Architosh readers may need to get used to the formerly private company, Bentley Systems, having quarterly reports to disclose since going public on the stock exchange in 2021. Bentley Systems, Inc. trades on the NASDAQ (BSY) in the United States.
BSY—Q3 Financial Results
Following a successful 2022 second quarter, Bentley Systems published its 2022 third quarter financial results on 8 November 2022. In a strong third quarter for Bentley Systems, its income and profits are up. In fact, the bottom line for all three quarters of the year looks good. Year-on-year profits are up too.
The strong third quarter for Bentley Systems. CEO, Greg Bentley.
Bentley Systems CEO Greg Bentley explains his company’s success:
“We are pleased to report that Bentley Systems’ operating performance continues dependably toward our established financial outlook range for full‐year 2022, albeit with reported revenues subject to this year’s foreign exchange gyrations. In constant currency, our year‐over‐year business performance ARR growth rate remained 11.5%, which includes the first‐half write‐down (1%) of our ARR in Russia, but does not include 2.5% from our 22Q1 acquisition of Power Line Systems. This reflects new business accelerating noticeably in the U.S., and for civil engineering organizations globally, consistent with multiple public infrastructure investment programs.
“Significantly, each of our primary growth initiatives is bearing fruit as intended in terms of business performance ARR growth, serving to make up for circumstantially fewer programmatic acquisitions during 2022 to date. Our enterprise success teams are increasing ARR accretion within our consumption‐based E365 program. Our Virtuoso subscriptions are growing exponentially in SMB accounts and new‐name prospects. Our Seequent and Power Line Systems platform acquisitions continue their pace‐setting growth. Finally, our Year in Infrastructure 2022 conference next week in London will showcase, through the Finalists’ Going Digital Awards presentations, notable digital twin advancements within our accounts.”
Third quarter financial highlights
- Operating income up.
- Net income up.
- Net income margin up.
- Adjusted net income up by just under USD 5 million.
- Adjusted Net Income per diluted share went up a little over 10%.
- Adjusted EBITDA (earnings before interest, tax, depreciation, and amortization ) increased by almost USD 6 million.
- Cash flow from operations up by a little over USD 11 million.
Third quarter in detail
Bentley’s operating income was USD 55.5 million, compared to an operating loss of USD 37.5 million for the same period last year. Bentley’s 2021 third-quarter operating loss was due to a one-time compensation charge of USD 90.7 million. This resulted from a modification of its deferred compensation plan.
Net income was USD 37.0 million, compared to a net loss of USD 48.0 million for the same period last year. Net income per diluted share was significantly improved: USD 0.12, compared to GAAP net loss per diluted share of USD 0.16 for the same period last year.
The net loss back in the third quarter of 2021 was due to a one-time compensation charge of USD 83.4 million, net of tax, resulting from a modification of its ‘deferred compensation plan.’
Net income margin was 13.8%, compared to the net loss margin of 19.1% for the same period last year. Adjusted Net Income was USD 61.8 million, compared to USD 56.3 million for the same period last year. Net Income per diluted share went up too: USD 0.19 compared to USD 0.17 for the same period last year.
Adjusted EBITDA increased: USD 89.7 million, compared to USD 84.5 million for the same period last year. Though adjusted EBITDA margin was very slightly lower: 33.4%, compared to 33.6% for the same period last year. Cash flow from operations was higher: USD 69.5 million, compared to USD 58.4 million for the same period last year.
Nine months ended 30 September 2022
Overall, the year to the end of September was pretty good for Bentley too.
- Total revenues were USD 812.1 million. Subscription revenues were USD 708.7 million, up 20.2% or 26.6% on a constant currency basis, year-over-year. Operating income was USD 167.9 million, compared to USD 51.3 million for the same period last year. The nine months ended 30 September 2021, its operating income includes a one-time compensation charge of USD 90.7 million resulting from a modification of our deferred compensation plan.
- Net income was USD 149.1 million, compared to USD 54.6 million for the same period last year. GAAP net income per diluted share was USD 0.46, compared to USD 0.17 for the same period last year. The nine months ended September 30, 2021 GAAP net income includes a one-time compensation charge of USD 83.4 million, net of tax, resulting from a modification of our deferred compensation plan. GAAP net income margin was 18.4%, compared to 7.8% for the same period last year;
- Adjusted net income was USD 215.2 million, compared to USD 195.0 million for the same period last year. Adjusted Net Income per diluted share was USD 0.66 compared to USD 0.62 for the same period last year.
- Cash flow from operations was USD 238.2 million, compared to USD 207.4 million for the same period last year.
Year-on-year
Bentley’s Chief Financial Officer, Werner Andre, tells us, “As the net favorable directions of business performance that Greg enumerated are serving to offset losses from Russia, we continue to reaffirm the range of our 2022 full-year annual financial outlook in constant currency metrics. This includes total revenues growth of 16.9% to 20.1% in constant currency, as well as constant currency ARR growth rate of 14% to 16%.”
Bentley’s total year-on-year revenues were up 6.7% to USD 268.3 million. That is a 14.7% increase when calculated on a constant currency basis. Meanwhile, its subscription revenues were USD 235.3 million. This represents a year-on-year increase of 9.4% or 17.6% on a constant currency basis. Its last twelve-month recurring revenues were USD 950.4 million, up 20.3% year-over-year.
About the number crunching
All the above figures were calculated using GAAP (generally accepted accounting principles).
The term ‘constant currency’ refers to a fixed exchange rate that eliminates fluctuations when calculating relative financial performance figures. Global companies such as Bentley systems have significant operations in several different countries. Such companies often represent their earnings in ‘constant currency’ terms because floating exchange rates can often mask a company’s true performance.
The full official Bentley Systems third quarter report can be downloaded as a PDF from here.
About Bentley Systems
Headquartered in Exton, Pennsylvania, USA, Bentley Systems Incorporated is a software company. It develops, manufactures, licenses sells and supports computer software and services for the design, construction, and operation of infrastructure. Its software is used 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.
Its software includes MicroStation-based applications for modeling and simulation, ProjectWise for project delivery, AssetWise for asset and network performance, Seequent’s leading geoprofessional software portfolio, and the iTwin platform for infrastructure digital twins. Bentley Systems employs more than 4,500 people worldwide. It generates annual revenues of approximately $1 billion in 186 countries. To learn more, please click here.