Bentley Systems, Incorporated · NASDAQ:BSY
Bentley Systems — Q3 2024 Earnings Presentation
51 slides from Bentley Systems's earnings presentation, Nov 7, 2024
Slide 1: Bentley Systems Third Quarter 2024 Results
Bentley Systems Third Quarter 2024 Results November 7, 2024 © 2024 © Bentley 2024Systems, ©2024 Bentley Incorporated. BentleySystems, Systems, Incorporated. Incorporated1
Slide 2: Agenda
Perspectives from the Executive Chair Greg Bentley, Executive Chair Operational perspectives Agenda Nicholas Cumins, Chief Executive Officer Financial performance Werner Andre, Chief Financial Officer © 2024 Bentley Systems, Incorporated. 2
Slide 3: Disclaimer
Disclaimer This presentation 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 st
Slide 4: Perspectives from the Executive Chair
Perspectives from the Executive Chair Greg Bentley © 2024 Bentley Systems, Incorporated. 4
Slide 5: Missed the keynote and break out sessions?
Missed the keynote and break out sessions? | Watch them all here: https://www.bentley.com/yii/videos/ CEO keynote Technology and product keynote Cesium's journey to infrastructure keynote Sustaining tomorrow’s infrastructure today: Making the right connections Cesium is the foundational open platfor
Slide 6: Explore the 2024 Winners/Finalists Projects
Explore the 2024 Winners/Finalists Projects | https://www.bentley.com/yii/projects/ China ENFI Engineering Co., Ltd. JMT Department of Public Works and Highways (DPWH) Digital Construction Project of Digital Experience for I-95 Comprehensive Waste Rappahannock River Crossing Digital Twin Implementat
Slide 7: View the 2024 Founders' Honors
View the 2024 Founders’ Honors | https://www.bentley.com/yii/videos/ © 2024 Bentley Systems, Incorporated. 7
Slide 8: ARR growth execution: from volatility to visibility
ARR growth execution: Perspectives from volatility to visibility © 2024 Bentley Systems, Incorporated. 8
Slide 9: Visibility and volatility: trade-offs
ARR growth execution: from volatility to visibility Perspectives Visibility and volatility: trade-offs © 2024 Bentley Systems, Incorporated. 9
Slide 10: BSY cash flow visibility (during public tenure, LTM)
BSY cash flow visibility (during public tenure, LTM) ($ Millions) 450 400 350 300 FCF13 250 FCF13-less-SBC FCF13-less-SBC CAGR : 15% 200 AOI-less-SBC 150 AOI-less-SBC CAGR : 15% 100 50 0 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 23Q3 23Q4 24Q1 24Q2 24Q3 Footnote 13: See appendix for KPI
Slide 11: BSY cash flow visibility (during public tenure, LTM)
BSY cash flow visibility (during public tenure, LTM) ($ Millions) 450 400 350 300 FCF13 250 FCF13-less-SBC FCF13-less-SBC CAGR : 15% 200 AOI-less-SBC 150 AOI-less-SBC CAGR : 15% 100 50 0 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 23Q3 23Q4 24Q1 24Q2 24Q3 Footnote 13: See appendix for KPI
Slide 12: Capital allocation: Whither convertibles maturing 1/2026--?
Capital Whither convertibles allocation maturing 1/2026--? © 2024 Bentley Systems, Incorporated. 12
Slide 13: BSY cash flow visibility (during public tenure, LTM)
BSY cash flow visibility (during public tenure, LTM) ($ Millions) 450 400 350 300 FCF13 250 FCF13-less-SBC 200 FCF13-less-SBC CAGR : 15% AOI-less-SBC 150 AOI-less-SBC CAGR : 15% 100 50 0 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 23Q3 23Q4 24Q1 24Q2 24Q3 Footnote 13: See appendix for KPI
Slide 14: Debt leverage
Whither convertibles Capital maturing 1/2026--? allocation Debt leverage © 2024 Bentley Systems, Incorporated. 14
Slide 15: Debt leverage
Debt leverage (EBITDA11 leverage x) 6 5 4 3 2 Convertible debt 1 Bank debt 0 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 23Q3 23Q4 24Q1 24Q2 24Q3 Footnote: Refer to slide Liquidity and capital structure in Financial performances Footnote 11: See appendix for KPI and non-GAAP definitions ©
Slide 16: Programmatic acquisitions
Whither convertibles maturing 1/2026--? Capital allocation Debt leverage Programmatic acquisitions © 2024 Bentley Systems, Incorporated. 16
Slide 17: BSY programmatic acquisition expenditures (LTM)
BSY programmatic acquisition expenditures (LTM) ($ Millions) 200 180 160 140 120 100 80 60 40 20 0 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 23Q3 23Q4 24Q1 24Q2 24Q3 © 2024 Bentley Systems, Incorporated. 17
Slide 18: Bentley Systems acquires 3D geospatial company Cesium
EXTON, PA — September 6, 2024 — Bentley Systems, Incorporated (Nasdaq: BSY), the infrastructure engineering software company, today announced it has acquired 3D geospatial company Cesium. Cesium is recognized as the foundational open platform for creating powerful 3D geospatial applications, and its
Slide 19: The platform for 3D geospatial
The platform for 3D geospatial Cesium is the foundational open platform for creating powerful 3D geospatial applications. Cesium ion Cesium for Omniverse CesiumJS Cesium for Unreal Cesium for Unity Cesium for O3DE © 2024 Bentley Systems, Incorporated. 19
Slide 20: Bentley Systems acquires 3D geospatial company Cesium
EXTON, PA — September 6, 2024 — Bentley Systems, Incorporated (Nasdaq: BSY), the infrastructure engineering software company, today announced it has acquired 3D geospatial company Cesium. Cesium is recognized as the foundational open platform for creating powerful 3D geospatial applications, and its
Slide 21: Operational perspectives
Operational perspectives Nicholas Cumins, Chief Executive Officer © 2024 Bentley Systems, Incorporated. 21
Slide 22: © 2024 Bentley Systems, Incorporated.
© 2024 Bentley Systems, Incorporated. 22
Slide 23: We've joined Bentley to advance infrastructure by combining iTwin and Cesium
“We’ve joined Bentley to advance infrastructure by combining iTwin and Cesium to build the open platform” © 2024 Bentley Systems, Incorporated. 23
Slide 24: © 2024 Bentley Systems, Incorporated.
© 2024 Bentley Systems, Incorporated. 24
Slide 25: Bentley Infrastructure Cloud
Bentley Infrastructure Cloud Connecting data and people across the lifecycle Bentley Open Applications Project Delivery Asset Performance Bentley Asset Analytics Creating and optimizing engineering designs Optimizing asset reliability and resilience iTwin Platform Powering infrastructure digital twi
Slide 26: Bentley Open Applications
Run on desktop Bentley Open Cloud qualities Applications Digital twin-native Next-gen AI-powered © 2024 Bentley Systems, Incorporated. 26
Slide 27: OpenSite+
iTwin-native and data-centric AI design assistant OpenSite+ for site and earthwork optimization AI-powered drawing automation and production © 2024 Bentley Systems, Incorporated. 27
Slide 28: Tone of business
Tone of business • Continued to execute at a high level, and market sentiment remained very positive • Broad-based ARR performance across sectors and geographic regions • Strong contributions of E365 and Virtuosity growth initiatives • Two headwinds remained China for ARR and Cohesive services reven
Slide 29: YoY ARR growth
YoY ARR growth 8 Accelerated to 12% as anticipated directionally Constant Currency Business Performance (%) 14 13 12 11 10 9 8 7 6 5 4 3 2 1 - 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 23Q3 23Q4 24Q1 24Q2 24Q3 Our constant currency ARR growth rate from business performanc
Slide 30: YoY ARR growth - Ex China
YoY ARR growth - Ex China 8 China now only ~2.5% of total ARR Constant Currency Business Performance (%) 14 13 12 11 10 9 8 7 6 5 4 3 2 1 - 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 23Q3 23Q4 24Q1 24Q2 24Q3 As reported Ex-China Note: Annualized Recurring Revenue (“ARR”)6
Slide 31: ARR by account size
ARR by account size 6 E365 remains a major growth driver: upgrades and application mix accretion. SMB continues to drive new logos End of 24Q3 E365 SMB E365 Prospects E365 growth during 24Q3 Note: Chart segment sizing corresponds to underlying % of 24Q3 ARR Footnote 6: See appendix for KPI and non-G
Slide 32: Virtuosity ARR
Virtuosity ARR 6 Eleventh straight quarter of at least 600 new logos ($ Millions) 70 60 50 40 30 20 10 - 23Q1 23Q2 23Q3 23Q4 20Q2 20Q3 20Q4 22Q1 22Q2 22Q3 22Q4 21Q1 21Q2 21Q3 21Q4 24Q1 24Q2 24Q3 Note: All periods use exchange rates as of September 30, 2024 Footnote 6: See appendix for KPI and non-GA
Slide 33: Higher backlog expected 12 months from now
Higher backlog expected 12 months from now Net rating trend +40 +39 +37 +37 +35 23Q3 23Q4 24Q1 24Q2 24Q3 Source: ACEC Research Institute Engineering Business Sentiment -> https://www.acec.org/resource/engineering-business-sentiment-q3-2024/ © 2024 Bentley Systems, Incorporated. 33
Slide 34: Sentiment 12 months from now remains strong
Sentiment 12 months from now remains strong Notable uptick for outlook of the U.S. economy Condition of the Condition of the engineering Condition of your firm’s U.S. Economy and design services industry overall finances 50 43 48 45 46 40 40 30 27 30 25 26 22 20 16 9 10 10 0 -2 23Q3 23Q4 24Q1 24Q2 2
Slide 35: Tone of business by infrastructure sector
Tone of business by infrastructure sector Strength in Public Works/Utilities followed by Resources Commercial/Facilities Industrial Public Works/Utilities 24Q3 ARR6 Resources Resources Note: Chart segment sizing corresponds to underlying % of 24Q3 Sector-attributable ARR6 Footnote 6: See appendix fo
Slide 36: Notable Q3 developments across geographic regions
Notable Q3 developments across geographic regions Consistent performance across regions Americas EMEA Asia Pacific Strong growth Steady growth Strong growth • Both NA and LATAM • Public Works/Utilities and • Southeast Asia and India Resources main growth standing out • Bipartisan support for drivers
Slide 37: Financial performance
Financial performance Werner Andre, Chief Financial Officer © 2024 Bentley Systems, Incorporated. 37
Slide 38: Revenue performance
Revenue performance Third quarter September year-to-date $ in millions $ in millions CC constant currency1 CC constant currency1 $1,003 +9% (CC +9%) $918 64 -17% (CC -17%) 32 -5% (CC -4%) 77 33 $335 +9% (CC +9%) $307 908 +12% (CC +12%) 21 -14% (CC -15%) 24 11 -5% (CC -5%) 12 808 +12% (CC +12%) 303 2
Slide 39: Recurring revenue performance
Recurring revenue performance LTM recurring revenues3 LTM recurring revenue retention $ in millions $ in millions CC constant currency1 Constant currency1, YoY 108% 107% 109% 110% 109% 108% 108% 109% $1,195 $1,076 +11% (CC +11%) Axis Title 98% 98% 98% 98% 98% 99% 99% 99% LTM 23Q3 LTM 24Q3 2019 2020
Slide 40: Recurring revenue performance
Recurring revenue performance ARR growth7,8 ARR6: $1,271 million at 09/30/2024 spot rates $ in millions Business performance8 Constant currency1, YoY 27% 26% 26% Impact from the onboarding of platform acquisitions 23% 13% 13% 15% Seequent 21Q2 to 22Q1 and 13% 15% Power Line Systems 22Q1 to 22Q4 14%
Slide 41: Profitability performance
Profitability performance GAAP operating income Adjusted OI w/ SBC9 $ in millions $ in millions 29.6% Adj. OI w/ SBC Margin10 27.% Adj. OI w/ SBC $297 Margin10 $241 $250 +19% $193 +25% 26.7% 28.2% Adj. OI w/ SBC Adj. OI w/ SBC Margin 10 Margin10 $86 $90 $74 $69 +4% -7% 23Q3 24Q3 23Q3 YTD 24Q3 YTD 23
Slide 42: Liquidity and capital structure
Liquidity and capital structure GAAP operating cash flows 24Q3 YTD capital allocation $ in millions Third quarter Year-to-date Last twelve months • $129 million for acquisitions $441 • $114 million in bank debt reduction $354 $366 • $54 million in dividends $330 +20% +7% • $57 million in share repur
Slide 43: Liquidity and capital structure
Liquidity and capital structure 9/30/2024 credit metrics 24Q4 senior secured credit facility refinancing $ in millions $ in millions Cash $ 72 • Refinanced credit facility in October 2024 Senior debta $ 168 • $1,300 revolving credit facility Net senior debtb $ 96 • 5 years Net senior debt leveragec
Slide 44: Full year 2024 financial outlook
Full year 2024 financial outlook Financial metrics Outlook Total revenues $1,350 million to $1,375 milliona (+10% to 12% in constant currencya) ARR growth8 (constant currency1) 10.5% to 13%b Adjusted OI w/SBC margin10 Approximately 100bps annual improvement Effective tax rate Approximately 20% Cash
Slide 45: Appendix
Appendix © 2024 Bentley Systems, Incorporated. 45
Slide 46: KPI and non-GAAP definitions
KPI and non-GAAP definitions This presentation includes certain KPIs and non-GAAP financial measures, which are defined herein. Reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures are included in our Form 8-K (Quarterly Earnings Release) announcin
Slide 47: KPI and non-GAAP definitions
KPI and non-GAAP definitions 6. Annualized Recurring Revenues (“ARR”). Our ARR is defined as the sum of the annualized value of our portfolio of contracts that produce recurring revenues as of the last day of the reporting period, and the annualized value of the last three months of recognized reven
Slide 48: Adjusted EBITDA
Adjusted EBITDA 11 Reconciliation of cash flow from operations to Adjusted EBITDA11 Last twelve months Reconciliation of cash flow from operations to adjusted EBITDA $ in millions $ in thousands LTM 24Q3 Cash flow from operations $ 440,713 $466 Cash interest 20,149 Cash taxes 46,751 Cash deferred co
Slide 49: Non-GAAP reconciliations (constant currency)
Non-GAAP reconciliations (constant currency) Reconciliation of total revenues and subscriptions revenues to total revenues and subscriptions revenues in constant currency Three months ended September 30, 2024 Three months ended September 30, 2023 Impact of foreign Impact of foreign Constant Constant
Slide 50: Historical OI to adjusted OI w/SBC
Historical OI to adjusted OI w/SBC ($ in thousands) 2018 2019 2020 2021 2022 2023 Operating income $ 121,391 $ 141,865 $ 150,150 $ 94,589 $ 208,612 $ 230,542 Amortization of purchased intangibles 17,215 18,731 20,721 34,001 53,592 51,219 Deferred compensation plan (75) 408 177 95,046 (15,782) 13,580
Slide 51: © 2024 Bentley Systems, Incorporated.
© 2024 Bentley Systems, Incorporated. 51