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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Bentley Systems Inc | NASDAQ:BSY | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.15 | 0.31% | 48.52 | 47.49 | 50.00 | 49.60 | 48.15 | 48.60 | 700,277 | 22:30:00 |
Bentley Systems, Incorporated (Nasdaq: BSY) (“Bentley Systems” or the “Company”), the infrastructure engineering software company, today announced operating results for its fourth quarter and full year ended December 31, 2022, and its financial outlook for 2023.
Fourth Quarter 2022 Financial Results
Full Year 2022 Financial Results
Definitions of the non‑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 Non‑GAAP Financial Measures.”
CEO Greg Bentley said, “The fourth quarter and thus full-year 2022 operating results quite successfully met the expectations we maintained throughout the year, notwithstanding the loss of Russia and pandemic-compounded headwinds in China. Our operating team colleagues, led by COO Nicholas Cumins, delivered what I consider our best year ever, operationally and financially. Our E365 and SMB growth initiatives hit a new stride, our Seequent and Power Line Systems platform acquisitions continued their breakout new business velocity, and every region throughout the world, other than China, continues to perform and grow at full pace. The stage is set for relatively favorable visibility into comparable growth during 2023, as our accounts and prospects are necessarily prioritizing going digital in order to meet accelerated demand for infrastructure engineering.
Our 2023 annual financial outlook must nonetheless factor in a cautious approach to China, where we are appropriately adapting to improve our long-term prospects under the assumption of continued geopolitical challenges. Our enduring annual commitment to margin improvement is now expressed in terms of Adjusted operating income inclusive of stock-based compensation (rather than Adjusted EBITDA) to align our external reporting with executive incentives that incorporate accountability for the full economic costs of equity awards and of operating capex. We are also announcing further generational management succession, as we round out our expected wave of post‑IPO executive retirements with, characteristically, ‘no drama.’”
CFO Werner Andre said, “In Q4, as throughout 2022, sustained favorable operating momentum enabled us to achieve our strong results despite the year’s challenges in Russia and China. Our Q4 decrease in cash flow from operations stemmed largely from timing and has been fully offset by resulting extraordinary collections in early 2023.
Our 2023 financial outlook reflects our confidence in continued strong market demand for infrastructure engineering going digital—led by our E365 program, SMB initiatives, and enduring strength of our platform acquisitions—subject to wider uncertainty surrounding potential outcomes in China. Our balanced capital allocation provides sufficiently for programmatic acquisitions and for equity and debt repurchase programs, as well as our 2023 increase to our modest dividend payout.”
Recent Financial Developments
2023 Financial Outlook
The Company is sharing the following financial outlook for the full year 2023:
(1)
Business performance excludes ARR acquired from platform acquisitions, but includes ARR acquired from programmatic acquisitions, which generally are immaterial, individually and in the aggregate.
The 2023 outlook information provided above includes non-GAAP financial measures management uses in measuring performance and liquidity. The Company is unable to reconcile these forward-looking non-GAAP measures to GAAP without unreasonable efforts because it is not possible to predict with a reasonable degree of certainty the actual impact of certain items and unanticipated events, including stock‑based compensation charges, depreciation and amortization of acquired intangible assets, realignment expenses, and other items, which would be included in GAAP results. The impact of such items and unanticipated events could be potentially significant.
The 2023 outlook is forward-looking, subject to significant business, economic, regulatory, and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management, and based upon assumptions with respect to future decisions, which are subject to change. Actual results may vary and those variations may be material. As such, our results may not fall within the ranges contained in this outlook. The Company uses these forward-looking measures to evaluate its ongoing operations and for internal planning and forecasting purposes.
Operating Results Call Details
Bentley Systems will host a live Zoom video webinar on February 28, 2023 at 8:15 a.m. EST to discuss operating results for its fourth quarter and full year ended December 31, 2022.
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_KICwUBUARgy6AyL7WgEOMw. 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.
Definitions of Certain Key Business Metrics
Definitions of the non‑GAAP financial measures used in this operating results press release and reconciliations of such measures to their nearest GAAP equivalents are included below under “Use and Reconciliation of Non‑GAAP Financial Measures.” Certain non‑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 non‑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 non‑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 stock‑based compensation charges, depreciation and amortization of acquired intangible assets, realignment expenses, and other items.
Constant Currency Metrics
In reporting period‑over‑period results, we calculate the effects of foreign currency fluctuations and constant currency information by translating current period results using prior period average foreign currency exchange rates. Our definition of constant currency may differ from other companies reporting similarly named measures, and these constant currency performance measures should be viewed in addition to, and not as a substitute for, our operating performance measures calculated in accordance with GAAP.
Use and Reconciliation of Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP, we have calculated Adjusted OI w/SBC, Adjusted operating income, Adjusted net income, Adjusted EPS, and Adjusted EBITDA, each of which are non‑GAAP financial measures. In future periods, we will discuss Adjusted OI w/SBC rather than Adjusted EBITDA as our performance measure, as management believes Adjusted OI w/SBC better captures the significant economic costs of stock‑based compensation and of operating depreciation and amortization. In future periods, we will discuss Adjusted EBITDA as our liquidity measure in the context of conversion of Adjusted EBITDA to cash flow from operations (i.e., the ratio of GAAP cash flow from operations to Adjusted EBITDA). We have provided tabular reconciliations of each of these non‑GAAP financial measures to such measure’s most directly comparable GAAP financial measure.
Management uses these non‑GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate financial performance. Our non‑GAAP financial measures are presented as supplemental disclosure as we believe they provide useful information to investors and others in understanding and evaluating our results and prospects period‑over‑period without the impact of certain items that do not directly correlate to our operating performance and that may vary significantly from period to period for reasons unrelated to our operating performance, as well as to compare our financial results to those of other companies.
Our definitions of these non‑GAAP financial measures may differ from similarly titled measures presented by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, our non‑GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, the financial information prepared in accordance with GAAP, and should be read in conjunction with the financial statements included in our Annual Report on Form 10‑K to be filed with the United States Securities and Exchange Commission.
We calculate these non‑GAAP financial measures as follows:
During the second quarter of 2022, we modified our definitions of Adjusted net income, Adjusted operating income, and Adjusted EBITDA to adjust for realignment expenses (income) relating to our wind down of business in, and exit from, the Russian market, which were subsequently adjusted during the third and fourth quarters of 2022 for our change in estimates. These realignment expenses (income) are comprised of termination benefits for colleagues whose positions were eliminated and corresponding asset impairments. Amounts for all periods herein reflect application of the aforementioned definitions modification.
For the three months and year ended December 31, 2022, payments related to the Company’s interest rate swap were recognized in Other income (expense), net in the consolidated statements of operations and the corresponding prior period amounts, which were previously recognized in Interest expense, net, were reclassified to conform to the current presentation. For the three months and year ended December 31, 2021, the amounts reclassified were not material, and Income before income taxes and Net income in the consolidated statements of operations did not change as a result of these reclassifications.
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; and our ability to integrate acquired businesses successfully.
Further information on potential factors that could affect the financial results of the Company are included in the Company’s Form 10‑K and subsequent Forms 10‑Q, which are on file with the United States Securities and Exchange Commission. 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
© 2023 Bentley Systems, Incorporated. Bentley, the Bentley logo, AssetWise, Bentley Infrastructure Cloud, EasyPower, iTwin, MicroStation, Power Line Systems, ProjectWise, Seequent, SYNCHRO, and Vetasi, are either registered or unregistered trademarks or service marks of Bentley Systems, Incorporated or one of its direct or indirect wholly owned subsidiaries. All other brands and product names are trademarks of their respective owners.
BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES Consolidated Balance Sheets (in thousands) (unaudited)
December 31,
2022
2021
Assets
Current assets:
Cash and cash equivalents
$
71,684
$
329,337
Accounts receivable
296,376
241,807
Allowance for doubtful accounts
(9,303
)
(6,541
)
Prepaid income taxes
18,406
16,880
Prepaid and other current assets
38,732
34,348
Total current assets
415,895
615,831
Property and equipment, net
32,251
31,823
Operating lease right-of-use assets
40,249
50,818
Intangible assets, net
292,271
245,834
Goodwill
2,237,184
1,588,477
Investments
22,270
6,438
Deferred income taxes
52,636
71,376
Other assets
72,249
48,646
Total assets
$
3,165,005
$
2,659,243
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
15,176
$
16,483
Accruals and other current liabilities
362,048
323,603
Deferred revenues
226,955
224,610
Operating lease liabilities
14,672
17,482
Income taxes payable
4,507
6,696
Current portion of long-term debt
5,000
5,000
Total current liabilities
628,358
593,874
Long-term debt
1,775,696
1,430,992
Deferred compensation plan liabilities
77,014
94,890
Long-term operating lease liabilities
27,670
35,274
Deferred revenues
16,118
7,983
Deferred income taxes
51,235
65,014
Income taxes payable
8,105
7,725
Other liabilities
7,355
14,269
Total liabilities
2,591,551
2,250,021
Stockholders’ equity:
Common stock
2,890
2,825
Additional paid-in capital
1,030,466
937,805
Accumulated other comprehensive loss
(89,740
)
(91,774
)
Accumulated deficit
(370,866
)
(439,634
)
Non-controlling interest
704
—
Total stockholders’ equity
573,454
409,222
Total liabilities and stockholders’ equity
$
3,165,005
$
2,659,243
BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES Consolidated Statements of Operations (in thousands, except share and per share data) (unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Revenues:
Subscriptions
$
251,489
$
223,105
$
960,220
$
812,807
Perpetual licenses
12,164
19,707
43,377
53,080
Subscriptions and licenses
263,653
242,812
1,003,597
865,887
Services
23,295
24,920
95,485
99,159
Total revenues
286,948
267,732
1,099,082
965,046
Cost of revenues:
Cost of subscriptions and licenses
39,674
34,439
147,578
124,321
Cost of services
22,677
25,128
89,435
92,218
Total cost of revenues
62,351
59,567
237,013
216,539
Gross profit
224,597
208,165
862,069
748,507
Operating expense (income):
Research and development
67,890
63,002
257,856
220,915
Selling and marketing
53,946
47,394
195,622
162,240
General and administrative
45,666
39,883
174,647
150,116
Deferred compensation plan
6,091
5,719
(15,782
)
95,046
Amortization of purchased intangibles
10,245
8,898
41,114
25,601
Total operating expenses
183,838
164,896
653,457
653,918
Income from operations
40,759
43,269
208,612
94,589
Interest expense, net
(11,114
)
(3,555
)
(34,635
)
(11,221
)
Other income, net
9,505
1,155
24,298
9,961
Income before income taxes
39,150
40,869
198,275
93,329
(Provision) benefit for income taxes
(13,062
)
(1,642
)
(21,283
)
3,448
Loss from investments accounted for using the equity method, net of tax
(366
)
(646
)
(2,212
)
(3,585
)
Net income
25,722
38,581
174,780
93,192
Less: Net income attributable to participating securities
(11
)
(3
)
(42
)
(9
)
Net income attributable to Class A and Class B common stockholders
$
25,711
$
38,578
$
174,738
$
93,183
Per share information:
Net income per share, basic
$
0.08
$
0.13
$
0.57
$
0.30
Net income per share, diluted
$
0.08
$
0.12
$
0.55
$
0.30
Weighted average shares, basic
310,025,480
307,447,788
309,226,677
305,711,345
Weighted average shares, diluted(1)
323,916,511
325,541,718
331,765,158
314,610,814
_____________
(1)
Weighted average shares, diluted for the three months ended December 31, 2021 have been corrected to reflect the dilutive effect of convertible senior notes.
BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands) (unaudited)
Year Ended
December 31,
2022
2021
Cash flows from operating activities:
Net income
$
174,780
$
93,192
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
71,537
52,793
Deferred income taxes
(5,126
)
(19,745
)
Stock-based compensation expense
75,206
49,045
Deferred compensation plan
(15,782
)
95,046
Amortization and write-off of deferred debt issuance costs
7,291
5,955
Change in fair value of derivative
(27,083
)
(9,770
)
Foreign currency remeasurement loss
6,000
64
Other non-cash items, net
2,593
5,338
Changes in assets and liabilities, net of effect from acquisitions:
Accounts receivable
(60,938
)
(35,519
)
Prepaid and other assets
14,053
14,260
Accounts payable, accruals, and other liabilities
29,181
47,957
Deferred revenues
2,292
5,340
Income taxes payable, net of prepaid income taxes
320
(15,932
)
Net cash provided by operating activities
274,324
288,024
Cash flows from investing activities:
Purchases of property and equipment and investment in capitalized software
(18,546
)
(17,539
)
Proceeds from sale of aircraft
2,380
—
Acquisitions, net of cash acquired
(743,007
)
(1,034,983
)
Other investing activities
(10,954
)
(4,081
)
Net cash used in investing activities
(770,127
)
(1,056,603
)
Cash flows from financing activities:
Proceeds from credit facilities
833,292
745,310
Payments of credit facilities
(487,694
)
(991,310
)
Proceeds from convertible senior notes, net of discounts and commissions
—
1,233,377
Payments of debt issuance costs
—
(5,643
)
Purchase of capped call options
—
(51,605
)
Settlement of convertible senior notes
(1,998
)
—
Proceeds from term loans
—
199,505
Repayments from term loans
(5,000
)
—
Payments of acquisition debt and other consideration
(8,460
)
(2,371
)
Payments of dividends
(34,493
)
(33,396
)
Proceeds from stock purchases under employee stock purchase plan
10,335
3,846
Proceeds from exercise of stock options
8,338
5,605
Payments for shares acquired including shares withheld for taxes
(43,561
)
(120,539
)
Repurchase of Class B Common Stock under approved program
(28,250
)
—
Other financing activities
525
(197
)
Net cash provided by financing activities
243,034
982,582
Effect of exchange rate changes on cash and cash equivalents
(4,884
)
(6,672
)
(Decrease) increase in cash and cash equivalents
(257,653
)
207,331
Cash and cash equivalents, beginning of year
329,337
122,006
Cash and cash equivalents, end of year
$
71,684
$
329,337
BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Measures For the Three Months and Year Ended December 31, 2022 and 2021 (in thousands, except share and per share data) (unaudited)
Reconciliation of operating income to Adjusted OI w/SBC and to Adjusted operating income:
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Operating income
$
40,759
$
43,269
$
208,612
$
94,589
Amortization of purchased intangibles
13,418
11,998
53,592
34,001
Deferred compensation plan
6,091
5,719
(15,782
)
95,046
Acquisition expenses
4,342
6,369
25,398
34,368
Realignment (income) expenses
(114
)
—
2,109
—
Adjusted OI w/SBC
64,496
67,355
273,929
258,004
Stock-based compensation
23,592
15,966
74,566
48,152
Adjusted operating income
$
88,088
$
83,321
$
348,495
$
306,156
Reconciliation of net income to Adjusted net income:
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
$
EPS(1)
$
EPS(1)
$
EPS(1)
$
EPS(1)
Net income
$
25,722
$
0.08
$
38,581
$
0.12
$
174,780
$
0.55
$
93,192
$
0.30
Non-GAAP adjustments, prior to income taxes:
Amortization of purchased intangibles
13,418
0.04
11,998
0.04
53,592
0.16
34,001
0.10
Stock-based compensation
23,592
0.07
15,966
0.05
74,566
0.22
48,152
0.15
Deferred compensation plan
6,091
0.02
5,719
0.02
(15,782
)
(0.05
)
95,046
0.29
Acquisition expenses
4,342
0.01
6,369
0.02
25,398
0.08
34,368
0.10
Realignment (income) expenses
(114
)
—
—
—
2,109
0.01
—
—
Other income, net
(9,505
)
(0.03
)
(1,155
)
—
(24,298
)
(0.07
)
(9,961
)
(0.03
)
Total non-GAAP adjustments, prior to income taxes
37,824
0.11
38,897
0.12
115,585
0.35
201,606
0.61
Income tax effect of non-GAAP adjustments
(4,227
)
(0.01
)
(5,909
)
(0.02
)
(18,059
)
(0.05
)
(30,491
)
(0.09
)
Loss from investments accounted for using the equity method, net of tax
366
—
646
—
2,212
0.01
3,585
0.01
Adjusted net income(2)(3)
$
59,685
$
0.19
$
72,215
$
0.22
$
274,518
$
0.85
$
267,892
$
0.83
Adjusted weighted average shares, diluted(4)
330,825,309
332,450,516
331,765,158
328,085,393
____________(1)
Adjusted EPS was computed independently for each reconciling item presented; therefore, the sum of Adjusted EPS for each line item may not equal total Adjusted EPS due to rounding.
(2)
Total Adjusted EPS for the three months and year ended December 31, 2021 have been corrected to reflect the dilutive effect of convertible senior notes.
(3)
Adjusted EPS numerator includes $1,695 and $1,706 for the three months ended December 31, 2022 and 2021, respectively, and $6,810 and $4,843 for the years ended December 31, 2022 and 2021, respectively, related to interest expense, net of tax, attributable to the convertible senior notes using the if‑converted method.
(4)
Adjusted weighted average shares, diluted includes incremental shares, which were considered anti-dilutive on a GAAP basis, of 6,908,798 shares for both the three months ended December 31, 2022 and 2021, and 13,474,579 shares for the year ended December 31, 2021 related to the dilutive effect of convertible senior notes using the if‑converted method.
Reconciliation of net income to Adjusted EBITDA:
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Net income
$
25,722
$
38,581
$
174,780
$
93,192
Interest expense, net
11,114
3,555
34,635
11,221
Provision (benefit) for income taxes
13,062
1,642
21,283
(3,448
)
Depreciation and amortization
17,893
16,847
71,537
52,793
Stock-based compensation
23,592
15,966
74,566
48,152
Deferred compensation plan
6,091
5,719
(15,782
)
95,046
Acquisition expenses
4,342
6,369
25,398
34,368
Realignment (income) expenses
(114
)
—
2,109
—
Other income, net
(9,505
)
(1,155
)
(24,298
)
(9,961
)
Loss from investments accounted for using the equity method, net of tax
366
646
2,212
3,585
Adjusted EBITDA
$
92,563
$
88,170
$
366,440
$
324,948
Reconciliation of cash flow from operations to Adjusted EBITDA:
Three Months Ended
Year Ended
December 31,
December 31,
2022
2021
2022
2021
Cash flow from operations
$
36,126
$
80,607
$
274,324
$
288,024
Cash interest
8,934
1,350
26,581
4,631
Cash taxes
7,388
6,292
25,890
30,831
Cash deferred compensation plan distributions
—
—
7,336
—
Cash acquisition expenses
2,999
4,416
26,168
27,873
Changes in operating assets and liabilities
38,588
(4,823
)
8,088
(27,681
)
Other(1)
(1,472
)
328
(1,947
)
1,270
Adjusted EBITDA
$
92,563
$
88,170
$
366,440
$
324,948
_____________
(1)
Includes payments related to interest rate swap.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230228005277/en/
BSY Investor Contact: Eric Boyer Investor Relations Officer ir@bentley.com
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