Bentley Systems, Incorporated, the infrastructure engineering software company, announced operating results for its third quarter and nine months ended September 30, 2023.
Third Quarter 2023 Operating Results
- Total revenues were $306.6 million, up 14.3% or 11.0% on a constant currency basis, year-over-year;
- Subscriptions revenues were $270.8 million, up 15.1% or 11.7% on a constant currency basis, year-over-year;
- Annualized Recurring Revenues (“ARR”) was $1,124.8 million as of September 30, 2023, compared to $983.7 million as of September 30, 2022, representing a constant currency ARR growth rate of 12.5%;
- Last twelve-month recurring revenues dollar-based net retention rate was 110%, consistent with the same period last year;
- Operating income margin was 24.0%, compared to 20.7% for the same period last year;
- Adjusted operating income inclusive of stock-based compensation expense (“Adjusted OI w/SBC”) margin was 28.2%, compared to 24.9% for the same period last year;
- Net income per diluted share was $0.16, compared to $0.12 for the same period last year;
- Adjusted net income per diluted share (“Adjusted EPS”) was $0.22, compared to $0.19 for the same period last year; and
- Cash flow from operations was $72.8 million, compared to $69.5 million for the same period last year.
Nine Months Ended September 30, 2023 Operating Results
- Total revenues were $917.8 million, up 13.0% or 12.8% on a constant currency basis, year-over-year;
- Subscriptions revenues were $807.8 million, up 14.0% or 13.6% on a constant currency basis, year-over-year;
- Operating income margin was 21.0%, compared to 20.7% for the same period last year;
- Adjusted OI w/SBC margin was 27.2%, compared to 25.8% for the same period last year;
- Net income per diluted share was $0.46, consistent with the same period last year;
- Adjusted EPS was $0.72, compared to $0.66 for the same period last year; and
- Cash flow from operations was $329.6 million, compared to $238.2 million for the same period last year.
CEO Greg Bentley said, “Our operating results this quarter demonstrate the sustainability of our more broadly balanced growth contributors. Year-over-year ARR growth (business performance in constant currency) remained strong at 12.5% despite fewer calendar workdays and an upsurge in perpetual license purchases. Continuing growth drivers include the Infrastructure Investment and Jobs Act in the U.S., expansion of E365 as our enterprise accounts accelerate going digital, and Virtuosity’s momentum in penetrating small and medium-sized business prospects.
“At our Year in Infrastructure Conference in Singapore last month, Going Digital Award finalists showcased advancements that enabled a reported median of 18% in project engineering savings. This reinforces our sustaining opportunity to help our accounts surmount the increasing capacity gap in infrastructure engineering resources, both through more specialized modeling and simulation applications and through iTwin-powered Bentley Infrastructure Cloud, to compound for them the ‘infrastructure intelligence’ value of their data.”
COO Nicholas Cumins commented, “Our 23Q3 operating results reflect continued strong performance, with trends generally in line with the previous quarter. ARR growth by sector was once again led by Public Works / Utilities; Resources remained above the company average, including Seequent despite the slowdown in new mine exploration projects, while Industrial was somewhat below average; and Commercial / Facilities remained flat. ARR growth by region was led by Americas, followed by Asia Pacific, then EMEA. In particular, we are pleased by the momentum we are seeing with the US DOTs and their ecosystem.”
CFO Werner Andre said, “In 23Q3 BSY’s financial results met or surpassed our expectations in revenues, recurring revenues dollar-based net retention rate, Adjusted operating income inclusive of stock-based compensation expense margin, and operating cash flows. Our constant currency ARR growth momentum and seasonality reflects the E365 consumption impact from this quarter’s fewer working days when compared to historic norm, and the increasing preferences for perpetual licenses especially in China. After de facto share repurchases, and this year’s higher dividends, we have primarily applied our strong operating cash flows to de-lever by 1.0x on a net debt to Adjusted EBITDA basis since the beginning of the year, and will look to further de-lever in the coming quarters as conditions permit in order to provide increasing capital structure strength and flexibility.”
Operating Results Call Details
Bentley Systems will host a live Zoom video webinar on November 7, 2023 at 8:15 a.m. EST to discuss operating results for its third quarter ended September 30, 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_VO5w_MjXT8CLW7nrIClg3A#/registration. 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.
