BENTLEY SYSTEMS INC

Previous wording

Bentley Systems is theinfrastructure engineering software company. Our purpose is to advance the world’s infrastructure for better quality of life. We empower people to design, build, and operate better and more resilient infrastructure through the adoption of our intelligent digital twin solutions. We manage our business globally within one reportable segment, the development and marketing of computer software and related services, which is consistent with how our CODM reviews and manages our business.

Current wording

Bentley Systems is the infrastructure engineering software company. Our purpose is to advance the world’s infrastructure for better quality of life. We empower people to design, build, and operate better and more resilient infrastructure through the adoption of our intelligent digital twin solutions. We manage our business globally within one reportable segment, the development and marketing of computer software and related services, which is consistent with how our CODM reviews and manages our business.

Previous wording

•ARR(2) was $1,270,726 as of September 30, 2024, compared to $1,124,774 as of September 30, 2023, representing a constant currency(1) ARR growth rate(2) of 12%;

Current wording

•ARR(2) was $1,319,256 as of March 31, 2025, compared to $1,186,456 as of March 31, 2024, representing a constant currency(1) ARR growth rate(2) of 12%;

Previous wording

•Last twelve-month recurring revenues dollar-based net retention rate(2) was 109% as of September 30, 2024, compared to 110% as of September 30, 2023;

Current wording

•Last twelve-month recurring revenues dollar-based net retention rate(2) was 110% as of March 31, 2025, compared to 108% as of March 31, 2024;

Previous wording

•Cash flows from operations were $353,660 for the nine months ended September 30, 2024, compared to $329,643 for the nine months ended September 30, 2023.

Current wording

•Cash flows from operations were $219,415 for the three months ended March 31, 2025, compared to $204,969 for the three months ended March 31, 2024.

Previous wording

(1)Constant currency and Adjusted OI w/SBC are non‑GAAP financial measures. Refer to the “Non‑GAAP Financial Measures” section for additional information, including our definitions and our uses of constant currency and Adjusted OI w/SBC.

Current wording

(1)Constant currency and AOI less SBC are non‑GAAP financial measures. Refer to the “Non‑GAAP Financial Measures” section for additional information, including our definitions and our uses of constant currency and AOI less SBC.

Previous wording

Our results of operations have been, and in the future will be, affected by changes in foreign currency exchange rates. Other than the natural hedge attributable to matching revenues and expenses in the same currencies, we do not currently hedge foreign currency exposure.

Current wording

Our results of operations have been, and in the future will be, affected by changes in foreign currency exchange rates. Other than the natural hedge attributable to matching revenues and expenses in the same currencies, we do not currently hedge foreign currency exposure. Additionally, because we have operations in, and derive revenue from, geographies around the world, we will continue to monitor the impact of tariffs and other trade policies on our business and the businesses of our accounts, as well as on our financial condition, results of operations, and/or cash flows.

Previous wording

The increase in total revenues for the three and nine months ended September 30, 2024 was driven by an increase in subscriptions revenues, partially offset by decreases in services revenues and perpetual licenses revenues.

Current wording

The increase in total revenues for the three months ended March 31, 2025 was driven by an increase in subscriptions revenues and perpetual licenses, partially offset by a decrease in services revenues.

Previous wording

Subscriptions. For the three and nine months ended September 30, 2024, the increase in subscriptions revenues was driven by improvements in our business performance of $32,488 ($31,957 on a constant currency basis) and $99,933 ($100,191 on a constant currency basis), respectively. Our business performance excludes the impact of our platform acquisitions and includes the impact from programmatic acquisitions, which generally are immaterial, individually and in the aggregate.

Current wording

Subscriptions. For the three months ended March 31, 2025, the increase in subscriptions revenues was driven by improvements in our business performance of $35,229 ($38,895 on a constant currency basis). Our business performance includes the impact from programmatic acquisitions, which generally are immaterial, individually and in the aggregate.

Previous wording

For the three and nine months ended September 30, 2024, the improvements in business performance were primarily driven by expansion from accounts with revenues in the same period in the prior year (“existing accounts”), and growth of 3% attributable to new accounts, most notably small- and medium-sized accounts. Improvements in business performance for the three and nine months ended September 30, 2024 were led by our engineering applications, geoprofessional applications, and our Bentley Infrastructure Cloud for project delivery.

Current wording

For the three months ended March 31, 2025, the improvements in business performance were primarily driven by expansion from accounts with revenues in the same period in the prior year (“existing accounts”), and growth of 3% attributable to new accounts, most notably small- and medium-sized accounts. Improvements in business performance for the three months ended March 31, 2025 were led by our engineering applications, followed by geoprofessional applications, and our Bentley Infrastructure Cloud.

Previous wording

Perpetual licenses. For the three and nine months ended September 30, 2024, the decrease in perpetual licenses revenues was driven by a decline in business performance of $613 ($634 on a constant currency basis) and $1,503 ($1,276 on a constant currency basis), respectively.

Current wording

Perpetual licenses. For the three months ended March 31, 2025, the increase in perpetual licenses revenues was driven by improvements in business performance of $1,280 ($1,443 on a constant currency basis).

Previous wording

Services. For the three and nine months ended September 30, 2024, the decrease in services revenues was driven by a decline in our business performance of $3,314 ($3,546 on a constant currency basis) and $12,929 ($13,291 on a constant currency basis), respectively, driven primarily from weakness in Maximo-related work within our digital integrator, Cohesive.

Current wording

Services. For the three months ended March 31, 2025, the decrease in services revenues was driven by a decline in our business performance of $3,730 ($3,440 on a constant currency basis), driven primarily from weakness within Asset Performance Services.

Previous wording

Americas. For the three and nine months ended September 30, 2024, the increase in revenues from the Americas was primarily driven by improvements in our business performance of $13,242 ($14,025 on a constant currency basis) and $46,564 ($47,514 on a constant currency basis), respectively.

Current wording

Americas. For the three months ended March 31, 2025, the increase in revenues from the Americas was primarily driven by improvements in our business performance of $14,782 ($16,664 on a constant currency basis).

Previous wording

The improvements in business performance for the three and nine months ended September 30, 2024 were primarily due to expansion of our subscriptions revenues from existing accounts in the U.S, partially offset by a decline in services revenues.

Current wording

The improvements in business performance for the three months ended March 31, 2025 were primarily due to expansion of our subscriptions revenues from existing accounts in the U.S., partially offset by a decline in services revenues.

Previous wording

EMEA. For the three and nine months ended September 30, 2024, the increase in revenues from EMEA was primarily driven by improvements in our business performance of $8,387 ($7,041 on a constant currency basis) and $22,690 ($20,099 on a constant currency basis), respectively.

Current wording

EMEA. For the three months ended March 31, 2025, the increase in revenues from EMEA was primarily driven by improvements in our business performance of $12,291 ($13,476 on a constant currency basis).

Previous wording

The improvements in business performance for the nine months ended September 30, 2024 were primarily due to expansion of our subscriptions revenues from existing accounts in the United Kingdom, the Middle East, and Africa, partially offset by a decline in services revenues.

Current wording

The improvements in business performance for the three months ended March 31, 2025 were primarily due to expansion of our subscriptions revenues from existing accounts in the United Kingdom, Africa, and the Middle East, partially offset by a decline in services revenues.

Previous wording

APAC. For the three and nine months ended September 30, 2024, the increase in revenues from APAC was primarily driven by improvements in our business performance of $6,932 ($6,711 on a constant currency basis) and $16,247 ($18,011 on a constant currency basis), respectively.

Current wording

APAC. For the three months ended March 31, 2025, the increase in revenues from APAC was primarily driven by improvements in our business performance of $5,706 ($6,758 on a constant currency basis).

Previous wording

The improvements in business performance for the three and nine months ended September 30, 2024 were primarily due to expansion of our subscriptions revenues from existing accounts in Australia, Southeast Asia, and India, partially offset by declines of our subscriptions revenues from existing accounts in China.

Current wording

The improvements in business performance for the three months ended March 31, 2025 were primarily due to expansion of our subscriptions revenues from existing accounts in Australia and India, as well as an increase in perpetual licenses revenues, partially offset by declines of our subscriptions revenues in China.

Previous wording

Cost of subscriptions and licenses. For the three months ended September 30, 2024, on a constant currency basis, cost of subscriptions and licenses increased primarily due to an increase in cloud‑related costs of $3,360, partially offset by lower amortization of capitalized costs under our Accelerated Commercial Development Program (“ACDP”) as compared to the same period in the prior year.

Current wording

Cost of subscriptions and licenses. For the three months ended March 31, 2025, on a constant currency basis, cost of subscriptions and licenses expenses increased primarily due to an increase in headcount-related costs of $4,245, mainly due to an increase in annual and other compensation costs, and an increase in cloud-related costs of $1,538.

Previous wording

Cost of services. For the three and nine months ended September 30, 2024, on a constant currency basis, cost of services decreased primarily due to a decrease in headcount‑related costs of $2,270 and $11,704, respectively, mainly due to a reduction in third‑party personnel costs.

Current wording

Cost of services. For the three months ended March 31, 2025, on a constant currency basis, cost of services expenses decreased primarily due to a decrease in headcount‑related costs of $1,332, mainly due to a reduction in third‑party personnel costs.

Previous wording

Research and development. For the three months ended September 30, 2024, on a constant currency basis, research and development expenses increased primarily due to an increase in headcount‑related costs of $4,137 mainly due to an increase in annual and other compensation costs.

Current wording

Research and development. For the three months ended March 31, 2025, on a constant currency basis, research and development expenses increased primarily due to an increase in headcount‑related costs of $5,761, mainly due to increases in headcount, and annual and other compensation costs, partially offset by lower acquisition-related retention incentives.

Previous wording

Selling and marketing. For the three and nine months ended September 30, 2024, on a constant currency basis, selling and marketing expenses increased primarily due to an increase in headcount‑related costs of $10,050 and $16,418, respectively, mainly due to an increase in annual and other compensation costs, and an increase in third‑party personnel costs primarily related to our marketing activities.

Current wording

Selling and marketing. For the three months ended March 31, 2025, on a constant currency basis, selling and marketing expenses increased primarily due to an increase in headcount‑related costs of $7,929, mainly due to increases in headcount, and annual and other compensation costs.

Previous wording

General and administrative. For the three months ended September 30, 2024, on a constant currency basis, general and administrative expenses increased primarily due to an increase in headcount‑related costs of $2,770, mainly due to an increase in annual and other compensation costs, partially offset by a decrease in stock‑based compensation expense. The decrease in stock‑based compensation expense primarily related to the reduction in Gregory S. Bentley’s fractional interest under the Bonus Plan as part of Mr. Bentley’s transition to the role of Executive Chair of the Board of Directors effective July 1, 2024. For the three months ended September 30, 2024, general and administrative expenses further increased due to higher charitable contributions focusing on education and sustainability of $2,599. Additionally, during the three months ended September 30, 2024, we recognized approximately $2,700 of costs associated with our internal‑use system implementations.

Current wording

General and administrative. For the three months ended March 31, 2025, on a constant currency basis, general and administrative expenses increased primarily due to an increase in headcount‑related costs of $1,641, mainly due to increases in headcount, and annual and other compensation costs, and to a lesser extent, higher third-party personnel costs. Partially offsetting these increases was lower incentive compensation expense related to the reduction in Gregory S. Bentley’s fractional interest under the Bonus Plan as part of Mr. Bentley’s transition to the role of Executive Chair effective July 1, 2024.

Previous wording

Deferred compensation plan. For the three and nine months ended September 30, 2024 and 2023, deferred compensation plan expense (income) was attributable to the marked to market impact on deferred compensation plan liability balances period over period.

Current wording

Deferred compensation plan. For the three months ended March 31, 2025 and 2024, deferred compensation plan (income) expense was attributable to the marked to market impact on deferred compensation plan liability balances period over period.

Previous wording

Amortization of purchased intangibles. For the three and nine months ended September 30, 2024, on a constant currency basis, amortization of purchased intangibles decreased primarily due to previously acquired intangible assets that continue to become fully amortized and lower acquisition activity as compared to prior periods.

Current wording

Amortization of purchased intangibles. For the three months ended March 31, 2025, on a constant currency basis, amortization of purchased intangibles decreased primarily due to previously acquired intangible assets that continue to become fully amortized and lower acquisition activity as compared to prior periods.

Previous wording

For the three and nine months ended September 30, 2024, interest expense, net decreased primarily due to lower weighted average debt outstanding, as compared to the same period in the prior year, mainly related to the pay down of our revolving loan borrowings in January 2024 and repayments of our senior secured term loan during the second and third quarters of 2024 under the Credit Facility.

Current wording

For the three months ended March 31, 2025, interest expense, net decreased primarily due to lower weighted average debt outstanding under the credit facilities as compared to the same period in the prior year.

Previous wording

(1)Foreign exchange gain (loss) is primarily attributable to foreign currency translation derived mainly from U.S. dollar denominated cash and cash equivalents, account receivables, customer deposits, and intercompany balances held by foreign subsidiaries. Intercompany finance transactions primarily denominated in U.S. dollars resulted in unrealized foreign exchange gains (losses) of $1,561 and $(1,574) for the three months ended September 30, 2024 and 2023, respectively, and $1,130 and $684 for the nine months ended September 30, 2024 and 2023, respectively.

Current wording

(1)Foreign exchange gain is primarily attributable to foreign currency translation derived mainly from U.S. dollar denominated cash and cash equivalents, account receivables, customer deposits, and intercompany balances held by foreign subsidiaries.

Previous wording

For the nine months ended September 30, 2024, the effective tax rate was higher compared to the same period in the prior year primarily due to the impact of the decrease in discrete tax benefits recognized in the current year period. For the nine months ended September 30, 2024 and 2023, we recorded discrete tax benefits of $17,794 and $31,895, respectively, primarily associated with windfall tax benefits from stock‑based compensation, net of the impact from officer compensation limitation provisions.

Current wording

For the three months ended March 31, 2025, the effective tax rate was lower as compared to the same period in the prior year primarily due to the impact of the increase in discrete tax benefits recognized in the current year period and an increase in the forecasted deductions to U.S. taxable income related to foreign revenues. For the three months ended March 31, 2025 and 2024, we recorded discrete tax benefits of $5,073 and $2,138, respectively, primarily associated with windfall tax benefits from stock‑based compensation, net of the impact from officer compensation limitation provisions.

Previous wording

ARR resulting from the annualization of recurring contracts with consumption measurement durations of less than one year, as a percentage of total ARR, was 49% and 46% as of September 30, 2024 and 2023, respectively, with our E365 subscription offering representing 43% and 39% of total ARR as of September 30, 2024 and 2023, respectively.

Current wording

ARR resulting from the annualization of recurring contracts with consumption measurement durations of less than one year, as a percentage of total ARR, was 50% and 48% as of March 31, 2025 and 2024, respectively, with our E365 subscription offering representing 45% and 42% of total ARR as of March 31, 2025 and 2024, respectively.

Previous wording

The last twelve‑months recurring revenues for the periods ended September 30, 2024 compared to the last twelve‑months of the comparative twelve‑month period increased by $118,684. This increase was primarily due to growth in ARR, which is primarily the result of growing our recurring revenues within our existing accounts as expressed 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 September 30, 2024 and 2023, 91% and 89%, respectively, of our revenues were recurring revenues.

Current wording

The last twelve‑months recurring revenues for the periods ended March 31, 2025 compared to the last twelve‑months of the comparative twelve‑month period increased by $147,017. This increase was primarily due to growth in ARR, which is primarily the result of growing our recurring revenues within our existing accounts as expressed 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 March 31, 2025 and 2024, 92% and 90%, respectively, of our revenues were recurring revenues.

Previous wording

Given that recurring revenues represented 91% and 89% of our total revenues for the twelve months ended September 30, 2024 and 2023, respectively, this metric helps explain our revenue performance as primarily growth from existing accounts.

Current wording

Given that recurring revenues represented 92% and 90% of our total revenues for the twelve months ended March 31, 2025 and 2024, respectively, this metric helps explain our revenue performance as primarily growth from existing accounts.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

Reconciliation of operating income to AOI less SBC and to Adjusted operating income:

Previous wording

Further explanation of certain of our adjustments in arriving at Adjusted OI w/SBC and Adjusted operating income are as follows:

Current wording

Further explanation of certain of our adjustments in arriving at AOI less SBC and Adjusted operating income are as follows:

Previous wording

(3)Acquisition expenses. We incur expenses for professional services rendered in connection with business combinations, which are included in our GAAP presentation of general and administrative expense (see Note 4 to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10‑Q). Also included in our acquisition expenses are retention incentives paid to executives of the acquired companies. 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.

Current wording

(3)Acquisition expenses. We incur expenses for professional services rendered in connection with business combinations, which are included in our GAAP presentation of general and administrative expense. Also included in our acquisition expenses are retention incentives paid to executives of the acquired companies. 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.

Previous wording

(4)Realignment expenses (income). We exclude these charges and subsequent adjustments to our estimates when we evaluate our continuing operational performance 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. For the three and nine months ended September 30, 2024, Realignment expenses were primarily associated with the 2023 Program. For the three and nine months ended September 30, 2023, Realignment expenses (income) was associated with the continued wind down of our Russian entities since we exited operations beginning in the second quarter of 2022.

Current wording

(4)Realignment expenses. We exclude these charges and subsequent adjustments to our estimates when we evaluate our continuing operational performance 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. For the three months ended March 31, 2024, Realignment expenses were primarily associated with the 2023 Program.

Previous wording

For the nine months ended September 30, 2024, compared to the same period in the prior year, net cash provided by operating activities was higher by $24,017 due to an increase in net income of $37,492 and a net increase in non‑cash adjustments of $30,200, partially offset by a decrease in net cash flows from the change in operating assets and liabilities of $43,675. The decrease in cash flows from the change in operating assets and liabilities was primarily due to the timing of collections on our receivables and a decrease in deferred revenues.

Current wording

For the three months ended March 31, 2025, compared to the same period in the prior year, net cash provided by operating activities was higher by $14,446 due to an increase in net income of $21,028 and an increase in net cash flows from the change in operating assets and liabilities of $1,954, partially offset by a net decrease in non‑cash adjustments of $8,536. The increase in net cash flows from the change in operating assets and liabilities period over period was primarily due to the overall timing of payments for income taxes and for software maintenance contracts, as well as lower capitalized internal‑use software implementation costs. Offsetting these increases were lower period over period Cloud Services Subscription deposits, and accruals and other liabilities.

Previous wording

Net cash used in investing activities was higher by $84,435 for the nine months ended September 30, 2024, compared to the same period in the prior year, primarily due to higher acquisition related payments of $105,664, partially offset by lower purchases of investments of $10,545 and lower purchases of property and equipment and investment in capitalized software of $10,407. We used available cash and borrowings under our Credit Facility to fund an acquisition in September 2024.

Current wording

Net cash used in investing activities was lower by $805 for the three months ended March 31, 2025, compared to the same period in the prior year, primarily due to lower purchases of property and equipment and investment in capitalized software of $555.

Previous wording

Net cash used in financing activities was lower by $66,801 for the nine months ended September 30, 2024, compared to the same period in the prior year, primarily due to lower net paydowns of the Credit Facility of $81,575, partially offset by higher dividend payments of $9,993, primarily due to an increase in our quarterly dividend per share to $0.06 in 2024 from $0.05 in 2023.

Current wording

Net cash used in financing activities was higher by $74,373 for the three months ended March 31, 2025, compared to the same period in the prior year, primarily due to higher net paydowns of the credit facilities of $40,788 and higher payments for shares acquired of $16,345, including shares repurchased under the Repurchase Program. Additionally, we paid $9,797 in cash to repurchase $10,000 aggregate principal amount of our outstanding 2026 Notes during the first quarter of 2025 and dividend payments were higher by $3,327, primarily due to an increase in our quarterly dividend per share to $0.07 from $0.06.