8:15 a.m. Eastern time to discuss operating results for its first quarter ended March 31, 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_OZ8XitGTQ5mR60Ty0Xrc_g. 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; 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 Companys 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

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