Slide 1: 23Q2 Operating Results
23Q2 Operating Results Greg Bentley Chief Executive Officer Nicholas Cumins Chief Operating Officer Werner Andre Chief Financial Officer August 8, 2023 | © 2023 Bentley Systems, Incorporated 1 © 2023 Bentley Systems, Incorporated |
Slide 2: Disclaimer
Disclaimer This presentation includes forward-looking statements regarding the future operate; the quality of our products; our ability to develop and market new results of operations and financial position, business strategy, and plans and products to address our accounts’ rapidly changing technolo
Slide 3: Agenda
Agenda Directions and Developments Greg Bentley, Chief Executive Officer Operational Perspectives Nicholas Cumins, Chief Operating Officer Financial Performance Werner Andre, Chief Financial Officer 3 © 2023 Bentley Systems, Incorporated |
Slide 4: Directions and Developments
Directions and Developments Greg Bentley, Chief Executive Officer
Slide 5: 23Q2 Directions
23Q2 Directions Broader Growth (Directionally Better…) E365 Contribution (Directionally Better…) SMB Contribution (Directionally Better…) Cycle within a Super-cycle: Resources (mining) / Seequent… 2023 (ARR) Visibility (Directionally Better, ex-China…)
Slide 6: 23Q2 Directions
23Q2 Directions ¢
Slide 7: YoY ARR Growth
YoY ARR Growth8 Sustained at High-water Mark… Constant Currency Business Performance 14% 12% 10% 8% 6% 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 Note: Annualized Recurring Revenue ARR6 Footnotes 6,8 : See appendix for KPI and non-GAAP definitions 7 © 2023 Bentley Systems,
Slide 8: 23Q2 Directions
23Q2 Directions Broader Growth (Directionally Better…) E365 Contribution (Directionally Better…)
Slide 9: ARR by Account Size
ARR6 by Account Size E365 leads Accretion… E365 SMB E365 Prospects E365 growth during 23Q2 • (primarily) in consumption, by existing E365 accounts • accounts new to E365 Note: Chart segment sizing corresponds to underlying % of 23Q2 ARR6 Footnote 6 : See appendix for KPI and non-GAAP definitions 9 ©
Slide 10: Current Backlog (Median)
Current Backlog (Median) Infrastructure Engineering Demand… 1 year 41% 28% 19% Median : 12 months 8% 2% 1% Less than 6 months to 1 year to 2 years to 3 years to 4 years 6 months less than less than less than less than or more 1 year 2 years 3 years 4 years 20 23 Q2 (n=585) Source: ACEC Research Inst
Slide 11: Economic Sentiment 12 Months from Now vs. Previous Quarters
Economic Sentiment 12 Months from Now vs. Previous Quarters Macro-resilient expectations… Condition of the Condition of the engineering Condition of your firm’s U.S. Economy and design services industry overall finances +60 +40 +31 +33 +35 +29 +20 +12 +19 +13 +11 0 22Q3 22Q4 23Q1 23Q2 22Q3 22Q4 23Q1
Slide 12: Backlog 12 Months from Now
Backlog 12 Months from Now “Net Rating” Inflection … +33 +27 +25 +21 22Q3 22Q4 23Q1 23Q2 20 23 Q2 (n=529) Source: ACEC Research Institute Engineering Business Sentiment © | 2023 Q2- https://programs.acec.org/impact-report-21/ 12 © 2023 Bentley Systems, Incorporated |
Slide 13: Industry Sentiment by Sector 12 Months from Now
Industry Sentiment by Sector 12 Months from Now Public Works / Utilities takes the lead… BSY Infrastructure Sector Public Works/Utilities Resources 60 Industrial 50 Commercial/Facilities 40 30 20 10 0 -10 -20 Source: ACEC Research Institute Engineering Business Sentiment © | 2023 Q2- https://program
Slide 14: Open Positions as Percentage of Overall FTEs
Open Positions as Percentage of Overall FTEs One Open Position for Every 10 FTE’s… (Mean) 10% 34% 31% 18% 16% Mean : 10% Less than 3% 3% to 5% to 10% or more less than 5% less than 10% 20 23 Q2 (n=570) Source: ACEC Research Institute Engineering Business Sentiment © | 2023 Q2- https://programs.acec.
Slide 15: ARR by Account Size
ARR6 by Account Size E365 drives Application Mix Accretion (Upsell)… E365 SMB E365 Prospects E365 growth during 23Q2 • (primarily) in consumption, by existing E365 accounts • accounts new to E365 Note: Chart segment sizing corresponds to underlying % of 23Q2 ARR6 Footnote 6 : See appendix for KPI an
Slide 16: YoY LTM Recurring Revenues Dollar-Based Net Retention Rate (NRR)
YoY LTM Recurring Revenues Dollar-Based Net Retention Rate5 (NRR) Sustained at High-water Mark… Constant Currency Business Performance 112% 111% 110% 109% 108% 107% 106% 105% 104% 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 Footnote 5: See appendix for KPI and non-GAAP defi
Slide 17: ARR by Account Size
ARR6 by Account Size SMB Broadens our Reach… E365 SMB E365 Prospects Note: Chart segment sizing corresponds to underlying % of 23Q2 ARR6 Footnote 6 : See appendix for KPI and non-GAAP definitions 17 © 2023 Bentley Systems, Incorporated |
Slide 18: 23Q2 Directions
23Q2 Directions Broader Growth (Directionally Better…) E365 Contribution (Directionally Better…) SMB Contribution (Directionally Better…)
Slide 19: Virtuosity ARR (Constant Currency)
Virtuosity ARR (Constant Currency1) 6 Cumulative Compounding… $45M $40M $35M $30M $25M $20M $15M $10M $5M $- 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 Footnotes 1,6 : See appendix for KPI and non-GAAP definitions 19 © 2023 Bentley Systems, Incorporated |
Slide 20: 23Q2 Directions
23Q2 Directions Broader Growth (Directionally Better…) E365 Contribution (Directionally Better…) SMB Contribution (Directionally Better…) Cycle within a Super-cycle: Resources (mining) …
Slide 21: 23Q2 Directions
23Q2 Directions Broader Growth (Directionally Better…) E365 Contribution (Directionally Better…) SMB Contribution (Directionally Better…) Cycle within a Super-cycle: Resources (mining) / Seequent…
Slide 22: © 2023 Bentley Systems, Incorporated |
22 © 2023 Bentley Systems, Incorporated |
Slide 23: 23Q2 Directions
23Q2 Directions Broader Growth (Directionally Better…) E365 Contribution (Directionally Better…) SMB Contribution (Directionally Better…) Cycle within a Super-cycle: Resources (mining) / Seequent… 2023 (ARR) Visibility (Directionally Better, ex-China…)
Slide 24: YoY ARR Growth
YoY ARR Growth8 Original Range Constant Currency Business Performance 14% Outlook Range 11.5%-13.5% 12% 10% 8% 6% 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 23Q3 23Q4 Note: Annualized Recurring Revenue ARR6 Footnotes 6,8 : See appendix for KPI and non-GAAP definitions 24 ©
Slide 25: YoY ARR Growth
YoY ARR Growth8 Mid-year Updated Range (Reserving for China ARR offset) Constant Currency Business Performance 14% Outlook Range 12%-13% 12% 10% 8% 6% 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 23Q3 23Q4 Note: Annualized Recurring Revenue ARR6 Footnotes 6,8 : See appendix
Slide 26: 23Q2 Directions
23Q2 Directions Broader Growth (Directionally Better…) E365 Contribution (Directionally Better…) SMB Contribution (Directionally Better…) Cycle within a Super-cycle: Resources (mining) / Seequent… 2023 (ARR) Visibility (Directionally Better, ex-China…)
Slide 27: Directions and Developments: General Manager, China
Directions and Developments General Manager, China
Slide 28: Bentley Systems Announces Allen Li Has Joined As General Manager, China
Bentley Systems Announces Allen Li Has Joined As General Manager, China Responsible For Bentley’s China Growth Initiatives Across All Channels Allen Li has been appointed to the new role of General Manager, China June 6, 2023 EXTON, Pa.–(BUSINESS WIRE) Bentley Systems, Incorporated (Nasdaq: BSY), th
Slide 29: Directions and Developments
Directions and Developments General Manager, China The Year in Infrastructure 2023 (Singapore, October 11-12)
Slide 30: 2023 Year in Infrastructure and Going Digital Awards
2023 Year in Infrastructure and Going Digital Awards Watch The Inspiring Keynotes and Industry Breakout Sessions LIVE OR ON DEMAND FROM SINGAPORE, OCTOBER 12 Register Today bentley.com/events/going-digital-awards Going Digital Awards in Infrastructure Finalists +300 Nominations 36 to be announced in
Slide 31: Agenda
Agenda Directions and Developments Greg Bentley, Chief Executive Officer Operational Perspectives Nicholas Cumins, Chief Operating Officer Financial Performance Werner Andre, Chief Financial Officer 31 © 2023 Bentley Systems, Incorporated |
Slide 32: Operational Perspectives
Operational Perspectives Nicholas Cumins, Chief Operating Officer
Slide 33: Tone of Business by Infrastructure Sector
Tone of Business by Infrastructure Sector Growth in Public Works/Utilities Leads the Way Commercial/Facilities Industrial Public Works/ Resources Resources Utilities Note: Chart segment sizing corresponds to underlying % of 23Q2 ARR6 Footnote 6 : See appendix for KPI and non-GAAP definitions 33 © 20
Slide 34: Notable Q2 Developments Across Geographies
Notable Q2 Developments Across Geographies Strong Performance Across the Board Americas Europe Asia Pacific Very solid growth Steady growth Very solid growth • Growth led by North America • EU funding of transportation, • India benefiting from strong water, and green initiatives tailwinds – govt inv
Slide 35: Cross River Rail
Cross River Rail Publicly Funded Mega Project with Digital Twins at its Core, Largest Project in Queensland's History Images courtesy of Cross River Rail 35 © 2023 Bentley Systems, Incorporated |
Slide 36: Notable Developments in New Business Across Products
Notable Developments in New Business Across Products Strong Growth of Structural and Civil Engineering Software APPLICATIONS ENGINEERING APPLICATIONS GEOPROFESSIONAL APPLICATIONS (SEEQUENT) - MicroStation - ADINA - OpenBridge - AutoPIPE - OpenBuildings - CUBE - Leapfrog - PLAXIS - OpenFlows - EMME -
Slide 37: Digital Twins and AI
Digital Twins and AI iTwin Strongly Positioned to Enable Endless Ways that AI May Be Applied 37 © 2023 Bentley Systems, Incorporated |
Slide 38: Financial Performance
Financial Performance Werner Andre, Chief Financial Officer
Slide 39: Revenue Performance
Revenue Performance Second Quarter First Half $ in millions $ in millions CC constant currency1 CC constant currency1 $611 +12% (CC +14%) 53 +9% (CC +12%) $544 21 -2% (CC -1%) 49 22 $297 +11% (CC +10%) $268 26 +5% (CC +6%) 537 +13% (CC +15%) 25 12 +2% (CC +1%) 12 473 259 +12% (CC +11%) 232 22Q2 23Q2
Slide 40: Recurring Revenue Performance
Recurring Revenue Performance LTM Recurring Revenues3 LTM Recurring Revenue Retention $ in millions Constant Currency1, YoY CC constant currency1 109% 110% 110% 110% 107% 108% 107% 9.0 10.0 9.0 11.0 12.0 12.0 12.0 $1,042 $931 +12% CC+16% 98% 98% 98% 98% 98% 98% 98% LTM 22Q2 LTM 23Q2 2018 2019 2020 2
Slide 41: Recurring Revenue Performance
Recurring Revenue Performance ARR Growth7,8 Constant Currency1, YoY Business Performance8 27% Impact from the onboarding of 26% 26% Platform Acquisitions 23% 13% 13% 15% Seequent 21Q2 to 22Q1 and 13% Power Line Systems 15% 14% 14% 22Q1 to 22Q4 2.5% 13% 2.5% 2.5% 13% 13% 13% 13% 12% 12.5% 11.5% 11.5%
Slide 42: Profitability Performance
Profitability Performance GAAP Operating Income Adjusted OI w/ SBC9 $ in millions $ in millions 26.8% Adj. OI w/ SBC Margin10 26.2% Adj. OI w/ SBC $119 Margin10 $164 $112 +6% $143 +15% 24.7% Adj. OI w/ SBC Margin10 24.0% Adj. OI w/ SBC $56 $53 Margin10 $73 -4% $64 +14% 22Q2 23Q2 22Q2 23Q2 22Q2 23Q2
Slide 43: Liquidity and Capital Structure
Liquidity and Capital Structure GAAP Operating Cash Flows 23Q2 Credit Metrics $ in millions $ in millions Second Quarter First Half Last Twelve Months Cash $ 83 $362 Senior Debta $ 394 $308 Net Senior Debtb $ 311 $257 +18% Net Senior Debt Leveragec 0.8x $169 Available Revolver Credit Capacity $ 649
Slide 44: Full Year 2023 Financial Outlook
Full Year 2023 Financial Outlook Financial Metrics Outlook Total Revenues $1,205 million to $1,235 milliona (+9.5% to 12.5%; +10.5% to 13.5% in constant currency1) ARR Growth8 (constant currency1) 12% to 13%b, updated from previous range of 11.5% to 13.5% Adjusted OI w/SBC Margin10 Approximately 26%
Slide 45: Appendix
Appendix
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 Adjusted OI w/SBC and Adjusted EBITDA to their nearest GAAP equivalents are included in our Form 8-K (Quarterly Earnings Release) announcing our quarterl
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 EBITDA11 Second Quarter Last Twelve Months $ in millions $ in millions $392 $357 $96 +10% $87 +10% 22Q2 23Q2 22Q2 23Q2 Footnote 11: See appendix for KPI and non-GAAP definitions 48 © 2023 Bentley Systems, Incorporated |