Bentley Systems Announces First Quarter 2024 Results

May 7, 2024

EXTON, Pa.--(BUSINESS WIRE)--May 7, 2024-- Bentley Systems, Incorporated (Nasdaq: BSY), the infrastructure engineering software company, today announced results for its first quarter ended March 31, 2024.

First Quarter 2024 Results

  • Total revenues were $337.8 million, up 7.4% or 7.2% on a constant currency basis, year-over-year;
  • Subscriptions revenues were $307.1 million, up 10.5% or 10.3% on a constant currency basis, year-over-year;
  • Annualized Recurring Revenues (“ARR”) was $1,186.5 million as of March 31, 2024, compared to $1,071.0 million as of March 31, 2023, representing a constant currency ARR growth rate of 11%;
  • Last twelve-month recurring revenues dollar-based net retention rate was 108%, compared to 110% for the same period last year;
  • Operating income margin was 27.2%, compared to 20.9% for the same period last year;
  • Adjusted operating income inclusive of stock-based compensation expense (“Adjusted OI w/SBC”) margin was 33.3%, compared to 28.8% for the same period last year;
  • Net income per diluted share was $0.22, compared to $0.14 for the same period last year;
  • Adjusted net income per diluted share (“Adjusted EPS”) was $0.31, compared to $0.25 for the same period last year; and
  • Cash flows from operations was $205.0 million, compared to $176.2 million for the same period last year.

CEO Greg Bentley said, “We are pleased with our 24Q1 performance, as year-over-year ARR growth of 11% (excluding China, 11.5%) is consistent with our recent financial outlook range for 2024. Profitability and operating cash flow started the year ahead of our expected pace, with subscription revenues (91% of total) fully on pace, although our digital integrator Cohesive’s professional services business unrelated to Bentley Systems software has declined significantly from 2023.

“Coinciding with our 40th anniversary observance, on March 21st in London we announced that COO Nicholas Cumins will succeed me as CEO on July 1st, as I take up the new role of Executive Chair. Through this generational transition we can perpetuate our characteristic steadiness, while cognizant that unprecedented opportunities presented by infrastructure digital twins could springboard, for Bentley Systems, transformative growth.”

COO Nicholas Cumins said, “I again thank the Board of Directors for entrusting me with the responsibility of following in Greg’s footsteps as CEO. With our singular focus on helping users improve infrastructure delivery and performance, Bentley is well positioned to address the infrastructure sectors’ biggest challenges, including the widening gap in engineering resource capacity. Our 24Q1 results are consistent with the trends we have seen in previous quarters, led by strong growth in Public Works / Utilities, and solid growth in Resources.”

CFO Werner Andre said, “We are pleased with the strong start to the year, which puts us in a good position to achieve our full-year outlook. Our strong 24Q1 operating margin and cash flow performance enabled us to de-lever by 0.5 times Adjusted EBITDA in the quarter, and by 1.7 times since the beginning of 2023. With all remaining debt protected from high or rising interest rates through very low fixed coupons on our convertible notes and our interest rate swap, we are well positioned to maintain our dividend, share repurchases, and programmatic M&A readiness.”

Call Details

Bentley Systems will host a live Zoom video webinar on May 7, 2024 at 8:15 a.m. Eastern time to discuss results for its first quarter ended March 31, 2024.

Those wishing to participate should access the live Zoom video webinar of the event through a direct registration link at https://us06web.zoom.us/webinar/register/WN_uHLOUkDdTKm5dDkkZl4lyg#/registration. Alternatively, the event can be accessed from the Events & Presentations page on Bentley Systems’ Investor Relations website at https://investors.bentley.com. In addition, a replay and transcript will be available after the conclusion of the live event on Bentley Systems’ Investor Relations website for one year.

Non-GAAP Financial Measures

In this press release, we sometimes refer to financial measures that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these measures are considered non-GAAP financial measures under the United States Securities and Exchange Commission (“SEC”) regulations. Those rules require the supplemental explanations and reconciliations that are in Bentley Systems’ Form 8-K (Quarterly Earnings Release) furnished to the SEC.

Forward-Looking Statements

This press release includes forward-looking statements regarding the future results of operations and financial condition, business strategy, and plans and objectives for future operations of Bentley Systems, Incorporated (the “Company,” “we,” “us,” and words of similar import). All such statements contained in this press release, other than statements of historical facts, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions 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, and there are a significant number of factors that could cause actual results to differ materially from statements made in this press release including: adverse changes in global economic and/or political conditions; the impact of current and future sanctions, embargoes and other similar laws at the state and/or federal level that impose restrictions on our counterparties or upon our ability to operate our business within the subject jurisdictions; political, economic, regulatory and public health and safety risks and uncertainties in the countries and regions in which we operate; failure to retain personnel necessary for the operation of our business or those that we acquire; failure to effectively manage succession; changes in the industries in which our accounts operate; the competitive environment in which we operate; the quality of our products; our ability to develop and market new products to address our accounts’ rapidly changing technological needs; changes in capital markets and our ability to access financing on terms satisfactory to us or at all; the impact of changing or uncertain interest rates on us and on the industries we serve; our ability to integrate acquired businesses successfully; and our ability to identify and consummate future investments and/or acquisitions on terms satisfactory to us or at all.

Further information on potential factors that could affect the financial results of the Company are included in the Company’s Form 10‑K and subsequent Form 10‑Qs, which are on file with the SEC. The Company disclaims any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

About Bentley Systems

Bentley Systems (Nasdaq: BSY) is the infrastructure engineering software company. We provide innovative software to advance the world’s infrastructure – sustaining both the global economy and environment. Our industry-leading software solutions are used by professionals, and organizations of every size, 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. Our offerings, powered by the iTwin Platform for infrastructure digital twins, include MicroStation and Bentley Open applications for modeling and simulation, Seequent’s software for geoprofessionals, and Bentley Infrastructure Cloud encompassing ProjectWise for project delivery, SYNCHRO for construction management, and AssetWise for asset operations. Bentley Systems’ 5,200 colleagues generate annual revenues of more than $1 billion in 194 countries.

www.bentley.com

© 2024 Bentley Systems, Incorporated. Bentley, the Bentley logo, AssetWise, Bentley Infrastructure Cloud, Bentley Open, Cohesive, iTwin, MicroStation, ProjectWise, Seequent, and SYNCHRO are either registered or unregistered trademarks or service marks of Bentley Systems, Incorporated or one of its direct or indirect wholly owned subsidiaries. All other brands and product names are trademarks of their respective owners.

BENTLEY SYSTEMS, INCORPORATED

Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

 

 

 

 

March 31,

2024

 

December 31,

2023

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

141,601

 

 

$

68,412

 

Accounts receivable

 

 

284,200

 

 

 

302,501

 

Allowance for doubtful accounts

 

 

(9,723

)

 

 

(8,965

)

Prepaid income taxes

 

 

10,891

 

 

 

12,812

 

Prepaid and other current assets

 

 

46,716

 

 

 

44,797

 

Total current assets

 

 

473,685

 

 

 

419,557

 

Property and equipment, net

 

 

38,563

 

 

 

40,100

 

Operating lease right-of-use assets

 

 

36,454

 

 

 

38,476

 

Intangible assets, net

 

 

236,402

 

 

 

248,787

 

Goodwill

 

 

2,261,190

 

 

 

2,269,336

 

Investments

 

 

23,641

 

 

 

23,480

 

Deferred income taxes

 

 

208,152

 

 

 

212,831

 

Other assets

 

 

75,681

 

 

 

67,283

 

Total assets

 

$

3,353,768

 

 

$

3,319,850

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

23,568

 

 

$

18,094

 

Accruals and other current liabilities

 

 

539,775

 

 

 

457,348

 

Deferred revenues

 

 

242,037

 

 

 

253,785

 

Operating lease liabilities

 

 

11,178

 

 

 

11,645

 

Income taxes payable

 

 

11,275

 

 

 

9,491

 

Current portion of long-term debt

 

 

10,000

 

 

 

10,000

 

Total current liabilities

 

 

837,833

 

 

 

760,363

 

Long-term debt

 

 

1,425,445

 

 

 

1,518,403

 

Deferred compensation plan liabilities

 

 

93,402

 

 

 

88,181

 

Long-term operating lease liabilities

 

 

28,812

 

 

 

30,626

 

Deferred revenues

 

 

15,206

 

 

 

15,862

 

Deferred income taxes

 

 

10,391

 

 

 

9,718

 

Income taxes payable

 

 

7,337

 

 

 

7,337

 

Other liabilities

 

 

2,735

 

 

 

5,378

 

Total liabilities

 

 

2,421,161

 

 

 

2,435,868

 

Stockholders’ equity:

 

 

 

 

Common stock

 

 

2,980

 

 

 

2,963

 

Additional paid-in capital

 

 

1,154,137

 

 

 

1,127,234

 

Accumulated other comprehensive loss

 

 

(92,619

)

 

 

(84,987

)

Accumulated deficit

 

 

(132,595

)

 

 

(161,932

)

Non-controlling interest

 

 

704

 

 

 

704

 

Total stockholders’ equity

 

 

932,607

 

 

 

883,982

 

Total liabilities and stockholders’ equity

 

$

3,353,768

 

 

$

3,319,850

 

BENTLEY SYSTEMS, INCORPORATED

Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

 

2024

 

 

 

2023

 

Revenues:

 

 

 

 

Subscriptions

 

$

307,089

 

 

$

277,845

 

Perpetual licenses

 

 

9,512

 

 

 

9,547

 

Subscriptions and licenses

 

 

316,601

 

 

 

287,392

 

Services

 

 

21,162

 

 

 

27,019

 

Total revenues

 

 

337,763

 

 

 

314,411

 

Cost of revenues:

 

 

 

 

Cost of subscriptions and licenses

 

 

40,218

 

 

 

40,931

 

Cost of services

 

 

21,612

 

 

 

26,253

 

Total cost of revenues

 

 

61,830

 

 

 

67,184

 

Gross profit

 

 

275,933

 

 

 

247,227

 

Operating expenses:

 

 

 

 

Research and development

 

 

68,371

 

 

 

67,800

 

Selling and marketing

 

 

54,386

 

 

 

52,141

 

General and administrative

 

 

46,482

 

 

 

46,807

 

Deferred compensation plan

 

 

5,799

 

 

 

4,146

 

Amortization of purchased intangibles

 

 

8,964

 

 

 

10,548

 

Total operating expenses

 

 

184,002

 

 

 

181,442

 

Income from operations

 

 

91,931

 

 

 

65,785

 

Interest expense, net

 

 

(6,520

)

 

 

(11,092

)

Other income, net

 

 

7,137

 

 

 

289

 

Income before income taxes

 

 

92,548

 

 

 

54,982

 

Provision for income taxes

 

 

(22,247

)

 

 

(9,492

)

Equity in net income of investees, net of tax

 

 

9

 

 

 

 

Net income

 

$

70,310

 

 

$

45,490

 

Per share information:

 

 

 

 

Net income per share, basic

 

$

0.22

 

 

$

0.15

 

Net income per share, diluted

 

$

0.22

 

 

$

0.14

 

Weighted average shares, basic

 

 

314,295,102

 

 

 

310,758,802

 

Weighted average shares, diluted

 

 

333,623,518

 

 

 

331,251,884

 

BENTLEY SYSTEMS, INCORPORATED

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

Net income

 

$

70,310

 

 

$

45,490

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

16,385

 

 

 

18,057

 

Deferred income taxes

 

 

5,302

 

 

 

(4,178

)

Stock-based compensation expense

 

 

19,658

 

 

 

19,484

 

Deferred compensation plan

 

 

5,799

 

 

 

4,146

 

Amortization of deferred debt issuance costs

 

 

1,823

 

 

 

1,823

 

Change in fair value of derivative

 

 

(2,790

)

 

 

4,489

 

Foreign currency remeasurement (gain) loss

 

 

(1,744

)

 

 

1,018

 

Other

 

 

1,099

 

 

 

(4,411

)

Changes in assets and liabilities, net of effect from acquisitions:

 

 

 

 

Accounts receivable

 

 

14,508

 

 

 

15,420

 

Prepaid and other assets

 

 

(5,321

)

 

 

12,137

 

Accounts payable, accruals, and other liabilities

 

 

85,071

 

 

 

53,127

 

Deferred revenues

 

 

(9,257

)

 

 

1,942

 

Income taxes payable, net of prepaid income taxes

 

 

4,126

 

 

 

7,679

 

Net cash provided by operating activities

 

 

204,969

 

 

 

176,223

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment and investment in capitalized software

 

 

(3,599

)

 

 

(4,284

)

Acquisitions, net of cash acquired

 

 

 

 

 

(10,299

)

Purchases of investments

 

 

(250

)

 

 

(6,178

)

Net cash used in investing activities

 

 

(3,849

)

 

 

(20,761

)

Cash flows from financing activities:

 

 

 

 

Proceeds from credit facilities

 

 

39,838

 

 

 

117,139

 

Payments of credit facilities

 

 

(131,866

)

 

 

(223,124

)

Repayments of term loan

 

 

(2,500

)

 

 

(1,250

)

Payments of contingent and non-contingent consideration

 

 

(451

)

 

 

(249

)

Payments of dividends

 

 

(17,871

)

 

 

(14,522

)

Proceeds from stock purchases under employee stock purchase plan

 

 

5,560

 

 

 

4,557

 

Proceeds from exercise of stock options

 

 

4,007

 

 

 

4,202

 

Payments for shares acquired including shares withheld for taxes

 

 

(8,099

)

 

 

(20,948

)

Repurchases of Class B common stock under approved program

 

 

(15,006

)

 

 

 

Other

 

 

(47

)

 

 

(46

)

Net cash used in financing activities

 

 

(126,435

)

 

 

(134,241

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(1,496

)

 

 

662

 

Increase in cash and cash equivalents

 

 

73,189

 

 

 

21,883

 

Cash and cash equivalents, beginning of year

 

 

68,412

 

 

 

71,684

 

Cash and cash equivalents, end of period

 

$

141,601

 

 

$

93,567

 

BENTLEY SYSTEMS, INCORPORATED

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except share and per share data)

(unaudited)

 

Reconciliation of operating income to Adjusted OI w/SBC and to Adjusted operating income:

     

 

 

Three Months Ended

 

 

March 31,

 

 

2024

 

2023

Operating income

 

$

91,931

 

 

$

65,785

 

Amortization of purchased intangibles

 

 

12,190

 

 

 

13,735

 

Deferred compensation plan

 

 

5,799

 

 

 

4,146

 

Acquisition expenses

 

 

2,359

 

 

 

8,777

 

Realignment expenses (income)

 

 

66

 

 

 

(1,979

)

Adjusted OI w/SBC

 

 

112,345

 

 

 

90,464

 

Stock-based compensation expense

 

 

19,337

 

 

 

19,198

 

Adjusted operating income

 

$

131,682

 

 

$

109,662

 

Reconciliation of net income to Adjusted net income:

     

 

 

Three Months Ended

 

 

March 31,

 

 

2024

 

2023

 

 

$

 

EPS(1)

 

$

 

EPS(1)

Net income

 

$

70,310

 

 

$

0.22

 

 

$

45,490

 

 

$

0.14

 

Non-GAAP adjustments, prior to income taxes:

 

 

 

 

 

 

 

 

Amortization of purchased intangibles

 

 

12,190

 

 

 

0.04

 

 

 

13,735

 

 

 

0.04

 

Stock-based compensation expense

 

 

19,337

 

 

 

0.06

 

 

 

19,198

 

 

 

0.06

 

Deferred compensation plan

 

 

5,799

 

 

 

0.02

 

 

 

4,146

 

 

 

0.01

 

Acquisition expenses

 

 

2,359

 

 

 

0.01

 

 

 

8,777

 

 

 

0.03

 

Realignment expenses (income)

 

 

66

 

 

 

 

 

 

(1,979

)

 

 

(0.01

)

Other income, net

 

 

(7,137

)

 

 

(0.02

)

 

 

(289

)

 

 

 

Total non-GAAP adjustments, prior to income taxes

 

 

32,614

 

 

 

0.10

 

 

 

43,588

 

 

 

0.13

 

Income tax effect of non-GAAP adjustments

 

 

 

 

 

 

 

 

(7,389

)

 

 

(0.02

)

Equity in net income of investees, net of tax

 

 

(9

)

 

 

 

 

 

 

 

 

 

Adjusted net income(2)

 

$

102,915

 

 

$

0.31

 

 

$

81,689

 

 

$

0.25

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average shares, diluted

 

333,623,518

 

331,251,884

____________________

(1)

 

Adjusted EPS was computed independently for each reconciling item presented; therefore, the sum of Adjusted EPS for each line item may not equal total Adjusted EPS due to rounding.

(2)

 

Adjusted EPS numerator includes $1,723 and $1,717 for the three months ended March 31, 2024 and 2023, respectively, related to interest expense, net of tax, attributable to the convertible senior notes using the if‑converted method.

Reconciliation of cash flow from operations to Adjusted EBITDA:

     

 

 

Three Months Ended

 

 

March 31,

 

 

 

2024

 

 

 

2023

 

Cash flow from operations

 

$

204,969

 

 

$

176,223

 

Cash interest

 

 

5,257

 

 

 

10,473

 

Cash taxes

 

 

11,543

 

 

 

6,033

 

Cash deferred compensation plan distributions

 

 

473

 

 

 

421

 

Cash acquisition expenses

 

 

1,807

 

 

 

11,053

 

Cash realignment costs

 

 

7,517

 

 

 

 

Changes in operating assets and liabilities

 

 

(93,332

)

 

 

(88,299

)

Other(1)

 

 

(2,357

)

 

 

(1,920

)

Adjusted EBITDA

 

$

135,877

 

 

$

113,984

 

____________________

(1)

 

Includes receipts related to interest rate swap.

Reconciliation of total revenues and subscriptions revenues to total revenues and subscriptions revenues in constant currency:

         

 

 

Three Months Ended March 31, 2024

 

Three Months Ended March 31, 2023

 

 

Actual

 

Impact of

Foreign

Exchange at

2023 Rates

 

Constant

Currency

 

Actual

 

Impact of

Foreign

Exchange at

2023 Rates

 

Constant

Currency

Total revenues

 

$

337,763

 

$

(843

)

 

$

336,920

 

$

314,411

 

$

(125

)

 

$

314,286

Subscriptions revenues

 

$

307,089

 

$

(761

)

 

$

306,328

 

$

277,845

 

$

(142

)

 

$

277,703

Explanation of Non-GAAP and Other Financial Measures

Constant currency

Constant currency and constant currency growth rates are non-GAAP financial measures that present our results of operations excluding the estimated effects of foreign currency exchange rate fluctuations. A significant amount of our operations is conducted in foreign currencies. As a result, the comparability of the financial results reported in U.S. dollars is affected by changes in foreign currency exchange rates. We use constant currency and constant currency growth rates to evaluate the underlying performance of the business, and we believe it is helpful for investors to present operating results on a comparable basis period over period to evaluate its underlying performance.

In reporting period‑over‑period results, except for ARR as discussed further below, we calculate the effects of foreign currency fluctuations and constant currency information by translating current and prior period results on a transactional basis to our reporting currency using prior period average foreign currency exchange rates in which the transactions occurred.

Recurring revenues

Recurring revenues are the basis for our other revenue-related key business metrics. We believe this measure is useful in evaluating our ability to consistently retain and grow our revenues from accounts with revenues in the prior period (“existing accounts”).

Recurring revenues are subscriptions revenues that recur monthly, quarterly, or annually with specific or automatic renewal clauses and professional services revenues in which the underlying contract is based on a fixed fee and contains automatic annual renewal provisions.

Annualized recurring revenues (“ARR”)

ARR is a key business metric that we believe is useful in evaluating the scale and growth of our business as well as to assist in the evaluation of underlying trends in our business. Furthermore, we believe ARR, considered in connection with our last twelvemonth recurring revenues dollarbased net retention rate, is a leading indicator of revenue growth.

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 revenues for our contractually recurring consumption‑based software subscriptions with consumption measurement durations of less than one year, calculated using the spot foreign currency exchange rates. We believe that the last three months of recognized revenues, on an annualized basis, for our recurring software subscriptions with consumption measurement period durations of less than one year is a reasonable estimate of the annual revenues, given our consistently high retention rate and stability of usage under such subscriptions.

Constant currency ARR growth rate is the growth rate of ARR measured on a constant currency basis. In reporting period‑over‑period ARR growth rates in constant currency, we calculate constant currency growth rates by translating current and prior period ARR on a transactional basis to our reporting currency using current year budget exchange rates. Constant currency ARR growth rate from business performance excludes the ARR onboarding of our platform acquisitions and includes the impact from the ARR onboarding of programmatic acquisitions, which generally are immaterial, individually and in the aggregate. We believe these ARR growth rates are important metrics indicating the scale and growth of our business.

Last twelve‑month recurring revenues dollar‑based net retention rate

Last twelvemonth recurring revenues dollarbased net retention rate is a key business metric that we believe is useful in evaluating our ability to consistently retain and grow our recurring revenues.

Last twelvemonth recurring revenues dollarbased net retention rate is calculated, using the average exchange rates for the prior period, as follows: the recurring revenues for the current period, including any growth or reductions from existing accounts, but excluding recurring revenues from any new accounts added during the current period, divided by the total recurring revenues from all accounts during the prior period. A period is defined as any trailing twelve months. Related to our platform acquisitions, recurring revenues into new accounts will be captured as existing accounts starting with the second anniversary of the acquisition when such data conforms to the calculation methodology. This may cause variability in the comparison.

Adjusted operating income inclusive of stock-based compensation expense (“Adjusted OI w/SBC”)

Adjusted OI w/SBC is a non-GAAP financial measure and is used to measure the operational strength and performance of our business, as well as to assist in the evaluation of underlying trends in our business.

Adjusted OI w/SBC is our primary performance measure, which excludes certain expenses and charges, including the non-cash amortization expense resulting from the acquisition of intangible assets, as we believe these may not be indicative of the Company’s core business operating results. We intentionally include stock-based compensation expense in this measure as we believe it better captures the economic costs of our business.

Management uses this non-GAAP financial measure to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, to evaluate financial performance, and in our comparison of our financial results to those of other companies. It is also a significant performance measure in certain of our executive incentive compensation programs.

Adjusted OI w/SBC is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, and realignment expenses (income), for the respective periods.

Adjusted OI w/SBC margin is calculated by dividing Adjusted OI w/SBC by total revenues.

Adjusted operating income

Adjusted operating income is a non-GAAP financial measure that we believe is useful to investors in making comparisons to other companies, although this measure may not be directly comparable to similar measures used by other companies.

Adjusted operating income is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, realignment expenses (income), and stock‑based compensation expense, for the respective periods.

Adjusted net income and Adjusted EPS

Adjusted net income and Adjusted EPS are non-GAAP financial measures presenting the earnings generated by our ongoing operations that we believe is useful to investors in making meaningful comparisons to other companies, although these measures may not be directly comparable to similar measures used by other companies, and period-over-period comparisons.

Adjusted net income is defined as net income adjusted for the following: amortization of purchased intangibles, stock‑based compensation expense, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, realignment expenses (income), other non‑operating (income) expense, net, the tax effect of the above adjustments to net income, and equity in net (income) losses of investees, net of tax, for the respective periods. The income tax effect of non‑GAAP adjustments was determined using the applicable rates in the taxing jurisdictions in which income or expense occurred, and represent both current and deferred income tax expense or benefit based on the nature of the non‑GAAP adjustments, including the tax effects of non‑cash stock‑based compensation expense.

Adjusted EPS is calculated as Adjusted net income, less net income attributable to participating securities, plus interest expense, net of tax, attributable to the convertible senior notes using the if‑converted method, if applicable, (numerator) divided by Adjusted weighted average shares, diluted (denominator). Adjusted weighted average shares, diluted is calculated by adding incremental shares related to the dilutive effect of convertible senior notes using the if‑converted method, if applicable, to weighted average shares, diluted.

Adjusted EBITDA

Adjusted EBITDA is our liquidity measure in the context of conversion of Adjusted EBITDA to cash flow from operations (i.e., the ratio of GAAP cash flow from operations to Adjusted EBITDA). We believe this non-GAAP financial measure provides a meaningful measure of liquidity and a useful basis for assessing our ability to repay debt, make strategic acquisitions and investments, and return capital to investors.

Adjusted EBITDA is defined as cash flow from operations adjusted for the following: cash interest, cash taxes, cash deferred compensation plan distributions, cash acquisition expenses, changes in operating assets and liabilities, and other cash items (such as those related to our interest rate swap). From time to time, we may exclude from Adjusted EBITDA the impact of certain cash receipts or payments that affect period-to-period comparability.

BSY Investor Contact:
Eric Boyer
Investor Relations Officer
ir@bentley.com

Source: Bentley Systems, Incorporated

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