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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

FORM 10-K

___________________________________

(Mark One)
☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the fiscal year ended December 31, 2021
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, par value $0.01 per share

BSY

The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒  No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐  No ☒

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 ☐

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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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes‑Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

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

The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2021, the last business day of the registrant’s most recently completed second fiscal quarter, was $7.0 billion based on the closing price reported on the Nasdaq Stock Market LLC on that date. As of February 22, 2022, the registrant had 11,601,757 shares of Class A and 272,292,311 shares of Class B Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for registrant’s Annual Meeting of Stockholders (the “Proxy Statement”) are incorporated by reference in Part III of this Form 10‑K to the extent stated herein. The Proxy Statement will be filed within 120 days of the registrant’s fiscal year ended December 31, 2021.

Auditor Name: KPMG LLP			Auditor Location: Philadelphia, Pennsylvania			Audit Firm ID: 185

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BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES

FORM 10-K

TABLE OF CONTENTS

									Page
			Cautionary Note Regarding Forward-Looking Statements						4
PART I
Item 1.			Business						5
Item 1A.			Risk Factors						33
Item 1B.			Unresolved Staff Comments						48
Item 2.			Properties						48
Item 3.			Legal Proceedings						48
Item 4.			Mine Safety Disclosures						48
PART II
Item 5.			Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities						49
Item 6.			[Reserved]						49
Item 7.			Management’s Discussion and Analysis of Financial Condition and Results of Operations						50
Item 7A.			Quantitative and Qualitative Disclosures About Market Risk						93
Item 8.			Financial Statements and Supplementary Data						94
Item 9.			Changes in and Disagreements With Accountants on Accounting and Financial Disclosure						94
Item 9A.			Controls and Procedures						94
Item 9B.			Other Information						95
Item 9C.			Disclosure Regarding Foreign Jurisdictions that Prevent Inspections						95
PART III
Item 10.			Directors, Executive Officers and Corporate Governance						96
Item 11.			Executive Compensation						97
Item 12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters						97
Item 13.			Certain Relationships and Related Transactions, and Director Independence						97
Item 14.			Principal Accountant Fees and Services						97
PART IV
Item 15.			Exhibit and Financial Statement Schedules						98
Item 16.			Form 10-K Summary						101
SIGNATURES									102
			Reports of Independent Registered Public Accounting Firm						F-1
			Consolidated Financial Statements						F-6
			Notes to Consolidated Financial Statements						F-12

3

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report includes forward‑looking statements. All statements contained in this report 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,” “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, 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 report 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 report 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 report in greater detail in the section titled “Risk Factors” and elsewhere in this report. 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 report to conform these statements to actual results or revised expectations.

4

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PART I

Item 1. Business

Bentley Systems: The Infrastructure Engineering Software Company

We are a leading global provider of software for infrastructure engineering, enabling the work of civil, structural, geoprofessional, and plant engineering practitioners, their project delivery enterprises, and owner‑operators of infrastructure assets. We were founded in 1984 by the Bentley brothers and on September 25, 2020, we completed our initial public offering (“IPO”). Our enduring commitment is to develop and support the most comprehensive portfolio of integrated software offerings across professional disciplines, project and asset lifecycles, infrastructure sectors, and geographies. Our software enables digital workflows across engineering disciplines, distributed project teams, from offices to the field, and across computing form factors, including desktops, on-premises servers, cloud-native services, mobile devices, and web browsers. We deliver our solutions via on-premises, cloud, and hybrid environments. Our users engineer, construct, and operate projects and assets across the following infrastructure sectors:

•public works (including roads, rail, airports, ports, and water and wastewater networks)/utilities (including electric, gas, water, and communications). We estimate that this sector represents 52% of the net infrastructure asset value of the global top 500 infrastructure owners (the “global top 500 infrastructure owners”) based on the 2021 edition of the Bentley Infrastructure 500 Top Owners, our annual compilation of the world’s largest infrastructure owners ranked by net depreciated value of their tangible fixed assets;

•industrial (including discrete and process manufacturing, power generation, and water treatment plants)/resources (including oil and gas, mining, offshore, and environmental). We estimate that this sector represents 34% of the global top 500 infrastructure owners’ net infrastructure asset value; and

•commercial/facilities (including office buildings, hospitals, and campuses). We estimate that this sector represents 14% of the global top 500 infrastructure owners’ net infrastructure asset value.

We address both the project and asset lifecycle phases of infrastructure, each with applications and enterprise information systems. Our Project Lifecycle solutions encompass conception, planning, surveying, design, engineering, simulation, and construction, as well as the collaboration offerings required to coordinate and share the work of interdisciplinary and/or distributed project teams. Our Asset Lifecycle solutions span the operating life of commissioned infrastructure assets, allowing our accounts to manage engineering changes for safety and compliance and to model performance and reliability to support operating and maintenance decisions.

5

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Our Solutions

We offer solutions for enterprises and professionals across the infrastructure lifecycle. Our Engineering Applications and Geoprofessional Applications support the breadth of engineering and geoprofessional disciplines and are primarily desktop applications for professional practitioners. Our project delivery and asset performance Enterprise systems are provided via cloud and hybrid environments, developed respectively to extend enterprise collaboration during project delivery, and to manage and leverage engineering information during operations and maintenance. Our Industry Solutions solve domain‑specific problems for owners of infrastructure assets, and the project delivery ecosystems that support these owners. Our cloud-native iTwin Platform solutions enable digital twin workflows, which can span project and asset lifecycles.

Our comprehensive solutions for the entire project delivery and asset performance lifecycle—spanning conception, planning, surveying, geoscience, design, simulation, construction, and operations—include Engineering Applications, Geoprofessional Applications, Enterprise Systems, Industry Solutions, and our iTwin Platform for infrastructure digital twins.

Engineering Applications. Our Engineering Applications are for modeling and simulation. Our modeling applications are domain-specific authoring tools used by professionals for the 3D design and documentation of infrastructure assets. Our simulation applications enable engineers to analyze the functional performance of the designs created with our modeling applications (or those of competitive vendors), preferably in iterative digital workflows, to improve engineering outcomes and to ensure compliance with design codes.

6

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Benefits of our Engineering Applications to infrastructure engineers include:

•Better designs. Our modeling and simulation applications work together to improve infrastructure engineering quality, for instance to eliminate “clashes” across respective disciplines’ work. Each application is for a specific purpose (asset-type or discipline; for example, OpenRoads for roadway design), and supports corresponding asset-specific engineering workflows (for example, the workflow a civil engineer would use in designing a road) by virtue of:

•Better engineering productivity. We endeavor to provide in our applications the most advanced and automated intelligence for transforming engineers’ conceptual decisions into complete, detailed, and editable deliverables; and

•Better configurability and continuity. We take care to enable users to continuously refine their modeling preferences and standards across successive generations of our applications. This capability enables engineers, throughout their careers, to maintain continuity and compatibility with their preferred interfaces, formats, and methodologies, while advancing their work at the leading edge of innovation;

•Better deliverables. Our applications share a common modeling environment to enable streamlined coordination and production of multi-discipline documentation; and

•Better handoff. Our comprehensive modeling environment and our supplemental cloud services enable projects to enrich information sharing (and to minimize problematic translations) across project delivery processes. For instance:

•by starting with reality modeling of existing conditions (often from drone surveying);

•by sharing engineering component definitions across disciplines and projects; and

•through “constructioneering” digital workflows, which automate the exchange of 3D design models to control GPS-enabled construction equipment (for earthmoving and paving), and to validate and preserve the resulting 3D as‑built models for maintenance.

Geoprofessional Applications. Our Geoprofessional Applications support modeling and simulation to help engineers and scientists develop a detailed understanding, and take full account of, near and deep subsurface conditions.

Our recent acquisition of Seequent Holdings Limited (“Seequent”) adds industry‑leading earth modeling, geoscience‑data management, and geoprofessional team collaboration software to our portfolio. The integration of these sophisticated technologies in combination with our existing geotechnical products, supplements visible built asset representations above ground with more probabilistic modeling of invisible subsurface conditions – deepening the potential of infrastructure digital twins.

Benefits of our geoprofessional applications to infrastructure professionals include:

•Delivering a clearer picture of what lies beneath. Our geodata modeling and visualization technologies helps geoprofessionals see what lies in the subsurface. When they can see it, they can understand it and make better decisions that reduce ground risk throughout the project lifecycle – saving budget and compressing timelines;

•Connecting workflows. As infrastructure and engineering projects become ever more complex, users need greater confidence in the earth sciences disciplines which support all surface infrastructure. The combination of Seequent’s subsurface geoscience and our existing geotechnical products means users have more flexibility in how they comprehensively solve complex geoscience and engineering problems; and

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•Better decisions that benefit people and the planet. Our geoprofessional applications help geoprofessionals to develop vital mineral resources more sustainably, design and build better infrastructure, protect the environment, source renewable energy, and help resolve historical challenges such as groundwater contamination. Our technology enables engineers and geoprofessionals to collaborate - ensuring infrastructure digital twins can reach full subsurface depths and augment environmental and economic resilience.

Enterprise Systems. Our Enterprise Systems support data management and collaborative workflows for both project delivery and asset performance.

Project Delivery Systems. Our Project Delivery systems support information and document management, engineering‑specific collaboration and work‑sharing for distributed project teams and enterprises, and construction planning, modeling and execution. The scope of these solutions is not limited to users of only our own engineering applications.

Often during the project delivery lifecycle, key data are constantly changing, with inputs received from multiple sources, resulting in the need for a single source of information that is used to collect, manage, and disseminate information for the whole project team. Our software assures that the rapidly-changing data are managed in a common data environment (“CDE”) such that only the correct milestone versions can be shared and referenced across the project. This functionality enables infrastructure project organizations to “virtualize” their talent so that the required work can be shared by all participants everywhere through our software, reducing the need for physical co-location of the project resources.

Our 4D construction modeling software spatially and temporally integrates a project’s 3D engineering models into its construction schedules to assess sequencing strategies and to visualize and understand planned and actual progress over the project timeline. Our solutions also enable project delivery teams to optimally define and manage discrete engineering, construction, and installation work packages, including the construction trades’ “workface planning,” which considers crafts and materials by day and zone. For work packages, which increasingly take advantage of modular offsite fabrication and manufacturing, our software manages and enables 4D visualization of the necessary spatial and logistical interfaces.

Benefits of our Project Delivery systems to project delivery enterprises include:

•Distributed work-sharing. Our solutions incorporate the rigorous workflow protocols required for structured coordination across engineering and construction supply chains and across geographies, enabling global sourcing for integrated project delivery, while maximizing economics, quality, and safety;

•Comprehensive collaboration. Our software leverages cloud and hybrid environments to streamline the aggregation, distribution, and interaction for project deliverables, ensuring that the right project participants have the right information in the right format at the right time, including at the project site and on every device; and

•Construction visibility. Our solutions’ broad span and continuous detail across design integration, construction modeling and work packaging, and mixed‑reality 4D visualization, advances predictability, accountability, and safety throughout the construction process.

Asset Performance Systems. Our Asset Performance systems span the operating life of commissioned infrastructure assets, capturing and managing changes to engineering models and enterprise information for compliance and safety, and to model performance and reliability to support operating and maintenance decisions.

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Our Asset Performance systems are used to manage engineering information and geospatial relationships for operating and provisioning infrastructure across all sectors, including linear networks for transportation, energy transmission and distribution, water, and communications. Our asset performance modeling provides the needed analytical context for “right-time” data, including from Internet of Things (“IoT”) sensor capabilities, to yield actionable insights.

Benefits of our Asset Performance systems for owner‑operators include:

•Better compliance and assurance. Our systems intrinsically enforce the rigor appropriate for operating infrastructure assets in order to provide dependable visibility into the impact of changes;

•Better asset performance. Our solutions include operational dashboards that provide decision support insights to maintain and improve throughput and reliability; and

•Better risk management. Our solutions include predictive analytics that identify potential problems before they occur and ensure the accessibility of best‑available engineering information and models for mitigation and resilience.

Industry Solutions. Our Industry solutions solve domain‑specific problems for owners of infrastructure assets, and the project delivery ecosystems that support these owners. These offerings span reality modeling, urban mobility simulation, and design and engineering of utility and communication networks; and support fit‑for‑purpose infrastructure digital twins through configurations of our iTwin Platform.

Benefits of our current Industry solutions include:

•Evergreen reality models. Our reality modeling software maintains engineering‑ready 3D models of cities, asset sites, or project sites, incorporating incrementally updated surveys, and thus ensures that project teams or engineering departments can rely on up‑to‑date geospatial context for digital workflows;

•Domain specific solutions. Our Industry solutions for transportation owners solve such problems as managing their assets, bridge inspections, and determining safe routes for oversize or overweight vehicles. For cities, our solutions help with planning, visualization, and mapping, including 3D mobile mapping. For utilities, our solutions help in the design and operation of electric distribution and transmission networks and substations, and gas and district energy networks;

•Better resilience. Our solutions can integrate geotechnical, structural/seismic, and hydrological engineering modeling with evergreen 3D city models to harden infrastructure from flood and other natural hazards, and to apply engineering simulations for mitigation and emergency response;

•Resource conservation. Taking full advantage of our solutions can significantly increase efficiency and reduce waste. For instance, our water network modeling tools, applied to compare “as‑designed” specifications to observed flows and pressures, can help to non‑invasively locate subsurface water network leaks; and

•Fit‑for‑purpose infrastructure digital twins. We leverage our deep domain expertise and our iTwin Platform to support fit‑for‑purpose digital twins, such as our current offerings for industrial plants, water and wastewater networks, and communications towers.

iTwin Platform. Our iTwin Platform for infrastructure digital twin offerings enable our users to create and curate cloud‑native 4D digital representations of physical infrastructure assets, incorporating underlying engineering information, federated with operational data, and then to model, simulate, analyze, chronicle, and predict performance over time. Using digital twins, our users can more fully extend digital workflows across project delivery and asset performance, increasing the value of infrastructure engineers’ work.

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Our digital twins technology is built on our iTwin Platform, which we use to build cloud services to enable digital twin workflows for a wide range of potential use cases. We have used the iTwin Platform to create cloud services which add digital twin capabilities to our project delivery and asset performance offerings, to create fit‑for‑purpose digital twin solutions for specific asset classes, and to support an emerging ecosystem of third-party developers.

Third parties can participate in this ecosystem by using iTwin.js, an open‑source development library, to develop desktop, mobile, or web apps that leverage the iTwin Platform or that augment iTwin products from us or from other third parties. While iTwin.js is open source, use of the iTwin Platform or of our products built on the iTwin Platform do require licenses from us.

Applications from Bentley Systems and third parties can participate in digital twin workflows through connectors, which enable any engineering file format to populate the iTwin Platform database schema. The iModel database is a distributed database based on a semantically intelligent infrastructure schema. It maintains transactional information to manage change as data is added or changed.

Benefits of our digital twin solutions to project delivery firms and owner‑operators include:

•Managing change. The design and construction of an infrastructure asset is complex and can take many years with participation of many different organizations working together as a widely distributed team. An operational asset may be designed to last many decades, with even more different stakeholders. Managing data transactions (who, what, when) against a timeline is key to enabling many digital twin workflows, such as revisiting why a design change was made at a particular point in time, orchestrating data from contributing disciplines to conduct design reviews, or comparing the performance of an asset at different points in time;

•Advanced insights. For project delivery, digital twins can reveal insights beyond what would be visible with traditional workflows; for example, a digital twin can show 3D heat maps highlighting where changes in a design have been unusually pervasive, indicating possible design flaws. For asset performance, such insights from digital twins can be used to evaluate different strategies for optimizing operational efficiencies and throughput;

•Predictive analytics. For project delivery, digital twins and machine learning can compare the progress of a current project with similar projects that have been previously completed, and identify in advance potential bottlenecks, in time to take corrective action. For asset performance, a digital twin can track observations from various operational inputs against design intelligence to predict future failures and recommend maintenance actions to minimize downtime;

•Continuous and comprehensive design reviews. For project delivery, digital twins can aggregate and align design models and data from all sources “on the fly” (without interruptions for translations, and without specialized software) to present immersive 3D status visualization in a web browser for any authorized stakeholder to participate in ongoing interactive design reviews;

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•Convergence of OT, IT, and now ET. Infrastructure owner‑operators are increasingly able to instrument their assets with IoT sensors, producing torrents of Operational Technology (“OT”) data that are difficult to interpret. Software advances in Information Technology (“IT”) can in turn make data from enterprise transaction systems, such as maintenance work order history, accessible for analytics. But even OT and IT together cannot inform decisions for improved asset performance as sufficiently as when combined with accessibility to comparable analytics from the assets’ engineering models, which we refer to as the Engineering Technology (“ET”). Infrastructure digital twins notably enable the convergence of ET with OT and IT. With infrastructure digital twins, the design intent (the “digital DNA” captured in the digital twins’ engineering models and simulations) can serve as a baseline for comparison to IoT-monitored “as‑operated” performance, in light of the asset’s operations and maintenance history stored in IT systems, to enable integrated analytics to provide timely insights and recommended actions to optimize safety and performance; and

•Addressing a wide range of emerging use cases. There are proliferating use cases to address infrastructure lifecycle issues that are made possible by semantically opening up engineering data to be combined with observed operational data. Many of these use cases have heretofore been impractical by virtue of having required multiple disconnected steps in a manual process. For example, maintenance of a bridge traditionally depends upon manual visual inspections, generally requiring human inspectors climbing precariously to capture photographs and to produce written inspection assessments. The work can be dangerous, and entail subjective judgements which may not be repeatable. A digital twin for a bridge, on the other hand, advances periodic inspections to more continuous and/or real-time monitoring. Sensors on the bridge can gather data on traffic flow, vibration, and other indicators. Drones can (increasingly autonomously) capture imagery to be processed into a high-resolution reality model of the bridge, to which artificial intelligence (machine learning) can be applied to recognize cracks, corrosion, or other defects or changes in the bridge that may affect structural integrity. The digital twin’s structural models (which were initially developed to validate the “as‑designed” capacity) can then be reapplied to the “as‑operated” bridge conditions, to indicate to engineers potential needs for maintenance or remediation interventions. In addition to comparable operational engineering use cases for every existing infrastructure asset, there are at least as many non-engineering use cases where infrastructure digital twins can be leveraged, such as 3D city models being used to adapt for mobility and safety under pandemic lockdowns.

Comprehensiveness of Our Offerings

Our offerings are comprehensive across professional disciplines, lifecycle stages, infrastructure sectors, and geographies, resulting in what we believe to be durable competitive advantages:

Professional Disciplines. Each infrastructure project requires seamless and deep collaboration among professional disciplines, which can include civil, structural, geotechnical, geoscience subsurface engineers, and process engineers, architects, geospatial professionals, city and regional planners, contractors, fabricators, and operations and maintenance engineers. Our open modeling and open simulation applications facilitate iterative interactions between disciplines and coordination across project participants. Additionally, we believe our collaboration systems lead the market in managing infrastructure engineering firms’ preferred work-in-progress workflows.

For example, to illustrate the benefits of interdisciplinary digital workflows in roadway design, our offerings’ comprehensiveness can enhance both safety and economics by enriching the interfaces between geotechnical (earthworks) and structural analyses to share full 3D modeling details. Previously, structural decisions tended to be based on just a single imported parameter for subsurface foundation strength, frequently resulting in designs that included specifications and reinforcing materials beyond what was necessary to sufficiently mitigate risk.

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The importance of integrating our offerings broadly across disciplines is also a reason that we have always prioritized interoperability with competitors’ design tools. For major projects, owners and their contractors want to have the choice of the best professionals in every discipline, rather than limiting their choices to those using a particular software vendor’s applications. Our offerings win acceptance within major organizations and projects both through our breadth of applications, and through each application’s virtuosity in interpreting and emulating formats beyond our own.

Lifecycle Stages. Both project delivery enterprises and owner‑operators benefit from our solutions, which enable digital workflows to extend between project and asset lifecycles, from design to construction and ultimately asset management. This capability allows our users’ digital engineering models to be leveraged as the context for real-time condition monitoring to achieve better and safer operations and maintenance.

For an example of advantageous digital workflows from projects to assets, consider our solutions for permitting and routing of over‑weight and over‑sized loads by departments of transportation. Instead of routing based merely on static maximum load ratings for each bridge, we use actual bridge design models for dynamic structural simulations, and 3D clearances of the actual load configurations. As a result, user organizations are able to engineer safe routes to maximize commerce while protecting bridge longevity.

Infrastructure Sectors. Most major engineering and project delivery firms pursue an ever‑changing mix of projects across the public works/utilities, industrial/resources, and commercial/facilities sectors and for flexibility tend to favor an infrastructure engineering software vendor whose portfolio correspondingly spans their full breadth. This comprehensiveness provides diversification for our own business, as an incidental advantage. For example, when there have been cyclical downturns in the primarily privately‑financed industrial/resources and commercial/facilities sectors, we have historically witnessed offsetting counter‑cyclical government investment in public works/utilities.

Geographies. While design codes may vary by country, infrastructure purposes and engineering practices are fundamentally the same throughout the world, which makes it possible for our infrastructure modeling applications to be used globally. Our offerings are available in most major languages, supporting country‑specific design codes, standards, and conventions. Our development teams are also globally dispersed, due in part to acquisitions made in various countries, but also to provide any needed last mile localization of our applications. Our global comprehensiveness enables our project delivery accounts to compete more efficiently across geographic markets, thus also providing global supply‑chain sourcing choices for owners.

The Digital Twins Opportunity

We believe that digital progress in infrastructure advancement has to date lagged behind other economic domains for several reasons, including that:

•most existing infrastructure assets predate engineering modeling software;

•engineers’ work, including by way of building information modeling (“BIM”) or geographic information systems (“GIS”), has been sequestered in native file formats that amount to “dark data,” inaccessible without the software that was used to create it, and therefore unavailable for use in digital workflows or analytics; and

•construction processes are often fragmented and isolated from digital workflows altogether, resulting in engineering information being effectively abandoned between the project and the asset lifecycle phases of infrastructure.

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Over our company’s history, as computing capabilities have advanced, the scope of infrastructure engineering software has correspondingly increased. However, project and asset lifecycle software markets have developed independently from one another and connecting digital workflows have not been offered. We believe that the new advancement of BIM and GIS to “evergreen” infrastructure digital twins will have the effect of merging what have to date been separate market spaces as well as enabling new use cases that were not possible or practical with previous technologies.

Period

Project Lifecycle Software

Asset Lifecycle Software

1985 – 1995

2D Drafting (“Computer Aided Design” or “CAD”): Workstations and then personal computers make possible interactive graphical applications to automate the creation of previously manually drafted 2D engineering drawings.

2D Mapping: Workstations and personal computers make possible interactive graphical applications to automate the creation of maps.

1996 – 2005

Collaboration: Networked personal computers and servers provide platforms for file-sharing and referencing. CDEs are introduced.

GIS: Networked personal computers and servers enable querying and visualization of geographic data.

2006 – 2015

3D BIM: Increased personal computing power enables the development of 3D applications for design of specific asset types including buildings, process plants, roads, water networks, and buildings. CDEs and the internet lead to global work-sharing and collaborative BIM.

Geospatial: Increased computing address space enables geo-coordinated engineering models. GPS technology enables alignment of digital components and real-world coordinates. Asset Performance Management (“APM”): solutions are introduced for reliability-centered maintenance and risk-based inspection.

2015 – 2018

Reality Modeling: Advances in digital imagery, unmanned aerial vehicles (“UAVs” or “drones”), and specialized software enable the automated capture of “as-operated” conditions of an asset or site in an engineering-ready, geo-coordinated 3D model. Cloud ubiquity enables Common Data Environments to evolve into Connected Data Environments.

APM evolves into Asset Performance Modeling, with engineering models recalibrated to reproduce and understand observed behaviors, and apply algorithms and analytics to derive insights and drive decisions.

2019 – Present

4D Digital Twins: Digital twins make possible the simulation of the behavior and the visualization of the changes of a project or infrastructure asset over time. Digital twins are continually updated in a cloud database and remain current and “evergreen,” over the full project and asset lifecycle, through continuous surveying of the physical context and embedded links to inputs from connected IoT sensors in the operating asset. With digital twins, users are empowered to better understand the impact of changes over time for projects and assets to improve project, construction, and operational efficiencies, predictability, and overall outcomes.

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To enable infrastructure engineering to catch up to other sectors and to advance in “going digital,” we have enabled infrastructure digital twins, cloud‑provisioned digital representations of projects and assets that incorporate and converge their 3D physical conditions (“digital context”) for reality, their underlying engineering information (“digital components”) for veracity, and their 4D timeline of changes (“digital chronology”) for fidelity, enabling the merging of project and asset lifecycle workflows.

Digital twin solutions are now made possible by new technologies including UAVs and their intrinsic “surveying” sensors, machine learning, cloud computing, open‑source development libraries, distributed ledger software, and mixed‑reality visualization.

Our software to leverage these advancements for digital twin offerings includes:

•Reality modeling software, which processes any combination of overlapping digital photography, video, and scanned imagery to produce a 3D reality model. Our software then uses machine learning to recognize and classify components within the 3D model (such as equipment, structural elements, pipes, valves, tags, and nameplates). This process populates the reality model’s digital context with these digital components, adding intelligence which can be aligned with engineering models from the design stage;

•iModels, which can be created through connectors which we provide for our own engineering applications or for the major third‑party applications (and which can be developed for any others using our Application Programming Interfaces (“APIs”)). Connectors transform data from the application’s proprietary format to correspond to the iModel’s distributed database schema. Since the iModel schema is comprehensive across infrastructure engineering disciplines (and can be extended as needed), all project and asset data can be aligned semantically and spatially with all other relevant models and data, allowing all this information to be accessed and queried to maximize the digital twin’s values of reality, veracity, and fidelity; and

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•iTwin Platform cloud services, which provides a range of cloud services to support digital twin solutions. At its core is the iModelHub, a cloud service that hosts and manages change to a digital twin’s data, keeping it synchronized as required with physical and engineering changes. Our iTwin services can be added to any user’s or accounts’ environments to generate incremental value by incorporating infrastructure engineering data within cloud-native evergreen digital twins. The go‑to‑market strategy for our iTwin cloud includes:

•Sales to accounts using ProjectWise and AssetWise of complementary services built on the iTwin Platform, such as ProjectWise Design Review Service for comprehensive project‑wide 4D design review and status visibility;

•Sales of new solutions purposely built on the iTwin platform, such as PlantSight;

•Adding digital twin capabilities to an existing offering “powered by iTwin”, such as SYNCHRO; and

•Creation of a third-party ecosystem developing solutions built on the iTwin platform, using our open source iTwin.js APIs, by leveraging our acceleration initiatives such as iTwin Ventures, which invests in early-stage software companies building infrastructure digital twin solutions.

We believe that the growing adoption of infrastructure digital twins will serve to overcome the factors that have held back the digital advancement of infrastructure engineering, and will facilitate the broader use of intelligent engineering data in the operation of infrastructure assets. Moreover, we believe that due to the comprehensiveness of our solutions across project and asset lifecycles, infrastructure digital twins and newly enabled digital workflows spanning design, construction, and operations, will most particularly benefit our users and enhance our competitiveness.

Our Growth Strategies

We employ the following growth strategies to address the infrastructure engineering software market opportunities:

•Accretion within existing accounts. Most of our accounts currently use a small portion of our overall portfolio, even though they are often working on projects and assets where a large portion of our portfolio could be applied. We believe we can further penetrate our existing accounts by broadening their use of our portfolio. There are three primary mechanisms for this expansion:

•New commercial formulations. We continually innovate with new commercial formulations to align the use of our software to the needs of our users. We offer options enabling unrestricted access to our comprehensive software portfolio by the day, month, quarter, and year. We believe the flexibility in our commercial models and deployment options facilitates our accounts’ continuous growth in usage. In particular, enterprise 365 (“E365”) is our premier enterprise subscription that bundles virtually-delivered expert services, through a structured execution process, with our software, enabling us to work strategically with subscriber accounts to achieve the business outcomes they seek;

•Automating user engagement. We employ various technologies to drive user engagement. These technologies help to automate the user experience and drive engagement by suggesting and recommending best practices and appropriate software upgrades, as well as providing access to our deep bench of domain experts. We will continue to leverage these interactive technologies to virtually assist our users and drive engagement across our software offerings; and

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•Adding new offerings. We have a history of building and maintaining leadership in infrastructure software engineering comprehensiveness and intend to continue to innovate and develop our software offerings. Selected recent examples of our product innovations include the introduction of newly integrated multi‑disciplinary modeling and simulation applications since 2019 for offshore wind turbines, since 2020 for 5G‑ready communications towers, and since 2021 to incorporate Seequent’s geoprofessional applications for subsurface digital twins. Over the near term, we believe our iTwin Platform’s cloud services represent a compelling opportunity to enhance value for our accounts. We intend to continue to develop and integrate new products and capabilities over time.

•Focusing on Asia. We believe Asia represents a large market opportunity and will continue to do so over the foreseeable future. According to the Oxford Economics Outlook, a majority of expected infrastructure spending for the period through 2040 is expected to occur in Asia. Additionally, we believe that in Asia there is an abundance of skilled engineers whose work can be virtually exported, as well as engineering organizations that are eager and aggressive to win mandates for engineering and construction projects around the world. We intend to continue investing in strategies to enhance our market position in Asia.

•Increasing inside sales. Historically, our account management resources have focused on larger firms. Smaller- and medium‑sized engineering firms, however, represent a significant market opportunity and have the same needs for our comprehensive portfolio as the larger firms. While these firms have generally been served by our competitors’ channel partners, we believe they will prefer to deal directly with us. We will continue to expand our global inside sales resources and to multiply their reach and effectiveness with superior digital tools to convert leads and to provide the self‑service administration that engineering practitioners prefer.

•Digital co-ventures. We have forged substantial alliances with other major participants in the infrastructure engineering supply chain, primarily to jointly develop and offer digital twin cloud services that extend the scope of our software. These alliances include:

•Siemens AG (“Siemens”): Our partnership integrates leading industrial software and IoT capabilities for a broad joint development program focused on improving outcomes during infrastructure operations and maintenance through digital workflows enabled by digital twins cloud services; and

•Microsoft: Our partnership extends Azure‑powered machine learning and analytics through digital workflows for infrastructure professionals and enterprises.

•Investing in programmatic acquisitions. Since our founding, we have purposefully pursued a strategy of regularly acquiring and integrating specialized infrastructure engineering software businesses. Our acquisitions have the following purposes:

•Filling in the breadth and depth of our comprehensive applications portfolio across disciplines and infrastructure sectors, especially where the developer organizations have already worked on integration and compatibility with our platforms and APIs;

•Extending our lifecycle comprehensiveness;

•Adding new horizontal technologies that we can incorporate within our platforms for the benefit of our applications and systems at large, such as reality modeling; and

•Adding new distribution capacity, such as acquiring channel partners in geographies where we wish to accelerate our scale and growth.

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Our executive management and our dedicated “BSY Investments” team (our executive team focused on portfolio development, mergers and acquisitions, venture capital investing, digital integrator business activities, and various incubating and accelerating business activities) proactively identify, develop, and evaluate acquisition opportunities across various disciplines and infrastructure sectors, and also consider unsolicited opportunities. We have a disciplined and robust diligence and valuation process for evaluating acquisition targets. Our general practice is to fully assimilate the acquired companies’ functions into our global functional structure as quickly as possible, supported by a dedicated team to manage and streamline the integration process. However, for rare “platform” acquisitions beyond our typical programmatic scale, we may choose to “onboard” in a different manner that would least jeopardize continuity of their independent momentum. We prioritize the retention and development of the incoming colleagues from our acquisitions, including offering talent mobility for key personnel. Further, many of our current executives are former founders and/or executive officers of companies we have acquired.

•Investing to develop an ecosystem in support of infrastructure digital twin adoption. Through our BSY Investments team, in addition to the aforementioned acquisition activities, we pursue strategic investments to enhance and grow our core software business with the objective of cultivating an ecosystem to stimulate the adoption of infrastructure digital twins. These investments may take the form of acquisitions, wholly owned start-up initiatives, minority equity stakes, alliances, or loans. BSY Investments’ responsibilities include:

•Digital Integrator Businesses are our relatively service‑intensive businesses that stimulate pull‑through demand for our solutions. Certain of our recent digital integrator activities include: (i) The Cohesive Companies, a consolidation of several acquisitions during 2020 and 2021, as well as certain legacy Bentley Systems professional services businesses. The Cohesive Companies provide advisory, systems integration, and technology strategies and services to help owner-operators advance their BIM, enterprise asset management, asset lifecycle information, and asset performance modeling environments; and (ii) Digital Construction Works, Inc. (“DCW”), a joint venture with Topcon Positioning Systems, Inc. (“Topcon”), which integrates leading surveying technologies, geospatial machine control technologies and IoT technologies to augment digital twins and derived workflows in construction operations and infrastructure asset monitoring activities;

•iTwin Ventures is our business for investing up to $100 million of corporate venture capital funding for seed, early, and growth stage technology companies with promising and emerging opportunities for infrastructure digital twin solutions strategically relevant to our business. We operate and govern the activities of iTwin Ventures as a distinct venture capital business, and refer to this business as our iTwin Ventures corporate venture capital fund for both internal and external branding purposes; and

•Acceleration Activities are our vehicle for investing in initiatives with unusually high growth opportunity or where we see a need to incubate solutions to augment our current portfolio of products and services. Such initiatives presently include (i) investment in our OpenTower solution and related go-to-market activities to assist owners and operators of telecom towers rapidly transitioning to 5G and embracing digital twins to manage their critical tower assets; (ii) investing in, incubating, and integrating our sensemetrics and Vista Data Vision acquisitions to establish infrastructure IoT standardization and integration of IoT data into the Bentley Systems’ iTwin platform and to help digital twins remain evergreen by comparing the asset’s behavior to its design and construction specifications; and (iii) integrating and investing in go‑to‑market initiatives for our recently acquired Power Line Systems business to rapidly scale to address the looming demand and accumulating support and funding to harden, optimize, and expand the world’s electrical grids.

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The forgoing activities of BSY Investments may have lower initial margin contribution than the mainstream of our software business activities due to the professional services nature of digital integrator revenues, due to the seed or early‑stage nature of the investments, or due to the focused and upfront investments to demonstrate technologies and accelerate market position and/or scale advantages for future returns.

Our Software Offerings

Our software offerings are managed within Engineering Applications, Geoprofessional Applications, Enterprise Systems, Industry Solutions, and iTwin Platform.

Engineering Applications

We undertake to provide comprehensive open modeling and open simulation applications for infrastructure design integration.

Our open modeling applications include:

•MicroStation, for flexible 3D design and documentation providing the common modeling environment upon which our applications are built;

•OpenRoads, for the planning, 3D design, and documentation of roads and highways;

•OpenRail, for the planning, 3D design, and documentation of rail and transit systems;

•OpenPlant, for the 2D and 3D design and documentation of process plants;

•OpenBuildings, for the 3D design and documentation of buildings and their integrated structural, HVAC, electrical, and plumbing systems;

•OpenBridge, for the 3D design and documentation of bridges;

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•OpenSite, for the optimal planning, 3D design, and documentation of building, residential development, and infrastructure sites; and

•OpenFlows, for water, wastewater, and stormwater system planning, design, and operations, incorporating hydrological, hydraulic, and flood modeling.

Our open simulation applications include:

•STAAD and RAM, for analysis and simulation respectively of infrastructure and building structural performance;

•SACS, for analysis and simulation of offshore structural performance;

•MOSES, for analysis and simulation of floating structures;

•AutoPIPE, for analysis and simulation of pipe stress in industrial process plants;

•SITEOPS, for simulation of compliant site layout, and optimization of earthworks, drainage, and parking;

•CUBE, for multi-modal transportation network modeling and land-use modeling;

•DYNAMEQ, for traffic simulation and dynamic traffic assignment;

•EMME, for multimodal urban, regional, and transport planning; and

•LEGION, for pedestrian traffic simulation.

Geoprofessional Applications

We undertake to provide comprehensive modeling and simulation of near and deep subsurface conditions.

Our applications include:

•Leapfrog, for 3D implicit modeling designed to rapidly integrate, communicate, and interpret geological data;

•AGS Workbench, for processing, inversion, and visualization of geophysical data;

•GeoStudio, for integrated geotechnical analysis for analyzing slope stability, groundwater flow, and heat and mass transfer in soil and rock;

•Imago, for the capture and management of drilling core images;

•MX Deposit, cloud drill hole software for simplifying and controlling how drill and other field data is collected, managed, and shared throughout the lifecycle of an ore deposit from early exploration through to mine production;

•Oasis montaj, for the quality control, correction, visualization, analysis, and interpretation of geophysical, geologic and geochemical data;

•PLAXIS, for geotechnical analysis to solve common and complex geotechnical problems, including advanced analysis for excavations, foundations, tunnels, and other infrastructure projects; and

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•OpenGround, for geotechnical information management for collecting, reporting, managing, visualizing, analyzing, and accessing geotechnical data.

Enterprise Systems

Our Enterprise Systems include solutions for both project delivery and asset performance.

Our Project Delivery systems support collaboration, work‑sharing, and 4D construction modeling for infrastructure project delivery enterprises.

These offerings include:

•ProjectWise, for helping teams to manage, share, and distribute work‑in‑progress engineering content. ProjectWise enables all stakeholders involved in design and engineering to share and find information, conduct collaborative design reviews, and manage contractual exchanges faster for maximum team productivity;

•ProjectWise Design Review Service, a ProjectWise service built on the iTwin Platform that allows project participants to leverage a digital twin throughout the project delivery lifecycle and that provides browser‑level immersive visualization, 3D and 4D design reviews, change management, and project analytics; and

•SYNCHRO, for 4D construction modeling across schedule simulation and immersive virtual or augmented visualization; cloud-based construction operational solutions for project and field management; and advanced work packaging, inclusive of engineering, construction, and installation work packages, and trade and task workface planning.

Our Asset Performance systems manage engineering information and geospatial relationships for operating and provisioning infrastructure across all sectors.

These offerings include:

•AssetWise, for asset performance throughout the operations and maintenance lifecycle of infrastructure assets and their associated networks, in transportation, energy, and communications. AssetWise services include:

•AssetWise ALIM, for managing infrastructure asset information and linear networks and for controlling and managing change over the asset lifecycle;

•AssetWise Asset Reliability, for reducing equipment downtime and limiting business risk associated with equipment failures, while increasing safety, reliability, and cost effectiveness;

•AssetWise Enterprise Interoperability, for enabling access to multiple data sources from third‑party providers, and integrating them in operations and maintenance workflows;

•AssetWise 4D Analytics, for employing advanced analytics and machine learning, particularly to IoT time series, to gather insights to understand current conditions and predict future performance;

•AssetWise Linear Network Management, for managing transportation network infrastructure and associated information including assets and linear events; and

•Seequent Central, a cloud solution designed for geoprofessional teams to visualize, track, integrate, and manage their geoscience data in a single, centralized, auditable environment.

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Industry Solutions

Our Industry Solution offerings solve domain‑specific problems for owners of infrastructure assets, and the project delivery ecosystems that support these owners. Many offerings extend AssetWise and/or leverage the iTwin Platform.

Industry Solution offerings include:

•AssetWise Linear SUPERLOAD, for automating the safe routing and permitting of overweight/oversized vehicles;

•AssetWise Linear Analytics, for visualizing and understanding vast quantities of linear network data to identify trends and anomalies, and optimize maintenance decisions, for rail or road networks;

•AssetWise Inspections, for performing inspections of bridges and related assets;

•ContextCapture, for surveying existing conditions of a city, construction site, or operating infrastructure asset by processing digital imagery captured by UAVs, cameras, and scanners into 3D, geo‑located, engineering‑ready mesh models underlying the necessary digital context for digital twins;

•OpenCities, for engineering‑ready geospatial urban planning and visualization, as well as engineering‑level GIS functions such as mapping, cadaster, and parcel management;

•OpenUtilities, for the design and management of electric, gas, and district energy networks, and substations;

•OpenTower, for the design of communications towers, including for 5G capacity;

•OpenWindPower, for the design of fixed and floating wind turbine structures;

•Power Line (PLS) applications, for design of overhead electric power transmission, distribution, and communication lines and their structures;

•SPIDA, for modeling and analysis of overhead electric distribution network systems;

•OrbitGT, for 3D and mobile mapping for use with reality modeling and digital twins;

•sensemetrics, for centralizing sensor data for environmental condition monitoring of critical assets;

•PlantSight, a digital twin solution for operating industrial plants; and

•WaterSight, a digital twin solution for water and wastewater networks.

iTwin Platform

Our iTwin Platform for infrastructure digital twins enables Bentley Systems and other third‑party developers to build solutions for a wide range of potential digital twin use cases. We have used this platform to create cloud services which complement and extend project delivery systems and asset performance systems offerings, to create fit‑for‑purpose industry digital twin solutions, and to support an emerging ecosystem of third‑party developers.

New complementary services leveraging the iTwin Platform for current products will be marketed and monetized under their existing brands. We may also incorporate iTwin capabilities to enhance currently monetized offerings. New products created on the iTwin Platform will have their own distinct branding and pricing. All will use the designation “Powered by iTwin” to help identify where the iTwin Platform advances have been leveraged.

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The iTwin brand is reserved for the iTwin Platform. Its many cloud services will be leveraged both by us and by third‑party solutions.

Our Commercial Offerings

Licensing Models

Our applications are offered through perpetual licenses or term licenses, priced dependent on the country of purchase and use. Most accounts owning perpetual licenses subscribe to our SELECT coverage which, in addition to providing support and upgrades, enables the use of their licenses for each product to be pooled within each country. For most larger accounts (generally a minimum of $250,000 annualized recurring revenues), we have traditionally offered an enterprise license subscription (“ELS”), which entitles unlimited use of any of our applications for an annual fixed fee, reset annually generally based on actual usage (within each country) for the previous year. During the fourth quarter of 2018, to respond to and improve upon new commercial models offered by peers and competitors, we introduced a new global consumption‑based plan with consumption measurement durations of less than one year, E365 subscription, which is priced uniformly per application per day of actual usage in any country, and inclusive of Success Services (described below) by our colleagues to assist with expanding and gaining the most value from usage of our software. Most of our largest ELS accounts have upgraded to E365, and many of the remainder, and of our largest SELECT subscriber accounts, continue to upgrade each quarter.

Our ProjectWise and AssetWise enterprise systems are offered under our cloud services subscription program, charged quarterly based on actual users of “passports” and “visas” for various levels of functionality. Passport and visa pricing include Azure provisioning at our cost, although some accounts elect to continue on‑premises and/or hybrid hosting. CSS commercial models entail an annual funding commitment, generally paid upfront, based on an estimation of services to be used for the upcoming year. Actual consumption is monitored and invoiced against the deposit on a calendar quarter basis. Accounts are charged only for what gets used, and deposited amounts never expire. At the end of 2021, accounts representing approximately 60% of our total annualized recurring revenues had chosen to institute our new commercial models of CSS and/or E365 consumption funding for licensing of our software.

User Success

Over the last two years, we have reorganized our activities focused on substantive support for existing users and their accounts into our new User Success group, now consisting of approximately 600 colleagues, most with domain experience and credentials in infrastructure engineering. User Success has enabled us to transition from traditional paradigms of on‑demand technical support, and episodically contracted professional services, to instead delivering proactive and continuous engagement with users and accounts through “Success Plans.” Success Plans are designed with our accounts’ business outcomes in mind ensuring that users and accounts maximize the value achieved from our solutions. Working collaboratively with our accounts, User Success Specialists deliver Success Plans through structured engagements based on explicit and standardized “Success Blueprints” that include annual planning, virtual or in-person engagements with subject matter experts, and quarterly business reviews. Typically, our User Success colleagues engage with our accounts remotely. Success Plans, based on allotted credits toward multiple Success Blueprints per calendar quarter, are bundled into our new E365 commercial program which has grown rapidly among our larger accounts.

Our Accounts

We provide our software solutions to over 39,000 accounts in 186 countries worldwide. Our revenues are balanced and diversified between engineering and construction contracting firms who work together to deliver the design and construction of capital projects (representing 56%, 57%, and 55% of our 2021, 2020, and 2019 total revenues, respectively), and their clients, the world’s public and private infrastructure asset owners and operators (representing 44%, 43%, and 45% of our 2021, 2020, and 2019 total revenues, respectively).

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We do not have material account concentration. No account, including any group of accounts under common control or accounts that are affiliates of each other, represented more than 2.5% of our total revenues in 2021, 2020, or 2019.

Our Technology

Our business is singularly focused on software for infrastructure engineering, primarily for the world’s largest projects and assets. As a result, we manage our software products to meet constraints imposed for fitness to this purpose. Our market position is built on several reputational hallmarks, including:

•generational stability of file formats, corresponding to the long lives of infrastructure projects and assets;

•commitment to openness and interoperability with competitors’ file formats;

•continuity of software applications’ lifecycles, never jeopardizing users’ cumulative investments by requiring them to “start over”; and

•highest capacity and performance, versus competitors, for large infrastructure models and datasets.

Application Framework

Our software solutions are delivered using flexible, reusable, and open technology, which results in highly integrated applications and cloud services that support comprehensive digital workflows in a scalable manner. For example, our modeling and simulation applications, including MicroStation, leverage a set of reusable components for graphics editing, visualization, solid modeling, and other capabilities. This open framework supports the addition of domain specific features, allowing us to offer highly compatible and well-integrated discipline‑specific applications based on this common framework.

Microsoft Integration

Our software leverages Microsoft’s platform technologies. We seek to take full advantage of integration with Microsoft Office 365 and other horizontal applications such as Teams for workflows that unify our engineering applications within enterprise environments across all computing form factors and devices.

iTwin Platform

Our iTwin Platform is a collection of cloud services used to create, curate, and leverage digital twins. The platform is used by us to create complementary digital twin offerings for current products, to embed digital twin capabilities in current products, and to support fit‑for‑purpose digital twin solutions for particular domains. Third parties can use the iModel.js open-source APIs to create desktop, mobile, and web apps, as well as cloud services and agents, that leverage and extend the iTwin Platform. They can create new digital twin solutions or provide complementary applications or services to existing Bentley Systems and third‑party solutions. The iTwin platform is managed by us on Azure providing anywhere, anytime access to infrastructure digital twin solutions for all stakeholders.

Our Licensing and Administration Platform

All of our applications and systems share a cloud‑native platform for license pooling, management of subscription entitlements, and usage reporting for us and for accounts, including for commercial consumption metrics. Our platform also logs usage of particular “instrumented” functions within our applications to enable our Success Plans to be of most value. Our platform can also provide in-application messaging to users from our User Success group.

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Our Acquisitions

Since our founding, we have purposefully pursued a strategy of regularly acquiring and integrating specialized infrastructure engineering software businesses, including 33 acquisitions over the past five years.

As a public company, we have been able to make platform acquisitions which appreciably increase our scale and/or the scope of our platform capabilities. Our platform acquisitions have been:

•Seequent (2021), and subsequent complementary programmatic acquisitions, to enable infrastructure digital twin capabilities to incorporate modeling and simulation of full subsurface depths, and advancing infrastructure resilience and sustainability by helping geoprofessionals to understand environmental conditions and to mitigate environmental risks; and

•Power Line Systems (2022), to bring design, analysis, and management of overhead electric power transmission lines and structures to our grid digital twin solutions. Power Line Systems substantially completes the reach of our comprehensive portfolio for the lifecycle integration of grid infrastructure across electrical transmission, substation, and distribution assets, and communications towers.

Our relatively numerous and frequent programmatic acquisitions, which most often “fill white space” from within our ecosystem of adjacent smaller companies, add their particular value principally by virtue of our existing platform comprehensiveness, and accordingly we consider this programmatic aspect of our growth as characteristically within our mainstream business performance (unlike platform acquisitions). Our average historical annualized recurring revenues growth rate from programmatic acquisitions over the last five years has been approximately 1.5% measured on a constant currency basis. Examples of recent programmatic acquisitions, along with their purposes, include:

•Citilabs (2019) and Inro (2021), to add traffic simulation software for multi‑modal mobility digital twins;

•OrbitGT (2019), to add specialized capabilities for mobile mapping (such as vehicle‑based scanning and photogrammetry) to our reality modeling offerings;

•GroupBC (2020), to bring additional common data environment solutions for construction projects and infrastructure assets, and federate to iTwin cloud services, extending the value of project and asset information through digital twins;

•Cohesive Solutions (2020), and subsequent complementary programmatic acquisitions, to bring digital integrator expertise for the convergence, through digital twin cloud services, of digital engineering models (ET), with IT and OT, for infrastructure assets in the utilities, energy, and facilities sectors;

•Vista Data Vision (2021), to add intrinsic IoT capabilities for infrastructure digital twins to incorporate real‑time sensor data. By virtue of the resulting “infrastructure IoT” standardization, the full IoT ecosystem becomes seamlessly accessible for IT/OT/ET integration through infrastructure digital twins; and

•SPIDA Software (2021), adds a key element to our grid digital twin solutions, the design, analysis, and management of utility pole systems, which deliver the environmentally vulnerable “last mile” of critical infrastructure for vital energy and communications.

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Our Competition

The market for our software solutions is highly competitive and subject to change. We compete against large, global, publicly‑traded companies that have resources greater than our own, and also against small, new, or geographically‑focused firms that specialize in developing niche software offerings. While we do not believe that any competitor offers a portfolio as comprehensive as ours, we do face strong competition, varying by infrastructure lifecycle phase and sector:

•our key competitors in public works/utilities applications include Autodesk, Inc., Trimble Inc., Hexagon AB, and Dassault Systèmes;

•our key competitors in industrial/resources applications include Hexagon AB, AVEVA Group plc, and Dassault Systèmes;

•our key competitors in commercial/facilities applications include Autodesk, Inc., Nemetschek SE, and Trimble Inc.;

•our key competitors in project delivery systems include Autodesk, Inc. and Oracle Corporation with their Primavera P6 and Aconex offerings; and

•our key competitors in asset performance systems include Aspen Technology, Inc., AVEVA Group plc, Environmental Systems Research Institute, Inc., and General Electric Corp.

The principal competitive factors affecting our market include:

•product features, performance, and effectiveness;

•reliability and security;

•product line breadth, depth, and continuity;

•comprehensiveness of offerings across disciplines and infrastructure sectors;

•specification by and endorsement of infrastructure owners, and degree of adoption across the relevant supply chain;

•familiarity and loyalty by professionals throughout their training and careers;

•ability to integrate with other technology;

•capacity to operate at scale;

•capabilities for configurability and APIs;

•ease of use and efficient workflows;

•price, commercial model, and total cost of use;

•support of industry standards;

•strength of sales and marketing efforts; and

•brand awareness and reputation.

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We believe we compete favorably against our competitors based on the factors above and that we distinguish ourselves through our comprehensive software portfolio, our commitment to both integration and interoperability across the entire infrastructure lifecycle, our flexible commercial models, and our direct sales channels.

Our Sales and Marketing

We bring our offerings to market primarily through direct sales channels that generated approximately 92% of our 2021 total revenues. Our direct sales channel includes:

•Account Managers, who are responsible for our largest accounts. For pre‑sales technical activities, Account Managers are supported by the engineering domain experts within our User Success organization;

•Inside Sales Specialists, who are responsible for servicing smaller‑ to medium‑sized accounts in territories defined by geography and product lines; and

•Product Sales Specialists, who are technical experts in a specific product line, help to sell across the territories of both Account Managers and Inside Sales Specialists.

We rely on specialist channel partners in geographic regions where we do not currently have a meaningful presence or where, for some of our offerings, direct sales efforts are less economically feasible. Channel partners accounted for approximately 8% of our 2021 total revenues.

Sales cycles for our applications tend to be relatively short, measured in weeks. The most prevalent transactions are increases by accounts in their use of our applications already in use. Our sales model allows and encourages accounts to try usage of our applications that are new to them with minimal obligation. We act upon our logs of such new usage to assign user success colleagues to help the new users in this expanded adoption.

Our ProjectWise and AssetWise enterprise systems offerings are generally sold through either proactive proposals or responses to requests for proposal, so sales cycles for those offerings range from months to several quarters. We have a comprehensive global proposals team to assure appropriate business development resources are allocated, to quality‑assure efficient and effective proposal contents, and to maximize the capture ratio for our proposal pursuit.

Our marketing functions include:

•Corporate marketing, to build brand awareness, brand equity, and thought leadership, including through corporate events and programs covering industry trends and challenges, and to conduct market research and industry studies;

•Industry and product marketing, for demand generation through digital marketing channels, including our website, Internet advertising, webinars, and virtual events, and paid and organic social media, and through traditional marketing channels such as trade print advertising, press releases, editorial placements, industry‑specific trade shows and conferences, in‑person seminars, and locally‑sponsored events; and

•Regional marketing, to localize and deliver our marketing programs throughout the world.

We also invest in our annual Year in Infrastructure Conference, which brings together leading infrastructure thought leaders from around the world for presentations on innovative projects, to learn about the latest advances to our applications and cloud offerings, and to network and share best practices. Our associated Year in Infrastructure and Going Digital Awards, which we held virtually in 2021 due to the COVID‑19 pandemic, attracted nearly 300 project nominations from our accounts to be judged by independent juries in 19 categories for digital advancements in infrastructure engineering.

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Our Research and Development

We continue to make substantial investments in research and development because we believe the infrastructure engineering software market presents compelling opportunities for the application of new technologies that advance our current solutions. Our research and development roadmap balances technology advances and new offerings with continuous enhancements to existing offerings. Our allocation of research and development resources is guided by management‑established priorities, input from product managers, and user and sales force feedback.

We had more than 1,600 colleagues engaged globally in software research and development as of December 31, 2021. Each of our product advancement groups for Engineering Applications, Geoprofessional Applications, Enterprise Systems, and Industry Solutions have research and development resources and responsibilities. Our iTwin Services group consists of approximately 180 colleagues and is entirely devoted to the rapid development of new and incremental cloud‑native services for infrastructure digital twins. Our separate Technology office assesses the potential of new software technologies and sources.

As part of our resource allocation process, we also conduct a cost‑benefit analysis of acquiring available technology in the marketplace versus developing our own solutions. Our Portfolio Development office, in addition to pursuing appropriate acquisitions and digital-integrator startups, allocates funding for internal “acceleration” projects, to “make” rather than “buy.” Each such project is staffed with colleagues dedicated to the “intrapreneurial” incubation of a new offering, which is brought back to its respective sponsoring product advancement group after market introduction.

For the years ended December 31, 2021, 2020, and 2019, our research and development spending was $220.9 million, $185.5 million, and $183.6 million, respectively, and as a percentage of our total revenues was 22.9%, 23.1%, and 24.9%, respectively.

Digital co-ventures

In 2019, we and Topcon created an equally‑owned joint venture, DCW, to serve as a digital integrator for major construction projects and related enterprises. We and Topcon each contributed experienced colleagues in addition to the required capital commitments.

As part of our co‑venturing with Siemens, we undertake a program of joint research and development investment in which each company bears its own costs. These investments have led to jointly offered cloud services for infrastructure digital twins, some of which are already commercially available.

Our Intellectual Property

We believe that the success of our business depends more on the quality of our proprietary software solutions, technology, processes, and domain expertise than on copyrights, patents, trademarks, and trade secrets. While we consider our intellectual property rights to be valuable, we do not believe that our competitive position depends primarily on obtaining legal protection for our software solutions and technology. Instead, we believe that our competitive position depends primarily on our ability to maintain a leadership position by developing innovative proprietary software solutions, technology, information, processes, and know‑how. Nevertheless, we rely on a combination of copyrights, patents, trademarks, and trade secrets in the United States (“U.S.”) and other jurisdictions to secure our intellectual property, and we use contractual provisions and non‑disclosure agreements to protect it. As of December 31, 2021, we had 134 patents granted and 48 patents pending in the U.S., the first of which expires on January 12, 2022, and 25 patents granted and 65 patents pending internationally, the first of which expires on August 14, 2022. In addition, from time to time we enter into collaboration arrangements and in‑bound licensing agreements with third parties, including certain of our competitors, in order to expand the functionality and interoperability of our software solutions. We are not substantially dependent upon any one of these arrangements, and we are not obligated to pay any material royalty or license fees with respect to them.

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Our patents cover systems and methods relating to various aspects of software for infrastructure design and modeling, collaboration and work‑sharing, and infrastructure asset operations. Among other things, our patents address a broad range of issues in infrastructure domains from analyzing building energy usage and structural analysis, railway system maintenance, water network design and operation and augmented reality, as well as techniques for creating, storing, displaying, and processing infrastructure models.

To innovate and increase our strategic position, our software developers are incentivized to alert our internal patent committee to innovations that might be patentable or of strategic value. In 2021, our patent committee reviewed 21 invention disclosures submitted by our software developers, and filed 17 U.S. and 14 foreign patent applications, while 17 U.S. and no foreign patents were granted. We also plan to assess appropriate occasions for seeking patent and other intellectual property protections for aspects of our technology and solutions that we believe constitute innovations providing significant competitive advantages. We have registered 173 trademarks, including “Bentley,” “MicroStation,” “AssetWise,” and “ProjectWise,” with the U.S. Patent and Trademark Office and in several jurisdictions outside the U.S.

Our names, logos, website names, and addresses are owned by us or licensed by us. This Annual Report on Form 10‑K contains trademarks, trade names, and service marks of other companies, which are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this Annual Report on Form 10‑K may appear without the ®, TM, or SM symbols, but the lack of those references is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names, and service marks. We do not intend our use or display of other parties’ trademarks, trade names, or service marks to imply, and such use or display should not be construed to imply, endorsement or sponsorship of us by these other parties.

Environmental, Social, and Governance (“ESG”)

At Bentley Systems, our commitment to ESG is driven by our service to engineering and related professions, and the positive impacts our products enable through the design, building, and operation of the world’s infrastructure. In 2021, we enhanced our ESG efforts and improved our performance, particularly in the areas of governance, strategy, and disclosure.

ESG Governance

In our first year as a public company, our primary objective was to establish strong ESG governance. In early 2021, we established formal Board oversight of ESG through the newly created Sustainability Committee of our board of directors. The Sustainability Committee, a committee of independent Bentley Systems directors, meets quarterly to assess the Company’s ESG performance, strategy, and disclosures. In addition, we enhanced internal governance of ESG through the formation of the internal ESG Steering Committee. The ESG Steering Committee meets regularly and consists of Bentley Systems executive sponsors from relevant functional departments and other subject matter experts with responsibilities for ESG strategy, implementation, and reporting.

ESG Strategy

To define our approach to ESG and our areas of focus, we reviewed the leading ESG reporting frameworks and engaged our ESG Steering Committee to develop our ESG Framework. Using the Sustainable Accounting Standards Board Software and IT Services Standard and the United Nations Sustainable Development Goals, we identified nine areas of focus that align with our E, S, and G pillars. These areas are where we believe Bentley Systems can best create value and mitigate potential risks. Building from this initial framework, we seek to articulate our current performance in each area, develop strategies to manage these areas over time, and engage stakeholders to refine this framework following the ESG principles of materiality.

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ESG Disclosure

As a first step to enhancing our ESG reporting, we developed an ESG website to centralize our relevant disclosures and to prepare for future reporting. The website details our ESG Framework, current ESG efforts, and numerous resources linked in the ESG Data Center.

To learn more, visit our ESG website at www.bentley.com/en/esg.

Human Capital Management

We consider our colleagues a key success factor in driving our continued growth. Our overall Talent Strategy focuses on building an inclusive and engaging culture in which our colleagues develop, collaborate, contribute, and thrive, so they can make a difference through advancing the world’s infrastructure.

As of December 31, 2021, we had 4,626 full‑time colleagues globally, including 1,860 in the Americas (the U.S., Canada, and Latin America (including the Caribbean)), 1,231 in Europe, the Middle East, and Africa (“EMEA”), and 1,535 in Asia‑Pacific (“APAC”). None of our full‑time U.S. colleagues are unionized. Outside the U.S., a small overall portion of our colleagues in certain countries are represented by a colleague representative organization, such as a union or colleague association. Our colleagues bring 67 languages to fulfill the needs of our globally dispersed accounts and users. Our colleagues are highly qualified with an average of six years of total service with the Company and advanced academic credentials, including 124 doctoral degrees and 1,264 master’s‑level degrees.

We believe our culture and values are a key driver for attracting, developing, and retaining highly talented colleagues. Our culture and values are rooted in the philosophy of corporate responsibility and ESG, which drive workforce motivation to make an impact on the world’s infrastructure and improve quality of life, a passion to solve our users’ challenging problems through innovation and creativity, a desire to connect and collaborate, and a commitment to deliver on our promises.

Our approach to talent management is guided by our strong sense of corporate culture. We do this by striving to remain competitive with our peers and to embed opportunity, engagement, diversity, inclusion, and continuous growth throughout the entire lifecycle of talent management.

Talent Acquisition Strategy

Our Talent Acquisition Strategy leverages best practices to attract, engage, and hire diverse people and current and future leaders who will work hand‑in‑hand with all colleagues to achieve success. Thanks to our culture and values, investment in colleague development opportunities, and competitive total rewards, we enjoy high levels of colleague referrals to supplement our corporate hiring practices, which are encouraged through our colleague referral program. We also build relationships with universities around the world as part of our Future Talent Program to hire talented graduates into our rotational Graduate Development Program, which provides curated growth and development opportunities while creating a solid talent pipeline for our critical business units and teams.

As part of our commitment to diversity, equity, and inclusion (“DEI”), we deploy strategies to identify diverse candidates with each open position, take measures to keep our Talent Acquisition process free of bias, and in the U.S., we intentionally partner and advertise jobs with organizations focused on women, veterans, people of color, people with disabilities, and LGBTQ+ populations. As part of our university efforts, we partner with Historically Black Colleges and Universities (“HBCUs”) in the U.S. and provide free Bentley Systems software learning licenses to HBCU students. We have also expanded our reach to students in our local communities via partnerships with organizations like CodePath, a non-profit organization striving to eliminate educational inequity in technical education.

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Professional Development

We are committed to investing in our most valuable resource, our colleagues. We provide our colleagues with various tools and opportunities to enhance their professional development and, as a result, the career potential of each colleague. Our goal is to enable and empower colleagues with learning and development resources to support their skills development as individual contributors, team managers, or organization leaders.

We offer:

•Colleague and Manager Portals. These robust portals provide colleagues and managers with essential resources throughout their career lifecycle at Bentley Systems. The portals contain learning pathways and programs on topics such as goal setting, competency training, coaching, feedback, performance reviews, and career development;

•Skill Development Portal. Colleagues are encouraged to create a habit of learning, and to develop foundational and core job function skills to improve efficiency and productivity. We offer colleagues access to a powerful learning platform, connecting them with content from over 30 integrated providers and millions of curated articles, videos, courses, podcasts, and events;

•Career Development Program. We encourage colleagues to take ownership of their career development. We expect our colleagues to craft their development plans with the assistance of their managers. Our managers are trained to support and empower their team members by giving continuous feedback and supporting their career goals. The Career Development Program includes self-assessments, career planning guides, goal setting tools, skill development, and career management resources;

•Formal Mentorship Programs. Our Leadership Enablement and Development (LEAD) Program arranges intensive mentorships to identify and accelerate growth potential for the next generation of Bentley Systems leaders. The LEAD Program was developed based on our leadership competence framework. Learning pathways corresponding to each competence and intensive one-on-one mentoring with our executives are offered to develop leadership competencies based on 360 feedback, personality assessment, and action planning. Our Bentley Network of Women (NOW) Program is a formal mentorship opportunity for our female colleagues to develop their skills and advance their careers;

•Educational Assistance Program. The Educational Assistance Program encourages professional development through formal education so that colleagues may further develop job-related skills and enhance career progression within Bentley Systems. This program covers a range of training programs and courses leading to degrees and certifications; and

•Subsidized Professional Memberships and Subscriptions. We reimburse colleagues for the annual fees related to continuing membership in, or subscription to, professional organizations that are directly related to the colleague’s role.

Engagement and Performance Management

Colleague engagement is critical to maintaining our strong sense of corporate culture. We conduct annual talent reviews and engagement surveys to ensure that we are executing business objectives, providing resources to optimize the performance and potential of our colleagues, and to ensure our colleagues are motivated and engaged.

In our 2021 Annual Colleague Engagement Survey, we were pleased to report an 86% participation rate across the organization despite the challenges of remote work. Of the colleagues who participated in the survey, 85% responded they were proud to work for Bentley Systems and 87% responded they would gladly recommend Bentley Systems as a place to work to people they know and respect.

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Diversity, Equity, and Inclusion

As a global company with colleagues of different cultures, backgrounds, and perspectives based in more than 40 countries worldwide, our diversity is what makes us successful. Bentley Systems is committed to fostering and continuing to build programs to promote DEI so that all colleagues can reach their highest performance and potential. We have developed strategies and programs focused on DEI and increasing diversity and equity, as well as fostering a culture of inclusion and well‑being in the workplace. These strategies and programs include:

•Building Diversity. We are building a pipeline of diverse candidates by recruiting and partnering in education programs at HBCUs. We are partnering with professional organizations to support underrepresented groups in engineering and technology. We provide internships; scholarships; Science, Technology, Engineering, and Mathematics (STEM) grants; mentorships; and programmatic support to organizations and schools with diverse and underrepresented groups. We implemented pre-hire assessments to reduce implicit bias in the hiring process;

•Colleagues. We continue to create an inclusive workplace through our colleague resource groups, the Inclusion, Diversity, and Equity Alliance (“IDEA”), which provides our colleagues a platform to join other colleagues from all regions, levels, demographics, and departments to build community and celebrate our diversity and differences. IDEA currently has four global focus groups: Bentley Pride, Open Abilities, People of Color in the U.S., and Women at Bentley. Our IDEA groups have built community and provided platforms for discussion by hosting book clubs, panel discussion, speakers, and celebrating global awareness days and events. We also invest in the Bentley Network of Women (NOW), a development and mentoring program for women globally at the Director level and below; and

•Awareness and Training. We have implemented robust DEI training as part of our annual compliance commitments. We have held interactive sessions with our executives, emerging leaders, and talent acquisition in fostering DEI and eliminating unconscious bias, and have implemented training for hiring managers to ensure fairness in the interview process.

In the U.S., we have provided extended paid parental leave and benefits for qualified gender affirming surgery. We plan to continue our commitments to gender pay parity and analysis and benefits to ensure our colleague’s well‑being.

Additional information on our DEI program can be found on our website at www.bentley.com/en/about-us/diversity-equity-inclusion.

COVID-19 Response

From the start of the COVID‑19 pandemic, we took immediate action to ensure our colleagues had the equipment and resources they needed to work from home, which also enabled success for our users. Our global task force provided continuous communication, education, and support services to our colleagues. Their well‑being fueled our response plan and we created learning resources to support them throughout the pandemic. These learning resources included guides and practices for managers to lead virtually with empathy, tips for maintaining team collaboration, and resources and support for colleagues to maintain a healthy work‑life balance. We are proud to share that at no point during the COVID‑19 pandemic have we had to resort to furloughs.

As the pandemic continues, and work flexibility is seen as the key to success for our business and colleagues’ well‑being, we created the Infrastructure Empowered Workforce Plan (the “IEWP”) in July 2021. The principle of the IEWP is for colleagues to take advantage of the world’s infrastructure through mobility, productive and enjoyable facilities, and the flexibility to work remotely, all while leveraging the power of technology. The IEWP encourages our colleagues to make the best of both remote and in‑office working worlds to perform at a high level in contributing to our company’s success— and accordingly to the world’s economy and environment, which depends on infrastructure.

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The IEWP is built on a solid foundation of trust, empowering colleagues to make responsible and effective choices about the right balance between working from the office and remotely. This plan does not require colleagues to come into the office at any specific frequency. Rather, it provides colleagues the flexibility to make these choices with their manager and within their teams, to achieve business success and maintain a high level of productivity and engagement.

From the IEWP survey conducted in September 2021, 85% of our colleagues who participated in the survey responded that they believed the IEWP will positively contribute to their work‑life balance and 78% responded that the IEWP will positively impact their productivity and effectiveness at work.

Corporate Information

Bentley Systems, Incorporated was incorporated in Delaware in 1987 and is headquartered in Exton, Pennsylvania. We were originally incorporated in California in 1984 upon our founding.

Website Access to Reports

Our internet address is www.bentley.com. The information posted on our website is not incorporated into this Annual Report on Form 10‑K. Our Annual Report on Form 10-K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on the Investor Relations portion of our website at www.bentley.com (or investors.bentley.com) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the U.S. Securities and Exchange Commission (“SEC”).

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Item 1A. Risk Factors

The following is a discussion of the material factors that make an investment in the Company and its securities speculative or risky. The risks described herein are not the only risks we may face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, or operating results.

Risks Related to Our Business and Industry

Demand for our software solutions is subject to volatility in our accounts’ underlying businesses, which includes infrastructure projects that typically have long timelines.

Our sales are based significantly on accounts’ demand for software solutions in the following infrastructure sectors: (i) public works/utilities; (ii) industrial/resources; and (iii) commercial/facilities. Although these sectors are typically countercyclical to one another in nature, each periodically experiences economic declines and may be exacerbated by other economic factors. If participants in any of these sectors reduce spending or allocate future funding in a manner that results in fewer infrastructure improvement or expansion projects, then our accounts’ underlying business may be impacted and demand for our software solutions may decrease or our rate of contract renewals may decrease. A prolonged decrease in such spending may harm our results of operations. Our accounts may request discounts or extended payment terms on new arrangements or seek to extend payment terms on existing arrangements due to lower levels of infrastructure spending or for other reasons, all of which may reduce revenue. We may not be able to adjust our operating expenses to offset such discounts or other arrangements because a substantial portion of our operating expenses is related to personnel, facilities, and marketing programs. The level of personnel and related expenses may not be able to be adjusted quickly and is based, in significant part, on our expectations for future revenues and demand.

Infrastructure projects typically have long timelines and we may invest in building capacity based on expected demand for our software solutions that takes longer to develop than we expect or fails to develop at all. Additionally, government spending on infrastructure may decrease, which could decrease the demand for our software solutions and have a negative impact on our results of operations. We may not be successful in forecasting future demand levels and could fail to win business at the expected rates. If we underestimate the demand for our software solutions, we may be unable to fulfill the increased demand in a timely fashion or at all. If we overestimate the demand for our software solutions, we may incur additional expenses for which we would not have corresponding revenues, negatively impacting our results of operations.

The ongoing global coronavirus outbreak could materially and adversely affect our business.

In March 2020, the World Health Organization declared a global pandemic related to the rapidly growing outbreak of the disease COVID-19, caused by a novel strain of coronavirus, SARS-CoV-2. The COVID-19 outbreak and certain preventative or protective actions that governments, businesses, and individuals have taken in respect of COVID-19 have resulted in global business disruptions. The COVID-19 pandemic has adversely affected global economies, financial markets, and the overall environment in which we do business, and the extent to which it may impact our future results of operations and overall financial performance remains uncertain. The COVID-19 pandemic has had a modest impact on the usage of our solutions by our users. Throughout 2020 and 2021, usage rates fluctuated modestly when compared to the corresponding periods in the prior year. Usage declines have had a minimal impact on our recurring revenues, which are comprised primarily of longer term contracts where short‑term usage rate declines do not adversely impact revenues. However, to the extent declines in usage have also occurred within our recurring revenue contracts with shorter term resets, as is the case with our E365 contracts, the usage declines have modestly impacted revenues. Our revenues from services have also been impacted as certain accounts have delayed new projects. Overall, while our rate of growth has been impacted, our revenues have continued to grow given the mission critical nature of our solutions. There can be no assurance that we will not experience more severe downward trends in usage for as long as the pandemic lasts and thereafter. While recent vaccine approvals and rollouts have raised expectations of a turnaround in the COVID-19 pandemic, new waves of outbreaks and variants as well as delays in vaccinations pose risks to recovery and our outlook. In addition, supply chain disruption and resulting inflationary pressures, a global labor shortage, and the ebb and flow of COVID-19 are currently impacting the pace of recovery. Growth may slow if virus outbreaks (including from new variants) prove difficult to contain, infections and deaths mount rapidly before vaccines are widely available, and social distancing measures and/or lockdowns return and are more stringent than anticipated. These uncertainties and risks could have a material adverse impact on our financial condition, business and results of operations, as well as those of our

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customers and counterparties. The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions, and the impact of these and other factors on our colleagues, accounts, suppliers, and partners. The COVID-19 pandemic may continue to materially affect the economies and financial markets in impacted countries and countries in which we operate, causing continued economic downturn that could decrease spending on infrastructure projects and adversely affect demand for our software solutions. Such impact on our business, financial condition, operating results, and/or cash flows could be material. The COVID-19 pandemic may also have the effect of heightening other risks disclosed in these Risk Factors, such as, but not limited to, those related to supply chain disruptions and global labor availability and cost.

The majority of our revenues and an increasing percentage of our operations are attributable to operations outside the U.S., and our results of operations therefore may be materially affected by the legal, regulatory, social, political, economic, and other risks of foreign operations.

Approximately 59%, 57%, and 58% of our total revenues were from outside the U.S. for the years ended December 31, 2021, 2020, and 2019, respectively. We anticipate that revenues from accounts outside the U.S. will continue to comprise a majority of our total revenues for the foreseeable future.

Our international revenues, including from emerging economies, are subject to general economic and political conditions in foreign markets and our revenues are impacted by the relative geographical and country mix of our revenues over time. These factors could adversely impact our international revenues and, consequently, our business. Our dependency on international revenues also makes us more exposed to global economic and political trends, which can negatively impact our financial results. Further, our operations outside the U.S. are subject to legal, regulatory, social, political, economic, and other risks inherent in international business operations, including, without limitation, local product preference and product requirements, trade protection measures, sanctions, quotas, embargoes, import and export licensing requirements, duties, tariffs or surcharges and more stringent regulations relating to privacy and data security and access to, or use of, commercial and personal information, such as the General Data Protection Regulation (the “GDPR”) applicable in the European Union (“E.U.”), the Personal Information Protection Law (the “PIPL”) applicable in the People’s Republic of China, and Brazil’s General Data Protection Law.

The occurrence of any one of these risks could negatively affect our international business and, consequently, our business, financial condition, and results of operations. Additionally, operating in international markets requires significant management attention and financial resources. We cannot be certain that the investment and additional resources required to operate in other countries will produce desired levels of revenue or profitability.

Decreased investment by APAC, including China, may have a negative effect on our business.

Approximately 19% for the years ended December 31, 2021 and 2020 and 20% of our total revenues for the years ended December 31, 2019 relate to infrastructure projects in APAC, including China. We cannot assure you that spending in these countries on infrastructure projects will continue at historical levels or increase in the future, or that demand for our software solutions in APAC in general will not be negatively affected by reductions in spending or other limitations.

We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows.

We sell our solutions in 186 countries, primarily through a direct sales force located throughout the world. Approximately 59%, 57%, and 58% of our total revenues were from outside the U.S. for the years ended December 31, 2021, 2020, and 2019, respectively. As we continue to expand our presence in international regions, the portion of our revenues, expenses, cash, accounts receivable, and payment obligations denominated in foreign currencies continues to increase. Further, we anticipate that revenues from accounts outside of the U.S. will continue to comprise the majority of our total revenues for the foreseeable future.

Because of our international activities, we have revenues, expenses, cash, accounts receivable and payment obligations denominated in foreign currencies. For the years ended December 31, 2021, 2020, and 2019, 47%, 43%, and 47%, respectively, of our total revenues were denominated in a currency other than the U.S. Dollar. As a result, we are subject to currency exchange risk. Our revenues and results of operations are adversely affected when the U.S. Dollar strengthens relative to other currencies and are positively affected when the U.S. Dollar weakens. As a result, changes in currency

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exchange rates will affect our financial position, results of operations, and cash flows. In the event that there are economic declines in countries in which we conduct transactions, the resulting changes in currency exchange rates may affect our financial condition, results of operations, and cash flows. We are most impacted by movements in and among the Euro, British Pound, Australian Dollar, Canadian Dollar, Chinese Yuan Renminbi, and New Zealand Dollars. For example, the Chinese Yuan Renminbi has fluctuated against the U.S. Dollar, at times significantly and unpredictably, due to changes in foreign exchange for a wide variety of reasons, including actions instituted by China. Because of changes in trade between the U.S. and China and Renminbi internationalization, China may in the future announce further changes to the exchange rate system, and we cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the U.S. Dollar in the future.

In addition, countries in which we operate may be classified as highly inflationary economies, requiring special accounting and financial reporting treatment for such operations, or such countries’ currencies may be devalued, or both, which may harm our business, financial condition, and results of operations.

We cannot predict the impact of foreign currency fluctuations and we may not be successful in minimizing the risks of these fluctuations. In addition, the fluctuation and volatility of currencies, even when it increases our revenues or decreases our expenses, impacts our ability to accurately predict our future results and earnings.

We may not be able to increase the number of new subscription‑based accounts or cause existing accounts to renew their subscriptions, which could have a negative impact on our future revenues and results of operations.

We may not be able to increase demand for our subscription‑based services in line with our growth strategy. Our accounts are not obligated to renew their subscriptions for our offerings, and they may elect not to renew. We cannot assure renewal rates or the mix of subscriptions renewals. Account renewal rates may decline or fluctuate due to a number of factors, including offering pricing, competitive offerings, account satisfaction, and reductions in account spending levels or account activity due to economic downturns or financial markets uncertainty. If our accounts do not renew their subscriptions or if they renew on less favorable terms, our revenues may decline, which could harm our business, financial condition, and results of operations.

Consolidation among our accounts and other enterprises in the markets in which we operate may result in a loss of business.

It is likely that some of our existing accounts will consolidate, be acquired, or experience a change in management, which could lead to a decrease in the size of our account base. We expect consolidation among our accounts as they attempt to strengthen or maintain their market positions. If two or more of our accounts consolidate, they may also wish to consolidate the software solutions and services that we provide to them. If an existing account is acquired by another company that uses the solutions of one of our competitors, we may lose business in that account to our competitor. In addition, if an account experiences a change in management, the new management team may be accustomed to the software of one of our competitors, and we could lose that account. Any such consolidation, acquisition, or management change could lead to pricing pressure, erosion of our margins, loss of accounts, and loss of market share, all of which could harm our business, financial condition, and results of operations.

We have in the past and expect to continue in the future to seek to grow our business through acquisitions of or investments in new or complementary businesses, software solutions, or technologies, and the failure to manage acquisitions or investments, or the failure to integrate them with our existing platform and business, could harm us.

Since our founding, we have strategically acquired and integrated numerous software assets and businesses. We may, however, be unable to identify suitable acquisition candidates in the future or, if suitable candidates are identified, we may be unable to complete the business combination on commercially acceptable terms. The process of exploring and pursuing acquisition opportunities may result in devotion of significant management and financial resources.

Even if we are able to consummate acquisitions that we believe will be successful, these transactions present many risks including, among others, failing to achieve anticipated synergies and revenue increases, difficulty incorporating and integrating the acquired technologies or software solutions with our offerings and existing applications, difficulties managing an acquired company’s technologies or lines of business or entering new markets where we have limited prior experience or where competitors may have stronger market positions, the loss of key colleagues, accounts, and channel partners of ours or of the acquired company, and the requirement to test and assimilate the internal control processes of the

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acquired business in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002.

Quality problems, defects, errors, failures, or vulnerabilities in our software solutions or services could harm our reputation and adversely affect our business, financial condition, results of operations, and prospects.

Our solutions are, in some cases, highly complex and incorporate advanced software technologies that we attempt to make interoperable with the products of other software providers. Despite testing prior to release, our software may contain undetected defects or errors. Further, the combined use of our software with those of other software providers may cause errors or failures, or it may expose undetected defects, errors, or failures in our software. These defects, errors, or failures could affect software performance and damage the businesses of our accounts, as well as delay the development or release of new software or new versions of software. Further, we cannot guarantee that all of our accounts are using the latest versions of our software solutions with enhanced security features and may be more vulnerable to cyber‑attacks. Allegations of unsatisfactory performance in any of these situations could damage our reputation in the market and our relationships with our accounts, cause us to lose revenue or market share, increase our service costs, cause us to incur substantial costs in analyzing, correcting, or redesigning the software, cause us to lose accounts, subject us to liability for damages, and divert our resources from other tasks, any one of which could adversely affect our business, financial condition, results of operations, and prospects. We may also be required to provide full replacements or refunds for such defective software. We cannot assure you that such remediation would not harm our business, financial condition, results of operations, and prospects.

Our business, financial condition, results of operations, and prospects may be harmed if we are unable to cross‑sell our solutions.

A significant component of our growth strategy is to increase the cross‑selling of our solutions to current and future accounts, however, we may not be successful in doing so if our accounts find our additional solutions to be unnecessary or unattractive. We have invested, and intend to continue to invest, significant resources in developing and acquiring additional solutions, which resources may not be recovered if we are unable to successfully cross‑sell these solutions to accounts using our existing solutions. Any failure to sell additional solutions to current and future accounts could harm our business, financial condition, results of operations, and prospects.

There are significant costs and restrictions associated with the repatriation of cash from our non-U.S. operations.

Our cash and cash equivalents balances are concentrated in a few locations around the world, with approximately 48% and 94% of those balances held outside of the U.S. as of December 31, 2021 and 2020. Cash repatriation restrictions may limit our ability to repatriate cash held by our foreign subsidiaries. Additionally, the repatriation of cash held by our foreign subsidiaries may result in adverse tax consequences. Any repatriation of cash may be restricted or may result in our incurring substantial costs. As a result, we may be required to seek sources of cash to fund our operations, including through the issuance of equity securities, which may be dilutive to existing stockholders, or by incurring additional indebtedness. There can be no assurance that we will be able to secure sources of financing on terms favorable to us, or at all.

From time to time we realign or introduce new business initiatives, including reorganizing our sales and marketing, research and development, and administrative functions; if we fail to successfully execute and manage these initiatives, our results of operations could be negatively impacted.

We rely heavily on our direct sales force. From time to time, we reorganize and make adjustments to our sales leadership and/or our sales force in response to such factors as management changes, performance issues, market opportunities, and other considerations. These changes may result in a temporary lack of sales production and may adversely impact revenues in future quarters. Market acceptance of any new business or sales initiative is dependent on our ability to match our accounts’ needs at the right time and price. There can be no assurance that we will not restructure our sales force in future periods or that the transition issues associated with such a restructuring will not occur. Similarly, reorganization of our research and development and administrative functions can disrupt our operations and negatively impact our results of operations if the execution is not managed properly. If any of our assumptions about expenses, revenues, or revenue recognition principles from these initiatives proves incorrect, or our attempts to improve efficiency are not successful, our actual results may vary materially from those anticipated, and our financial results could be negatively impacted.

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A portion of our revenues are from sales by our channel partners and we could be subject to loss or liability based on their actions.

Sales through our global network of independent regional channel partners accounted for 8% of our total revenues for the years ended December 31, 2021, 2020, and 2019. These channel partners sell our software solutions to smaller-sized accounts, in geographic regions where we do not have a meaningful presence, and in niche markets where they have specialized industry and technical knowledge. Where we rely on channel partners, we may have reduced contact with ultimate users that purchase through such channel partners, thereby making it more difficult to establish brand awareness, ensure proper installation, service ongoing requirements, estimate demand, and respond to the evolving needs of an account. Any of our channel partners may choose to terminate its relationship with us at any time. As a result, our ability to service the ultimate users who were interfacing with that channel partner may take time to develop as we divert resources to service those users directly or find a suitable alternative channel partner to continue the relationship. Any disruption in service may damage our reputation and business. In addition, our channel partners may be unable to meet their payment obligations to us, which would have a negative impact on our results of operations and revenues. Our channel partners may also not have loyalty to our brand and therefore may not be particularly motivated to sell our software solutions or services.

The use of channel partners could also subject us to lawsuits, potential liability, and reputational harm if, for example, any channel partners misrepresent the functionality of our software solutions or services to accounts, fail to comply with their contractual obligations, or violate laws or our corporate policies. Such actions may impact our ability to distribute our software solutions into certain regions and markets, and may have an adverse effect on our results of operations and cash flows.

Risks Related to Information Technology Systems and Intellectual Property

Interruptions in the availability of server systems or communications with Internet, third‑party hosting facilities or cloud‑based services, or failure to maintain the security, confidentiality, accessibility, or integrity of data stored on such systems, could harm our business or impair the delivery of our managed services.

A significant portion of our software development personnel, source code, and computer equipment is located at operating facilities outside the U.S. We also depend on data maintained on servers running third‑party enterprise resource planning, account relationship management, and other business operations systems. We further rely upon a variety of Internet service providers, third‑party hosting facilities, and cloud computing platform providers, such as Microsoft Azure, as well as local service providers to support project teams and users in most regions and countries throughout the world, particularly with respect to our cloud service solutions. Failure to maintain the security, confidentiality, accessibility, or integrity of data stored on such systems could damage our reputation in the market and our relationships with our accounts, cause us to lose revenue or market share, increase our service costs, cause us to incur substantial costs, cause us to lose accounts, subject us to liability for damages, and divert our resources from other tasks, any one of which could adversely affect our business, financial condition, results of operations, and prospects. Any damage to, or failure of, such systems, or communications to and between such systems, could result in interruptions in our operations, managed services, and software development activities. Such interruptions may reduce our revenue, delay billing, cause us to issue credits or pay penalties, cause accounts to terminate their subscriptions, or adversely affect our attrition rates and our ability to attract new accounts. Our business would also be harmed if our accounts and potential accounts believe our products or services are unreliable.

If our security measures or those of our third‑party cloud data hosts, cloud computing platform providers, or third‑party service partners, are breached, and unauthorized access is obtained to an account’s data, our data or our IT systems, our services may be perceived as not being secure, accounts may curtail or stop using our services, and we may incur significant legal and financial exposure and liabilities.

As we digitize and use cloud and web‑based technologies to leverage account data to deliver a more complete account experience, we are exposed to increased security risks and the potential for unauthorized access to, or improper use of, our and our accounts’ information. Certain of our services involve the storage and transmission of accounts’ proprietary information, and security breaches could expose us to a risk of loss of this information, litigation, and possible liability. Although we devote resources to maintaining our security and integrity, we may not prevent security incidents.

The risk of a security breach or disruption, particularly through cyber‑attack or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has increased as the number, intensity, and sophistication of attempted

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attacks and intrusions from around the world have increased. These threats include but are not limited to identity theft, unauthorized access, domain name system attacks, wireless network attacks, viruses and worms, advanced persistent threat, application centric attacks, peer-to-peer attacks, phishing, backdoor trojans, and distributed denial of service attacks. Any of the foregoing could attack our accounts’ data (including their employees’ personal data), our data (including colleagues’ personal data), or our IT systems. It is virtually impossible for us to entirely eliminate this risk. Like all software, our software is vulnerable to cyber‑attacks. The impact of cyber‑attacks could disrupt the proper functioning of our software solutions or services, cause errors in the output of our accounts’ work, allow unauthorized access to sensitive, proprietary, or confidential information of ours or our accounts, and other destructive outcomes.

Additionally, third parties may attempt to fraudulently induce colleagues or accounts into disclosing sensitive information such as user names, passwords, or other information in order to gain access to our accounts’ data, our data, or our IT systems. Malicious third parties may also conduct attacks designed to temporarily deny accounts access to our services. Any security breach could result in a loss of confidence in the security of our products and services, damage our reputation, negatively impact our future sales, disrupt our business, and lead to regulatory inquiry and legal liability.

Failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand.

Our future success and competitive position depend in large part on our ability to protect our intellectual property and proprietary technologies. We rely on a combination of copyright, patent, trademark, and trade secret laws, as well as confidentiality procedures and contractual restrictions, to secure and protect our intellectual property rights, all of which provide only limited protection and may not currently or in the future provide us with a competitive advantage. Patents or trademarks may not issue from any of our pending or future patent or trademark applications. Patents or trademarks that do issue from such applications may not give us the protection that we seek, and such patents or trademarks may be challenged, invalidated, or circumvented. Any patents or trademarks that may issue in the future from our pending or future patent and trademark applications may not provide sufficiently broad protection and may not be enforceable in actions against alleged infringers.

The steps we take may not be adequate to protect our technologies and intellectual property, our patent and trademark applications may not lead to issued patents or registered trademarks, others may develop or patent similar or superior technologies or solutions, and our patents, trademarks, and other intellectual property may be challenged, invalidated, designed around, or circumvented by others. Furthermore, effective copyright, patent, trademark, and trade secret protection may not be available in every country in which our solutions are available or where we do business.

Increasingly stringent and growing data protection and privacy laws with respect to cloud computing, cross‑border data transfer restrictions, and other restrictions may apply to our business and non‑compliance with such rules may limit the use and adoption of our services, adversely affect our business, or expose us to increased liability.

As a global software and service provider, we collect and process personal data and other data from our users and prospective users. We use this information to provide solutions and applications to our accounts, to validate user identity, to fulfill contractual duties and administer billing and support, to expand and improve our business, and to communicate and recommend products and services through our marketing and advertising efforts. We may also share accounts’ personal data with certain third parties as described in the privacy policy provided to each account. As a result, we are required to comply with federal, state, and foreign privacy and data security laws and regulations that apply to the treatment of personal data. Governments, regulators, privacy advocates, plaintiffs’ attorneys, and our users and accounts are increasingly focused on how companies collect, process, use, store, share, and transmit personal data.

Globally, new and evolving regulations regarding data protection and privacy and other standards governing the collection, processing, storage, sharing, transmission, and use of personal data impose additional burdens for us due to increasing compliance standards that could restrict the use and adoption of our solutions and applications (in particular cloud services).

We have significant business operations in the E.U. and European Economic Area (“EEA”), where the GDPR went into effect on May 25, 2018. The GDPR harmonized data protection regulations across the E.U. and EEA, implementing stringent requirements for the protection of E.U. and EEA individuals’ (“data subjects”) personal data. These requirements include expanded requirements for our users as E.U. and EEA data subjects, new obligations on us as data controllers and processors, and mandatory breach notification to affected individuals and data protection supervisory authorities. Non-

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compliance with GDPR could result in fines and penalties up to the greater of €20 million or 4% of global turnover for the preceding financial year. Moreover, individuals can claim damages resulting from infringement of the GDPR. As a result of the GDPR, as a personal data processor for our business‑to‑business accounts, we must commit to detailed contractual obligations, including to ensure we only process such data on our accounts’ instructions, keep it secure, require our sub-processors to commit to similar commitments, delete data when the contract ends, and let our accounts audit our compliance.

In addition, E.U. and EEA data protection rules regulate the transfers of E.U. and EEA individuals’ personal data to other countries that have been deemed by the European Commission not to provide adequate protection to personal data. The U.S. is not deemed to have adequate laws to protect personal data. Following the invalidation of the E.U.‑U.S. Privacy Shield program on July 16, 2020, we transitioned to relying upon standard contractual clauses to legitimize the transfer of personal data to the U.S. and other third countries in compliance with the GDPR. Notably, on June 4, 2021, the European Commission published revised standard contractual clauses, which imposed additional requirements on companies that utilize this to legitimize transfers of personal data to the U.S. and other third countries. There are a number of legal uncertainties regarding the application of the revised standard contractual clauses and we will continue to face uncertainty as regulatory guidance is developed in this area as to whether our efforts to comply with our obligations under European privacy laws will be sufficient. Our accounts continue to access the data transfer mechanisms we utilize and may decide not to do business with us. For example, some of our accounts or potential accounts in the E.U. may require their vendors to host all personal data within the E.U. and may decide to do business with one of our competitors who hosts personal data within the E.U. instead of doing business with us. This and other future developments regarding the flow of data across borders could increase the cost and complexity of delivering our products and services in some markets and may lead to governmental enforcement actions, litigation, fines and penalties, or adverse publicity, which could have an adverse effect on our reputation and business.

Further, laws such as the E.U.’s Privacy and Electronic Communications Directive 2002 (“ePrivacy Directive”) and national legislation across the E.U. implementing the ePrivacy Directive and the proposed ePrivacy Regulation are increasingly aimed at the use of personal data for marketing purposes, and the tracking of individuals’ online activities. These existing or proposed laws and regulations are subject to differing interpretations and may be inconsistent among jurisdictions and member states. These and other requirements may have a negative effect on businesses, including ours, that collect and use online usage information for consumer acquisition and marketing. As the text of the ePrivacy Regulation is still under development, and as further guidance is issued and interpretation of both the ePrivacy Regulation and GDPR develop, we could incur costs to comply with these regulations.

In the Asia‑Pacific region, where we have significant business operations, changes in privacy and cybersecurity regulation, some of which is similar to changes effected by the GDPR, have come into effect in 2021, and similar significant regulatory changes are expected across the Asia‑Pacific region in the future. These changes, including the PIPL in China introduce more stringent requirements, including that we register our data processing activities in certain jurisdictions, appoint local representatives in-country, restrict the cross‑border transfer of personal, confidential, and commercially sensitive information in some cases, provide expanded disclosures to tell our accounts about how we use their personal information, and obtain detailed consents from accounts to processing of personal information. There are also increased rights for accounts to access, control, and delete their personal information. In addition, there are mandatory data breach notification requirements that differ depending on the jurisdiction, as well as increases to penalties and expanded enforcement powers for regulators.

We also expect that there will continue to be new proposed laws, regulations, and industry standards concerning privacy, data protection, and information security in the U.S., the E.U., the EEA, and other jurisdictions, and we cannot yet determine the impact such future laws, regulations, and standards may have on our business. For example, there are currently three states in the U.S. which have adopted different comprehensive consumer privacy laws: California enacted the California Consumer Privacy Act (the “CCPA”), its amendment and the California Privacy Rights Act; Virginia enacted the Virginia Consumer Data Protection Act; and Colorado enacted the Colorado Privacy Act. These acts give residents expanded privacy rights and protections, provide for civil penalties for violations and in certain instances provide for a private right of action for data breaches. In addition to government activity, privacy advocacy groups and technology and other industries are considering various new, additional, or different self‑regulatory standards that may place additional burdens on us. Future laws, regulations, standards, and other obligations, and changes in the interpretation of existing laws, regulations, standards, and other obligations could impair our ability to collect, use, or disclose personally identifiable information, increase our costs, and impair our ability to maintain and grow our account base and increase our revenue.

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New laws, amendments to or re‑interpretations of existing laws and regulations, industry standards, contractual obligations, and other obligations may require us to incur additional costs and restrict our business operations. Such laws and regulations may require companies to implement privacy and security policies, localize data (even at a state level) permit users to access, correct, and delete personal data stored or maintained by such companies, inform individuals of security breaches that affect their personal data, and, in some cases, obtain individuals’ consent to use personal data for certain purposes. If we, or the third parties on which we rely, fail to comply with federal, state, and international data privacy laws and regulations, our ability to successfully operate our business and pursue our business goals could be harmed.

Our failure to comply with applicable laws and regulations, or to protect such data, could result in enforcement action against us, including fines and public censure, claims for damages by accounts and other affected individuals, damage to our reputation and loss of goodwill (both in relation to existing accounts and prospective accounts), any of which could harm our business, financial condition, and results of operations.

Around the world, there are numerous lawsuits in process against various technology companies that process personal data. If those lawsuits are successful, it could increase the likelihood that we may be exposed to liability for our own policies and practices concerning the processing of personal data and could hurt our business.

Our accounts expect us to meet voluntary certification or other standards established by third parties or imposed by the accounts themselves. If we are unable to maintain these certifications or meet these standards, it could adversely affect our ability to provide our solutions to certain accounts and could harm our business. Further, if we were to experience a breach of systems compromising our accounts’ sensitive data, our brand and reputation could be adversely affected, use of our software solutions and services could decrease, and we could be exposed to a risk of loss, litigation, and regulatory proceedings.

The costs of compliance with and other burdens imposed by laws, regulations, and standards may limit the use and adoption of our services and reduce overall demand for them, or lead to significant fines, penalties, or liabilities for any noncompliance.

Furthermore, concerns regarding data privacy may cause our accounts’ customers to resist providing the data necessary to allow our accounts to use our services effectively. Even the perception that the privacy of personal information is not satisfactorily protected or does not meet regulatory requirements could inhibit sales of our software solutions or services, and could limit adoption of our cloud‑based solutions.

We license third‑party technologies for the development of certain of our software solutions, and, in some instances, we incorporate third‑party technologies, including open source software, into our software solutions. If we fail to maintain these licenses or are unable to secure alternative licenses on reasonable terms, our business could be adversely affected.

We license third-party technologies to develop certain of our products, and, in some cases, we incorporate third‑party technologies into our own software solutions, including technologies owned by our competitors. If we were to seek to expand the scope of this activity in the future, we could be required to obtain additional licenses and enter into long‑term arrangements with third parties on whose technology we could become substantially dependent.

If we are unable to use or license these third‑party technologies on reasonable terms, including commercially justifiable royalty rates, or if these technologies fail to operate properly or be appropriately supported, maintained, or enhanced, we may not be able to secure alternatives in a timely manner and our ability to develop and commercialize our own software solutions could be adversely impacted. In addition, licensed technology may be subject to claims that it infringes others’ intellectual property rights and we may lose access to or have restrictions placed on our use of the licensed technology. We also incorporate open source software into our products. While we have attempted not to use open source code in a manner which could adversely impact our proprietary code, the terms of many open source licenses have not been interpreted by U.S. courts, and there is a risk that such licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to market or sell our products or to develop new products.

Assertions by third parties of infringement or other violations by us of their intellectual property rights could result in significant costs and harm our business and results of operations.

Vigorous protection and pursuit of intellectual property rights has resulted in protracted and expensive litigation for many companies in our industry. Although claims of this kind have not materially affected our business to date, there can

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be no assurance such claims will not arise in the future. Any claims or proceedings against us, regardless of whether meritorious, could be time consuming, result in costly litigation, require significant amounts of management time, result in the diversion of significant operational resources, or require us to enter into royalty or licensing agreements, any of which could harm our business, financial condition, and results of operations.

Risks Related to Regulation and Litigation

Recent and potential tariffs imposed by the U.S. government or a global trade war could increase the cost of our products and services and the cost of conducting our business, which could harm our business, financial condition, and results of operations.

Recent and potential tariffs imposed by the U.S. government or a global trade war could increase the cost of our products and services and the cost of conducting our business, which could harm our business, financial condition, and results of operations. The U.S. government has threatened substantial changes to trade agreements and has raised the possibility of imposing significant increases on tariffs on goods imported into the U.S., particularly from China. The imposition of additional tariffs by the U.S. could result in the adoption of tariffs by other countries, leading to a global trade war. In addition, certain of these risks may be heightened as a result of changing political climates, which may also be exacerbated as a result of the COVID‑19 pandemic. For example, throughout 2018 and 2019, the U.S. and China have been levying tariffs on their respective imports. Such tariffs could have a significant impact on our business and the business of our accounts. While we may attempt to renegotiate prices with suppliers or diversify our supply chain in response to tariffs, such efforts may not yield immediate results or may be ineffective. We might also consider increasing prices to the end consumer; however, this could reduce the competitiveness of our products and services and adversely affect revenue. If we fail to manage these dynamics successfully, our gross margins and profitability could be adversely affected.

The withdrawal by the United Kingdom (“U.K.”) from the E.U. may have a negative effect on global economic conditions, financial markets, and our business.

The U.K.’s withdrawal from the E.U. (“Brexit”) has created political and economic uncertainty, particularly in the U.K. and the E.U., and this uncertainty may last for years. Despite the implementation of the EU‑U.K. Trade and Cooperation Agreement beginning on January 1, 2021, it is still unclear how Brexit will ultimately impact relationships within the U.K. and between the U.K. and other countries on many aspects of fiscal policy, cross‑border trade and international relations. As a result, it is possible that there may be adverse practical or operational implications on our business. Demand for our software solutions or services could be affected by the impact of Brexit. For example, while we have invoiced our U.K.‑based accounts and operated our business within the U.K. through our U.K.‑based subsidiary since the fourth quarter of 2018 to manage risks posed to our business and operations by Brexit, Brexit may cause delays in purchasing decisions by our potential and current accounts affected by this transition and there is considerable uncertainty as to when the long‑term nature of the U.K.’s relationship with the E.U. will be agreed and implemented and what the terms of that relationship will be. The final terms of this exit by the U.K. from the E.U. may result in new regulatory and cost challenges to our U.K. and global operations. In addition, our business and our channel partners’ businesses could be negatively affected by new trade agreements between the U.K. and other countries, including the U.S. and by the possible imposition of trade or other regulatory barriers in the U.K. The unresolved final terms of Brexit have also created uncertainty with regard to the regulation of data protection in the U.K. For example, the UK Data Protection Act, which substantially implements the GDPR, became effective in May 2018. It remains unclear, however, how U.K. data protection laws or regulations will develop and be interpreted in the medium to longer term, how data transfers to and from the U.K. will be regulated, and how those regulations may differ from those in the E.U. Further, the U.K.’s exit from the E.U. may create increased compliance costs and an uncertain regulatory landscape for offering equity‑based incentives to our employees in the U.K. If we are unable to maintain equity‑based incentive programs for our employees in the U.K. due to the departure of the U.K. from the E.U., our business in the U.K. may suffer and we may face legal claims from employees in the U.K. to whom we previously offered equity‑based incentive programs.

We are subject to legal proceedings and regulatory inquiries, and we may be named in additional legal proceedings or become involved in regulatory inquiries in the future, any of which may be costly, distracting to our core business and could result in an unfavorable outcome, or harm on our business, financial condition, results of operations, cash flows, or the trading price for our securities.

We are subject to various investigations, claims, and legal proceedings that arise in the ordinary course of business, including commercial disputes, labor and employment matters, tax audits, alleged infringement of intellectual property

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rights, and other matters. As the global economy has changed, our industry has seen an increase in litigation activity and regulatory inquiries. Like many other high technology companies, on a regular and ongoing basis, we receive inquiries from U.S. and foreign regulatory agencies regarding our business and our business practices, and the business practices of others in our industry. In the event that we are involved in significant disputes or are the subject of a formal action by a regulatory agency, we could be exposed to costly and time consuming legal proceedings that could result in any number of outcomes. Any claims or regulatory actions initiated by or against us, whether successful or not, could result in expensive costs of defense, costly damage awards, injunctive relief, increased costs of business, fines or orders to change certain business practices, significant dedication of management time, diversion of significant operational resources, or otherwise harm our business. In any of these cases, our financial results could be negatively impacted.

Failure to comply with the U.S. Foreign Corrupt Practices Act (“FCPA”) and similar anti‑bribery and anti‑corruption laws associated with our activities outside the U.S. could subject us to penalties and other adverse consequences.

The majority of our revenues are from jurisdictions outside of the U.S. We are subject to the FCPA, which generally prohibits U.S. companies and their intermediaries from making payments to foreign officials for the purpose of directing, obtaining, or keeping business, and requires companies to maintain reasonable books and records and a system of internal accounting controls. The FCPA applies to companies and individuals alike, including company directors, officers, employees, and agents. Under the FCPA, U.S. companies may be held liable for corrupt actions taken by employees, strategic or local partners, or other representatives. In addition, the government may seek to rely on a theory of successor liability and hold us responsible for FCPA violations committed by companies or associated with assets that we acquire.

We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls.

Our offerings may be subject to U.S. export controls and economic sanctions laws and regulations that restrict the delivery of our solutions and services to certain locations, governments, and persons. While we have processes in place to prevent our offerings from being exported in violation of these laws, including obtaining authorizations as appropriate and screening against U.S. government lists of restricted and prohibited persons, we cannot guarantee that these processes will prevent all violations of export control and sanctions laws. We may also decide to acquire companies whose past activities could give rise to potential liability under export control and sanctions laws. Such acquisitions may require substantial time and resources to integrate the acquired company into our compliance processes, to correct potential compliance gaps, and to remediate past potential violations by the acquired company, including through our own internal actions, voluntary self‑disclosures, or other measures.

Further, if our channel partners fail to obtain appropriate import, export, or re‑export licenses or permits, we may also be adversely affected, for example, through reputational harm, as well as other negative consequences including government investigations and penalties. Complying with export control and sanctions regulations for a particular sale may be time‑consuming and may result in the delay or loss of sales opportunities.

Violations of U.S. sanctions or export control laws can result in fines, penalties, denial of export and trading privileges, and seizure of goods and assets. Other consequences include negative publicity and harm to business reputation, increased government scrutiny (including intrusive audits, and increased difficulty obtaining government licenses and approvals), and/or remedial compliance measures as a condition of settling government charges.

We may face exposure to product or professional liability claims that could cause us to be liable for damages.

The use of our software could lead to the filing of product liability claims against us were someone to allege that our software provided inaccurate or incomplete information at any stage of the infrastructure lifecycle or otherwise failed to perform according to specifications. In the event that accounts or third parties sustain property damage, injury, death, or other loss in connection with their use of our software or infrastructure for which our software solutions and services were used to engineer, we, along with others, may be sued, and whether or not we are ultimately determined to be liable, we may incur significant legal expenses, management’s attention could be diverted from operations, and market acceptance of our software could decrease. Our risk of exposure to litigation in these situations could rise as our software solutions and services are used for increasingly complex and high‑profile infrastructure projects. Litigation could also impair our ability to obtain professional liability or product liability insurance or increase the cost of such insurance. These claims may be brought by individuals seeking relief on their own behalf or purporting to represent a class. In addition, product liability claims may be asserted against us in the future based on events we are not aware of at the present time.

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The limitations of our liability included in our contracts with accounts may not be enforceable or may not otherwise protect us from liability for damages. Additionally, we may be subject to claims that are not explicitly covered by contract, such as a claim directly by a third party. There is no assurance that our insurance coverage will be adequate to cover incurred liabilities or that we will be able to obtain acceptable product and professional liability coverage in the future.

Risks Related to Our Indebtedness

Our credit agreement, as amended, contains restrictive covenants that may limit our operating flexibility, and certain changes in ownership of equity interests in us by the Bentley Family (Barry J. Bentley, Gregory S. Bentley, Keith A. Bentley, Raymond B. Bentley, and Richard P. Bentley, collectively (the “Bentleys”), certain other family members and trusts and other entities controlled by or primarily for the benefit of the Bentleys and their families) constitutes an event of default.

Our amended and restated credit agreement, entered into on December 19, 2017 (the “Credit Facility”), contains certain restrictive covenants that limit our ability to, among other things, incur indebtedness other than amounts under the Credit Facility and specified baskets, incur additional liens, merge or consolidate with other companies or consummate certain changes of control, enter into new lines of business, pay dividends to our stockholders, make investments in and acquire other businesses, and transfer or dispose of assets. In certain circumstances, the agreement governing the Credit Facility may also limit our ability to transfer cash among our subsidiaries and between us and our subsidiaries, including our foreign subsidiaries. It also contains certain financial covenants, including a covenant requiring us not to permit the net leverage ratio to exceed 3.50 to 1.00 and a covenant requiring the fixed charge coverage ratio for any period of four consecutive fiscal quarters to not be less than 3.00 to 1.00, and financial reporting requirements. Borrowings under the Credit Facility are secured by a first priority security interest in substantially all of our U.S. assets and 65% of the stock of our foreign subsidiaries owned by a party to the agreement governing the Credit Facility.

Further, if the Bentley Family ceases to collectively own equity interests in us representing at least 20% of the aggregate voting power of the Company, then such change in ownership will be an event of default under the agreement governing the Credit Facility and, among other things, the commitments under the Credit Facility may be terminated immediately and the outstanding loans and accrued interest may become due and payable immediately.

In addition, there is no guarantee that we will be able to generate sufficient cash flow or revenues to meet these financial covenants or pay the principal and interest on any debt. Furthermore, there is no guarantee that future working capital, borrowings, or equity financing will be available to repay or refinance any debt. Any inability to make scheduled payments or meet the financial covenants in the agreement governing the Credit Facility would adversely affect our business.

The phase‑out of LIBOR could affect interest rates under our Credit Facility.

In July 2017, the Financial Conduct Authority (“FCA”) (the authority that regulates LIBOR) announced it intends to stop persuading or compelling banks to submit rates for the calculation of LIBOR after 2021. Further, on November 30, 2020, the ICE Benchmark Administration Limited (“ICE”) announced its plan to extend the date that most USD‑LIBOR values would cease being computed to June 30, 2023. The Alternative Reference Rates Committee (“ARRC”) and the International Swaps and Derivatives Association (“ISDA”) have identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative rate for USD‑LIBOR in debt, derivatives, and other financial contracts. LIBOR is used as the reference rate for Euro currency borrowings under our Credit Facility and as one of the alternatives for U.S. Dollar borrowings under our Credit Facility. If LIBOR ceases to exist, the administration agent under our Credit Facility has the authority to select a benchmark replacement index and adjustment margins and, as such, the interest rate on Euro currency borrowings under our Credit Facility may change. The new rate may not be as favorable as those in effect prior to any LIBOR phase‑out. Furthermore, the transition process may result in delays in funding, higher interest expense, additional expenses, and increased volatility in markets for instruments that currently rely on LIBOR, all of which could negatively impact our interest expense, results of operations, and cash flow. Even if financial instruments are transitioned to alternative benchmarks, such as SOFR, successfully, the new benchmarks are likely to differ from LIBOR, and our interest expense associated with our outstanding indebtedness or any future indebtedness we incur may increase. Further, transitioning to an alternative benchmark rate, such as SOFR, may result in us incurring significant expense and legal risks, as renegotiation and changes to documentation may be required in effecting the transition. Any alternative benchmark rate may be calculated differently than LIBOR and may increase the interest expense associated with our existing or future

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indebtedness.

We may incur substantial additional debt, which could exacerbate the risks described above.

We may incur additional debt in the future. Although the agreement governing the Credit Facility contains restrictions on our ability to incur indebtedness, those restrictions are subject to a number of exceptions which permit us and our subsidiaries to incur substantial debt. Adding new debt to current debt levels could intensify the related risks that we and our subsidiaries now face. See the section titled “Liquidity and Capital Resources” included in Part II, Item 7 of this Annual Report on Form 10‑K.

Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.

Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance our indebtedness depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control. Our business may not continue to generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt, or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations. In addition, any future indebtedness we may incur may contain financial and other restrictive covenants that limit our ability to operate our business, raise capital, or make payments under our other indebtedness. If we fail to comply with these covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and our other indebtedness becoming immediately payable in full.

Risks Related to Our Class B Common Stock

We issued convertible notes that have rights senior to our Class B Common Stock.

In January 2021, we issued $690 million aggregate principal amount of convertible senior notes due 2026 (the “2026 Notes”), which will mature on January 15, 2026, unless earlier redeemed or repurchased by us or converted by the holder pursuant to their terms. In June 2021, we issued $575 million aggregate principal amount of convertible senior notes due 2027 (the “2027 Notes”), which will mature on July 1, 2027, unless earlier redeemed or repurchased by us or converted by the holder pursuant to their terms. The 2026 Notes and 2027 Notes rank senior in right of payment to our Class B Common Stock and any of our indebtedness that is expressly subordinated in right of payment to the 2026 Notes and 2027 Notes; equal in right of payment to any of our liabilities that are not so subordinated; effectively junior in right of payment to any of our secured indebtedness, to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries. In the event of our bankruptcy, liquidation, reorganization, or other winding up, our assets that secure debt ranking senior or equal in right of payment to the 2026 Notes and 2027 Notes will be available to pay obligations on the 2026 Notes and 2027 Notes only after the secured debt has been repaid in full from these assets, and our assets will be available to pay common stockholders only after all debt obligations have been repaid. There may not be sufficient assets remaining to pay amounts due on any or all of the 2026 Notes and 2027 Notes then outstanding or any or all shares of our Class B Common Stock then outstanding.

The accounting method for convertible debt securities that may be settled in cash, such as the 2026 Notes and 2027 Notes, could have a material effect on our reported financial condition and results.

The accounting method for reflecting the 2026 Notes and 2027 Notes on our consolidated balance sheet and reflecting the underlying shares of our Class B Common Stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020‑06, Debt–Debt with Conversion and Other Options (Subtopic 470‑20) and Derivatives and Hedging–Contracts in Entity’s Own Equity (Subtopic 815‑40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020‑06”). Effective January 1, 2021, we early adopted ASU 2020‑06. In accordance with ASU 2020‑06, we are required to calculate diluted earnings per share under the if‑converted method. Under the if‑converted method,

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diluted earnings per share will be calculated assuming that all the 2026 Notes and 2027 Notes are converted solely into shares of Class B Common Stock at the beginning of the reporting period, unless the result would be anti‑dilutive. The application of the if‑converted method will reduce our reported diluted earnings per share.

Furthermore, if any of the conditions to the convertibility of the 2026 Notes and/or the 2027 Notes is satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the 2026 Notes and/or the 2027 Notes as a current, rather than long‑term, liability. This reclassification could be required even if no noteholders convert their notes and could materially reduce our reported working capital.

The conditional conversion feature of the 2026 Notes and 2027 Notes may adversely affect our financial condition and operating results.

In the event the conditional conversion feature of the 2026 Notes and/or the 2027 Notes is triggered, holders of the 2026 Notes and/or the 2027 Notes will be entitled to convert the 2026 Notes and/or the 2027 Notes at any time during specified periods at their option. If one or more holders elect to convert their 2026 Notes and/or their 2027 Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class B Common Stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their 2026 Notes and/or their 2027 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2026 Notes and/or the 2027 Notes as a current, rather than long‑term, liability, which would result in a material reduction of our net working capital.

Conversion of the 2026 Notes and/or the 2027 Notes will dilute the ownership interest of existing stockholders, including holders who had previously converted their 2026 Notes and/or their 2027 Notes, or may otherwise depress the price of our Class B Common Stock.

The conversion of some or all of the 2026 Notes and/or the 2027 Notes will dilute the ownership interests of existing stockholders to the extent we deliver shares upon conversion of any of the 2026 Notes and/or the 2027 Notes. Any sales in the public market of the Class B Common Stock issuable upon such conversion could adversely affect prevailing market prices of our Class B Common Stock. In addition, the existence of the 2026 Notes and 2027 Notes may encourage short selling by market participants because the conversion of the 2026 Notes and/or the 2027 Notes could be used to satisfy short positions, or anticipated conversion of the 2026 Notes and/or the 2027 Notes into shares of our Class B Common Stock could depress the price of our Class B Common Stock. As of December 31, 2021, without giving effect to any potential adjustments to the conversion rate set forth in the indenture or any limits on conversion, and assuming our Class B Common Stock is trading at or above $64.13 per share for the 2026 Notes and $83.23 per share for the 2027 Notes, 10,759,395 and 6,908,567 shares of our Class B Common Stock would be issuable upon a full conversion of the 2026 Notes and 2027 Notes, respectively.

The capped call transactions entered into when we issued the 2026 Notes and 2027 Notes may affect the value of our common stock.

In connection with the issuances of the 2026 Notes and 2027 Notes, we entered into capped call transactions with the respective option counterparties. The capped call transactions are expected generally to reduce the potential dilution upon conversion of the 2026 Notes and 2027 Notes, and/or offset any cash payments we are required to make in excess of the principal amount of converted 2026 Notes and 2027 Notes with such reduction and/or offset subject to a cap. In connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates entered into various derivative transactions with respect to our Class B Common Stock concurrently with or shortly after the pricing of the 2026 Notes and 2027 Notes. The option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding derivatives with respect to our Class B Common Stock and/or purchasing or selling our Class B Common Stock or other securities of ours in secondary market transactions prior to the maturity of the 2026 Notes and 2027 Notes (and are likely to do so during any observation period related to a conversion of 2026 Notes and 2027 Notes). This activity could cause or avoid an increase or a decrease in the market price of our Class B Common Stock.

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The dual class structure of our common stock has the effect of concentrating voting control with the Bentley Control Group (the Bentleys and certain of their family members, trusts or other permitted transferees, as well as all other holders of our Class A Common Stock in respect of such shares of Class A Common Stock, who collectively are acting as a group).

Our Class A Common Stock has 29 votes per share, and our Class B Common Stock, which is the class of common stock that is issuable upon conversion of the 2026 Notes and 2027 Notes, and is the only class that is publicly traded and listed, has one vote per share. The beneficial owners of our Class A Common Stock together hold approximately 55.4% of the voting power of our outstanding capital stock as of December 31, 2021. Moreover, as a result of the 29 to one voting ratio between our Class A and Class B Common Stock, the Bentley Control Group controls and will continue to control a majority of the combined voting power of our common stock and therefore is able to control all matters submitted to our stockholders for approval, subject to the occurrence of certain events that would reduce the voting power of our Class A Common Stock or cause the conversion thereof. This concentrated control will limit or preclude stockholders’ ability to influence corporate matters for the foreseeable future and may have the effect of delaying, deferring or preventing a change in control, impeding a merger, consolidation, takeover, or other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of our business, even if such a transaction would benefit other stockholders. The Bentley Control Group may also have interests that differ from those of other stockholders and may vote in a way with which other stockholders disagree and which may be adverse to such other stockholders’ interests.

In addition, we are a “controlled company” for the purposes of Nasdaq Listing Rules, which provides us with exemptions from certain of the corporate governance standards imposed by the rules of The Nasdaq Global Select Market. These provisions further allow the Bentley Control Group to exercise significant control over our corporate decisions and limit the ability of the public stockholders to influence our decision making.

The choice of forum provision in our amended and restated certificate of incorporation could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or colleagues.

Our amended and restated certificate of incorporation provides that, to the fullest extent permitted by law, the Court of Chancery of the State of Delaware is the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of a breach of fiduciary duty owed by any of our directors or officers, any action asserting a claim against us arising pursuant to Delaware General Corporation Law, our amended and restated certificate of incorporation or amended and restated bylaws, or any action seeking to interpret, apply, enforce, or determine the validity of our amended and restated certificate of incorporation or amended and restated bylaws, and any action asserting a claim against us that is governed by the internal affairs doctrine. In addition, the choice of forum provision provides that, to the extent permitted by applicable law, claims brought under the Securities Act or the Exchange Act must be brought exclusively in the federal district court for the District of Delaware. Despite the choice of forum provision, investors cannot waive compliance with federal securities laws and rules and regulations thereunder. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other colleagues, which may discourage such lawsuits against us and our directors, officers, and other colleagues. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.

General Risk Factors

Global economic conditions may negatively impact our business, financial condition, and results of operations.

Our operations and performance depend significantly on foreign and domestic economic conditions. Uncertainty regarding economic conditions may negatively impact us as accounts defer spending or postpone infrastructure projects in response to tighter credit, higher unemployment, higher inflation, financial market volatility, government austerity programs, negative financial news, escalations of hostilities or the threat of hostilities, pandemics, declining valuations of investments, and other factors. In addition, certain of our accounts’ budgets may be constrained and they may be unable to procure our solutions at the same level as in prior periods. Our accounts’ ability to pay for our software solutions and services may also be impaired, which may lead to an increase in our allowance for doubtful accounts and write‑offs of accounts receivable. Since we are exposed to the majority of major world markets, uncertainty in any significant market

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may negatively impact our performance and results, particularly with respect to our largest geographic accounts. Our accounts include government entities, including the U.S. government, and if spending cuts impede the ability of governments to purchase our products and services, our revenues could decline. In addition, a number of our accounts rely, directly and indirectly, on government spending. We are unable to predict economic conditions or the likelihood of additional economic uncertainty arising in any of our key markets. Changes in economic conditions could result in us not meeting our revenue growth objectives and could harm our business, financial condition, results of operations, and cash flows.

Geopolitical trends toward nationalism and protectionism and the weakening or dissolution of international trade pacts may increase the cost of, or otherwise interfere with, conducting our business. These trends have increased levels of political and economic unpredictability globally, and may increase the volatility of global financial markets; the impact of such developments on the global economy remains uncertain. Political instability or adverse political developments, including, without limitation, as a result of or in connection with trade relations between the U.S. and China, in any of the countries in which we do business could harm our business, financial condition, and results of operations.

Changes in existing financial accounting standards or practices, or taxation rules or practices may adversely affect our results of operations.

Changes in existing accounting or taxation rules or practices, new accounting pronouncements or taxation rules, or varying interpretations of current accounting pronouncements or taxation practices could have a significant adverse effect on our results of operations or the way we conduct our business. Further, such changes could potentially affect our reporting of transactions completed before such changes are effective.

We are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes‑Oxley Act of 2002 and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.

Pursuant to Section 404 of the Sarbanes‑Oxley Act of 2002, we are required to furnish a report by our management on our internal control over financial reporting, including an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year. This assessment must include a statement as to whether or not our internal control over financial reporting is effective and disclosure of any material weaknesses in our internal control over financial reporting identified by management. If our management or independent registered public accounting firm identifies one or more material weaknesses in our internal control over financial reporting, we are unable to assert that our internal control over financial reporting is effective, or our independent registered public accounting firm is unable to express an opinion that our internal controls are effective, investors could lose confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on our business and stock price.

In preparing our financial statements, we make certain estimates and assumptions that affect amounts reported in our consolidated financial statements which, if not accurate, may significantly impact our financial results.

We make estimates and assumptions for a number of items, including revenue recognition, the fair value of acquired assets and liabilities, the fair value of stock consideration in conjunction with business combinations, the fair value of deferred compensation plan liabilities, the fair value of derivative financial instruments, the fair value of common stock (prior to our IPO), operating lease assets and liabilities, useful lives for depreciation and amortization, impairment of goodwill and intangible assets, valuation allowances for tax assets, and accruals for uncertain tax positions. These estimates and assumptions are drawn from historical experience and various other factors that we believe are reasonable under the circumstances as of the date of the consolidated financial statements. Actual results could differ materially from our estimates and such differences could significantly impact our financial results.

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Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our corporate headquarters are located in Exton, Pennsylvania and consist of approximately 107,000 square feet of office space, of which we own approximately 76,000 square feet. Our lease for the remainder expires in 2025. Our headquarters accommodates our principal software engineering, sales, marketing professional services, and administrative activities. In addition to our headquarters, we own one other location in India, which is used for office space, for an aggregate total, including our headquarters, of approximately 107,000 square feet of real property owned by us. See Note 5 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10‑K for more information about our properties. We lease facilities in an additional 129 locations in the U.S. and internationally through our foreign subsidiaries. See Note 8 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10‑K for more information about our lease commitments.

We believe that our current facilities are suitable and adequate to meet our current needs and that suitable additional or substitute space will be available as needed in the future to accommodate our operations.

Item 3. Legal Proceedings

We are subject from time to time to various legal proceedings and claims which arise in the ordinary course of our business. Although the outcome of these and other claims cannot be predicted with certainty, we do not believe that the ultimate resolution of pending matters will have a material adverse effect on our financial condition, results of operations, or cash flows. We currently believe that we do not have any material litigation pending against us.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information for Common Stock

Our Class B Common Stock is traded on the Nasdaq Stock Market LLC under the symbol BSY.

Stockholders

As of January 31, 2022, there were 17 holders of record of our Class A Common Stock and 2,935 holders of record of our Class B Common Stock. Because many of our shares of Class B Common Stock are held by brokers or other institutions on behalf of stockholders, we are unable to estimate the total number of Class B stockholders represented by the record holders.

Dividend Policy

The declaration and payment of dividends is within the discretion of our board of directors. We paid quarterly dividends of $0.03 per share of common stock in both 2021 and 2020, and quarterly dividends of $0.025 per share of common stock in 2019. In addition, we paid a special dividend of $1.50 per share of common stock on September 2, 2020. While we intend to continue paying quarterly dividends, any future determination will be subject to the discretion of our board of directors and will be dependent on a number of factors, including our results of operations, capital requirements, restrictions under Delaware law, and overall financial condition, as well as any other factors our board of directors considers relevant. In addition, the terms of the agreement governing the Credit Facility limit the amount of dividends we can pay.

Recent Sales of Unregistered Equity Securities

From October 1, 2021 to December 31, 2021, we issued 87,646 shares of our Class B Common Stock in connection with distributions from our amended and restated Bentley Systems, Incorporated Nonqualified Deferred Compensation Plan.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. Unless otherwise stated, the sales of the above securities were deemed to be exempt from registration under the Securities Act in reliance on Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer pursuant to benefit plans and contracts relating to compensation as provided under Rule 701. All recipients had adequate access, through their relationships with us, to information about us. The issuance of these securities were made without any general solicitation or advertising.

Item 6. [Reserved]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our audited consolidated financial statements and notes thereto appearing in Part II, Item 8 of this Annual Report on Form 10‑K. In addition to historical information, this discussion contains forward‑looking statements that involve risks, uncertainties, and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences are set forth in Part I, Item 1A. Risk Factors of this Annual Report on Form 10‑K.

All amounts presented in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, except share and per share amounts, are presented in thousands. Additionally, many of the amounts and percentages have been rounded for convenience of presentation.

Overview:

We are a leading global provider of software for infrastructure engineering, enabling the work of civil, structural, geoprofessional, and plant engineering practitioners, their project delivery enterprises, and owner‑operators of infrastructure assets. We were founded in 1984 by the Bentley brothers and on September 25, 2020, we completed our IPO.

Our enduring commitment is to develop and support the most comprehensive portfolio of integrated software offerings across professional disciplines, project and asset lifecycles, infrastructure sectors, and geographies. Our software enables digital workflows across engineering disciplines, distributed project teams, from offices to the field, and across computing form factors, including desktops, on‑premises servers, cloud‑native services, mobile devices, and web browsers. We deliver our solutions via on‑premise, cloud, and hybrid environments. Our users engineer, construct, and operate projects and assets across the following infrastructure sectors:

•public works (including roads, rail, airports, ports, and water and wastewater networks)/utilities (including electric, gas, water, and communications). We estimate that this sector represents 52% of the net infrastructure asset value of the global top 500 infrastructure owners based on the 2021 edition of the Bentley Infrastructure 500 Top Owners, our annual compilation of the world’s largest infrastructure owners ranked by net depreciated value of their tangible fixed assets;

•industrial (including discrete and process manufacturing, power generation, and water treatment plants)/resources (including oil and gas, mining, and offshore). We estimate that this sector represents 34% of the global top 500 infrastructure owners’ net infrastructure asset value; and

•commercial/facilities (including office buildings, hospitals, and campuses). We estimate that this sector represents 14% of the global top 500 infrastructure owners’ net infrastructure asset value.

We offer solutions for enterprises and professionals across the infrastructure lifecycle. Our Engineering Applications and Geoprofessional Applications support the breadth of engineering and geoprofessional disciplines and are primarily desktop applications for professional practitioners. Our project delivery and asset performance Enterprise systems are provided via cloud and hybrid environments, developed respectively to extend enterprise collaboration during project delivery, and to manage and leverage engineering information during operations and maintenance. Our Industry Solutions solve domain‑specific problems for owners of infrastructure assets, and the project delivery ecosystems that support these owners. Our cloud-native iTwin Platform solutions enable digital twin workflows, which can span project and asset lifecycles.

We continue to make substantial investments in research and development because we believe the infrastructure engineering software market presents compelling opportunities for the application of new technologies that advance our current solutions. Our research and development roadmap balances technology advances and new offerings with continuous enhancements to existing offerings. Our allocation of research and development resources is guided by management‑established priorities, input from product managers, and user and sales force feedback.

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We bring our offerings to market primarily through direct sales channels that generated approximately 92% of our 2021 total revenues.

Since its founding, Bentley Systems has remained focused on our mission to provide software in support of the professional needs of those responsible for creating and managing the world’s infrastructure. We have methodically grown through periods of global expansion, periods of expansion in our portfolio of solutions, and periods of rapid technological change. The following provides key corporate milestones over our 37‑year history:

Our sources of revenue growth, in order of magnitude and excluding the impact from acquisitions, come from the recurrence of existing subscriptions revenues, additional revenue and growth from existing accounts using the same products, additional revenue and growth from existing accounts using new products, and growth from new accounts. For the year ended December 31, 2021, subscriptions represented 84% of our total revenues, and together with certain services revenues that are recurring in nature and represented 2% of our total revenues, bring the proportion of our recurring revenues to 86% of our total revenues. The remaining 14% of our revenues were generated from the sale of perpetual licenses and the delivery of non‑recurring services. We have a highly‑diversified account base, with our largest account representing no more than 2.5% of our total revenues in 2021. Our 2021 total revenues were also diversified by account type, size, and geography. Additionally, we believe that we have a loyal account base, with over 70% of our 2021 total revenues from organizations that have been our accounts for over ten years. Between 2001 and 2021, our total revenues had an approximately 8% compound annual growth rate.

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Our Commercial Offerings:

Our solutions are made available to our accounts in a broad range of commercial offerings designed to accommodate the diverse preferences of our accounts, which range from owned versus subscribed, short‑term subscriptions versus longer term annual subscriptions, and fee‑certain arrangements versus variable or consumption‑based arrangements with consumption measurement durations of less than one year. We contract our commercial offerings under a single form of standard contract, which includes liability and other risk protections in our favor, and appropriate standard addendums to the primary contract, which specifically address the commercial offerings provided. Our standard commercial offerings are summarized in the table below, with further descriptions following the table:

SELECT Subscriptions. Our SELECT subscription is a prepaid annual recurring subscription that accompanies a new or previously purchased perpetual license. We believe that the SELECT benefits summarized below support our favorable rates of account retention and growth:

•Software upgrades;

•Comprehensive technical support;

•License pooling providing accounts with efficiency advantages;

•Portfolio balancing providing accounts the opportunity to exchange unused or under used licenses with other of our license offerings;

•Learning benefits, Azure‑based cloud collaboration services, and mobility advantages; and

•Access to our entire application portfolio with usage of licenses not previously purchased monetized quarterly in arrears based on consumption. See the section titled “—Term License Subscriptions” below.

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Enterprise Subscriptions. Our Enterprise subscription offerings provide our largest accounts with complete and unlimited global access to our comprehensive portfolio of solutions.

•Enterprise License Subscriptions (“ELS”). Our ELS offering provides access to our comprehensive portfolio of solutions for a fixed annual fee. Subsequent annual renewals are based on the account’s usage of software in the preceding year, effectively resulting in an annual consumption‑based arrangement. The majority of our ELS subscribers were historically SELECT subscribers that have grown into a position to take full advantage of our ELS offering.

•Enterprise 365 (“E365”) Subscriptions. Under our E365 subscription, participating accounts have unrestricted access to our comprehensive software portfolio, similar to ELS, however they are charged based upon daily usage. E365 subscriptions can contain quarterly usage floors or collars as accounts transition to the usage model or for accounts within the public sector. The daily usage fee also includes a term license component, SELECT maintenance and support, hosting, and Success Blueprints, which are designed to achieve business outcomes through more efficient and effective use of our software. The E365 subscription offering was introduced during the fourth quarter of 2018. We are prioritizing efforts to transition ELS subscribers to E365 subscriptions, primarily to simplify pricing, more closely align consumption to monetization, and to establish Success Blueprints as recurring to ensure better business outcomes for our users. To the extent we succeed in transitioning subscribers to E365, we recognize a greater proportion of our revenues on a quarterly basis rather than substantially upfront. See the section titled “—Key Factors Impacting Comparability and Performance.”

Term License Subscriptions

Annual Term Licenses (“ATL”) Subscription. Annual term licenses are generally prepaid annually for named user access to specific products and include our Virtuoso subscriptions sold via our Virtuosity eStore for practitioner licenses. Virtuoso subscriptions are bundles with customizable training and expert consultation administered through “keys” or credits. ATL are also used to monetize site or enterprise wide access for certain of our AssetWise solutions within given usage bands.

Quarterly Term License (“QTL”) Subscription. Through quarterly term licenses, accounts pay quarterly in arrears for licenses they have used representing usage beyond their contracted quantities. Much like our Enterprise subscription programs, a QTL allows smaller- and medium‑sized accounts to match usage to ongoing project requirements.

Monthly Term License (“MTL”) Subscription. Monthly term licenses are identical to QTL subscriptions, except for the term of the license, and the manner in which they are monetized. MTL subscriptions require a Cloud Services Subscription, which is discussed below.

Visas and Passports. Visas and Passports are quarterly or annual term licenses enabling users to access specific project or enterprise information and entitles our users to certain functionality of our ProjectWise and AssetWise systems. Generally, a Passport provides desktop, web, and mobile application access to project information and certain functions, and a Visa provides similar access, plus added functionality depending upon the product to which the Visa is aligned.

While certain legacy arrangements are supported, our standard offering requires Visas and Passports to be fulfilled and contracted via a CSS, which is discussed below.

Cloud Services Subscription (“CSS”). CSS is designed to streamline the procurement, administration, and payment process for us and our accounts. A CSS requires an upfront annual estimation of MTL, Visa and Passport consumption, and any Success Services expected for the upcoming year. A deposit for the annual estimated consumption is submitted in advance. Actual consumption is monitored and invoiced against the deposit on a calendar quarter basis. Accounts are charged only for what gets used and deposited amounts never expire.

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Perpetual Licenses

We historically have sold perpetual licenses and continue to offer them to our accounts as an available option for most of our applications. Perpetual licenses are available for accounts that prefer to own their software licenses and may be sold with or without attaching a SELECT subscription. Historically, attachment and retention of the SELECT subscription has been high given the benefits of the SELECT subscription.

Services

We provide professional services, including training, implementation, configuration, customization, and strategic consulting services. We perform projects on both a time and materials and a fixed fee basis. Certain of our fixed‑fee arrangements, including our Success Services offerings, are structured as subscription‑like, packaged offerings that are annually recurring in nature. Success Services are standard service offerings that provide a level of dedicated professional services above the standard technical support offered to all accounts as part of their SELECT or Enterprise agreement.

Key Business Metrics:

We regularly review the following key metrics to evaluate our business, measure our performance, identify trends in our business, prepare financial projections, and make strategic decisions.

			Year Ended December 31,
			2021						2020						2019
Last twelve-months recurring revenues			$	834,150					$	696,662					$	631,097
Constant Currency:
Annualized recurring revenues (“ARR”) growth rate			26		%				8		%				12		%
Account retention rate			98		%				98		%				98		%	(1)
Recurring revenues dollar-based net retention rate			109		%				107		%				108		%	(1)

(1)On January 1, 2019, we adopted FASB ASU No. 2014‑09, Revenue from Contracts with Customers, and related amendments (“Topic 606”), which superseded the guidance provided by Accounting Standards Codification (“ASC”) 985‑605, Software-Revenue Recognition, and Topic 605‑25, Revenue Recognition, Multiple-Element Arrangements. We refer to ASC 985‑605 and Topic 605‑25 collectively as “Topic 605.” Prior to the year ended December 31, 2020, the account retention rate and recurring revenues dollar‑based net retention rate were calculated using revenues recognized pursuant to Topic 605 for all periods in order to enhance comparability during our transition to Topic 606 as we did not have all information that was necessary to calculate account retention rate pursuant to Topic 606 for earlier periods.

Last twelve‑months recurring revenues. Last twelve‑months recurring revenues is calculated as recurring revenues recognized over the preceding twelve‑month period. We define recurring revenues as subscriptions revenues that recur monthly, quarterly, or annually with specific or automatic renewal clauses and services revenues in which the underlying contract is based on a fixed fee and contains automatic annual renewal provisions.

We believe that last twelve‑months recurring revenues is an important indicator of our performance during the immediately preceding twelve‑month time period. We believe that we will continue to experience favorable growth in recurring revenues primarily due to our strong account retention and recurring revenues dollar‑based net retention rates, as well as the addition of new accounts with recurring revenues. The last twelve‑months recurring revenues for the periods ended December 31, 2021, 2020, and 2019 compared to the last twelve‑months of the preceding twelve‑month period increased by $137,488, $65,565, and $44,631, respectively. This increase was primarily due to growth in ARR, which is primarily the result of growth in our recurring revenues dollar‑based net retention rate, as well as additional recurring revenues resulting from new accounts and acquisitions. For the twelve months ended December 31, 2021, 2020, and 2019, 86%, 87%, and 86%, respectively, of our revenues were recurring revenues.

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Constant currency metrics. In reporting period‑over‑period results, we calculate the effects of foreign currency fluctuations and constant currency information by translating current period results using prior period average foreign currency exchange rates. Our definition of constant currency may differ from other companies reporting similarly named measures, and these constant currency performance measures should be viewed in addition to, and not as a substitute for, our operating performance measures calculated in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

ARR growth rate. Our ARR growth rate is the growth rate of our ARR, measured on a constant currency basis. 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 revenues for our contractually recurring consumption‑based software subscriptions with consumption measurement durations of less than one year. 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. ARR resulting from the annualization of recurring contracts with consumption measurement durations of less than one year, as a percentage of total ARR, was 38%, 36%, and 25% as of December 31, 2021, 2020, and 2019, respectively. Within our consumption‑measured ARR, the continuous uptake of our E365 subscription offering has introduced daily consumption‑measured ARR, representing 29% of total ARR as of December 31, 2021. ARR is inclusive of the ARR of acquired companies as of the date they are acquired. We believe that ARR and ARR growth are important metrics indicating the scale and growth of our business. Furthermore, we believe ARR, considered in connection with our recurring revenues dollar‑based net retention rate, is a leading indicator of revenue growth. Our ARR as of December 31, 2021 was $921,218, calculated using the spot foreign exchange rates as of December 31, 2021.

For the year ended December 31, 2021, our ARR growth rate was favorably impacted from the Seequent acquisition by 13%.

Account retention rate. Our account retention rate for any given twelve-month period is calculated using the average currency exchange rates for the prior period, as follows: the prior period recurring revenues from all accounts with recurring revenues in the current and prior period, divided by total recurring revenues from all accounts during the prior period. The account retention rate for the years ended December 31, 2021 and 2020 was calculated under Topic 606. For the year ended December 31, 2019, the account retention rate was calculated using revenues recognized pursuant to Topic 605 as we did not have all information that was necessary to calculate account retention rate pursuant to Topic 606. Our account retention rate is an important indicator that provides insight into the long‑term value of our account relationships and our ability to retain our account base. We believe that our consistent and high account retention rates illustrate our ability to retain and cultivate long‑term relationships with our accounts.

Recurring revenues dollar‑based net retention rate. Our recurring revenues dollar‑based 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. The recurring revenues dollar‑based net retention rate for the years ended December 31, 2021 and 2020 was calculated under Topic 606. For the year ended December 31, 2019, the recurring revenues dollar‑based net retention rate was calculated using revenues recognized pursuant to Topic 605 as we did not have all information that was necessary to calculate recurring revenues dollar‑based net retention rate pursuant to Topic 606. We believe our recurring revenues dollar‑based net retention rate is a key indicator of our success in growing our revenues within our existing accounts. Given that recurring revenues represented 86% of our total revenues for the twelve months ended December 31, 2021, this metric helps explain our revenue performance as primarily growth into existing accounts. We believe that our consistent and high recurring revenues dollar‑based net retention rate illustrates our ability to consistently retain accounts and grow them.

Our calculation of these metrics may not be comparable to other companies with similarly‑titled metrics.

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Non-GAAP Financial Measures:

In addition to our results determined in accordance with U.S. GAAP, we also use the below non‑GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes.

			Year Ended December 31,
			2021						2020						2019
Adjusted EBITDA			$	324,948					$	266,376					$	188,537
Adjusted Net Income			266,940						192,812						135,357

Adjusted EBITDA. We define Adjusted EBITDA as net income adjusted for interest expense, net, provision (benefit) for income taxes, depreciation and amortization, stock‑based compensation, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, realignment expenses, expenses associated with IPO, other non‑operating (income) expense, net, and (income) loss from investment accounted for using the equity method, net of tax.

Adjusted Net Income. We define Adjusted Net Income as net income adjusted for the following: amortization of purchased intangibles and developed technologies, stock‑based compensation, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, realignment expenses, expenses associated with IPO, other non‑operating (income) expense, net, the tax effect of the above adjustments to net income, and (income) loss from investment accounted for using the equity method, net of tax. The tax effect of adjustments to net income is based on the estimated marginal effective tax rates in the jurisdictions impacted by such adjustments.

Adjusted EBITDA and Adjusted Net Income are not presentations made in accordance with U.S. GAAP, and our use of the terms Adjusted EBITDA and Adjusted Net Income may vary from the use of similarly titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation. We believe the presentation of Adjusted EBITDA and Adjusted Net Income provides useful information to management and investors regarding financial and business trends related to our results of operations and that when non‑GAAP financial information is viewed with U.S. GAAP financial information, investors are provided with a more meaningful understanding of our ongoing operating performance. We also use Adjusted EBITDA and Adjusted Net Income to compare our results to those of our competitors and to consistently measure our performance from period to period. During the third quarter of 2021, we modified our definitions of Adjusted EBITDA and Adjusted Net Income to adjust for expense (income) relating to deferred compensation plan liabilities and amounts for all periods herein reflect application of the modified definition.

Adjusted EBITDA and Adjusted Net Income should not be considered as alternatives to net income, operating income, or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance. Adjusted EBITDA and Adjusted Net Income have important limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.

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Reconciliation of net income to Adjusted EBITDA:

			Year Ended December 31,
			2021						2020						2019
Net income			$	93,192					$	126,521					$	103,096
Interest expense, net			12,491						7,476						8,199
(Benefit) provision for income taxes			(3,448)						38,625						23,738
Depreciation and amortization (1)			52,793						36,117						32,160
Stock-based compensation (3)			48,152						32,114						8,091
Deferred compensation plan (4)			95,046						177						408
Acquisition expenses (5)			34,368						11,666						6,597
Realignment expenses (6)			—						10,022						(584)
Expenses associated with IPO (7)			—						26,130						—
Other (income) expense, net (8)			(11,231)						(24,946)						5,557
Loss from investment accounted for using the equity method, net of tax			3,585						2,474						1,275
Adjusted EBITDA			$	324,948					$	266,376					$	188,537

Reconciliation of net income to Adjusted Net Income:

			Year Ended December 31,
			2021						2020						2019
Net income			$	93,192					$	126,521					$	103,096
Non-GAAP adjustments, prior to income taxes:
Amortization of purchased intangibles and developed technologies (2)			34,001						20,721						18,731
Stock-based compensation (3)			48,152						32,114						8,091
Deferred compensation plan (4)			95,046						177						408
Acquisition expenses (5)			34,368						11,666						6,597
Realignment expenses (6)			—						10,022						(584)
Expenses associated with IPO (7)			—						26,130						—
Other (income) expense, net (8)			(11,231)						(24,946)						5,557
Total non-GAAP adjustments, prior to income taxes			200,336						75,884						38,800
Income tax effect of non-GAAP adjustments			(30,173)						(12,067)						(7,814)
Loss from investment accounted for using the equity method, net of tax			3,585						2,474						1,275
Adjusted Net Income			$	266,940					$	192,812					$	135,357

Further explanation of certain of our adjustments in arriving at Adjusted EBITDA and Adjusted Net Income are as follows:

(1)Depreciation and amortization. Depreciation and amortization includes amortization of $7,020, $4,699, and $3,516 for the years ended December 31, 2021, 2020, and 2019, respectively, related to certain projects under our Accelerated Commercial Development Program (“ACDP”).

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(2)Amortization of purchased intangibles and developed technologies. Amortization of purchased intangibles varies in amount and frequency and is significantly impacted by the timing and size of our acquisitions. Amortization of acquisition related developed technologies under our ACDP was $275, $388, and $723 for the years ended December 31, 2021, 2020, and 2019, respectively. Management finds it useful to exclude these non‑cash charges from our operating expenses to assist in budgeting, planning, and forecasting future periods. The use of intangible assets and developed technologies contributed to our revenues earned during the periods presented and will also contribute to our revenues in future periods. Amortization of purchased intangible assets and developed technologies will recur in future periods.

(3)Stock‑based compensation. We exclude certain stock‑based compensation expenses from our non‑GAAP measures primarily because they are non‑cash expenses and management finds it useful to exclude certain non‑cash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning, and forecasting future periods. Moreover, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, Compensation—Stock Compensation, we believe excluding stock‑based compensation expenses allows investors to make meaningful comparisons between our recurring core business results of operations and those of other companies.

(4)Deferred compensation plan. In August 2021, our board of directors approved an amendment to the Company’s unfunded Nonqualified Deferred Compensation Plan, as amended and restated, effective as of September 22, 2020 (the “DCP”), which offered to certain active executives in the DCP a one‑time, short‑term election to reallocate a limited portion of their DCP holdings from phantom shares of the Company’s Class B Common Stock into other DCP phantom investment funds. The offer to reallocate was subject to a proration mechanism which adjusted the aggregate elections to a maximum of 1,500,000 phantom shares of the Company’s Class B Common Stock. This one‑time reallocation opportunity was offered only to certain active executives (but not to Directors or Bentley family members) in order to encourage retention, as otherwise these executives could only have materially diversified their investments in Company equity (primarily held in the DCP) by voluntarily terminating employment to trigger DCP distributions. These executives in aggregate accordingly diversified 24% of their phantom shares of the Company’s Class B Common Stock. While DCP participants’ investments in phantom shares remain equity classified, as they will be settled in shares of Class B Common Stock upon eventual distribution, the amendment and elections resulted in a change to liability classification for the reallocated phantom investments, as they will be settled in cash upon eventual distribution. As a result, during the year ended December 31, 2021, we recognized a one‑time compensation charge of $90,721 to Deferred compensation plan expenses in the consolidated statements of operations to record the reallocated deferred compensation plan liabilities at their fair value. Deferred compensation plan liabilities are marked to market at the end of each reporting period, with changes in the liabilities recorded as an expense (income) to Deferred compensation plan in the consolidated statements of operations. We exclude these charges because they are not reflective of our ongoing business and results of operation. We believe it is useful for investors to understand the effects of these items on our total operating expenses.

(5)Acquisition expenses. We incur expenses for professional services rendered in connection with business combinations, which are included in our U.S. GAAP presentation of general and administrative expense. Also included in our acquisition expenses are retention incentives paid to executives of the acquired companies, as well as adjustments related to deferred revenues from acquisitions that closed prior to 2021. The adjustment to acquired deferred revenues has no impact on our business or cash flow, but it does reduce reported U.S. GAAP revenues in the periods following an acquisition. We exclude these acquisition expenses when we evaluate our continuing operational performance as we would not have otherwise incurred these expenses in the periods presented as part of our continuing operations. For the year ended December 31, 2021, $16,557 of our acquisition expenses related to the acquisition of Seequent.

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(6)Realignment expenses. These expenses are associated with realigning our business strategies to better serve our accounts and to better align resources with the evolving needs of the business. In connection with these actions, we recognize costs related to termination benefits for colleagues whose positions were eliminated. We exclude these charges because they are not reflective of our ongoing business and results of operations. We believe it is useful for investors to understand the effects of these items on our total operating expenses. In the ordinary course of operating our business, we incur severance expenses that are not included in this adjustment.

(7)Expenses associated with IPO. These expenses include certain non-recurring costs relating to our IPO, consisting of the payment of underwriting discounts and commissions applicable to the sale of shares by the selling stockholders, professional fees, and other expenses. We exclude these charges because they are not reflective of our ongoing business and results of operation. We believe it is useful for investors to understand the effects of these items on our total operating expenses.

(8)Other (income) expense, net. Primarily consists of foreign exchange (gains) losses of $(827), $(22,919), and $5,591 for the years ended December 31, 2021, 2020, and 2019, respectively. The foreign exchange (gains) losses derive primarily from U.S. Dollar denominated cash and cash equivalents, accounts receivable, and intercompany balances held by foreign subsidiaries. The gains and losses from such translations are included in Other (income) expense, net in the consolidated statements of operations. Intercompany finance transactions denominated in U.S. Dollars resulted in unrealized foreign exchange losses (gains) of $779, $(22,310), and $5,270 for the years ended December 31, 2021, 2020, and 2019, respectively. These U.S. Dollar denominated balances are being translated into their functional currencies at the rates in effect at the balance sheet date and are fully eliminated in consolidation. For the year ended December 31, 2021, other (income) expense, net includes a gain from the change in fair value of our interest rate swap of $9,770. For the year ended December 31, 2020, other (income) expense, net includes a gain from the change in fair value of our interest rate swap of $347 and a gain from the change in fair value of acquisition contingent consideration of $1,340. We exclude these charges because they are not reflective of ongoing business and results of operations. We believe it is useful for investors to understand the effects of these items on our total operating expenses.

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Key Factors Impacting Comparability and Performance:

Highlights for the year ended December 31, 2021. In addition to our performance previously discussed in “—Key Business Metrics” and “—Non-GAAP Financial Measures,” and as discussed further below in “—Results of Operations” and “—Liquidity and Capital Resources,” our consolidated financial statements for the year ended December 31, 2021 were impacted by the following:

•On June 17, 2021, we completed the acquisition of Seequent, a leader in software for geological and geophysical modeling, geotechnical stability, and cloud services for geodata management and collaboration, for approximately $883,336 in cash, net of cash acquired, plus 3,141,342 shares of our Class B Common Stock. For the year ended December 31, 2021, we incurred $16,557 of expenses related to the acquisition of Seequent;

•On June 28, 2021, we completed a private offering of $575,000 of 0.375% convertible senior notes due 2027. We incurred $15,065 of expenses in connection with the 2027 Notes offering consisting of the payment of initial purchasers’ discounts and commissions, professional fees, and other expenses (“transaction costs”). Transaction costs were recorded as a direct deduction from the related debt liability in the consolidated balance sheet and are amortized to interest expense over the term of the 2027 Notes;

•In connection with the pricing of the 2027 Notes, we entered into capped call options with certain of the initial purchasers or their respective affiliates and certain other financial institutions. The capped call options are expected to reduce potential dilution to our Class B Common Stock upon any conversion of 2027 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap. We paid premiums of $25,875 in connection with the capped call options. The capped call options are indexed to our common stock and classified in stockholders’ equity. As such, the premiums paid for the capped call options have been included as a net reduction to Additional paid-in capital in the consolidated balance sheet;

•On January 26, 2021, we completed a private offering of $690,000 of 0.125% convertible senior notes due 2026. We incurred $18,055 of expenses in connection with the 2026 Notes offering consisting of transaction costs. Transaction costs were recorded as a direct deduction from the related debt liability in the consolidated balance sheet and are amortized to interest expense over the term of the 2026 Notes;

•In connection with the pricing of the 2026 Notes, we entered into capped call options with certain of the initial purchasers or their respective affiliates and certain other financial institutions. The capped call options are expected to reduce potential dilution to our Class B Common Stock upon any conversion of 2026 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap. We paid premiums of $25,530 in connection with the capped call options. The capped call options are indexed to our common stock and classified in stockholders’ equity. As such, the premiums paid for the capped call options have been included as a net reduction to Additional paid-in capital in the consolidated balance sheet;

•On January 25, 2021, we entered into the Second Amendment to the Credit Facility, which increased the senior secured revolving loan facility from $500,000 to $850,000 and extended the maturity date from December 18, 2022 to November 15, 2025. We performed an extinguishment versus modification assessment on a lender‑by‑lender basis resulting in the write‑off of unamortized debt issuance costs of $353 and the capitalization of fees paid to lenders and third parties of $3,577. Debt issuance costs are amortized to interest expense through the maturity date of November 15, 2025;

•On December 22, 2021, we entered into the Fourth Amendment to the Credit Facility, which provided for a new $200,000 senior secured term loan with a maturity of November 15, 2025 (the “2021 Term Loan”). We incurred $540 of debt issuance costs related to the 2021 Term Loan. We used borrowings under the 2021 Term Loan to pay down borrowings under the swingline sub‑facility and revolving facility under the Credit Facility;

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•In August 2021, our board of directors approved an amendment to the DCP, which offered to certain active executives in the DCP a one‑time, short‑term election to reallocate a limited portion of their DCP holdings from phantom shares of our Class B Common Stock into other DCP phantom investment funds. The offer to reallocate was subject to a proration mechanism which adjusted the aggregate elections to a maximum of 1,500,000 phantom shares of the Company’s Class B Common Stock. This one‑time reallocation opportunity was offered only to certain active executives (but not to Directors or Bentley family members) in order to encourage retention, as otherwise these executives could only have materially diversified their investments in Company equity (primarily held in the DCP) by voluntarily terminating employment to trigger DCP distributions. These executives in aggregate accordingly diversified 24% of their phantom shares of the Company’s Class B Common Stock. While DCP participants’ investments in phantom shares remain equity classified, as they will be settled in shares of Class B Common Stock upon eventual distribution, the amendment and elections resulted in a change to liability classification for the reallocated phantom investments, as they will be settled in cash upon eventual distribution. As a result, during the year ended December 31, 2021, we recognized a one‑time compensation charge of $90,721 to Deferred compensation plan expenses in the consolidated statements of operations to record the reallocated deferred compensation plan liabilities at their fair value. Subsequent to the one‑time reallocation, these diversified deferred compensation plan liabilities are marked to market at the end of each reporting period, with changes in the liabilities recorded as an expense (income) to Deferred compensation plan in the consolidated statements of operations;

•Effective as of the beginning of the fourth quarter of 2020, participants in the Bentley Systems, Incorporated Bonus Pool Plan, as amended and restated, effective as of September 22, 2020 (the “Bonus Plan”) may elect to receive any portion, or all, of such participants’ non‑deferred incentive bonus in the form of shares of fully vested Class B Common Stock instead of cash payments and subject to a combined quarterly limit of $7,500. For the year ended December 31, 2021, we recorded $23,121 of stock‑based compensation expense related to this plan, as compared to $6,524 during the fourth quarter of 2020; and

•Effective September 22, 2020, our board of directors and stockholders adopted and approved the Bentley Systems, Incorporated Global Employee Stock Purchase Plan (the “ESPP”). The ESPP has been implemented by means of consecutive offering periods, with the first offering period commencing on the first trading day on or after January 1, 2021 and ending on the last trading day on or before June 30, 2021. For the year ended December 31, 2021, we recorded $2,118 of stock‑based compensation expense related to this plan.

Impact of foreign currency. A portion of our total revenues and operating expenses were derived from outside the U.S. and as such, were denominated in various foreign currencies, including most significantly: Euros, British Pounds, Australian Dollars, Canadian Dollars, Chinese Yuan Renminbi, and New Zealand Dollars. Our financial results are therefore affected by changes in foreign currency rates. In 2021, 47% of our total revenues were denominated in various foreign currencies. Correspondingly, in 2021, 42% of our total operating expenses were denominated in various foreign currencies. Other than the natural hedge attributable to matching revenues and expenses in the same currencies, we do not currently hedge foreign currency exposure. Accordingly, our results of operations have been, and in the future will be, affected by changes in foreign exchange rates.

We identify the effects of foreign currency on our operations and present constant currency growth rates and fluctuations because we believe exchange rates are an important factor in understanding period‑over‑period comparisons and enhance the understanding of our results and evaluation of our performance. In reporting period to period results, we calculate the effects of foreign currency fluctuations and constant currency information by translating current period results using prior period average foreign currency exchange rates. Our definition of constant currency may differ from other companies reporting similarly named measures, and these constant currency performance measures should be viewed in addition to, and not as a substitute for, our operating performance measures calculated in accordance with U.S. GAAP.

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Acquisitions. Historically, we have enhanced our business with acquisitions of businesses, software solutions, and technologies. Going forward, we plan to selectively acquire adjacent software solutions that can be sold broadly across our account base, as well as to acquire new technologies that we can leverage across our existing software solution portfolio. We completed 13 and six acquisitions for the years ended December 31, 2021 and 2020, respectively.

Impact of COVID‑19. In March 2020, the World Health Organization declared a global pandemic related to the rapidly growing outbreak of the disease COVID‑19, caused by a novel strain of coronavirus, SARS‑CoV‑2. In response to the COVID-19 pandemic, we implemented a number of initiatives to ensure the safety of our colleagues and enable them to move to a work from home environment seamlessly and continue working effectively. We continue to monitor the global situation, with the health and safety of our colleagues and users as a top priority. Currently, the majority of our workforce remains remote due to COVID-19.

Our business model is such that we have experienced minimal disruption to our ability to deliver our solutions to accounts. The COVID‑19 pandemic has had a modest impact on the usage of our solutions by our users. Throughout 2020 and 2021, usage rates fluctuated modestly when compared to the corresponding periods in the prior year. Usage declines have had a minimal impact on our recurring revenues, which are comprised primarily of longer term contracts where short‑term usage rate declines do not adversely impact revenues. However, to the extent declines in usage have also occurred within our recurring revenue contracts with shorter term resets, as is the case with our E365 contracts, the usage declines have modestly impacted revenues. Our services revenues have also been impacted as certain accounts have delayed new projects. Overall, while our rate of growth has been impacted, our revenues have continued to grow given the mission critical nature of our solutions.

As a precaution in the COVID-19 environment, we have and continue to actively manage our spending. Actions taken during 2020 included efforts to minimize colleague travel, and to reduce and recharacterize promotional spending with a shift to virtual events. Although compensation levels and incentive plan payouts have returned to normal for 2021, during 2020 our actions also included curtailment in variable compensation plans to align to COVID-19 pandemic related uncertainties. These actions have resulted in substantial cost savings during the pandemic, which are unlikely to be fully sustainable prospectively.

For further discussion of the potential impact of COVID-19 on our business, see Part I, Item 1A. Risk Factors of this Annual Report on Form 10-K.

Components of Results of Operations:

We manage our business globally within one operating segment, the development and marketing of computer software and related services, which is consistent with how our chief operating decision maker reviews and manages our business.

Revenues

We generate revenues from subscriptions, perpetual licenses, and services.

Subscriptions

SELECT subscriptions. We provide prepaid annual recurring subscriptions that accounts can elect to add to a new or previously purchased perpetual license. SELECT provides accounts with benefits, including upgrades, comprehensive technical support, pooled licensing benefits, annual portfolio balancing exchange rights, learning benefits, certain Azure‑based cloud collaboration services, mobility advantages, and access to other available benefits. SELECT subscriptions revenues are recognized as distinct performance obligations are satisfied.

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Enterprise subscriptions. We also provide Enterprise subscription offerings, which provide our largest accounts with complete and unlimited global access to our comprehensive portfolio of solutions. ELS provides access for a prepaid fee. Our E365 subscription, which was introduced during the fourth quarter of 2018, provides unrestricted access to our comprehensive software portfolio, similar to ELS, however is charged based upon daily usage. E365 subscriptions can contain quarterly usage floors or collars as accounts transition to the usage model or for accounts within the public sector. The daily usage fee also includes a term license component, SELECT maintenance and support, hosting, and Success Blueprints, which are designed to achieve business outcomes through more efficient and effective use of our software. The ELS and E365 offerings both contain a distinct term license component. ELS revenues are recognized as the distinct performance obligations are satisfied. E365 revenues are recognized based upon usage incurred by the account.

Term license subscriptions. We provide annual, quarterly, and monthly term licenses for our software products. ATL subscriptions are generally prepaid annually for named user access to specific products and include our Virtuoso subscriptions sold via our Virtuosity eStore for practitioner licenses. Virtuoso subscriptions are bundles with customizable training and expert consultation administered through “keys” or credits. QTL subscriptions allow accounts to pay quarterly in arrears for license usage that is beyond their SELECT contracted quantities. MTL subscriptions are identical to QTL subscriptions, except for the term of the license, and the manner in which they are monetized. MTL subscriptions require a CSS, which is described below.

Visas and Passports are quarterly or annual term licenses enabling users to access specific project or enterprise information and entitles users to certain functionality of our ProjectWise and AssetWise systems. Our standard offerings are usage based with monetization through our CSS program as described below. Annual, quarterly, and monthly term licenses revenues are recognized as the distinct performance obligations for each are satisfied. Billings in advance are recorded as Deferred revenues in the consolidated balance sheets. QTL, MTL, Visas and Passports subscriptions are recognized based upon usage incurred by the account.

CSS is a program designed to streamline the procurement, administration, and payment process. The program requires an estimation of annual usage for CSS eligible offerings and a deposit of funds in advance. Actual consumption is monitored and invoiced against the deposit on a calendar quarter basis. CSS balances not utilized for eligible products or services may roll over to future periods or are refundable. Paid and unconsumed CSS balances are recorded in Accruals and other current liabilities in the consolidated balance sheets. Software and services consumed under CSS are recognized pursuant to the applicable revenue recognition guidance for the respective software or service and classified as subscriptions or services based on their respective nature.

Perpetual licenses

Perpetual licenses may be sold with or without attaching a SELECT subscription. Historically, attachment and retention of the SELECT subscription has been high given the benefits of the SELECT subscription discussed above. Perpetual licenses revenues are recognized upon delivery of the license to the user.

Services

We provide professional services, including training, implementation, configuration, customization, and strategic consulting services. We perform projects on both a time and materials and a fixed fee basis. Certain of our fixed‑fee arrangements, including our Success Services offerings, are structured as subscription‑like, packaged offerings that are annually recurring in nature. Success Services are standard service offerings that provide a level of dedicated professional services above the standard technical support offered to all accounts as part of their SELECT or Enterprise agreement. Revenues are recognized as services are performed.

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Headcount-related costs

For the years ended December 31, 2021, 2020, and 2019, approximately 80% of our aggregate cost of revenues, and research and development, selling and marketing, and general and administrative expenses were represented by what we refer to herein as “headcount-related” costs. These costs primarily include salaries, incentives, benefits, employment taxes, travel, and realignment of our colleagues, and third‑party personnel and related overhead. Our headcount‑related costs are variable in nature. We actively manage these costs to align to our trending run rate of revenue performance, with the objective of enhancing visibility and predictability of resulting operating profit margins.

Cost of subscriptions, licenses, and services

Cost of subscriptions and licenses. Cost of subscriptions and licenses includes salaries and other related costs, including the depreciation of property and equipment and the amortization of capitalized software costs associated with servicing software subscriptions, the amortization of intangible assets associated with acquired software and technology, channel partner compensation for providing sales coverage to subscribers, as well as cloud‑related costs incurred for servicing our accounts using cloud provisioned solutions and our license administration platform.

Cost of services. Cost of services includes salaries for internal and third‑party personnel and related overhead costs, including depreciation of property and equipment and amortization of capitalized software costs, for providing training, implementation, configuration, and customization services to accounts.

Operating expenses

Research and development. Research and development expenses, which are generally expensed as incurred, primarily consist of personnel and related costs of our research and development staff, including salaries, incentives, and benefits, and costs of certain third‑party contractors, as well as allocated overhead costs. We expense software development costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external accounts, before technological feasibility is reached. In general, technological feasibility is reached shortly before the release of such products and as a result, development costs that meet the criteria for capitalization were not material for the periods presented.

Under our ACDP (our structured approach to an in‑house business incubator function), we capitalize certain development costs related to certain projects once technological feasibility is established. Technological feasibility is established when a detailed program design has been completed and documented; we have established that the necessary skills, hardware, and software technology are available to produce the product; and there are no unresolved high‑risk development issues. Once the software is ready for its intended use, amortization is recorded over the software’s estimated useful life (generally three years). Total costs capitalized under the ACDP were $6,608, $7,809, and $6,060 for the years ended December 31, 2021, 2020, and 2019, respectively. Additionally, total ACDP related amortization recorded in Costs of subscriptions and licenses was $7,020, $4,699, and $3,516 for the years ended December 31, 2021, 2020, and 2019, respectively.

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Selling and marketing. Selling and marketing expenses include salaries, benefits, bonuses, and stock‑based compensation expense for our selling and marketing colleagues, the expense of travel, entertainment, and training for such personnel, online marketing, product marketing and other brand‑building activities, such as advertising, trade shows, and expositions, various sales and promotional programs, and costs of computer equipment and facilities used in selling and marketing activities. We anticipate that we will continue to make strategic investments in our global business systems and methods to enhance major account sales activities and to support our worldwide sales and marketing strategies, and the business in general. We capitalize certain incremental costs of obtaining a contract and recognize these expenses over the period of benefit associated with these costs, resulting in a deferral of certain contract costs each period. The contract costs are amortized based on the economic life of the goods and services to which the contract costs relate. We apply a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. These costs include our internal sales force compensation program and certain channel partner sales incentive programs for which the annual compensation is commensurate with annual sales activities.

General and administrative. General and administrative expenses include salaries, bonuses, benefits, and stock‑based compensation expense for our finance, human resources, and legal colleagues, the expense of travel, entertainment, and training for such personnel, professional fees for legal and accounting services, and costs of computer equipment and facilities used in general and administrative activities. Following the completion of the IPO, we continued to incur additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a U.S. securities exchange and costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC. In addition, as a public company, we incur increased expenses in the areas of insurance, investor relations, and professional services. As a result, we expect the dollar amount of our general and administrative expenses to increase for the foreseeable future. We expect, however, that our general and administrative expenses will decrease as a percentage of our total revenues over time, although the percentage may fluctuate from period to period depending on fluctuations in our revenue and the timing and extent of our general and administrative expenses.

Deferred compensation plan. In August 2021, our board of directors approved an amendment to the DCP, which offered to certain active executives in the DCP a one‑time, short‑term election to reallocate a limited portion of their DCP holdings from phantom shares of the Company’s Class B Common Stock into other DCP phantom investment funds. The offer to reallocate was subject to a proration mechanism which adjusted the aggregate elections to a maximum of 1,500,000 phantom shares of the Company’s Class B Common Stock. This one‑time reallocation opportunity was offered only to certain active executives (but not to Directors or Bentley family members) in order to encourage retention, as otherwise these executives could only have materially diversified their investments in Company equity (primarily held in the DCP) by voluntarily terminating employment to trigger DCP distributions. These executives in aggregate accordingly diversified 24% of their phantom shares of the Company’s Class B Common Stock. While DCP participants’ investments in phantom shares remain equity classified, as they will be settled in shares of Class B Common Stock upon eventual distribution, the amendment and elections resulted in a change to liability classification for the reallocated phantom investments, as they will be settled in cash upon eventual distribution. As a result, during the year ended December 31, 2021, we recognized a one‑time compensation charge of $90,721 to Deferred compensation plan expenses in the consolidated statements of operations to record the reallocated deferred compensation plan liabilities at their fair value. Deferred compensation plan liabilities are marked to market at the end of each reporting period, with changes in the liabilities recorded as an expense (income) to Deferred compensation plan in the consolidated statements of operations.

Amortization of purchased intangibles. Amortization of purchased intangibles includes the amortization of acquired non‑product related intangible assets, primarily customer relationships, trademarks, and non‑compete agreements recorded in connection with completed acquisitions.

Expenses associated with initial public offering. Expenses associated with IPO include certain non-recurring costs relating to our IPO, consisting of the payment of underwriting discounts and commissions applicable to the sale of shares by the selling stockholders, professional fees, and other expenses. We completed our IPO on September 25, 2020. These fees were expensed in the period incurred.

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Interest expense, net

Interest expense, net primarily represents interest associated with the Credit Facility, the 2026 Notes, and the 2027 Notes, amortization and write‑off of deferred debt issuance costs, and interest income from our investments in money market funds.

Other income (expense), net

Other income (expense), net primarily consists of foreign currency translation results derived primarily from U.S. Dollar denominated cash and cash equivalents, accounts receivable, and intercompany balances held by foreign subsidiaries with non‑U.S. Dollar functional currencies. Other income (expense), net also includes the fair value valuation result of our interest rate swap and changes in fair value of acquisition contingent consideration.

(Provision) benefit for income taxes

(Provision) benefit for income taxes includes the aggregate consolidated income tax expense for U.S. domestic and foreign income taxes.

Loss from investment accounted for using the equity method, net of tax

Loss from investment accounted for using the equity method includes our proportional share of loss in a joint venture.

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Results of Operations:

The following table sets forth selected consolidated statements of operations data for each of the periods indicated:

						Year Ended December 31,
						2021						2020						2019
Revenues:
Subscriptions						$	812,807					$	679,273					$	608,300
Perpetual licenses						53,080						57,382						59,693
Subscriptions and licenses						865,887						736,655						667,993
Services						99,159						64,889						68,661
Total revenues						965,046						801,544						736,654
Cost of revenues:
Cost of subscriptions and licenses						124,321						95,803						71,578
Cost of services						92,218						71,352						72,572
Total cost of revenues						216,539						167,155						144,150
Gross profit						748,507						634,389						592,504
Operating expenses:
Research and development						220,915						185,515						183,552
Selling and marketing						162,240						143,791						155,294
General and administrative						150,116						113,274						97,172
Deferred compensation plan						95,046						177						408
Amortization of purchased intangibles						25,601						15,352						14,213
Expenses associated with initial public offering						—						26,130						—
Total operating expenses						653,918						484,239						450,639
Income from operations						94,589						150,150						141,865
Interest expense, net						(12,491)						(7,476)						(8,199)
Other income (expense), net						11,231						24,946						(5,557)
Income before income taxes						93,329						167,620						128,109
Benefit (provision) for income taxes						3,448						(38,625)						(23,738)
Loss from investment accounted for using the equity method, net of tax						(3,585)						(2,474)						(1,275)
Net income						93,192						126,521						103,096
Less: Net income attributable to participating securities						(9)						(234)						(8)
Net income attributable to Class A and Class B common stockholders						$	93,183					$	126,287					$	103,088
Per share information:
Net income per share, basic						$	0.30					$	0.44					$	0.36
Net income per share, diluted						$	0.30					$	0.42					$	0.35
Weighted average shares, basic						305,711,345						289,863,272						284,625,642
Weighted average shares, diluted						314,610,814						299,371,129						293,796,707

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In reporting period‑over‑period results, we calculate the effects of foreign currency fluctuations and constant currency information by translating current period results using prior period average foreign currency exchange rates. Our definition of constant currency may differ from other companies reporting similarly named measures, and these constant currency performance measures should be viewed in addition to, and not as a substitute for, our operating performance measures calculated in accordance with U.S. GAAP.

Comparison of the Years Ended December 31, 2021 and 2020

Revenues

															Comparison
			Year Ended																								Constant
			December 31,																								Currency
			2021						2020						Amount						%						%
Revenues:
Subscriptions			$	812,807					$	679,273					$	133,534					19.7		%				17.6		%
Perpetual licenses			53,080						57,382						(4,302)						(7.5)		%				(8.9)		%
Subscriptions and licenses			865,887						736,655						129,232						17.5		%				15.6		%
Services