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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________

FORM 10-Q
___________________________________

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
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 classTrading SymbolName of each exchange on which registered
Class B Common Stock, par value $0.01 per shareBSY
The Nasdaq Stock Market LLC

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 

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 is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes   No 

As of May 3, 2022, the registrant had 11,601,757 shares of Class A and 275,932,539 shares of Class B Common Stock outstanding.



BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS

Page

2



PART I. FINANCIAL INFORMATION
Item 1. Unaudited Consolidated Financial Statements
BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)

March 31, 2022December 31, 2021
Assets
Current assets:
Cash and cash equivalents$129,617 $329,337 
Accounts receivable233,032 241,807 
Allowance for doubtful accounts(7,486)(6,541)
Prepaid income taxes26,254 16,880 
Prepaid and other current assets32,644 34,348 
Total current assets414,061 615,831 
Property and equipment, net32,043 31,823 
Operating lease right-of-use assets49,432 50,818 
Intangible assets, net329,029 245,834 
Goodwill2,217,578 1,588,477 
Investments8,680 6,438 
Deferred income taxes47,683 71,376 
Other assets59,797 48,646 
Total assets$3,158,303 $2,659,243 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$19,058 $16,483 
Accruals and other current liabilities351,273 323,603 
Deferred revenues215,448 224,610 
Operating lease liabilities16,963 17,482 
Income taxes payable5,048 6,696 
Current portion of long-term debt5,000 5,000 
Total current liabilities612,790 593,874 
Long-term debt1,871,527 1,430,992 
Deferred compensation plan liabilities89,282 94,890 
Long-term operating lease liabilities34,907 35,274 
Deferred revenues13,006 7,983 
Deferred income taxes58,316 65,014 
Income taxes payable7,718 7,725 
Other liabilities13,104 14,269 
Total liabilities2,700,650 2,250,021 
Commitments and contingencies (Note 18)
Stockholders’ equity:
Preferred stock, $0.01 par value, authorized 100,000,000 shares; none issued or outstanding as of March 31, 2022 and December 31, 2021
  
Class A Common Stock, $0.01 par value, authorized 100,000,000 shares; issued and outstanding 11,601,757 shares as of March 31, 2022 and December 31, 2021, and Class B Common Stock, $0.01 par value, authorized 1,800,000,000 shares; issued and outstanding 273,532,336 and 270,924,962 shares as of March 31, 2022 and December 31, 2021, respectively
2,851 2,825 
Additional paid-in capital957,498 937,805 
Accumulated other comprehensive loss
(75,324)(91,774)
Accumulated deficit(427,372)(439,634)
Total stockholders’ equity457,653 409,222 
Total liabilities and stockholders’ equity
$3,158,303 $2,659,243 

See accompanying notes to consolidated financial statements.
3



BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)

Three Months Ended
March 31,
20222021
Revenues:
Subscriptions$241,233 $188,125 
Perpetual licenses10,205 10,116 
Subscriptions and licenses251,438 198,241 
Services24,079 23,764 
Total revenues275,517 222,005 
Cost of revenues:
Cost of subscriptions and licenses33,727 28,945 
Cost of services22,058 20,344 
Total cost of revenues55,785 49,289 
Gross profit219,732 172,716 
Operating expense (income):
Research and development61,273 47,803 
Selling and marketing45,945 32,440 
General and administrative51,154 33,221 
Deferred compensation plan(5,138)167 
Amortization of purchased intangibles9,906 3,438 
Total operating expenses163,140 117,069 
Income from operations
56,592 55,647 
Interest expense, net(7,042)(2,319)
Other income, net
10,641 14,482 
Income before income taxes
60,191 67,810 
Provision for income taxes
(3,231)(10,358)
Loss from investment accounted for using the equity method, net of tax
(572)(446)
Net income
56,388 57,006 
Less: Net income attributable to participating securities
(9) 
Net income attributable to Class A and Class B common stockholders
$56,379 $57,006 
Per share information:
Net income per share, basic
$0.18 $0.19 
Net income per share, diluted
$0.18 $0.18 
Weighted average shares, basic307,969,672 302,583,452 
Weighted average shares, diluted331,330,256 321,736,649 

See accompanying notes to consolidated financial statements.
4



BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)

Three Months Ended
March 31,
20222021
Net income
$56,388 $57,006 
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments16,437 (9,182)
Actuarial gain on retirement plan, net of tax effect of $(5) and $(8), respectively
13 21 
Total other comprehensive income (loss), net of taxes
16,450 (9,161)
Comprehensive income
$72,838 $47,845 

See accompanying notes to consolidated financial statements.
5



BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Stockholders’ Equity
(in thousands, except share data)
(unaudited)

Three Months Ended March 31, 2022
Accumulated
Class A and Class BAdditionalOtherTotal
Common StockPaid-inComprehensiveAccumulatedStockholders’
SharesPar ValueCapitalLossDeficitEquity
Balance, December 31, 2021282,526,719 $2,825 $937,805 $(91,774)$(439,634)$409,222 
Net income
— — — — 56,388 56,388 
Other comprehensive income
— — — 16,450 — 16,450 
Dividends declared— — — — (8,353)(8,353)
Shares issued in connection with deferred compensation plan, net809,751 8 — — (24,254)(24,246)
Deferred compensation plan elective participant deferrals— — 669 — — 669 
Shares issued in connection with Executive Bonus Plan, net72,105 1 4,995 — (2,192)2,804 
Shares issued in connection with employee stock purchase plan109,749 1 4,610 — (121)4,490 
Stock option exercises, net1,401,249 14 2,754 — (7,651)(4,883)
Acquisition option exercises, net149,855 1 (1)— —  
Stock-based compensation expense— — 6,667 — — 6,667 
Shares related to restricted stock, net64,665 1 (1)— (1,555)(1,555)
Balance, March 31, 2022285,134,093 $2,851 $957,498 $(75,324)$(427,372)$457,653 

Three Months Ended March 31, 2021
Accumulated
Class A and Class BAdditionalOtherTotal
Common StockPaid-inComprehensiveAccumulatedStockholders’
SharesPar ValueCapitalLossDeficitEquity
Balance, December 31, 2020272,154,504 $2,722 $741,113 $(26,233)$(376,003)$341,599 
Net income
— — — — 57,006 57,006 
Other comprehensive loss
— — — (9,161)— (9,161)
Purchase of capped call options, net of tax of $6,250
— — (19,430)— — (19,430)
Dividends declared— — — — (8,219)(8,219)
Shares issued in connection with deferred compensation plan, net339,503 3 — — (8,862)(8,859)
Deferred compensation plan elective participant deferrals— — 854 — — 854 
Shares issued in connection with Executive Bonus Plan, net79,961 1 5,573 — (2,037)3,537 
Stock option exercises, net1,263,121 12 1,739 — (7,158)(5,407)
Stock-based compensation expense— — 2,786 — — 2,786 
Shares related to restricted stock, net(114,606)(1)— — (708)(709)
Balance, March 31, 2021273,722,483 $2,737 $732,635 $(35,394)$(345,981)$353,997 

See accompanying notes to consolidated financial statements.
6



BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

Three Months Ended
March 31,
20222021
Cash flows from operating activities:
Net income
$56,388 $57,006 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization17,212 8,993 
Bad debt allowance
955 746 
Deferred income taxes9,042 966 
Stock-based compensation expense15,099 8,913 
Deferred compensation plan(5,138)1,021 
Amortization and write-off of deferred debt issuance costs1,778 1,229 
Change in fair value of derivative(12,084)(13,661)
Change in fair value of contingent consideration500  
Change on fair value of investments(112) 
Gain on sale of aircraft(2,029) 
Foreign currency remeasurement loss (gain)
1,677 (583)
Loss from investment accounted for using the equity method, net of tax
572 446 
Changes in assets and liabilities, net of effect from acquisitions:
Accounts receivable8,691 14,903 
Prepaid and other assets5,718 8,257 
Accounts payable, accruals, and other liabilities26,791 54,977 
Deferred revenues(12,515)(21,889)
Income taxes payable, net of prepaid income taxes(10,814)11,474 
Net cash provided by operating activities
101,731 132,798 
Cash flows from investing activities:
Purchases of property and equipment and investment in capitalized software(4,176)(2,655)
Proceeds from sale of aircraft2,380  
Acquisitions, net of cash acquired (695,968)(57,975)
Other investing activities(2,811) 
Net cash used in investing activities
(700,575)(60,630)
Cash flows from financing activities:
Proceeds from credit facilities563,912 16,000 
Payments of credit facilities(123,696)(262,000)
Proceeds from convertible senior notes, net of discounts and commissions 672,750 
Payments of debt issuance costs (3,777)
Purchase of capped call options (25,530)
Repayment of term loan(1,250) 
Payments of financing leases(48)(50)
Payments of acquisition debt and other consideration(2,721)(25)
Payments of dividends(8,528)(8,219)
Payments for shares acquired including shares withheld for taxes(35,117)(18,763)
Proceeds from stock purchases under employee stock purchase plan4,611  
Proceeds from exercise of stock options2,768 1,751 
Net cash provided by financing activities
399,931 372,137 
Effect of exchange rate changes on cash and cash equivalents(807)3,225 
(Decrease) increase in cash and cash equivalents
(199,720)447,530 
Cash and cash equivalents, beginning of year329,337 122,006 
Cash and cash equivalents, end of period
$129,617 $569,536 
7



BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

Three Months Ended
March 31,
20222021
Supplemental information:
Cash paid for income taxes$6,766 $4,214 
Income tax refunds798 4,519 
Interest paid5,296 766 
Non-cash investing and financing activities:
Contingent acquisition consideration 549 
Deferred, non-contingent consideration, net 1,718 
Convertible senior notes expenses included in Accounts payable and Accruals and other current liabilities
 605 
Capped call options expenses included in Accounts payable
 150 
Share-settled Executive Bonus Plan awards4,996 5,574 
Deferred compensation plan elective participant deferrals669 855 

See accompanying notes to consolidated financial statements.
8


BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(in thousands, except share and per share data)
(unaudited)

Note 1: Basis of Presentation
Basis of Presentation — The accompanying unaudited consolidated financial statements include the accounts of Bentley Systems, Incorporated (“Bentley” or the “Company”) and its wholly-owned subsidiaries, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all the information and notes required by U.S. GAAP for annual financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Part II, Item 8 of the Company’s 2021 Annual Report on Form 10K on file with the SEC. In management’s opinion, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal, recurring and non-recurring adjustments) that were considered necessary for the fair statement of the Company’s financial position, results of operations, and cash flows at the dates and for the periods indicated. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. Actual results could differ materially from those estimates. The December 31, 2021 consolidated balance sheet included herein is derived from the Company’s audited consolidated financial statements.
Certain reclassifications of prior period amounts have been made to conform to the current period presentation.
Business Combinations — On January 31, 2022, the Company completed the acquisition of Power Line Systems, a leader in software for the design of overhead electric power transmission lines and their structures, for $695,968 in cash, net of cash acquired. On June 17, 2021, the Company completed the acquisition of Seequent Holdings Limited (“Seequent”), a leader in software for geological and geophysical modeling, geotechnical stability, and cloud services for geodata management and collaboration, for $883,336 in cash, net of cash acquired, plus 3,141,342 shares of the Company’s Class B Common Stock (see Note 4).
Note 2: Recent Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020‑04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020‑04”), which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. ASU 2020‑04 applies only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform between March 12, 2020 and December 31, 2022. The expedients and exceptions provided by ASU 2020‑04 do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company had no transactions that were impacted by ASU 2020‑04 during the three months ended March 31, 2022.
9



Note 3: Revenue from Contracts with Customers
Nature of Products and Services
The Company generates revenues from subscriptions, perpetual licenses, and services.
Subscriptions
SELECT subscriptions — The Company provides prepaid annual recurring subscriptions that accounts (which are based on distinct contractual and billing relationships with the Company, where affiliated entities of a single parent company may each have an independent account with the Company) 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. The performance obligations within the SELECT offering, outside of the portfolio balancing exchange right, are concurrently delivered and have the same pattern of recognition. These performance obligations are accounted for ratably over the term as a single performance obligation.
Enterprise subscriptions — The Company also provides Enterprise subscription offerings, which provide its largest accounts with complete and unlimited global access to the Company’s comprehensive portfolio of solutions. Enterprise License Subscriptions (“ELS”) provide access for a prepaid fee, which is based on the account’s usage of software in the preceding year, to effectively create a fee‑certain consumption‑based arrangement. ELS contain a term license component, SELECT maintenance and support, and performance consulting days. The SELECT maintenance and support benefits under ELS do not include a portfolio balancing performance obligation. Revenue is allocated to the various performance obligations based on their respective standalone selling price (“SSP”). Revenue allocated to the term license component is recognized upon delivery at the start of the subscription term while revenues for the SELECT maintenance and support and the performance consulting days are recognized as delivered over the subscription term. Billings in advance are recorded as Deferred revenues in the consolidated balance sheets.
Enterprise 365 (“E365”) subscriptions provide unrestricted access to the Company’s comprehensive software portfolio, similar to ELS, however, the accounts are charged based upon daily usage. 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 the Company’s software. E365 revenues are recognized based upon usage incurred by the account. Usage is defined as distinct user access on a daily basis. E365 subscriptions can contain quarterly usage floors or collars as accounts transition to the usage model or for accounts within the public sector. The term of E365 subscriptions aligns with calendar quarters and revenue is recognized based on actual usage.
10



Term license subscriptions — The Company provides annual, quarterly, and monthly term licenses for its software products. Term license subscriptions contain a term license component and SELECT maintenance and support. Revenue is allocated to the various performance obligations based on their SSP. Annual term licenses (“ATL”) are generally prepaid annually for named user access to specific products and include the Company’s Virtuoso subscriptions sold via the Company’s Virtuosity eStore for practitioner licenses. Virtuoso subscriptions are bundles with customizable training and expert consultation administered through “keys” or credits. Quarterly term license (“QTL”) subscriptions allow accounts to pay quarterly in arrears for license usage that is beyond their prepaid subscriptions. Monthly term license (“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 Cloud Services Subscription (“CSS”), which is described below. For ATL, revenue allocated to the term license component is recognized upon delivery at the start of the subscription term while revenue for the SELECT maintenance and support is recognized as delivered over the subscription term. For Virtuoso keys, revenue is recognized as services are delivered. Billings in advance are recorded as Deferred revenues in the consolidated balance sheets. For usage‑based QTL and MTL subscriptions, revenues are recognized based upon usage incurred by the account. Usage is defined as peak usage over the respective terms. The terms of QTL and MTL subscriptions align with calendar quarters and calendar months, respectively, and revenue is recognized based on actual usage.
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 the Company’s ProjectWise and AssetWise systems. The Company’s standard offerings are usage based with monetization through the Company’s CSS program as described below.
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
The Company provides professional services, including training, implementation, configuration, customization, and strategic consulting services. The Company performs projects on both a time and materials and a fixed fee basis. Certain of the Company’s fixed‑fee arrangements, including its 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.
The Company primarily utilizes its direct internal sales force and also has arrangements through independent channel partners to promote and sell Bentley products and subscriptions to end‑users. Channel partners are authorized to promote the sale of an authorized set of Bentley products and subscriptions within an authorized geography under a Channel Partner Agreement.
11



Significant Judgments and Estimates
The Company’s contracts with customers may include promises to transfer licenses (perpetual or term‑based), maintenance, and services to a user. Judgment is required to determine if the promises are separate performance obligations, and if so, the allocation of the transaction price to each performance obligation. When an arrangement includes multiple performance obligations which are concurrently delivered and have the same pattern of transfer to the customer, the Company accounts for those performance obligations as a single performance obligation. For contracts with more than one performance obligation, the transaction price is allocated among the performance obligations in an amount that depicts the relative SSP of each obligation. Judgment is required to determine the SSP for each distinct performance obligation. In instances where SSP is not directly observable, such as when the Company does not sell the product or service separately, the Company determines the SSP using information that may include market conditions and other observable inputs. The Company uses a range of amounts to estimate SSP when it sells each of the products and services separately and needs to determine whether there is a discount that should be allocated based on the relative SSP of the various products and services.
The Company’s SELECT agreement provides users with perpetual licenses a right to exchange software for other eligible perpetual licenses on an annual basis upon renewal. The Company refers to this option as portfolio balancing and has concluded that the portfolio balancing feature represents a material right resulting in the deferral of the associated revenue. Judgment is required to estimate the percentage of users who may elect to portfolio balance and considers inputs such as historical user elections. This feature is available once per term and must be exercised prior to the respective renewal term. The Company recognizes the associated revenue upon election or when the portfolio balancing right expires. This right is included in the initial and subsequent renewal terms and the Company reestablishes the revenue deferral for the material right upon the beginning of the renewal term. As of March 31, 2022 and December 31, 2021, the Company has deferred $17,724 and $18,020, respectively, related to portfolio balancing exchange rights which is included in Deferred revenues in the consolidated balance sheets.
Contract Assets and Contract Liabilities
March 31, 2022December 31, 2021
Contract assets$309 $336 
Deferred revenues228,454 232,593 
As of March 31, 2022 and December 31, 2021, the Company’s contract assets relate to performance obligations completed in advance of the right to invoice and are included in Prepaid and other current assets in the consolidated balance sheets. Contract assets were not impaired as of March 31, 2022 and December 31, 2021.
Deferred revenues consist of billings made or payments received in advance of revenue recognition from subscriptions and services. The timing of revenue recognition may differ from the timing of billings to users.
For the three months ended March 31, 2022, $97,005 of revenues that were included in the December 31, 2021 deferred revenues balance were recognized. There were additional deferrals of $94,522, which were primarily related to new billings and acquisitions (see Note 4). For the three months ended March 31, 2021, $91,125 of revenues that were included in the December 31, 2020 deferred revenues balance were recognized. There were additional deferrals of $78,210, which were primarily related to new billings.
Remaining Performance Obligations
The Company’s contracts with customers include amounts allocated to performance obligations that will be satisfied at a later date. As of March 31, 2022, amounts allocated to these remaining performance obligations are $228,454, of which the Company expects to recognize 94.3% over the next 12 months with the remaining amount thereafter.
12



Disaggregation of Revenues
The following table details revenues:
Three Months Ended
March 31,
20222021
Subscriptions:
SELECT subscriptions$66,598 $66,140 
Enterprise subscriptions (1)
81,827 71,015 
Term license subscriptions92,808 50,970 
Subscriptions241,233 188,125 
Perpetual licenses10,205 10,116 
Subscriptions and licenses251,438 198,241 
Services:
Recurring4,701 6,077 
Other19,378 17,687 
Services24,079 23,764 
Total revenues$275,517 $222,005 
(1)Enterprise subscriptions includes revenue attributable to E365 subscriptions of $68,598 and $48,265 for the three months ended March 31, 2022 and 2021, respectively.
The Company recognizes perpetual licenses and the term license component of subscriptions as revenue when either the licenses are delivered or at the start of the subscription term. For the three months ended March 31, 2022 and 2021, the Company recognized $125,225 and $95,625 of license related revenues, respectively, of which $115,020 and $85,509, respectively, were attributable to the term license component of the Company’s subscription based commercial offerings recorded in Subscriptions in the consolidated statements of operations.
The Company derived 7% and 8% of its total revenues through channel partners for the three months ended March 31, 2022 and 2021, respectively.
Revenue to external customers is attributed to individual countries based upon the location of the customer.
Three Months Ended
March 31,
20222021
Americas (1)
$154,260 $108,862 
Europe, the Middle East, and Africa (“EMEA”) (2)
77,480 73,848 
Asia-Pacific (“APAC”)
43,777 39,295 
Total revenues$275,517 $222,005 
(1)Americas includes the United States (“U.S.”), Canada, and Latin America (including the Caribbean). Revenue attributable to the U.S. totaled $116,133 and $92,940 for the three months ended March 31, 2022 and 2021, respectively.
(2)Revenue attributable to the United Kingdom totaled $22,291 and $22,383 for the three months ended March 31, 2022 and 2021, respectively.
13


Note 4: Acquisitions
On January 31, 2022, the Company completed the acquisition of Power Line Systems, a leader in software for the design of overhead electric power transmission lines and their structures, for $695,968 in cash, net of cash acquired. For the year ended December 31, 2021, the Company completed a number of acquisitions, for an aggregate purchase price of $1,269,844. On June 17, 2021, the Company 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 $883,336 in cash, net of cash acquired, plus 3,141,342 shares of the Company’s Class B Common Stock. The operating results of the acquired businesses, except for Seequent, were not material, individually or in the aggregate, to the Company’s consolidated statements of operations and financial position.
The aggregate details of the Company’s acquisition activity are as follows:
Acquisitions Completed in
Three Months EndedYear Ended
March 31, 2022December 31, 2021
Number of acquisitions1 13 
Cash paid at closing (1)
$715,114 $1,072,820 
Cash acquired(19,146)(37,837)
Net cash paid$695,968 $1,034,983 
(1)Of the cash paid at closing for the three months ended March 31, 2022 and year ended December 31, 2021, $3,000 and $8,701, respectively, was deposited into an escrow account to secure any potential indemnification and other obligations of the seller.
The fair value of the contingent consideration from acquisitions is included in the consolidated balance sheets as follows:
March 31, 2022December 31, 2021
Accruals and other current liabilities$3,401 $5,382 
Other liabilities960 1,231 
Contingent consideration from acquisitions$4,361 $6,613 
The fair value of non-contingent consideration from acquisitions is included in the consolidated balance sheets as follows:
March 31, 2022December 31, 2021
Accruals and other current liabilities$3,522 $4,751 
Other liabilities6,180 6,177 
Non-contingent consideration from acquisitions$9,702 $10,928 
The operating results of the acquired businesses are included in the Company’s consolidated financial statements from the closing date of each respective acquisition. The purchase price for each acquisition has been allocated to the net tangible and intangible assets and liabilities based on their estimated fair values at the respective acquisition date.
14


The Company is in the process of finalizing the purchase accounting for Power Line Systems. Identifiable assets acquired and liabilities assumed were provisionally recorded at their estimated fair values on the acquisition date. The initial accounting for Power Line Systems is not complete because the evaluation necessary to assess the fair values of certain net assets acquired is still in process. The provisional amounts are subject to revision until the evaluations are completed to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. The allocation of the purchase price may be modified from the date of the acquisition as more information is obtained about the fair values of assets acquired and liabilities assumed, however, such measurement period cannot exceed one year.
Acquisition costs are expensed as incurred and are recorded in General and administrative in the consolidated statements of operations. For the three months ended March 31, 2022 and 2021, the Company incurred acquisition expenses of $10,574 and $6,861, respectively, which include costs related to legal, accounting, valuation, insurance, general administrative, and other consulting fees. For the three months ended March 31, 2022, $9,773 of the Company’s acquisition expenses related to the acquisition of Power Line Systems, and $6,716 of the Company’s acquisition expenses related to the acquisition of Seequent for the three months ended March 31, 2021.
15


The following summarizes the fair values of the assets acquired and liabilities assumed, as well as the weighted average useful lives assigned to acquired intangible assets at the respective date of each acquisition (including contingent consideration):
Acquisitions Completed in
Three Months EndedYear Ended
March 31, 2022December 31, 2021
Consideration:
Cash paid at closing$715,114 $1,072,820 
Shares issued at closing (1)(2)
 182,390 
Contingent consideration 4,544 
Deferred, non-contingent consideration, net 10,090 
Total consideration$715,114 $1,269,844 
Assets acquired and liabilities assumed:
Cash$19,146 $37,837 
Accounts receivable and other current assets1,098 24,174 
Operating lease right-of-use assets1,237 12,095 
Property and equipment963 4,383 
Other assets 874 
Software and technology (weighted average useful life of 5 years)
9,700 43,560 
Customer relationships (weighted average useful life of 10 and 9 years, respectively)
78,300 158,555 
Trademarks (weighted average useful life of 10 years)
5,200 38,256 
In-process research and development 3,700 
Total identifiable assets acquired excluding goodwill115,644 323,434 
Accruals and other current liabilities(610)(27,649)
Deferred revenues(10,219)(26,245)
Operating lease liabilities(1,237)(11,988)
Deferred income taxes(6,865)(53,342)
Other liabilities (716)
Total liabilities assumed(18,931)(119,940)
Net identifiable assets acquired excluding goodwill96,713 203,494 
Goodwill618,401 1,066,350 
Net assets acquired$715,114 $1,269,844 
(1)Of the total 3,141,342 shares issued at closing, 83,627 shares are subject to forfeiture if post‑closing employment service conditions are not met. Accordingly, $5,452 is being recorded as stock‑based compensation expense over the related forfeiture period of two years (see Note 15).
(2)A fair value adjustment of $16,943 was applied to the stock consideration due to restrictions on the transfer of securities.
16


The fair values of the working capital, other assets (liabilities), and property and equipment approximated their respective carrying values as of the acquisition date.
The fair values of deferred revenues were determined in accordance with the Company’s revenue recognition policies (see Note 3).
The fair values of the intangible assets were primarily determined using the income approach. When applying the income approach, indications of fair values were developed by discounting future net cash flows to their present values at market‑based rates of return. The cash flows were based on estimates used to price the acquisitions and the discount rates applied were benchmarked with reference to the implied rate of return from the Company’s pricing model and the weighted average cost of capital.
Goodwill recorded in connection with the acquisitions was attributable to synergies expected to arise from cost saving opportunities, as well as future expected cash flows. The Company expects $519,564 of the goodwill recorded relating to the acquisition of Power Line Systems will be deductible for income tax purposes.
Unaudited Pro Forma Financial Information
Had the acquisition of Seequent been made at the beginning of 2020, unaudited pro forma total revenues for the three months ended March 31, 2021 would have been $255,783. Net income, net income per share, basic, and net income per share, diluted for the three months ended March 31, 2021 would not have been materially different than the amounts reported primarily due to the pro forma adjustments to reflect the amortization of purchased intangibles and the cost to finance the transaction, net of the related tax effects.
The unaudited pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2021. The unaudited pro forma financial information combines the historical results of the Company, the adjusted historical results of Seequent considering the date the Company completed the acquisition of Seequent, and the effects of the pro forma adjustments described above.
Acquisition Subsequent to March 31, 2022
In April 2022, the Company completed one acquisition. The acquisition is not expected to be material to the Company’s consolidated financial statements.
17


Note 5: Property and Equipment, Net
Property and equipment, net consist of the following:
March 31, 2022December 31, 2021
Land$2,811 $2,811 
Building and improvements36,366 35,188 
Computer equipment and software49,169 47,651 
Furniture, fixtures, and equipment14,400 14,274 
Aircraft2,038 4,075 
Other59 61 
Property and equipment, at cost104,843 104,060 
Less: Accumulated depreciation(72,800)(72,237)
Total property and equipment, net$32,043 $31,823 
Depreciation expense for the three months ended March 31, 2022 and 2021 was $2,490 and $2,497, respectively.
Related Party Equipment Sale
In January 2022, the audit committee of the Company’s board of directors authorized the Company to sell 50% of its interest in the Company’s aircraft at fair market value to an entity controlled by the Company’s Chief Executive Officer. The transaction was completed on February 1, 2022 for $2,380 and resulted in a gain of $2,029, which was recorded in Other income, net in the consolidated statement of operations for the three months ended March 31, 2022. Subsequent to the transaction, ongoing operating and fixed costs of the aircraft are shared on a proportional use basis subject to a cost-sharing agreement. Such costs were not material during the three months ended March 31, 2022. Pursuant to FASB Accounting Standards Codification (“ASC”) Topic 850, Related Party Disclosures, the Company determined this transaction was to a related party.
Note 6: Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill are as follows:
Balance, December 31, 2021$1,588,477 
Acquisitions618,401 
Foreign currency translation adjustments10,828 
Other adjustments(128)
Balance, March 31, 2022$2,217,578 
18


Details of intangible assets other than goodwill are as follows:
March 31, 2022December 31, 2021
Estimated
Useful Life
Gross
Carrying
Amount
Accumulated
Amortization
Net Book
Value
Gross
Carrying
Amount
Accumulated
Amortization
Net Book
Value
Intangible assets subject to amortization:
Software and technology
3-5 years
$95,909 $(50,327)$45,582 $101,588 $(63,225)$38,363 
Customer relationships
3-10 years
324,657 (91,288)233,369 245,325 (83,799)161,526 
Trademarks
3-10 years
68,703 (22,422)46,281 63,080 (20,893)42,187 
Non-compete agreements
5 years
350 (156)194 350 (139)211 
489,619 (164,193)325,426 410,343 (168,056)242,287 
Intangible assets not subject to amortization:
In-process research and development3,603 — 3,603 3,547 — 3,547 
Total intangible assets$493,222 $(164,193)$329,029 $413,890 $(168,056)$245,834 
The aggregate amortization expense for purchased intangible assets with finite lives was reflected in the Company’s consolidated statements of operations as follows:
Three Months Ended
March 31,
20222021
Cost of subscriptions and licenses$3,022 $1,151 
Amortization of purchased intangibles9,906