Bentley Systems, Incorporated (“Bentley Systems” or the “Company”), the infrastructure engineering software company, announced operating results for its first quarter ended March 31, 2023.
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-over-year;
- 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 end-markets, 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.
