BENTLEY SYSTEMS INC [BSY] Filings

10-Q 1 bsy-20240630.htm 10-Q bsy-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

FORM 10-Q

___________________________________


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended June 30, 2024
OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission File Number: 001-39548

___________________________________

BENTLEY SYSTEMS, INCORPORATED

(Exact name of registrant as specified in its charter)

___________________________________


Delaware						95-3936623
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

685 Stockton Drive
Exton, Pennsylvania						19341
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code: (610) 458-5000

___________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Class B Common Stock, $0.01 Par Value

BSY

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S‑T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.


Large accelerated filer ☒			Accelerated filer ☐
Non-accelerated filer ☐			Smaller reporting company ☐
			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐ No ☒

As of July 30, 2024, the registrant had 11,537,627 shares of Class A and 290,620,299 shares of Class B common stock outstanding.

BENTLEY SYSTEMS, INCORPORATED

FORM 10-Q

TABLE OF CONTENTS


						Page
PART I. FINANCIAL INFORMATION
Item 1. Unaudited Consolidated Financial Statements
Consolidated Balance Sheets						4
Consolidated Statements of Operations						5
Consolidated Statements of Comprehensive Income						6
Consolidated Statements of Stockholders’ Equity						7
Consolidated Statements of Cash Flows						9
Notes to Consolidated Financial Statements						11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						32
Item 3. Quantitative and Qualitative Disclosures About Market Risk						46
Item 4. Controls and Procedures						46

PART II. OTHER INFORMATION
Item 1. Legal Proceedings						48
Item 1A. Risk Factors						48
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						48
Item 5. Other Information						49
Item 6. Exhibits						50

SIGNATURE						51

EXPLANATORY NOTE

This Quarterly Report on Form 10‑Q is for the three and six months ended June 30, 2024. This Quarterly Report on Form 10‑Q modifies and supersedes documents filed before it. The United States (“U.S.”) Securities and Exchange Commission (“SEC”) allows us to “incorporate by reference” information that we file with it, which means that we can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part of this Quarterly Report on Form 10‑Q. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Quarterly Report on Form 10‑Q.

Unless indicated otherwise, throughout this Quarterly Report on Form 10‑Q, we refer to Bentley Systems, Incorporated and its consolidated subsidiaries, as “Bentley Systems,” “Bentley,” the “Company,” “we,” “us,” and “our.”

This Quarterly Report on Form 10‑Q contains trademarks, service marks, brands, or product names owned by us, as well as those owned by others.

Numerical information in this report is presented on a rounded basis using actual amounts. Minor differences in totals and percentage calculations may exist due to rounding.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10‑Q includes forward‑looking statements. All statements contained in this Quarterly Report on Form 10‑Q other than statements of historical facts, including statements regarding our future results of operations and financial position, our business strategy, and plans and our objectives for future operations, are forward‑looking statements. The words “believe,” “may,” “will,” “could,” “would,” “seeks,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions, as well as statements regarding our focus for the future, 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, including those described in the section titled “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward‑looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report on Form 10‑Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward‑looking statements. The forward‑looking statements, as well as our Quarterly Report on Form 10‑Q as a whole, are subject to risks and uncertainties.

These statements are only current predictions and are subject to known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance, or achievements to be materially different from those anticipated by the forward‑looking statements. We discuss many of these risks in this Quarterly Report on Form 10‑Q in greater detail in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10‑Q. You should not rely upon forward‑looking statements as predictions of future events.

Although we believe that the expectations reflected in the forward‑looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements, events, or circumstances reflected in the forward‑looking statements will occur. Except as required by law, we undertake no obligation to update any of these forward‑looking statements after the date of this Quarterly Report on Form 10‑Q to conform these statements to actual results or revised expectations.

PART I. FINANCIAL INFORMATION

Item 1. Unaudited Consolidated Financial Statements

BENTLEY SYSTEMS, INCORPORATED

Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)


	June 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	51,278	$	68,412
Accounts receivable	282,918		302,501
Allowance for doubtful accounts	(9,099)		(8,965)
Prepaid income taxes	18,487		12,812
Prepaid and other current assets	43,101		44,797
Total current assets	386,685		419,557
Property and equipment, net	36,756		40,100
Operating lease right-of-use assets	34,868		38,476
Intangible assets, net	225,539		248,787
Goodwill	2,265,174		2,269,336
Investments	24,258		23,480
Deferred income taxes	206,259		212,831
Other assets	77,641		67,283
Total assets	$	3,257,180	$	3,319,850
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	23,901	$	18,094
Accruals and other current liabilities	500,007		457,348
Deferred revenues	236,624		253,785
Operating lease liabilities	11,429		11,645
Income taxes payable	13,817		9,491
Current portion of long-term debt	—		10,000
Total current liabilities	785,778		760,363
Long-term debt	1,334,618		1,518,403
Deferred compensation plan liabilities	91,172		88,181
Long-term operating lease liabilities	26,950		30,626
Deferred revenues	15,259		15,862
Deferred income taxes	11,899		9,718
Income taxes payable	3,615		7,337
Other liabilities	3,383		5,378
Total liabilities	2,272,674		2,435,868
Commitments and contingencies (Note 18)
Stockholders’ equity:
Preferred stock, $0.01 par value, authorized 100,000,000 shares; none issued or outstanding as of June 30, 2024 and December 31, 2023	—		—
Class A common stock, $0.01 par value, authorized 100,000,000 shares; issued and outstanding 11,537,627 shares as of June 30, 2024 and December 31, 2023	115		115
Class B common stock, $0.01 par value, authorized 1,800,000,000 shares; issued and outstanding 288,209,506 and 284,728,210 shares as of June 30, 2024 and December 31, 2023, respectively	2,882		2,848
Additional paid-in capital	1,176,630		1,127,234
Accumulated other comprehensive loss	(93,264)		(84,987)
Accumulated deficit	(102,561)		(161,932)
Non-controlling interest	704		704
Total stockholders’ equity	984,506		883,982
Total liabilities and stockholders’ equity	$	3,257,180	$	3,319,850

See accompanying notes to consolidated financial statements.

BENTLEY SYSTEMS, INCORPORATED

Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenues:
Subscriptions	$	297,444	$	259,243	$	604,533	$	537,088
Perpetual licenses	10,863		11,718		20,375		21,265
Subscriptions and licenses	308,307		270,961		624,908		558,353
Services	22,030		25,788		43,192		52,807
Total revenues	330,337		296,749		668,100		611,160
Cost of revenues:
Cost of subscriptions and licenses	42,432		41,156		82,650		82,087
Cost of services	20,761		25,270		42,373		51,523
Total cost of revenues	63,193		66,426		125,023		133,610
Gross profit	267,144		230,323		543,077		477,550
Operating expenses:
Research and development	65,709		70,117		134,080		137,917
Selling and marketing	57,129		54,364		111,515		106,505
General and administrative	54,854		39,258		101,336		86,065
Deferred compensation plan	883		3,777		6,682		7,923
Amortization of purchased intangibles	8,392		9,502		17,356		20,050
Total operating expenses	186,967		177,018		370,969		358,460
Income from operations	80,177		53,305		172,108		119,090
Interest expense, net	(5,100)		(9,484)		(11,620)		(20,576)
Other income, net	2,280		965		9,417		1,254
Income before income taxes	77,357		44,786		169,905		99,768
(Provision) benefit for income taxes	(5,330)		3,899		(27,577)		(5,593)
Equity in net income of investees, net of tax	19		—		28		—
Net income	$	72,046	$	48,685	$	142,356	$	94,175
Per share information:
Net income per share, basic	$	0.23	$	0.16	$	0.45	$	0.30
Net income per share, diluted	$	0.22	$	0.15	$	0.44	$	0.29
Weighted average shares, basic	314,980,580		311,914,602		314,660,906		311,366,371
Weighted average shares, diluted	333,780,984		332,352,725		333,725,315		331,831,973

See accompanying notes to consolidated financial statements.

BENTLEY SYSTEMS, INCORPORATED

Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Net income	$	72,046	$	48,685	$	142,356	$	94,175
Other comprehensive (loss) income, net of taxes:
Foreign currency translation adjustments	(645)		1,538		(8,378)		1,878
Actuarial gain on retirement plan, net of tax effect of $0, $(1), $(28), and $(7), respectively	—		8		101		34
Total other comprehensive (loss) income, net of taxes	(645)		1,546		(8,277)		1,912
Comprehensive income	$	71,401	$	50,231	$	134,079	$	96,087

See accompanying notes to consolidated financial statements.

BENTLEY SYSTEMS, INCORPORATED

Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

(unaudited)


	Three Months Ended June 30, 2024
						Accumulated
	Class A and Class B			Additional		Other				Non-		Total
	Common Stock			Paid-In		Comprehensive		Accumulated		Controlling		Stockholders’
	Shares	Par Value		Capital		Loss		Deficit		Interest		Equity
Balance, March 31, 2024	298,014,682	$	2,980	$	1,154,137	$	(92,619)	$	(132,595)	$	704	$	932,607
Net income	—	—		—		—		72,046		—		72,046
Other comprehensive loss	—	—		—		(645)		—		—		(645)
Dividends declared	—	—		—		—		(17,980)		—		(17,980)
Shares issued in connection with deferred compensation plan	1,936,318	19		(19)		—		—		—		—
Deferred compensation plan elective participant deferrals	—	—		43		—		—		—		43
Shares issued in connection with executive bonus plan	102,352	1		5,564		—		—		—		5,565


Shares issued for stock grants, net	11,391	—		600		—		—		—		600
Stock-based compensation expense	—	—		16,306		—		—		—		16,306
Shares related to restricted stock, net	109,473	1		(1)		—		(1,527)		—		(1,527)
Repurchases of Class B common stock under approved program	(427,083)	(4)		—		—		(22,505)		—		(22,509)

Balance, June 30, 2024	299,747,133	$	2,997	$	1,176,630	$	(93,264)	$	(102,561)	$	704	$	984,506


	Six Months Ended June 30, 2024
						Accumulated
	Class A and Class B			Additional		Other				Non-		Total
	Common Stock			Paid-In		Comprehensive		Accumulated		Controlling		Stockholders’
	Shares	Par Value		Capital		Loss		Deficit		Interest		Equity
Balance, December 31, 2023	296,265,837	$	2,963	$	1,127,234	$	(84,987)	$	(161,932)	$	704	$	883,982
Net income	—	—		—		—		142,356		—		142,356
Other comprehensive loss	—	—		—		(8,277)		—		—		(8,277)
Dividends declared	—	—		—		—		(35,851)		—		(35,851)
Shares issued in connection with deferred compensation plan	2,474,063	24		(24)		—		—		—		—
Deferred compensation plan elective participant deferrals	—	—		101		—		—		—		101
Shares issued in connection with executive bonus plan	168,291	2		8,914		—		—		—		8,916
Shares issued in connection with employee stock purchase plan, net	122,020	1		5,559		—		(175)		—		5,385
Stock option exercises, net	844,283	8		3,999		—		(2,195)		—		1,812
Shares issued for stock grants, net	11,391	—		600		—		—		—		600
Stock-based compensation expense	—	—		30,253		—		—		—		30,253
Shares related to restricted stock, net	590,929	6		(6)		—		(7,256)		—		(7,256)
Repurchases of Class B common stock under approved program	(729,681)	(7)		—		—		(37,508)		—		(37,515)

Balance, June 30, 2024	299,747,133	$	2,997	$	1,176,630	$	(93,264)	$	(102,561)	$	704	$	984,506

See accompanying notes to consolidated financial statements.

BENTLEY SYSTEMS, INCORPORATED

Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

(unaudited)


	Three Months Ended June 30, 2023
						Accumulated
	Class A and Class B			Additional		Other				Non-		Total
	Common Stock			Paid-In		Comprehensive		Accumulated		Controlling		Stockholders’
	Shares	Par Value		Capital		Loss		Deficit		Interest		Equity
Balance, March 31, 2023	291,501,271	$	2,915	$	1,060,842	$	(89,374)	$	(360,897)	$	704	$	614,190
Net income	—	—		—		—		48,685		—		48,685
Other comprehensive income	—	—		—		1,546		—		—		1,546
Dividends declared	—	—		—		—		(14,702)		—		(14,702)
Shares issued in connection with deferred compensation plan, net	1,729,443	17		(17)		—		(22,703)		—		(22,703)
Deferred compensation plan elective participant deferrals	—	—		118		—		—		—		118
Shares issued in connection with executive bonus plan, net	57,393	1		4,321		—		(1,901)		—		2,421

Stock option exercises, net	1,308,527	13		5,485		—		(4,288)		—		1,210
Shares issued for stock grants, net	12,639	—		600		—		—		—		600
Stock-based compensation expense	—	—		13,718		—		—		—		13,718
Shares related to restricted stock, net	103,710	1		(1)		—		(1,311)		—		(1,311)


Balance, June 30, 2023	294,712,983	$	2,947	$	1,085,066	$	(87,828)	$	(357,117)	$	704	$	643,772


	Six Months Ended June 30, 2023
						Accumulated
	Class A and Class B			Additional		Other				Non-		Total
	Common Stock			Paid-In		Comprehensive		Accumulated		Controlling		Stockholders’
	Shares	Par Value		Capital		Loss		Deficit		Interest		Equity
Balance, December 31, 2022	289,014,487	$	2,890	$	1,030,466	$	(89,740)	$	(370,866)	$	704	$	573,454
Net income	—	—		—		—		94,175		—		94,175
Other comprehensive income	—	—		—		1,912		—		—		1,912
Dividends declared	—	—		—		—		(29,224)		—		(29,224)
Shares issued in connection with deferred compensation plan, net	2,782,181	28		(28)		—		(36,329)		—		(36,329)
Deferred compensation plan elective participant deferrals	—	—		1,651		—		—		—		1,651
Shares issued in connection with executive bonus plan, net	137,197	2		9,804		—		(4,326)		—		5,480
Shares issued in connection with employee stock purchase plan, net	153,381	1		4,556		—		(222)		—		4,335
Stock option exercises, net	2,236,827	22		9,678		—		(5,989)		—		3,711
Shares issued for stock grants, net	12,639	—		600		—		—		—		600
Stock-based compensation expense	—	—		28,343		—		—		—		28,343
Shares related to restricted stock, net	376,271	4		(4)		—		(4,336)		—		(4,336)


Balance, June 30, 2023	294,712,983	$	2,947	$	1,085,066	$	(87,828)	$	(357,117)	$	704	$	643,772

See accompanying notes to consolidated financial statements.

BENTLEY SYSTEMS, INCORPORATED

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Six Months Ended
	June 30,
	2024		2023
Cash flows from operating activities:
Net income	$	142,356	$	94,175
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	32,367		35,304
Deferred income taxes	8,666		(28,935)
Stock-based compensation expense	41,759		37,588
Deferred compensation plan	6,682		7,923
Amortization of deferred debt issuance costs	3,750		3,646
Change in fair value of derivative	(2,361)		663
Foreign currency remeasurement loss (gain)	502		(144)
Other	(1,715)		3,530
Changes in assets and liabilities, net of effect from acquisitions:
Accounts receivable	14,330		49,171
Prepaid and other assets	(585)		(364)
Accounts payable, accruals, and other liabilities	41,622		41,969
Deferred revenues	(14,888)		(1,792)
Income taxes payable, net of prepaid income taxes	(4,930)		14,085
Net cash provided by operating activities	267,555		256,819
Cash flows from investing activities:
Purchases of property and equipment and investment in capitalized software	(6,689)		(11,253)
Acquisitions, net of cash acquired	(5,000)		(10,299)
Purchases of investments	(557)		(8,200)

Other	1,300		—
Net cash used in investing activities	(10,946)		(29,752)
Cash flows from financing activities:
Proceeds from credit facilities	51,724		288,387
Payments of credit facilities	(143,752)		(432,739)





Repayments of term loan	(105,000)		(2,500)
Payments of contingent and non-contingent consideration	(451)		(2,860)
Payments of dividends	(35,851)		(29,224)
Proceeds from stock purchases under employee stock purchase plan	5,560		4,557
Proceeds from exercise of stock options	4,007		9,700
Payments for shares acquired including shares withheld for taxes	(9,626)		(51,202)
Repurchases of Class B common stock under approved program	(37,515)		—
Other	(95)		(95)
Net cash used in financing activities	(270,999)		(215,976)
Effect of exchange rate changes on cash and cash equivalents	(2,744)		(59)
(Decrease) increase in cash and cash equivalents	(17,134)		11,032
Cash and cash equivalents, beginning of year	68,412		71,684
Cash and cash equivalents, end of period	$	51,278	$	82,716

BENTLEY SYSTEMS, INCORPORATED

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Six Months Ended
	June 30,
	2024		2023
Supplemental information:
Cash paid for income taxes	$	23,472	$	18,167
Income tax refunds	625		168
Interest paid	8,706		19,382
Non-cash investing and financing activities:
Cost method investment	—		3,500


Deferred, non-contingent consideration, net	—		525

Share-settled executive bonus plan awards	8,916		9,806
Deferred compensation plan elective participant deferrals	101		1,651

See accompanying notes to consolidated financial statements.

BENTLEY SYSTEMS, INCORPORATED

Notes to Consolidated Financial Statements

(in thousands, except share and per share data)

(unaudited)

Note 1: Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. The accompanying unaudited consolidated financial statements have been prepared in U.S. dollars, and in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the SEC regarding interim financial reporting. Accordingly, they do not include all the information and notes required by GAAP for annual financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2023 Annual Report on Form 10‑K. In management’s opinion, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal, recurring and non-recurring adjustments) that were considered necessary for the fair statement of the Company’s financial position, results of operations, and cash flows as of the dates and for the periods indicated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. Actual results could differ materially from those estimates. The December 31, 2023 consolidated balance sheet included herein is derived from the Company’s audited consolidated financial statements.

Note 2: Recent Accounting Pronouncements

In March 2024, the SEC adopted the final rule under SEC Release No. 33‑11275, The Enhancement and Standardization of Climate‑Related Disclosures for Investors. The final rule requires registrants to disclose certain climate‑related information in registration statements and annual reports. The final rule disclosure requirements will begin phasing in prospectively for the Company’s fiscal year beginning January 1, 2025. Subsequent to issuance, the final rule became the subject of litigation and the SEC issued a stay to allow the legal process to proceed. The Company is currently evaluating the impact of the final rule on its consolidated financial statements disclosures.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023‑09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023‑09”), which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. ASU 2023‑09 is effective for the Company for the annual reporting period beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2023‑09 on its consolidated financial statements disclosures.

In November 2023, the FASB issued ASU No. 2023‑07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023‑07”), which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how the Company’s chief operating decision maker (“CODM”) uses reported segment profit or loss information in assessing segment performance and allocating resources. ASU 2023‑07 is effective for the Company for the annual reporting period beginning after December 15, 2023, and interim periods beginning after December 15, 2024. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of ASU 2023‑07 on its consolidated financial statements disclosures.

Note 3: Revenue from Contracts with Customers

Disaggregation of Revenues

The Company’s revenues consist of the following:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Subscriptions:
Enterprise subscriptions (1)	$	127,845	$	103,674	$	255,372	$	207,578
SELECT subscriptions	63,648		64,085		127,189		127,428
Term license subscriptions	105,951		91,484		221,972		202,082
Subscriptions	297,444		259,243		604,533		537,088
Perpetual licenses	10,863		11,718		20,375		21,265
Subscriptions and licenses	308,307		270,961		624,908		558,353
Services:
Recurring	4,040		4,949		7,854		9,127
Other	17,990		20,839		35,338		43,680
Services	22,030		25,788		43,192		52,807
Total revenues	$	330,337	$	296,749	$	668,100	$	611,160

(1)Enterprise subscriptions includes revenue attributable to Enterprise 365 (“E365”) subscriptions of $125,630 and $99,248 for the three months ended June 30, 2024 and 2023, respectively, and $248,666 and $193,579 for the six months ended June 30, 2024 and 2023, respectively.

The Company recognizes perpetual licenses and the term license component of subscriptions as revenue when either the licenses are delivered or at the start of the subscription term. For the three months ended June 30, 2024 and 2023, the Company recognized $162,458 and $138,822 of license related revenues, respectively, of which $151,595 and $127,104, respectively, were attributable to the term license component of the Company’s subscription‑based commercial offerings recorded in Subscriptions in the consolidated statements of operations. For the six months ended June 30, 2024 and 2023, the Company recognized $338,767 and $296,846 of license related revenues, respectively, of which $318,392 and $275,581, respectively, were attributable to the term license component of the Company’s subscription‑based commercial offerings recorded in Subscriptions in the consolidated statements of operations.

The Company derived 7% of its total revenues through channel partners for the three and six months ended June 30, 2024 and 2023.

Revenue from external customers is attributed to individual countries based upon the location of the customer. Revenues by geographic region are as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Americas (1)	$	176,310	$	158,836	$	360,503	$	327,181
Europe, the Middle East, and Africa (“EMEA”)	95,865		83,444		190,579		176,276
Asia-Pacific (“APAC”)	58,162		54,469		117,018		107,703
Total revenues	$	330,337	$	296,749	$	668,100	$	611,160

(1)Americas includes the U.S., Canada, and Latin America (including the Caribbean). Revenue attributable to the U.S. totaled $139,010 and $127,847 for the three months ended June 30, 2024 and 2023, respectively, and $277,262 and $255,297 for the six months ended June 30, 2024 and 2023, respectively.

Unbilled Revenues

Unbilled revenues represent revenues that have not yet been billed to customers due to timing differences in usage and billing cycles, and are included in Accounts receivable in the consolidated balance sheets. As of June 30, 2024 and December 31, 2023, unbilled revenues were $144,540 and $129,494, respectively.

Contract Balances

As of June 30, 2024 and December 31, 2023, the Company’s contract assets relate to performance obligations completed in advance of the right to invoice and are included in Prepaid and other current assets in the consolidated balance sheets. Contract assets were not material as of June 30, 2024 or December 31, 2023.

Deferred revenues consist of billings made or payments received in advance of revenue recognition from subscriptions and services. The timing of revenue recognition may differ from the timing of billings to users. As of June 30, 2024 and December 31, 2023, total deferred revenues on the consolidated balance sheets were $251,883 and $269,647, respectively.

For the six months ended June 30, 2024, $165,042 of revenues that were included in the December 31, 2023 deferred revenues balance were recognized. There were additional deferrals of $152,734 for the six months ended June 30, 2024, which were primarily related to new billings. For the six months ended June 30, 2023, $149,247 of revenues that were included in the December 31, 2022 deferred revenues balance were recognized. There were additional deferrals of $151,528 for the six months ended June 30, 2023, which were primarily related to new billings.

As of June 30, 2024 and December 31, 2023, the Company has deferred $18,565 and $18,269, respectively, related to portfolio balancing exchange rights which is included in Deferred revenues in the consolidated balance sheets.

Remaining Performance Obligations

The Company’s contracts with customers include amounts allocated to performance obligations that will be satisfied at a later date. As of June 30, 2024, amounts allocated to these remaining performance obligations are $251,883, of which the Company expects to recognize approximately 94% over the next 12 months with the remaining amount thereafter.

Note 4: Acquisitions

The aggregate details of the Company’s acquisition activity are as follows:


	Acquisitions Completed During
	Six Months Ended June 30,
	2024		2023
Number of acquisitions	1		1
Cash paid at closing	$	5,000	$	10,299

Net cash paid	$	5,000	$	10,299

The operating results of the acquired businesses were not material, individually or in the aggregate, to the Company’s consolidated statements of operations.

The fair value of non-contingent consideration from acquisitions is included in the consolidated balance sheets as follows:


	June 30, 2024		December 31, 2023
Accruals and other current liabilities	$	2,571	$	3,576

Non-contingent consideration from acquisitions	$	2,571	$	3,576

The operating results of the acquired businesses are included in the Company’s consolidated financial statements from the closing date of each respective acquisition. The purchase price for each acquisition has been allocated to the net tangible and intangible assets and liabilities based on their estimated fair values at the respective acquisition date.

The Company is in the process of finalizing the purchase accounting for one acquisition completed during the six months ended June 30, 2024 and two acquisitions completed during the year ended December 31, 2023. Identifiable assets acquired and liabilities assumed were provisionally recorded at their estimated fair values on the respective acquisition date. The initial accounting for these business combinations is not complete because the evaluation necessary to assess the fair values of certain net assets acquired is still in process. The provisional amounts are subject to revision until the evaluations are completed to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. The allocation of the purchase price may be modified from the date of the acquisition as more information is obtained about the fair values of assets acquired and liabilities assumed, however, such measurement period cannot exceed one year.

Acquisition costs are expensed as incurred and are recorded in General and administrative in the consolidated statements of operations. For the three months ended June 30, 2024 and 2023, the Company’s acquisition expenses were $231 and $113, respectively, and $429 and $5,298 for the six months ended June 30, 2024 and 2023, respectively, which include costs related to legal, accounting, valuation, insurance, and other consulting and transaction fees.

The following summarizes the fair values of the assets acquired and liabilities assumed, as well as the weighted average useful lives assigned to acquired intangible assets at the respective date of each acquisition (including contingent consideration):


	Acquisitions Completed During
	Six Months Ended		Year Ended
	June 30, 2024		December 31, 2023
Consideration:
Cash paid at closing	$	5,000	$	26,287


Deferred, non-contingent consideration, net	—		525
Other	—		15
Total consideration	$	5,000	$	26,827
Assets acquired and liabilities assumed:
Cash	$	—	$	264
Accounts receivable and other current assets	635		1,742
Operating lease right-of-use assets	—		397

Deferred income taxes	—		2,151
Other assets	15		6
Software and technology (weighted average useful life of 3 years)	825		3,077
Customer relationships (weighted average useful life of 6 years)	—		3,900
Trademarks (weighted average useful life of 5 years)	—		1,000


Total identifiable assets acquired excluding goodwill	1,475		12,537
Accruals and other current liabilities	(694)		(624)
Deferred revenues	(1,537)		(4,623)
Operating lease liabilities	—		(397)


Total liabilities assumed	(2,231)		(5,644)
Net identifiable assets acquired excluding goodwill	(756)		6,893
Goodwill	5,756		19,934
Net assets acquired	$	5,000	$	26,827

Goodwill recorded in connection with the acquisitions was attributable to synergies expected to arise from cost saving opportunities, as well as future expected cash flows. The Company expects $5,756 of the goodwill recorded relating to the 2024 acquisition will be deductible for income tax purposes.

Note 5: Property and Equipment, Net

Property and equipment, net consist of the following:


	June 30, 2024		December 31, 2023
Land	$	2,811	$	2,811
Building and improvements	31,168		31,025
Computer equipment and software	48,572		46,202
Furniture, fixtures, and equipment	10,022		9,799
Aircraft	2,038		2,038
Other	82		89
Property and equipment, at cost	94,693		91,964
Less: Accumulated depreciation	(57,937)		(51,864)
Total property and equipment, net	$	36,756	$	40,100

Depreciation expense was $3,313 and $2,910 for the three months ended June 30, 2024 and 2023, respectively, and $6,680 and $5,634 for the six months ended June 30, 2024 and 2023, respectively.

Note 6: Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill are as follows:


Balance, December 31, 2023	$	2,269,336
Acquisitions	5,756
Foreign currency translation adjustments	(9,085)
Other adjustments	(833)
Balance, June 30, 2024	$	2,265,174

Details of intangible assets other than goodwill are as follows:


		June 30, 2024						December 31, 2023
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Intangible assets subject to amortization:
Software and technology	3-5 years	$	89,820	$	(64,720)	$	25,100	$	89,693	$	(59,045)	$	30,648
Customer relationships	3-10 years	321,359		(154,666)		166,693		323,442		(142,378)		181,064
Trademarks	3-10 years	70,437		(36,732)		33,705		70,710		(33,709)		37,001
Non-compete agreements	5 years	350		(309)		41		350		(276)		74



Total intangible assets		$	481,966	$	(256,427)	$	225,539	$	484,195	$	(235,408)	$	248,787

The aggregate amortization expense for purchased intangible assets with finite lives was reflected in the Company’s consolidated statements of operations as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Cost of subscriptions and licenses	$	3,129	$	3,123	$	6,355	$	6,310
Amortization of purchased intangibles	8,392		9,502		17,356		20,050
Total amortization expense	$	11,521	$	12,625	$	23,711	$	26,360

Note 7: Investments

Investments consist of the following:


	June 30, 2024		December 31, 2023
Cost method investments	$	21,850	$	21,044
Equity method investments	2,408		2,436
Total investments	$	24,258	$	23,480

Cost Method Investments

The Company invests in technology development companies, generally in the form of equity interests or convertible notes. In March 2023, the Company acquired an equity interest in Worldsensing, a leading global connectivity hardware platform company for infrastructure monitoring, via contribution of its sensemetrics’ Thread connectivity device business (the “Thread business”) and cash. The non‑cash contribution of the Thread business resulted in an insignificant gain, which was recorded in Other income, net in the consolidated statements of operations for the six months ended June 30, 2023.

During the second quarter of 2023, the Company recognized impairment charges of $7,318 to write-down certain cost method investments to their fair value primarily as a result of the investees’ decline in operating performance and the overall decline in the venture investment valuation environment. The impairment charges were recorded in Other income, net in the consolidated statements of operations for the three and six months ended June 30, 2023 (see Note 20).

During the six months ended June 30, 2024, the Company invested a total of $557. During the six months ended June 30, 2023, the Company invested a total of $11,700, including $8,928 of cash and non-cash for its investment in Worldsensing. As of June 30, 2024 and December 31, 2023, the Company’s investment balance in Worldsensing was $8,928.

During the second quarter of 2024, the Company acquired a business from Teralytics Holdings AG (“Teralytics”) for $5,000. Subsequent to the acquisition, the Company retained its ownership percentage in Teralytics, which had a carrying value of zero as of June 30, 2024 and December 31, 2023.

Note 8: Leases

The Company’s operating leases consist of office facilities, office equipment, and automobiles. As of June 30, 2024, the Company’s leases have remaining terms of less than one year to nine years, some of which include one or more options to renew, with renewal terms from one year to five years and some of which include options to terminate the leases from less than one year to five years.

The components of operating lease cost reflected in the consolidated statements of operations were as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Operating lease cost (1)	$	3,558	$	4,534	$	7,253	$	9,162
Variable lease cost	1,115		1,146		2,288		2,348

Total operating lease cost	$	4,673	$	5,680	$	9,541	$	11,510

(1)Operating lease cost includes rent cost related to operating leases for office facilities of $3,301 and $4,329 for the three months ended June 30, 2024 and 2023, respectively, and $6,772 and $8,746 for the six months ended June 30, 2024 and 2023, respectively.

Supplemental operating cash flows and other information related to leases was as follows:


	Six Months Ended
	June 30,
	2024		2023
Cash paid for operating leases included in operating cash flows	$	7,409	$	9,319
Right-of-use assets obtained in exchange for new operating lease liabilities (1)	$	3,502	$	11,212

(1)For the six months ended June 30, 2023, right‑of‑use assets obtained in exchange for new operating lease liabilities does not include the impact from an acquisition of $345.

The weighted average remaining lease term for operating leases was 4.4 years and 4.6 years as of June 30, 2024 and December 31, 2023, respectively. The weighted average discount rate was 5.1% and 4.8% as of June 30, 2024 and December 31, 2023, respectively.

As of June 30, 2024, the Company had additional minimum operating lease payments of $3,737 for executed leases that have not yet commenced, primarily for office locations.

Note 9: Accruals and Other Current Liabilities

Accruals and other current liabilities consist of the following:


	June 30, 2024		December 31, 2023
Cloud Services Subscription deposits	$	343,816	$	284,276
Accrued benefits	41,106		39,983
Accrued compensation	34,338		43,316
Due to customers	16,145		16,924
Accrued indirect taxes	8,240		10,722
Accrued professional fees	7,932		5,970
Accrued acquisition stay bonus	6,592		4,336
Employee stock purchase plan contributions	5,770		5,790
Accrued cloud provisioning costs	4,138		3,572
Deferred compensation plan liabilities	3,610		2,355
Non-contingent consideration from acquisitions	2,571		3,576
Accrued realignment costs	1,551		12,459

Other accrued and current liabilities	24,198		24,069
Total accruals and other current liabilities	$	500,007	$	457,348

Note 10: Long-Term Debt

Long‑term debt consists of the following:


	June 30, 2024		December 31, 2023


Credit facility:
Revolving loan facility due November 2025	$	—	$	92,028
Term loan due November 2025	85,000		190,000
Convertible senior notes due January 2026 (the “2026 Notes”)	687,830		687,830
Convertible senior notes due July 2027 (the “2027 Notes”)	575,000		575,000
Unamortized debt issuance costs	(13,212)		(16,455)
Total debt	1,334,618		1,528,403
Less: Current portion of long-term debt	—		(10,000)
Long-term debt	$	1,334,618	$	1,518,403

The Company had $150 of letters of credit outstanding as of June 30, 2024 and December 31, 2023 under its amended and restated credit agreement, entered into on December 19, 2017 (the “Credit Facility”). As of June 30, 2024 and December 31, 2023, the Company had $849,850 and $757,822, respectively, available under the Credit Facility.

During the three months ended June 30, 2024, the Company made repayments of $102,500 on the senior secured term loan under the Credit Facility. Under the terms of the senior secured term loan, repayments are applied to unpaid quarterly principal installments. There are no remaining required principal installments on the senior secured term loan through the maturity date of November 15, 2025.

As of June 30, 2024 and December 31, 2023, the Company was in compliance with all debt covenants and none of the conditions of the 2026 Notes or 2027 Notes to early convert had been met.

Interest Expense, Net

Interest expense, net consists of the following:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Contractual interest expense	$	(4,072)	$	(9,364)	$	(9,486)	$	(18,674)
Amortization of deferred debt issuance costs	(1,927)		(1,823)		(3,750)		(3,646)
Other interest (expense) income	(2)		1,193		(68)		1,005
Interest income	901		510		1,684		739
Interest expense, net	$	(5,100)	$	(

BENTLEY SYSTEMS INC [BSY] Filings
10-Q	[2024-08-06]
10-Q	[2024-05-07]
10-K	[2024-02-27]
10-Q	[2023-11-07]
10-Q	[2023-08-08]
10-Q	[2023-05-09]
10-K	[2023-02-28]
10-Q	[2022-11-08]
10-Q	[2022-08-09]
10-Q	[2022-05-10]
10-K	[2022-03-01]
10-Q	[2021-11-09]
10-Q	[2021-08-10]
10-Q	[2021-05-11]
10-K	[2021-03-02]
S-1	[2020-11-10]
10-Q	[2020-11-10]
S-1	[2020-08-21]