Bentley Systems, Incorporated · NASDAQ:BSY

Bentley Systems — Q3 2023 Earnings Presentation

60 slides from Bentley Systems's earnings presentation, Nov 7, 2023

  1. Slide 1: 23Q3 Operating Results

    23Q3 Operating Results Greg Bentley Chief Executive Officer Nicholas Cumins Chief Operating Officer Werner Andre Chief Financial Officer 1 November 7, 2023 | © © 2023 2023Bentley BentleySystems, Systems, | Incorporated Incorporated

  2. 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

  3. Slide 3: Agenda

    Directions and Developments Greg Bentley, Chief Executive Officer Agenda Operational Perspectives Nicholas Cumins, Chief Operating Officer Financial Performance Werner Andre, Chief Financial Officer 3 © 2023 Bentley Systems, Incorporated |

  4. Slide 4: Directions

    Directions 4 © 2023 Bentley Systems, Incorporated |

  5. Slide 5: YoY ARR Growth: Sustained at High-water Mark

    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 23Q3 Note: Annualized Recurring Revenue (“ARR”)6 5 © 2023 Bentley Systems, Incorporated | Footnotes 6,8 : See appendix for KPI

  6. Slide 6: Directions: U.S. IIJA Flywheel

    Directions U.S. IIJA Flywheel 6 © 2023 Bentley Systems, Incorporated |

  7. Slide 7: Current Backlog

    Current Backlog Median : 11 months > 40% 32% 18% 8% 1% 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 2023 Q3 (n=526) Source: ACEC Research Institute Engineering Business Sentiment © | 2023 Q3-

  8. Slide 8: Economic Sentiment 12 Months from Now vs. Previous Quarters

    Economic Sentiment 12 Months from Now vs. Previous Quarters 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 +43 +25 +29 +20 +12 +19 +13 +11 0 -2 22Q3 22Q4 23Q1 23Q2 23Q3 22Q3 22Q4 23Q1 23Q2 23Q3 -20

  9. Slide 9: Backlog 12 Months from Now

    Backlog 12 Months from Now +37 +33 +27 +25 +21 22Q3 22Q4 23Q1 23Q2 23Q3 2023 Q2 (n=529) Source: ACEC Research Institute Engineering Business Sentiment © | 2023 Q3- https://programs.acec.org/impact-report-21/ 9 © 2023 Bentley Systems, Incorporated |

  10. Slide 10: Lack of Qualified Workers: Single Largest Barrier to Growth?

    Lack of Qualified Workers: Single Largest Barrier to Growth? 32% 19% 19% Net Rating: +52 13% 9% 6% 3% Strongly Strongly Disagree Agree 2023 Q3 (n=511) Source: ACEC Research Institute Engineering Business Sentiment © | 2023 Q3- https://programs.acec.org/impact-report-21/ 10 © 2023 Bentley Systems, In

  11. Slide 11: Infrastructure Engineers Are Working Longer Days

    Infrastructure Engineers Are Working Longer Days BSY Applications Avg. Hours/Day 6 ~23 Minutes Increase 5 since 2019 4 3 2 1 0 2019 2020 2021 2022 23Q1 23Q2 23Q3 … 11 © 2023 Bentley Systems, Incorporated |

  12. Slide 12: Directions: E365 (Puts and Takes)

    Directions U.S. IIJA Flywheel E365 (Puts and Takes) 12 © 2023 Bentley Systems, Incorporated |

  13. Slide 13: YoY LTM Recurring Revenues Dollar-Based Net Retention Rate

    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 23Q3 13 © 2023 Bentley Systems, Incorporated | Foo

  14. Slide 14: YoY ARR Growth: Sustained at High-water Mark

    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 23Q3 Note: Annualized Recurring Revenue (“ARR”)6 14 © 2023 Bentley Systems, Incorporated | Footnotes 6,8 : See appendix for KPI

  15. Slide 15: ARR by Account Size: E365 leads Accretion

    ARR6 by Account Size E365 leads Accretion… E365 SMB E365 Prospects E365 growth during 23Q3 Note: Chart segment sizing corresponds to underlying % of 23Q3 ARR6 15 © 2023 Bentley Systems, Incorporated | Footnote 6 : See appendix for KPI and non-GAAP definitions

  16. Slide 16: 23Q3 / 22Q3 Fewer Weekdays

    23Q3 / 22Q3 Fewer Weekdays 22Q3 – 66 weekdays JULY -21 weekdays AUGUST - 23 weekdays SEPTEMBER - 22 weekdays S M T W T F S S M T W T F S S M T W T F S 1 2 1 2 3 4 5 6 1 2 3 3 4 5 6 7 8 9 7 8 9 10 11 12 13 4 5 6 7 8 9 10 10 11 12 13 14 15 16 14 15 16 17 18 19 20 11 12 13 14 15 16 17 17 18 19 20 21 22

  17. Slide 17: Weekdays per Quarter 2023/2022

    Weekdays per Quarter 2023/2022 66 Weekdays -1 weekday (-4 days annualized) 65 64 63 62 61 60 Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 2022 2023 2022 2023 2022 023 2022 2023 17 © 2023 Bentley Systems, Incorporated |

  18. Slide 18: Directions: SMB / License Sales (Puts and Takes)

    U.S. IIJA Flywheel Directions E365 (Puts and Takes) SMB / License Sales (Puts and Takes) 18 © 2023 Bentley Systems, Incorporated |

  19. Slide 19: ARR by Account Size: SMB Broadens our Reach

    ARR6 by Account Size SMB Broadens our Reach… E365 SMB E365 Prospects Note: Chart segment sizing corresponds to underlying % of 23Q3 ARR6 Footnote 6 : See appendix for KPI and non-GAAP definitions 19 © 2023 Bentley Systems, Incorporated |

  20. Slide 20: Virtuosity ARR: Cumulative Compounding

    Virtuosity ARR 6 Cumulative Compounding… $50M $45M $40M $35M $30M $25M $20M $15M $10M $5M $- 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 23Q3 23Q3 Notes: All periods use exchange rates as of Sept 30, 2023 Footnotes 6 : See appendix for KPI and non-GAAP definitions 20 © 2023 Bent

  21. Slide 21: Perpetual License Revenues

    Perpetual License Revenues (Constant Currency1) $15 $ in millions $14 $13 $12 $11 $2.2 M Increase $10 in 23Q3 $9 $8 $7 $6 $5 $4 $3 $2 $1 $- Q1 Q1 Q2 Q2 Q3 Q3 Q4 2022 2023 2022 2023 2022 2023 2022 Footnotes 1 : See appendix for KPI and non-GAAP definitions 21 © 2023 Bentley Systems, Incorporated |

  22. Slide 22: Perpetual License Revenues

    Perpetual License Revenues (Constant Currency1) $15 $ in millions $14 $13 $12 $11 $10 $9 $8 $7 $6 $5 $4 $3 $2 $.9M Increase $1.3 $2.2 $1 in China License Sales $- Q1 Q1 Q2 Q2 Q3 Q3 Q4 2022 2023 2022 2023 2022 2023 2022 Footnotes 1 : See appendix for KPI and non-GAAP definitions 22 © 2023 Bentley Sys

  23. Slide 23: Directions: Puts and Takes Summary

    U.S. IIJA Flywheel Directions E365 (Puts and Takes) SMB / License Sales (Puts and Takes) 23 © 2023 Bentley Systems, Incorporated |

  24. Slide 24: Developments: Towards Infrastructure Intelligence

    Developments Towards Infrastructure Intelligence 24 © 2023 Bentley Systems, Incorporated |

  25. Slide 25: Going Digital: Towards Infrastructure Intelligence!

    Going Digital Towards Infrastructure Intelligence! Going Digital Awards in Infrastructure +300 Nominations Finalists 36 in 12 categories 2023 Year in Infrastructure and Going Digital Awards Watch the full Inspiring Keynotes and Industry Breakout Sessions bentley.com/events/going-digital-awards 25 ©

  26. Slide 26: 2023 Year in Infrastructure and Going Digital Awards

    2023 Year in Infrastructure and Going Digital Awards Watch a summary of the Keynotes and Industry Breakout Sessions Keynotes Industry Breakout Session Summary YII event Towards Product & Construction Energy Transportation Water & Utility YII 2023 Overview Infrastructure Technology 27:00 to 29:26 min

  27. Slide 27: Going Digital Award Finalists

    Going Digital Award Finalists 302 Nominees from 51 Countries Americas EMEA APAC 4 Finalists 13 Finalists 19 Finalists United States (4) Belgium China (7) Germany (2) Italy (2) Australia (3) Lithuania India (5) Netherlands Japan South Africa Republic of Korea Spain Malaysia United Kingdom (4) New Zea

  28. Slide 28: (Engineering) Hours Saved by Finalists Reporting

    (Engineering) Hours Saved by Finalists Reporting Project Name Organization Saved Hours N4 Montrose Interchange SMEC South Africa 42% 41% South Africa RSAS – Carstairs Arcadis 35% 35% India Digital Twins and Artificial Intelligence for Historic Robert Street Bridge Rehabilitation Collins Engineers, I

  29. Slide 29: Crediting iTwin Capture

    Crediting iTwin Capture Submissions 2023 Finalists 2022 44% 28% 29 © 2023 Bentley Systems, Incorporated |

  30. Slide 30: Crediting SYNCHRO

    Crediting SYNCHRO Submissions 2023 Finalists 2022 31% 17% 30 © 2023 Bentley Systems, Incorporated |

  31. Slide 31: Crediting iTwin

    Crediting iTwin Submissions 2023 Finalists 2023 35% 64% 31 © 2023 Bentley Systems, Incorporated |

  32. Slide 32: Accumulating Becomes Compounding Value

    Accumulating Becomes Compounding Value Going Digital Adding >100 Million Digital Components per Month 32 © 2023 Bentley Systems, Incorporated |

  33. Slide 33: bp Selects AssetWise Lifecycle Information Management and AssetWise Reliability

    bp Selects AssetWise Lifecycle Information Management and AssetWise Reliability as Standard for Information Management and Asset Integrity For an Enterprise-wide Approach to Asset Information Management in Parallel with Structural Integrity and Reliability Management November 2, 2023 EXTON, Pa. – No

  34. Slide 34: Bentley Infrastructure 500 Top Owners

    Bentley Infrastructure 500 Top Owners >20% >20% Increase in BSY runrate of overall (359 accounts) VS BI500 2022 BSY runrate bentley.com/top-infrastructure-owners 34 © 2023 Bentley Systems, Incorporated |

  35. Slide 35: Engineering Design Tools

    #1 #1 #1 #1 Engineering Design Tools Electric T&D Mining Water & Wastewater Owner / Operators September 2023 Communications Distribution 35 © 2023 Bentley Systems, Incorporated |

  36. Slide 36: Developments: Programmatic Acquisitions

    Developments Towards Infrastructure Intelligence Programmatic Acquisitions 36 © 2023 Bentley Systems, Incorporated |

  37. Slide 37: iTwin Ventures Acquires Blyncsy

    Bentley Systems’ iTwin Ventures Acquires Blyncsy, Breakthrough Innovator in AI Services for Transportation Operations and Maintenance To Broaden And Accelerate Infrastructure Asset Analytics August 14, 2023 EXTON, Pa. – Bentley Systems, Incorporated (Nasdaq: BSY), the infrastructure engineering soft

  38. Slide 38: © 2023 Bentley Systems, Incorporated |

    38 © 2023 Bentley Systems, Incorporated |

  39. Slide 39: Seequent's Acquisition of Flow State Solutions

    Bentley Systems Announces Seequent’s Acquisition of Geothermal Simulation Leader Flow State Solutions Combines Seequent’s Geological Modeling With Flow State Solutions’ Geothermal Simulation Software October 11, 2023 SINGAPORE – Oct. 11, 2023 – Bentley Systems, Incorporated (Nasdaq: BSY), the infras

  40. Slide 40: Agenda

    Directions and Developments Greg Bentley, Chief Executive Officer Agenda Operational Perspectives Nicholas Cumins, Chief Operating Officer Financial Performance Werner Andre, Chief Financial Officer 40 © 2023 Bentley Systems, Incorporated |

  41. Slide 41: Operational Perspectives

    Operational Perspectives Nicholas Cumins, Chief Operating Officer 41 © 2023 Bentley Systems, Incorporated |

  42. Slide 42: 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 23Q3 ARR6 Footnote 6 : See appendix for KPI and non-GAAP definitions 42 © 20

  43. Slide 43: Notable Q3 Developments Across Geographies

    Notable Q3 Developments Across Geographies Strong Performance Across the Board Americas EMEA Asia Pacific Very solid growth Steady growth Very solid growth • North America leading growth • EU funding benefiting • Australia & India leading transportation, water and growth • IIJA funding continues to

  44. Slide 44: Trusted Advisor to US DOTs for Digital Delivery

    Trusted Advisor to US DOTs for Digital Delivery BENTLEY BLOG PRESS RELEASE The Advanced Digital Construction Management Bentley, Infotech, And AASHTO Unite To Support Digital Systems Discretionary Grant Program Delivery Initiatives For Departments Of Transportation Notice of Funding Opportunity rele

  45. Slide 45: Notable Developments in New Business Across Products

    Notable Developments in New Business Across Products Strong Growth of Water Modeling, Civil and Structural Engineering Applications APPLICATIONS ENGINEERING APPLICATIONS GEOPROFESSIONAL APPLICATIONS (SEEQUENT) - MicroStation - ADINA - OpenBridge - AutoPIPE - OpenBuildings - CUBE - Leapfrog - PLAXIS

  46. Slide 46: Accelerating Infrastructure Intelligence

    Accelerating Infrastructure Intelligence Bentley Bentley Bentley Open Applications iTwin Platform Infrastructure Cloud 46 © 2023 Bentley Systems, Incorporated |

  47. Slide 47: AI as a Paradigm Shift

    AI as a Paradigm Shift 47 © 2023 Bentley Systems, Incorporated |

  48. Slide 48: Clear Commitment to Data Stewardship

    Clear Commitment to Data Stewardship We are committed to helping you derive ever more value from all of 1 the engineering data that you secure in Bentley Infrastructure Cloud (ProjectWise, SYNCHRO, AssetWise). 2 By using Bentley Infrastructure Cloud to manage and leverage your engineering data, you

  49. Slide 49: Financial Performance

    Financial Performance Werner Andre, Chief Financial Officer 49 © 2023 Bentley Systems, Incorporated |

  50. Slide 50: Revenue Performance

    Revenue Performance Third Quarter September YTD $ in millions $ in millions CC constant currency1 CC constant currency1 $918 +13% (CC +13%) 77 +6% (CC +8%) $812 33 +6% (CC +6%) 72 31 $307 +14% (CC +11%) $268 24 +2% (CC 0%) 808 +14% (CC +14%) 12 +26% (CC +23%) 24 9 709 271 +15% (CC +12%) 235 22Q3 23Q

  51. Slide 51: 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% 110% 107% 108% 107% 9.0 10.0 9.0 11.0 12.0 12.0 12.0 13.0 $1,076 $950 +13% (CC +14%) 98% 98% 98% 98% 98% 98% 98% 97% LTM 22Q3 LTM 23Q3

  52. Slide 52: Recurring Revenue Performance

    Recurring Revenue Performance ARR Growth7,8 ARR6: $1,125 million at 9/30/2023 Spot Rates 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% 15% Power Line Systems 14% 14% 22Q1 to 22Q4 2.5% 2.5% 2

  53. Slide 53: Profitability Performance

    Profitability Performance GAAP Operating Income Adjusted OI w/ SBC9 $ in millions $ in millions 27.2% Adj. OI w/ SBC Margin10 25.8% Adj. OI w/ SBC $250 Margin10 $193 $209 $168 +19% +15% 28.2% Adj. OI w/ SBC Margin10 24.9% Adj. OI w/ SBC Margin10 $74 $86 $56 $67 +33% +29% 22Q3 23Q3 22Q3 23Q3 22Q3 23Q

  54. Slide 54: Liquidity and Capital Structure

    Liquidity and Capital Structure GAAP Operating Cash Flows 23Q3 Credit Metrics $ in millions $ in millions Third Quarter Year-To-Date Last Twelve Months Cash $ 67 $366 Senior Debta $ 345 $330 $319 Net Senior Debtb $ 278 +15% $238 Net Senior Debt Leveragec 0.7x +38% Available Revolver Credit Capacity

  55. Slide 55: 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%bc Adjusted OI w/SBC Margin10 Approximately 26% Effective Tax Rate Approximately 20% Cash Flo

  56. Slide 56: Q&A

    Q&A 56 © 2023 Bentley Systems, Incorporated |

  57. Slide 57: Appendix

    Appendix 57 © 2023 Bentley Systems, Incorporated |

  58. Slide 58: 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

  59. Slide 59: 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

  60. Slide 60: Adjusted EBITDA and Non-GAAP Reconciliation

    Adjusted EBITDA11 and Non-GAAP Reconciliation Last Twelve Months Reconciliation of cash flow from operations to Adjusted EBITDA11 $ in millions $ in millions $411 $362 +14% LTM 23Q3 Cash flow from operations $ 366 Cash interest 38 Cash taxes 36 Cash deferred compensation plan distributions 2 Cash ac

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