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 September 30, 2023March 31, 2024
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)

Delaware95-3936623
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
685 Stockton Drive
Exton, Pennsylvania19341
(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 sharePar ValueBSYThe 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 October 31, 2023,April 30, 2024, the registrant had 11,567,62711,537,627 shares of Class A and 284,354,543288,462,583 shares of Class B Common Stockcommon stock outstanding.



BENTLEY SYSTEMS, INCORPORATED
FORM 10-Q
TABLE OF CONTENTS

Page

2


EXPLANATORY NOTE
This Quarterly Report on Form 10‑Q is for the three months ended March 31, 2024. This Quarterly Report on Form 10‑Q modifies and supersedes documents filed before it. The United States (“U.S.”) Securities and Exchange Commission (“SEC”) allows us to “incorporate by reference” information that we file with it, which means that we can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part of this Quarterly Report on Form 10‑Q. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Quarterly Report on Form 10‑Q.
Unless indicated otherwise, throughout this Quarterly Report on Form 10‑Q, we refer to Bentley Systems, Incorporated and its consolidated subsidiaries, as “Bentley Systems,” “Bentley,” the “Company,” “we,” “us,” and “our.”
This Quarterly Report on Form 10‑Q contains trademarks, service marks, brands, or product names owned by us, as well as those owned by others.
Numerical information in this report is presented on a rounded basis using actual amounts. Minor differences in totals and percentage calculations may exist due to rounding.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This reportQuarterly Report on Form 10‑Q includes forward‑looking statements. All statements contained in this reportQuarterly Report on Form 10‑Q 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,” “could,” “would,” “seeks,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions, as well as statements regarding our focus for the future, 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 reportQuarterly Report on Form 10‑Q 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 reportQuarterly Report on Form 10‑Q 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 reportQuarterly Report on Form 10‑Q in greater detail in the section titled “Risk Factors” and elsewhere in this report.Quarterly Report on Form 10‑Q. 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 reportQuarterly Report on Form 10‑Q to conform these statements to actual results or revised expectations.
3



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

September 30, 2023December 31, 2022
March 31, 2024March 31, 2024December 31, 2023
AssetsAssets
Current assets:Current assets:
Current assets:
Current assets:
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalentsCash and cash equivalents$66,963 $71,684 
Accounts receivableAccounts receivable243,488 296,376 
Allowance for doubtful accountsAllowance for doubtful accounts(8,312)(9,303)
Prepaid income taxesPrepaid income taxes25,972 18,406 
Prepaid and other current assetsPrepaid and other current assets46,128 38,732 
Total current assetsTotal current assets374,239 415,895 
Property and equipment, netProperty and equipment, net38,309 32,251 
Operating lease right-of-use assetsOperating lease right-of-use assets41,434 40,249 
Intangible assets, netIntangible assets, net259,979 292,271 
GoodwillGoodwill2,251,312 2,237,184 
InvestmentsInvestments30,332 22,270 
Deferred income taxesDeferred income taxes61,664 52,636 
Other assetsOther assets77,574 72,249 
Total assetsTotal assets$3,134,843 $3,165,005 
Liabilities and Stockholders’ EquityLiabilities and Stockholders’ Equity
Current liabilities:Current liabilities:
Current liabilities:
Current liabilities:
Accounts payable
Accounts payable
Accounts payableAccounts payable$26,389 $15,176 
Accruals and other current liabilitiesAccruals and other current liabilities403,428 362,048 
Deferred revenuesDeferred revenues211,815 226,955 
Operating lease liabilitiesOperating lease liabilities11,430 14,672 
Income taxes payableIncome taxes payable18,879 4,507 
Current portion of long-term debtCurrent portion of long-term debt8,750 5,000 
Total current liabilitiesTotal current liabilities680,691 628,358 
Long-term debtLong-term debt1,580,752 1,775,696 
Deferred compensation plan liabilitiesDeferred compensation plan liabilities79,537 77,014 
Long-term operating lease liabilitiesLong-term operating lease liabilities31,355 27,670 
Deferred revenuesDeferred revenues15,189 16,118 
Deferred income taxesDeferred income taxes43,530 51,235 
Income taxes payableIncome taxes payable7,317 8,105 
Other liabilitiesOther liabilities4,311 7,355 
Total liabilitiesTotal liabilities2,442,682 2,591,551 
Commitments and contingencies (Note 18)Commitments and contingencies (Note 18)Commitments and contingencies (Note 18)
Stockholders’ equity:Stockholders’ equity:
Preferred stock, $0.01 par value, authorized 100,000,000 shares; none issued or outstanding as of September 30, 2023 and December 31, 2022— — 
Class A Common Stock, $0.01 par value, authorized 100,000,000 shares; issued and outstanding 11,567,627 and 11,601,757 shares as of September 30, 2023 and December 31, 2022, respectively, and Class B Common Stock, $0.01 par value, authorized 1,800,000,000 shares; issued and outstanding 283,676,579 and 277,412,730 shares as of September 30, 2023 and December 31, 2022, respectively2,952 2,890 
Preferred stock, $0.01 par value, authorized 100,000,000 shares; none issued or outstanding as of March 31, 2024 and December 31, 2023
Preferred stock, $0.01 par value, authorized 100,000,000 shares; none issued or outstanding as of March 31, 2024 and December 31, 2023
Preferred stock, $0.01 par value, authorized 100,000,000 shares; none issued or outstanding as of March 31, 2024 and December 31, 2023
Class A common stock, $0.01 par value, authorized 100,000,000 shares; issued and outstanding 11,537,627 and 11,537,627 shares as of March 31, 2024 and December 31, 2023, respectively
Class B common stock, $0.01 par value, authorized 1,800,000,000 shares; issued and outstanding 286,477,055 and 284,728,210 shares as of March 31, 2024 and December 31, 2023, respectively
Additional paid-in capitalAdditional paid-in capital1,108,816 1,030,466 
Accumulated other comprehensive lossAccumulated other comprehensive loss(95,128)(89,740)
Accumulated deficitAccumulated deficit(325,183)(370,866)
Non-controlling interestNon-controlling interest704 704 
Total stockholders’ equityTotal stockholders’ equity692,161 573,454 
Total liabilities and stockholders’ equityTotal liabilities and stockholders’ equity$3,134,843 $3,165,005 

See accompanying notes to consolidated financial statements.
4



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

Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Three Months Ended
Three Months Ended
Three Months Ended
March 31,March 31,
202420242023
Revenues:Revenues:
Subscriptions
Subscriptions
SubscriptionsSubscriptions$270,751 $235,307 $807,839 $708,731 
Perpetual licensesPerpetual licenses11,887 9,460 33,152 31,213 
Subscriptions and licensesSubscriptions and licenses282,638 244,767 840,991 739,944 
ServicesServices23,974 23,565 76,781 72,190 
Total revenuesTotal revenues306,612 268,332 917,772 812,134 
Cost of revenues:Cost of revenues:
Cost of subscriptions and licensesCost of subscriptions and licenses42,088 37,371 124,175 107,904 
Cost of subscriptions and licenses
Cost of subscriptions and licenses
Cost of servicesCost of services22,588 21,812 74,111 66,758 
Total cost of revenuesTotal cost of revenues64,676 59,183 198,286 174,662 
Gross profitGross profit241,936 209,149 719,486 637,472 
Operating expense (income):
Operating expenses:
Research and development
Research and development
Research and developmentResearch and development65,465 63,827 203,382 189,966 
Selling and marketingSelling and marketing53,757 46,114 160,262 141,676 
General and administrativeGeneral and administrative42,678 37,794 128,743 128,981 
Deferred compensation planDeferred compensation plan(3,160)(4,576)4,763 (21,873)
Amortization of purchased intangiblesAmortization of purchased intangibles9,517 10,446 29,567 30,869 
Total operating expensesTotal operating expenses168,257 153,605 526,717 469,619 
Income from operationsIncome from operations73,679 55,544 192,769 167,853 
Interest expense, netInterest expense, net(10,047)(9,134)(30,623)(23,521)
Other income, netOther income, net5,953 932 7,207 14,793 
Income before income taxesIncome before income taxes69,585 47,342 169,353 159,125 
Provision for income taxesProvision for income taxes(16,514)(9,664)(22,107)(8,221)
Loss from investments accounted for using the equity method, net of tax(44)(681)(44)(1,846)
Equity in net income of investees, net of tax
Net incomeNet income$53,027 $36,997 $147,202 $149,058 
Per share information:Per share information:
Net income per share, basic
Net income per share, basic
Net income per share, basicNet income per share, basic$0.17 $0.12 $0.47 $0.48 
Net income per share, dilutedNet income per share, diluted$0.16 $0.12 $0.46 $0.46 
Weighted average shares, basicWeighted average shares, basic313,069,132 310,116,104 311,915,808 308,959,801 
Weighted average shares, dilutedWeighted average shares, diluted332,825,186 325,170,383 332,144,893 332,077,834 

See accompanying notes to consolidated financial statements.
5



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

Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Three Months EndedThree Months Ended
March 31,March 31,
202420242023
Net incomeNet income$53,027 $36,997 $147,202 $149,058 
Other comprehensive loss, net of taxes:
Other comprehensive (loss) income, net of taxes:
Foreign currency translation adjustmentsForeign currency translation adjustments(7,294)(12,809)(5,416)(10,192)
Actuarial (loss) gain on retirement plan, net of tax effect of $(8), $(5), $(15), and $(15), respectively(6)11 28 37 
Total other comprehensive loss, net of taxes(7,300)(12,798)(5,388)(10,155)
Foreign currency translation adjustments
Foreign currency translation adjustments
Actuarial gain on retirement plan, net of tax effect of $(28) and $(6), respectively
Total other comprehensive (loss) income, net of taxes
Comprehensive incomeComprehensive income$45,727 $24,199 $141,814 $138,903 

See accompanying notes to consolidated financial statements.
6



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

Three Months Ended September 30, 2023
Accumulated
Class A and Class BAdditionalOtherNon-Total
Common StockPaid-InComprehensiveAccumulatedControllingStockholders’
SharesPar ValueCapitalLossDeficitInterestEquity
Balance, June 30, 2023294,712,983 $2,947 $1,085,066 $(87,828)$(357,117)$704 $643,772 
Three Months Ended March 31, 2024Three Months Ended March 31, 2024
Accumulated
Class A and Class B
Class A and Class B
Class A and Class BAdditionalOtherNon-Total
Common StockCommon StockPaid-InComprehensiveAccumulatedControllingStockholders’
SharesSharesPar ValueCapitalLossDeficitInterestEquity
Balance, December 31, 2023
Net incomeNet income— — — — 53,027 — 53,027 
Other comprehensive lossOther comprehensive loss— — — (7,300)— — (7,300)
Dividends declaredDividends declared— — — — (14,768)— (14,768)
Shares issued in connection with deferred compensation plan, net63,267 — — — (2,127)— (2,127)
Shares issued in connection with deferred compensation plan
Deferred compensation plan elective participant deferralsDeferred compensation plan elective participant deferrals— — 61 — — — 61 
Shares issued in connection with executive bonus plan, net34,313 — 3,251 — (1,430)— 1,821 
Shares issued and repurchased in connection with employee stock purchase plan, net162,459 5,429 — (623)— 4,808 
Shares issued in connection with executive bonus plan
Shares issued in connection with employee stock purchase plan, net
Stock option exercises, netStock option exercises, net185,255 888 — (419)— 471 
Stock-based compensation expenseStock-based compensation expense— — 14,122 — — — 14,122 
Stock-based compensation expense
Stock-based compensation expense
Shares related to restricted stock, netShares related to restricted stock, net85,929 (1)— (1,726)— (1,726)
Repurchases of Class B common stock under approved program
Balance, September 30, 2023295,244,206 $2,952 $1,108,816 $(95,128)$(325,183)$704 $692,161 
Balance, March 31, 2024
Balance, March 31, 2024
Balance, March 31, 2024

Nine Months Ended September 30, 2023
Accumulated
Class A and Class BAdditionalOtherNon-Total
Common StockPaid-InComprehensiveAccumulatedControllingStockholders’
SharesPar ValueCapitalLossDeficitInterestEquity
Three Months Ended March 31, 2023Three Months Ended March 31, 2023
Accumulated
Class A and Class B
Class A and Class B
Class A and Class BAdditionalOtherNon-Total
Common StockCommon StockPaid-InComprehensiveAccumulatedControllingStockholders’
SharesSharesPar ValueCapitalLossDeficitInterestEquity
Balance, December 31, 2022Balance, December 31, 2022289,014,487 $2,890 $1,030,466 $(89,740)$(370,866)$704 $573,454 
Net incomeNet income— — — — 147,202 — 147,202 
Other comprehensive loss— — — (5,388)— — (5,388)
Other comprehensive income
Dividends declaredDividends declared— — — — (43,992)— (43,992)
Shares issued in connection with deferred compensation plan, netShares issued in connection with deferred compensation plan, net2,845,448 28 (28)— (38,456)— (38,456)
Deferred compensation plan elective participant deferralsDeferred compensation plan elective participant deferrals— — 1,712 — — — 1,712 
Shares issued in connection with executive bonus plan, netShares issued in connection with executive bonus plan, net171,510 13,055 — (5,756)— 7,301 
Shares issued in connection with employee stock purchase plan, netShares issued in connection with employee stock purchase plan, net315,840 9,985 — (845)— 9,143 
Stock option exercises, netStock option exercises, net2,422,082 24 10,566 — (6,408)— 4,182 
Shares issued for stock grants, net12,639 — 600 — — — 600 
Stock-based compensation expense
Stock-based compensation expense
Stock-based compensation expenseStock-based compensation expense— — 42,465 — — — 42,465 
Shares related to restricted stock, netShares related to restricted stock, net462,200 (5)— (6,062)— (6,062)
Balance, September 30, 2023295,244,206 $2,952 $1,108,816 $(95,128)$(325,183)$704 $692,161 
Balance, March 31, 2023
Balance, March 31, 2023
Balance, March 31, 2023

See accompanying notes to consolidated financial statements.
7



BENTLEY SYSTEMS, INCORPORATED
Consolidated Statements of Stockholders’ EquityCash Flows
(in thousands, except share data)thousands)
(unaudited)

Three Months Ended September 30, 2022
Accumulated
Class A and Class BAdditionalOtherTotal
Common StockPaid-InComprehensiveAccumulatedStockholders’
SharesPar ValueCapitalLossDeficitEquity
Balance, June 30, 2022288,154,159 $2,882 $981,203 $(89,131)$(397,961)$496,993 
Net income— — — — 36,997 36,997 
Other comprehensive loss— — — (12,798)— (12,798)
Dividends declared— — — — (8,592)(8,592)
Shares issued in connection with deferred compensation plan97,591 (1)— — — 
Deferred compensation plan elective participant deferrals— — 1,586 — — 1,586 
Shares issued in connection with executive bonus plan, net125,195 4,416 — — 4,417 
Shares issued in connection with employee stock purchase plan, net197,657 5,722 — (152)5,572 
Stock option exercises, net218,018 992 — (59)935 
Stock-based compensation expense— — 11,158 — — 11,158 
Shares related to restricted stock, net58,270 — (1)— (1,060)(1,061)
Repurchases of Class B Common Stock under approved program(433,125)(4)— — (15,004)(15,008)
Balance, September 30, 2022288,417,765 $2,884 $1,005,075 $(101,929)$(385,831)$520,199 

Nine Months Ended September 30, 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— — — — 149,058 149,058 
Other comprehensive loss— — — (10,155)— (10,155)
Dividends declared— — — — (25,623)(25,623)
Shares issued in connection with deferred compensation plan, net3,523,386 35 (27)— (24,254)(24,246)
Deferred compensation plan elective participant deferrals— — 4,694 — — 4,694 
Shares issued in connection with executive bonus plan, net284,992 16,307 — (5,197)11,113 
Shares issued in connection with employee stock purchase plan, net307,406 10,332 — (273)10,062 
Stock option exercises, net2,272,603 23 6,832 — (8,459)(1,604)
Acquisition option exercises, net185,178 (2)— — — 
Shares issued for stock grants, net13,632 — 450 — — 450 
Stock-based compensation expense— — 28,687 — — 28,687 
Shares related to restricted stock, net199,975 (3)— (3,208)(3,209)
Repurchases of Class B Common Stock under approved program(896,126)(9)— — (28,241)(28,250)
Balance, September 30, 2022288,417,765 $2,884 $1,005,075 $(101,929)$(385,831)$520,199 

See accompanying notes to consolidated financial statements.
Three Months Ended
March 31,
20242023
Cash flows from operating activities:
Net income$70,310 $45,490 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization16,385 18,057 
Deferred income taxes5,302 (4,178)
Stock-based compensation expense19,658 19,484 
Deferred compensation plan5,799 4,146 
Amortization of deferred debt issuance costs1,823 1,823 
Change in fair value of derivative(2,790)4,489 
Foreign currency remeasurement (gain) loss(1,744)1,018 
Other1,099 (4,411)
Changes in assets and liabilities, net of effect from acquisitions:
Accounts receivable14,508 15,420 
Prepaid and other assets(5,321)12,137 
Accounts payable, accruals, and other liabilities85,071 53,127 
Deferred revenues(9,257)1,942 
Income taxes payable, net of prepaid income taxes4,126 7,679 
Net cash provided by operating activities204,969 176,223 
Cash flows from investing activities:
Purchases of property and equipment and investment in capitalized software(3,599)(4,284)
Acquisitions, net of cash acquired— (10,299)
Purchases of investments(250)(6,178)
Net cash used in investing activities(3,849)(20,761)
Cash flows from financing activities:
Proceeds from credit facilities39,838 117,139 
Payments of credit facilities(131,866)(223,124)
Repayments of term loan(2,500)(1,250)
Payments of contingent and non-contingent consideration(451)(249)
Payments of dividends(17,871)(14,522)
Proceeds from stock purchases under employee stock purchase plan5,560 4,557 
Proceeds from exercise of stock options4,007 4,202 
Payments for shares acquired including shares withheld for taxes(8,099)(20,948)
Repurchases of Class B common stock under approved program(15,006)— 
Other(47)(46)
Net cash used in financing activities(126,435)(134,241)
Effect of exchange rate changes on cash and cash equivalents(1,496)662 
Increase in cash and cash equivalents73,189 21,883 
Cash and cash equivalents, beginning of year68,412 71,684 
Cash and cash equivalents, end of period$141,601 $93,567 
8



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

Nine Months Ended
September 30,
20232022
Cash flows from operating activities:
Net income$147,202 $149,058 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization52,787 53,644 
Deferred income taxes(14,632)(13,670)
Stock-based compensation expense56,092 51,359 
Deferred compensation plan4,763 (21,873)
Amortization of deferred debt issuance costs5,469 5,468 
Change in fair value of derivative(4,102)(29,318)
Foreign currency remeasurement loss3,198 14,445 
Other2,464 4,193 
Changes in assets and liabilities, net of effect from acquisitions:
Accounts receivable56,065 12,550 
Prepaid and other assets(1,246)7,779 
Accounts payable, accruals, and other liabilities33,437 28,765 
Deferred revenues(17,688)(26,725)
Income taxes payable, net of prepaid income taxes5,834 2,523 
Net cash provided by operating activities329,643 238,198 
Cash flows from investing activities:
Purchases of property and equipment and investment in capitalized software(18,906)(12,982)
Proceeds from sale of aircraft— 2,380 
Acquisitions, net of cash acquired(23,110)(719,539)
Purchases of investments(11,352)(10,304)
Proceeds from investments2,123 — 
Net cash used in investing activities(51,245)(740,445)
Cash flows from financing activities:
Proceeds from credit facilities442,566 753,376 
Payments of credit facilities(634,718)(408,714)
Repayments of term loan(3,750)(3,750)
Payments of contingent and non-contingent consideration(3,039)(6,996)
Payments of dividends(43,992)(25,828)
Proceeds from stock purchases under employee stock purchase plan9,988 10,335 
Proceeds from exercise of stock options10,590 6,855 
Payments for shares acquired including shares withheld for taxes(57,527)(42,213)
Repurchases of Class B Common Stock under approved program— (28,250)
Other(137)(123)
Net cash (used in) provided by financing activities(280,019)254,692 
Effect of exchange rate changes on cash and cash equivalents(3,100)(8,926)
Decrease in cash and cash equivalents(4,721)(256,481)
Cash and cash equivalents, beginning of year71,684 329,337 
Cash and cash equivalents, end of period$66,963 $72,856 
9



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

Nine Months Ended
September 30,
20232022
Three Months EndedThree Months Ended
March 31,March 31,
202420242023
Supplemental information:Supplemental information:
Cash paid for income taxes
Cash paid for income taxes
Cash paid for income taxesCash paid for income taxes$29,467 $20,696 
Income tax refundsIncome tax refunds764 2,194 
Interest paidInterest paid29,370 17,647 
Non-cash investing and financing activities:Non-cash investing and financing activities:
Cost method investmentCost method investment3,500 6,022 
Cost method investment
Cost method investment
Deferred, non-contingent consideration, netDeferred, non-contingent consideration, net525 157 
Deferred, non-contingent consideration, net
Deferred, non-contingent consideration, net
Share-settled executive bonus plan awardsShare-settled executive bonus plan awards13,057 16,310 
Share-settled executive bonus plan awards
Share-settled executive bonus plan awards
Deferred compensation plan elective participant deferralsDeferred compensation plan elective participant deferrals1,712 4,694 

See accompanying notes to consolidated financial statements.
109



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

Note 1: Basis of Presentation
The accompanying unaudited consolidated financial statements include the accounts of Bentley Systems, Incorporatedthe Company and its wholly-owned subsidiaries (“Bentley Systems, Incorporated” or the “Company”), andconsolidated subsidiaries. The accompanying unaudited consolidated financial statements have been prepared in U.S. dollars, and in accordance with United StatesU.S. generally accepted accounting principles (“U.S. GAAP”) and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”)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 the Company’s 20222023 Annual Report on Form 10K. 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 as of 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, 20222023 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. For the three and nine months ended September 30, 2023, payments related to the Company’s interest rate swap were recognized in Other income (expense), net in the consolidated statements of operations and the corresponding prior period amounts, which were previously recognized in Interest expense, net, were reclassified to conform to the current period presentation. For the three and nine months ended September 30, 2022, the amounts reclassified were not material, and Income before income taxes and Net income in the consolidated statements of operations did not change as a result of these reclassifications.
Note 2: Recent Accounting Pronouncements
Recently Adopted Accounting GuidanceIn March 2024, the SEC adopted the final rule under SEC Release No. 33‑11275, The Enhancement and Standardization of Climate‑Related Disclosures for Investors.The final rule requires registrants to disclose certain climate‑related information in registration statements and annual reports. The final rule disclosure requirements will begin phasing in prospectively for the Company’s fiscal year beginning January 1, 2025. Subsequent to issuance, the final rule became the subject of litigation and the SEC issued a stay to allow the legal process to proceed. The Company is currently evaluating the impact of the final rule on its disclosures.
In March 2020,December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020‑04,2023‑09, Reference Rate ReformIncome Taxes (Topic 848)740): FacilitationImprovements to Income Tax Disclosures (“ASU 2023‑09”), which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. ASU 2023‑09 is effective for the Company for the annual reporting period beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the Effectsadoption of Reference Rate ReformASU 2023‑09 on Financial Reporting (“ASU 2020‑04”), which provides optional expedientsits consolidated financial statements 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. related disclosures.
In December 2022,November 2023, the FASB issued ASU No. 2022‑06,2023‑07, Reference Rate ReformSegment Reporting (Topic 848)280): DeferralImprovements to Reportable Segment Disclosures (“ASU 2023‑07”), which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how the Company’s chief operating decision maker (“CODM”) uses reported segment profit or loss information in assessing segment performance and allocating resources. ASU 2023‑07 is effective for the Company for the annual reporting period beginning after December 15, 2023, and interim periods beginning after December 15, 2024. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the Sunset Dateadoption of Topic 848, which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reformASU 2023‑07 on financial reporting by extending the sunset date of Topic 848 to December 31, 2024. The expedients and exceptions provided by these ASUs do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2024, except for hedging relationships existing as of December 31, 2024, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company adopted these ASUs during the second quarter of 2023 (see Note 10) and the adoption did not have a material impact on the Company’sits consolidated financial statements.statements and related disclosures.
1110



Note 3: Revenue from Contracts with Customers
Disaggregation of Revenues
The Company’s revenues consist of the following:
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Three Months EndedThree Months Ended
March 31,March 31,
202420242023
Subscriptions:Subscriptions:
Enterprise subscriptions (1)
Enterprise subscriptions (1)
Enterprise subscriptions (1)
Enterprise subscriptions (1)
$111,318 $89,041 $318,896 $252,461 
SELECT subscriptionsSELECT subscriptions63,406 63,609 190,834 196,786 
Term license subscriptionsTerm license subscriptions96,027 82,657 298,109 259,484 
SubscriptionsSubscriptions270,751 235,307 807,839 708,731 
Perpetual licensesPerpetual licenses11,887 9,460 33,152 31,213 
Subscriptions and licensesSubscriptions and licenses282,638 244,767 840,991 739,944 
Services:Services:
RecurringRecurring3,606 4,557 12,733 13,431 
Recurring
Recurring
OtherOther20,368 19,008 64,048 58,759 
ServicesServices23,974 23,565 76,781 72,190 
Total revenuesTotal revenues$306,612 $268,332 $917,772 $812,134 
(1)Enterprise subscriptions includes revenue attributable to Enterprise 365 (“E365”) subscriptions of $107,681$123,036 and $80,298$94,331 for the three months ended September 30,March 31, 2024 and 2023, and 2022, respectively, and $301,260 and $221,801 for the nine months ended September 30, 2023 and 2022, 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 September 30,March 31, 2024 and 2023, and 2022, the Company recognized $147,340$176,309 and $125,140$158,024 of license related revenues, respectively, of which $135,453$166,797 and $115,680,$148,477, 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. For the nine months ended September 30, 2023 and 2022, the Company recognized $444,186 and $380,237 of license related revenues, respectively, of which $411,034 and $349,024, respectively, were attributable to the term license component of the Company’s subscription‑subscription based commercial offerings recorded in Subscriptions in the consolidated statements of operations.
The Company derived 8% and 7% of its total revenues through channel partners for the three months ended September 30, 2023March 31, 2024 and 2022, respectively, and 7% of its total revenues through channel partners for the nine months ended September 30, 2023 and 2022.2023.
12



Revenue from external customers is attributed to individual countries based upon the location of the customer. Revenues by geographic region are as follows:
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Three Months EndedThree Months Ended
March 31,March 31,
202420242023
Americas (1)
Americas (1)
$162,367 $141,599 $489,548 $440,218 
Europe, the Middle East, and Africa (“EMEA”)Europe, the Middle East, and Africa (“EMEA”)86,956 75,416 263,232 227,696 
Asia-Pacific (“APAC”)Asia-Pacific (“APAC”)57,289 51,317 164,992 144,220 
Total revenuesTotal revenues$306,612 $268,332 $917,772 $812,134 
(1)Americas includes the United States (“U.S.”), Canada, and Latin America (including the Caribbean). Revenue attributable to the U.S. totaled $129,510$138,252 and $122,372$127,450 for the three months ended September 30,March 31, 2024 and 2023, and 2022, respectively, and $384,807 and $346,961 for the nine months ended September 30, 2023 and 2022, respectively.
11



Unbilled Revenues
Unbilled revenues represent revenues that have not yet been billed to customers due to timing differences in usage and billing cycles, and are included in Accounts receivable in the consolidated balance sheets. As of March 31, 2024 and December 31, 2023, unbilled revenues were $142,361 and $129,494, respectively.
Contract Assets and Contract Liabilities
September 30, 2023December 31, 2022
Contract assets$472 $575 
Deferred revenues227,004 243,073 
Balances
As of September 30, 2023March 31, 2024 and December 31, 2022,2023, 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 impairedmaterial as of September 30, 2023March 31, 2024 or December 31, 2022.2023.
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. As of March 31, 2024 and December 31, 2023, total deferred revenues on the consolidated balance sheets were $257,243 and $269,647, respectively.
For the ninethree months ended September 30,March 31, 2024, $105,678 of revenues that were included in the December 31, 2023 $183,335deferred revenues balance were recognized. There were additional deferrals of $96,617 for the three months ended March 31, 2024, which were primarily related to new billings. For the three months ended March 31, 2023, $95,979 of revenues that were included in the December 31, 2022 deferred revenues balance were recognized. There were additional deferrals of $169,368$101,577 for the ninethree months ended September 30,March 31, 2023, which were primarily related to new billings and acquisitions. For the nine months ended September 30, 2022, $174,194 of revenues that were included in the December 31, 2021 deferred revenues balance were recognized. There were additional deferrals of $158,125 for the nine months ended September 30, 2022, which were primarily related to new billings and acquisitions.
As of September 30, 2023March 31, 2024 and December 31, 2022,2023, the Company has deferred $17,873$18,323 and $17,338,$18,269, respectively, related to portfolio balancing exchange rights which is included in Deferred revenues in the consolidated balance sheets.
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 September 30, 2023,March 31, 2024, amounts allocated to these remaining performance obligations are $227,004,$257,243, of which the Company expects to recognize approximately 93%94% over the next 12 months with the remaining amount thereafter.
13



Note 4: Acquisitions
The aggregate details of the Company’s acquisition activity are as follows:
Acquisitions Completed DuringAcquisitions Completed During
Three Months Ended March 31,Three Months Ended March 31,
202420242023
Number of acquisitions
Cash paid at closing
Acquisitions Completed during
Nine Months Ended
September 30,
20232022
Number of acquisitions
Cash paid at closing (1)
$23,375 $738,810 
Cash acquired(265)(19,271)
Net cash paidNet cash paid$23,110 $719,539 
Net cash paid
Net cash paid
(1)Of the cash paid at closing for the nine months ended September 30, 2023 and 2022, $1,000 and $3,000, respectively, was deposited into an escrow account to secure any potential indemnification and other obligations of the seller.
On January 31, 2022, the Company completed the acquisition of Power Line Systems (“PLS”), 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. The operating results of the acquired businesses were not material, individually or in the aggregate, to the Company’s consolidated statements of operations.
12


The fair value of the contingent consideration from acquisitions is included in the consolidated balance sheets as follows:
September 30, 2023December 31, 2022
Accruals and other current liabilities$$1,196 
Contingent consideration from acquisitions$$1,196 
The fair value of non-contingent consideration from acquisitions is included in the consolidated balance sheets as follows:
March 31, 2024March 31, 2024December 31, 2023
Accruals and other current liabilities
September 30, 2023December 31, 2022
Accruals and other current liabilities$3,966 $2,434 
Other liabilities— 2,977 
Non-contingent consideration from acquisitionsNon-contingent consideration from acquisitions$3,966 $5,411 
Non-contingent consideration from acquisitions
Non-contingent consideration from acquisitions
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.
The Company is in the process of finalizing the purchase accounting for one acquisition completed during the nine months ended September 30, 2023 and one acquisitiontwo acquisitions completed during the year ended December 31, 2022.2023. Identifiable assets acquired and liabilities assumed were provisionally recorded at their estimated fair values on the respective acquisition date. The initial accounting for these business combinations 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.
14



Acquisition costs are expensed as incurred and are recorded in General and administrative in the consolidated statements of operations. For the three months ended September 30,March 31, 2024 and 2023, and 2022, the Company’s acquisition expensescosts were insignificant,$198 and for the nine months ended September 30, 2023 and 2022 were $5,803 and $10,824,$5,185, respectively, which include costs related to legal, accounting, valuation, insurance, general administrative, and other consulting and transaction fees. For the three and nine months ended September 30, 2022, $350 and $10,149, respectively, of the Company’s acquisition expenses related to the acquisition of PLS.
13



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
Nine Months EndedYear Ended
September 30, 2023December 31, 2022
Consideration:
Cash paid at closing$23,375 $763,228 
Contingent consideration— 1,390 
Deferred, non-contingent consideration, net525 749 
Other56 (269)
Total consideration$23,956 $765,098 
Assets acquired and liabilities assumed:
Cash$265 $20,221 
Accounts receivable and other current assets1,706 8,890 
Operating lease right-of-use assets397 1,237 
Property and equipment— 1,316 
Deferred income taxes2,151 — 
Other assets
Software and technology (weighted average useful life of 3 and 5 years, respectively)2,600 10,608 
Customer relationships (weighted average useful life of 6 and 10 years, respectively)3,900 82,278 
Trademarks (weighted average useful life of 5 and 8 years, respectively)1,000 6,972 
Total identifiable assets acquired excluding goodwill12,025 131,529 
Accruals and other current liabilities(584)(4,079)
Deferred revenues(4,599)(14,176)
Operating lease liabilities(397)(1,237)
Deferred income taxes— (5,745)
Total liabilities assumed(5,580)(25,237)
Net identifiable assets acquired excluding goodwill6,445 106,292 
Goodwill17,511 658,806 
Net assets acquired$23,956 $765,098 
15
Acquisitions Completed During
Year Ended
December 31, 2023
Consideration:
Cash paid at closing$26,287 
Deferred, non-contingent consideration, net525 
Other15 
Total consideration$26,827 
Assets acquired and liabilities assumed:
Cash$264 
Accounts receivable and other current assets1,742 
Operating lease right-of-use assets397 
Deferred income taxes2,151 
Other assets
Software and technology (weighted average useful life of 3 years)3,077 
Customer relationships (weighted average useful life of 6 years)3,900 
Trademarks (weighted average useful life of 5 years)1,000 
Total identifiable assets acquired excluding goodwill12,537 
Accruals and other current liabilities(624)
Deferred revenues(4,623)
Operating lease liabilities(397)
Total liabilities assumed(5,644)
Net identifiable assets acquired excluding goodwill6,893 
Goodwill19,934 
Net assets acquired$26,827 



The fair values of the working capital, other assets (liabilities), and property and equipment approximated their respective carrying values as of the acquisition date.
Deferred revenues were determined in accordance with the Company’s revenue recognition policies.
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 $7,289 of the goodwill recorded relating to the 2023 acquisitions will be deductible for income tax purposes.
Note 5: Property and Equipment, Net
Property and equipment, net consist of the following:
September 30, 2023December 31, 2022
March 31, 2024March 31, 2024December 31, 2023
LandLand$2,811 $2,811 
Building and improvementsBuilding and improvements36,293 35,717 
Computer equipment and softwareComputer equipment and software64,639 54,636 
Furniture, fixtures, and equipmentFurniture, fixtures, and equipment14,848 14,600 
AircraftAircraft2,038 2,038 
OtherOther93 156 
Property and equipment, at costProperty and equipment, at cost120,722 109,958 
Less: Accumulated depreciationLess: Accumulated depreciation(82,413)(77,707)
Total property and equipment, netTotal property and equipment, net$38,309 $32,251 
Depreciation expense was $3,135 and $2,613 for the three months ended September 30,March 31, 2024 and 2023 was $3,367 and 2022, respectively, and $8,769 and $8,025 for the nine months ended September 30, 2023 and 2022,$2,724, 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 statements of operations for the nine months ended September 30, 2022 (see Note 20). 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 nine months ended September 30, 2023 and 2022. The Company determined this transaction was with a related party.
1614


Note 6: Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill are as follows:
Balance, December 31, 20222023$2,237,1842,269,336 
Acquisitions17,511 
Foreign currency translation adjustments(3,179)(7,585)
Other adjustments(204)(561)
Balance, September 30, 2023March 31, 2024$2,251,3122,261,190 
Details of intangible assets other than goodwill are as follows:
September 30, 2023December 31, 2022
Estimated
Useful Life
Gross
Carrying
Amount
Accumulated
Amortization
Net Book
Value
Gross
Carrying
Amount
Accumulated
Amortization
Net Book
Value
March 31, 2024March 31, 2024December 31, 2023
Estimated
Useful Life
Estimated
Useful Life
Gross
Carrying
Amount
Accumulated
Amortization
Net Book
Value
Gross
Carrying
Amount
Accumulated
Amortization
Net Book
Value
Intangible assets subject to amortization:Intangible assets subject to amortization:
Software and technology
Software and technology
Software and technologySoftware and technology3-5 years$88,675 $(55,305)$33,370 $92,390 $(51,938)$40,452 
Customer relationshipsCustomer relationships3-10 years323,223 (135,237)187,986 323,164 (114,387)208,777 
TrademarksTrademarks3-10 years70,510 (31,979)38,531 69,803 (26,904)42,899 
Non-compete agreementsNon-compete agreements5 years350 (258)92 350 (207)143 
Total intangible assetsTotal intangible assets$482,758 $(222,779)$259,979 $485,707 $(193,436)$292,271 
Total intangible assets
Total intangible assets
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 EndedNine Months Ended
September 30,September 30,
2023202220232022
Three Months Ended
Three Months Ended
Three Months Ended
March 31,March 31,
202420242023
Cost of subscriptions and licensesCost of subscriptions and licenses$3,161 $3,129 $9,471 $9,305 
Amortization of purchased intangiblesAmortization of purchased intangibles9,517 10,446 29,567 30,869 
Total amortization expenseTotal amortization expense$12,678 $13,575 $39,038 $40,174 
Note 7: Investments
Investments consist of the following:
September 30, 2023December 31, 2022
Cost method investments$27,957 $22,174 
Equity method investments2,375 96 
Total investments$30,332 $22,270 
17


March 31, 2024December 31, 2023
Cost method investments$21,236 $21,044 
Equity method investments2,405 2,436 
Total investments$23,641 $23,480 
Cost Method Investments
Through its iTwin Ventures initiative, theThe Company invests in technology development companies, generally in the form of equity interests or convertible notes. In March 2023, the Company acquired an equity interest in Worldsensing, a leading global connectivity hardware platform company for infrastructure monitoring, via contribution of its sensemetrics’ Thread connectivity device business (the “Thread business”) and cash. The non‑cash contribution of the Thread business resulted in an insignificant gain, which was recorded in Other income, net in the consolidated statements of operations for the ninethree months ended September 30, 2023 (see Note 20). In July 2022, the Company acquired an equity interest in Teralytics Holdings AG (“Teralytics”), a global platform company for human mobility analysis.March 31, 2023.
15

During the second quarter of 2023, the Company recognized impairment charges of $7,318 to write-down certain cost method investments to their fair value primarily as a result of the investees’ decline in operating performance and the overall decline in the venture investment valuation environment. The impairment charges were recorded in Other income, net in the consolidated statements of operations for the nine months ended September 30, 2023 (see Note 20).
During the third quarter of 2023, the Company recognized gains on investments of $2,360, which was recorded in Other income, net in the consolidated statements of operations for the three and nine months ended September 30, 2023 (see Note 20).
During the ninethree months ended September 30,March 31, 2024, the Company invested a total of $250. During the three months ended March 31, 2023, the Company invested a total of $12,591,$9,678, including $8,928 of cash and non-cash for ourits investment in Worldsensing. During the nine months ended September 30, 2022, the Company invested a total of $14,921, including $11,130 of cash and non-cash for our investment in Teralytics. As of September 30,March 31, 2024 and December 31, 2023, ourthe Company’s investment balance in Worldsensing and Teralytics was $8,928 and $7,270, respectively. As of December 31, 2022, our investment balance in Teralytics was $11,130.
Equity Method Investments
The Company is party to joint ventures, which are accounted for using the equity method. For the nine months ended September 30, 2023 and 2022, the Company invested $2,261 and $1,700, respectively.$8,928.
Note 8: Leases
The Company’s operating leases consist of office facilities, office equipment, and automobiles. As of September 30, 2023,March 31, 2024, the Company’s leases have remaining terms of less than one year to ten years, some of which include one or more options to renew, with renewal terms from one year to five years and some of which include options to terminate the leases from less than one year to five years.
The components of operating lease cost reflected in the consolidated statements of operations were as follows:
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Three Months EndedThree Months Ended
March 31,March 31,
202420242023
Operating lease cost (1)
Operating lease cost (1)
$4,312 $4,703 $13,474 $15,651 
Variable lease costVariable lease cost1,133 1,115 3,481 3,356 
Short-term lease cost— — 16 
Total operating lease costTotal operating lease cost$5,445 $5,824 $16,955 $19,023 
Total operating lease cost
Total operating lease cost
(1)Operating lease cost includes rent cost related to operating leases for office facilities of $4,180$3,471 and $4,553$4,417 for the three months ended September 30,March 31, 2024 and 2023, and 2022, respectively, and $12,926 and $15,120 for the nine months ended September 30, 2023 and 2022, respectively.
18



Supplemental operating cash flowflows and other information related to leases was as follows:
Nine Months Ended
September 30,
20232022
Three Months EndedThree Months Ended
March 31,March 31,
202420242023
Cash paid for operating leases included in operating cash flowsCash paid for operating leases included in operating cash flows$13,830 $14,295 
Right-of-use assets obtained in exchange for new operating lease liabilities (1)
Right-of-use assets obtained in exchange for new operating lease liabilities (1)
$14,794 $7,763 
(1)Right‑For the three months ended March 31, 2023, right‑of‑use assets obtained in exchange for new operating lease liabilities does not include the impact from acquisitionsan acquisition of $397 and $1,237 for the nine months ended September 30, 2023 and 2022, respectively.$345.
The weighted average remaining lease term for operating leases was 4.74.5 years and 3.94.6 years as of September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively. The weighted average discount rate was 4.6% and 3.4%4.8% as of September 30, 2023March 31, 2024 and December 31, 2022, respectively.2023.
16

As of September 30, 2023, the Company had additional minimum operating lease payments of $961 for executed leases that have not yet commenced, primarily for office locations.


Note 9: Accruals and Other Current Liabilities
Accruals and other current liabilities consist of the following:
September 30, 2023December 31, 2022
March 31, 2024March 31, 2024December 31, 2023
Cloud Services Subscription (“CSS”) depositsCloud Services Subscription (“CSS”) deposits$269,047 $201,082 
Accrued benefitsAccrued benefits36,814 35,493 
Accrued compensationAccrued compensation34,631 40,296 
Due to customersDue to customers16,738 13,720 
Accrued indirect taxesAccrued indirect taxes5,804 9,766 
Accrued acquisition stay bonus
Accrued professional feesAccrued professional fees4,152 4,984 
Non-contingent consideration from acquisitions3,966 2,434 
Accrued acquisition stay bonus3,765 9,135 
Accrued realignment costs
Accrued cloud provisioning costsAccrued cloud provisioning costs3,469 4,224 
Employee stock purchase plan contributionsEmployee stock purchase plan contributions2,923 5,230 
Non-contingent consideration from acquisitions
Deferred compensation plan liabilitiesDeferred compensation plan liabilities2,182 2,067 
Contingent consideration from acquisitions1,196 
Other accrued and current liabilities
Other accrued and current liabilities
Other accrued and current liabilitiesOther accrued and current liabilities19,934 32,421 
Total accruals and other current liabilitiesTotal accruals and other current liabilities$403,428 $362,048 
19



Note 10: Long-Term Debt
Long‑term debt consists of the following:
September 30, 2023December 31, 2022
March 31, 2024March 31, 2024December 31, 2023
Credit facility:Credit facility:
Credit facility:
Credit facility:
Revolving loan facility due November 2025
Revolving loan facility due November 2025
Revolving loan facility due November 2025Revolving loan facility due November 2025$153,445 $345,597 
Term loan due November 2025Term loan due November 2025191,250 195,000 
Convertible senior notes due January 2026 (the “2026 Notes”)Convertible senior notes due January 2026 (the “2026 Notes”)687,830 687,830 
Convertible senior notes due July 2027 (the “2027 Notes”)Convertible senior notes due July 2027 (the “2027 Notes”)575,000 575,000 
Unamortized debt issuance costsUnamortized debt issuance costs(18,023)(22,731)
Total debtTotal debt1,589,502 1,780,696 
Less: Current portion of long-term debtLess: Current portion of long-term debt(8,750)(5,000)
Long-term debtLong-term debt$1,580,752 $1,775,696 
Credit Facility
The Company is party to a Credit Agreement dated December 19, 2017 (as amended from time to time), which provides for an $850,000 senior secured revolving loan facility that matures on November 15, 2025 (the “Credit Facility”). The Credit Facility also provides up to $50,000 of letters of credit and other borrowings subject to availability, including an $85,000 U.S. dollar swingline sub‑facility and a $200,000 incremental “accordion” sub‑facility. Debt issuance costs are amortized to interest expense through the maturity date.
Under the Credit Facility, the Company has a $200,000 senior secured term loan with a maturity of November 15, 2025 (the “Term Loan”). The Term Loan requires principal repayment at the end of each calendar quarter. Beginning with March 31, 2022 and ending with December 31, 2023, the Company is required to repay $1,250 per quarter. Beginning with March 31, 2024 and ending with the last such date prior to the maturity date, the Company is required to repay $2,500 per quarter.
The Company had $150 of letters of credit and surety bonds outstanding as of September 30, 2023March 31, 2024 and December 31, 20222023 under the Credit Facility.its amended and restated credit agreement, entered into on December 19, 2017 (the “Credit Facility”). As of September 30, 2023March 31, 2024 and December 31, 2022,2023, the Company had $696,405$849,850 and $504,253,$757,822, respectively, available under the Credit Facility.
Effective June 23, 2023, the Company amended the Credit Facility to replace the referenced interest rate based on LIBOR with the Secured Overnight Financing Rate (“SOFR”).
Revolving loan borrowings under the Credit Facility bear interest at variable rates that reset every one, three, or six months depending on the period selected by the Company. Under the Term SOFR elections, revolving loan borrowings bear an interest rate of the applicable term SOFR rate plus 10 basis points (“bps”), plus a spread ranging from 125 bps to 225 bps as determined by the Company’s net leverage ratio. Under the non‑Term SOFR elections, revolving loan borrowings bear a base interest rate of the highest of (i) the prime rate, (ii) the overnight bank funding effective rate plus 50 bps, or (iii) the applicable term SOFR rate plus 10 bps, plus a spread ranging from 25 bps to 125 bps as determined by the Company’s net leverage ratio.
Swingline borrowings under the Credit Facility bear interest that resets daily. Interest on U.S. dollar swingline borrowings bear an interest rate of the daily simple SOFR rate plus 3.5 bps, plus a spread ranging from 125 bps to 225 bps as determined by the Company’s net leverage ratio. The Company cannot make optional currency swingline borrowings without the consent of the applicable swingline lender.
20



Term loan borrowings under the Credit Facility bear interest at variable rates that reset every one, three, or six months depending on the period selected by the Company. Under the Term SOFR elections, term loan borrowings bear an interest rate of the applicable term SOFR rate plus 10 bps, plus a spread ranging from 100 bps to 200 bps as determined by the Company’s net leverage ratio. Under the non‑Term SOFR elections, term loan borrowings bear a base interest rate of the highest of (i) the prime rate, (ii) the overnight bank funding effective rate plus 50 bps, or (iii) the applicable term SOFR rate plus 10 bps, plus a spread ranging from 0 bps to 100 bps as determined by the Company’s net leverage ratio.
In addition, a commitment fee for the unused Credit Facility ranges from 20 bps to 30 bps as determined by the Company’s net leverage ratio.
Borrowings under the Credit Facility are guaranteed by all of the Company’s material first tier domestic subsidiaries and are secured by a first priority security interest in substantially all of the Company’s and the guarantors’ U.S. assets and 65% of the stock of their directly owned foreign subsidiaries.
The agreement governing the Credit Facility contains customary positive and negative covenants, including restrictions on our ability to pay dividends and make other restricted payments, as well as events of default, including, without limitation, payment defaults, breaches of representations and warranties, covenants defaults, cross-defaults to certain other indebtedness in excess of $50,000, certain events of bankruptcy and insolvency, judgment defaults in excess of $10,000, failure of any security document supporting the Credit Facility to be in full force and effect, and a change of control. The Credit Facility also contains customary financial covenants, including maximum net leverage ratio. As of September 30, 2023March 31, 2024 and December 31, 2022,2023, the Company was in compliance with all debt covenants in its Credit Facility.
Voluntary prepayments of amounts outstanding under the Credit Facility, in whole or in part, are permitted at any time, so long as the Company gives notice as required by the Credit Facility. However, if prepayment is made with respect to a SOFR‑based loan and the prepayment is made on a date other than an interest payment date, the Company is subject to customary breakage costs.
Convertible Senior Notes
As of September 30, 2023 and December 31, 2022, the Company was in compliance with all covenants in the 2026 Notes and 2027 Notes, and none of the conditions of the 2026 Notes or 2027 Notes to early convert had been met.
Derivative Arrangements
17
The Company records derivative instruments as an asset or liability measured at fair value and depending on the nature of the hedge, the corresponding changes in the fair value of these instruments are recorded in the consolidated statements of operations or comprehensive income. If the derivative is determined to be a hedge, changes in the fair value of the derivative are offset against the change in the fair value of the hedged assets or liabilities through the consolidated statements of operations or recognized in Other comprehensive income (loss), net of taxes until the hedged item is recognized in the consolidated statements of operations. The ineffective portion of a derivative’s change in fair value is recognized in earnings. Also, changes in the entire fair value of a derivative that is not designated as a hedge are recognized in earnings.
21



Effective on April 2, 2020, the Company entered into an interest rate swap with a notional amount of $200,000 and a ten‑year term to reduce the interest rate risk associated with the Credit Facility. Effective on June 26, 2023, the Company amended the interest rate swap agreement to replace the LIBOR rate to SOFR under the ISDA Fallback Protocols included within the agreement. Subsequent to the amendment, the Company will continue to pay a fixed interest rate of 72.9 bps, and will receive a floating interest rate equal to daily SOFR plus an ARRC spread adjustment of 11.448 bps. The interest rate swap is not designated as a hedging instrument for accounting purposes. The Company accounts for the interest rate swap as either an asset or a liability on the consolidated balance sheets and carries the derivative at fair value (see Note 17). Gain (loss) from the change in fair value and payments related to the interest rate swap are recognized in Other income (expense), net in the consolidated statements of operations (see Note 20). The bank counterparty to the derivative potentially exposes the Company to credit-related losses in the event of nonperformance. To mitigate that risk, the Company only contracts with counterparties who meet the Company’s minimum requirements under its counterparty risk assessment process. The Company monitors counterparty risk on at least a quarterly basis and adjusts its exposure as necessary. The Company does not enter into derivative instrument transactions for trading or speculative purposes.
Interest Expense, Net
Interest expense, net consists of the following:
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Three Months Ended
Three Months Ended
Three Months Ended
March 31,March 31,
202420242023
Contractual interest expenseContractual interest expense$(8,678)$(7,345)$(27,352)$(17,092)
Amortization of deferred debt issuance costsAmortization of deferred debt issuance costs(1,823)(1,822)(5,469)(5,468)
Other interest (expense) income(47)(76)958 (1,234)
Other interest expense
Interest incomeInterest income501 109 1,240 273 
Interest expense, netInterest expense, net$(10,047)$(9,134)$(30,623)$(23,521)
The weighted average interest rate on borrowings under the Credit Facility were 7.44%7.46% and 4.34%6.67% for the three months ended September 30,March 31, 2024 and 2023, and 2022, respectively, and 7.04% and 3.20% for the nine months ended September 30, 2023 and 2022, respectively.
Note 11: Executive Bonus Plan
For the three months ended September 30,March 31, 2024 and 2023, and 2022, the incentive compensation, including cash payments, election to receive shares of fully vested Class B Common Stock,common stock, and deferred compensation to plan participants, recognized under the amended and restated Bentley Systems, Incorporated Bonus Pool Plan (the “Bonus Plan”) (net of all applicable holdbacks) was $5,081$7,031 and $8,454, respectively, and $17,326 and $24,984 for the nine months ended September 30, 2023 and 2022,$7,948, respectively.
22



Note 12: Retirement Plans
Deferred Compensation Plan
Deferred compensation plan (income) expense was $(3,160)$5,799 and $(4,576)$4,146 for the three months ended September 30,March 31, 2024 and 2023, and 2022, respectively, and $4,763 and $(21,873) for the nine months ended September 30, 2023 and 2022, respectively.
For the three months ended September 30,March 31, 2024 and 2023, and 2022, elective participant deferrals into the Company’s unfunded amended and restated Bentley Systems, Incorporated Nonqualified Deferred Compensation Plan (the “DCP”) were $61$58 and $1,586, respectively, and $1,712 and $4,694 for the nine months ended September 30, 2023 and 2022,$1,533, respectively. No discretionary contributions were made to the DCP during the three and nine months ended September 30, 2023March 31, 2024 and 2022.2023. As of September 30, 2023March 31, 2024 and December 31, 2022,2023, 16,847,673 and 17,364,980 phantom shares of the Company’s Class B Common Stock issuable bycommon stock were distributable under the DCP, respectively. As of March 31, 2024, shares of Class B common stock available for future issuance under the DCP were 17,911,610 and 21,587,831, respectively.4,401,185.
The total liabilities related to the DCP is included in the consolidated balance sheets as follows:
September 30, 2023December 31, 2022
March 31, 2024March 31, 2024December 31, 2023
Accruals and other current liabilitiesAccruals and other current liabilities$2,182 $2,067 
Deferred compensation plan liabilitiesDeferred compensation plan liabilities79,537 77,014 
Total DCP liabilitiesTotal DCP liabilities$81,719 $79,081 
18



Note 13: Common Stock
BSY Stock Repurchase Program
OnIn May 11, 2022, the Company announced that its Board of Directors approved the BSY Stock Repurchase Program (the “Repurchase Program”) authorizing the Company to repurchase up to $200,000 of the Company’s Class B Common Stockcommon stock through June 30, 2024. OnIn December 14, 2022, the Company’s Board of Directors amended the Repurchase Program to allow the Company also to repurchase its outstanding convertible senior notes. This additional authorization did not increase the overall dollar limit of the Repurchase Program. Effective July 1, 2024, the Company’s Board of Directors extended the Repurchase Program, authorizing the Company to repurchase from such date up to $200,000 of the Company’s Class B common stock and/or convertible senior notes through June 30, 2026. The Company’s current authorization under the Repurchase Program expires on June 30, 2024.
The shares and convertible senior notes proposed to be acquired in the Repurchase Program may be repurchased from time to time in open market transactions, through privately negotiated transactions, or by other means in accordance with federal securities laws. The Company intends to fund repurchases from available working capital and cash provided by operating activities. The timing, as well as the number and value of shares and/or convertible senior notes repurchased under the Repurchase Program, will be determined by the Company at its discretion and will depend on a variety of factors, including management’s assessment of the intrinsic value of the Company’s shares, the market price of the Company’s Class B Common Stockcommon stock and outstanding convertible senior notes, general market and economic conditions, available liquidity, compliance with the Company’s debt and other agreements, and applicable legal requirements. The exact number of shares and/or convertible senior notes to be repurchased by the Company is not guaranteed, and the Repurchase Program may be suspended, modified, or discontinued at any time without prior notice.
During the three months ended March 31, 2024, the Company repurchased 302,598 shares for $15,006 under the Repurchase Program. The Company did not repurchase shares under the Repurchase Program for the ninethree months ended September 30,March 31, 2023. For the nine months ended September 30, 2022, the Company repurchased 896,126 shares for $28,250 under the Repurchase Program. As of September 30, 2023, $169,752March 31, 2024, $154,752 was available under the Company’s Board of Directors authorization for future repurchases of Class B Common Stockcommon stock and/or outstanding convertible senior notes under the Repurchase Program.
23



Common Stock Issuances, Sales, and Repurchases
ForDuring the ninethree months ended September 30,March 31, 2024, the Company issued 537,745 shares of Class B common stock to DCP participants in connection with distributions from the plan. There were no shares sold back to the Company as they were issued on a gross basis during the three months ended March 31, 2024. During the three months ended March 31, 2023, the Company issued 2,422,0821,052,738 shares of Class B Common Stockcommon stock to colleagues who exercised their stock options,DCP participants in connection with distributions from the plan, net of 234,472368,733 shares withheld at exercisewhich were sold back to the Company in the same period to pay for the cost of the stock options, as well as for $6,408 of applicable income tax withholdings. The Company received $10,590 in proceeds fromwithholdings of $13,626.
During the exercise of stock options. For the ninethree months ended September 30, 2022,March 31, 2024, the Company issued 2,272,60365,939 shares of Class B Common Stockcommon stock in connection with Bonus Plan incentive compensation. There were no shares sold back to colleagues who exercised their stock options, net of 362,826 shares withheld at exercise to pay for the cost ofCompany as they were issued on a gross basis during the stock options, as well as for $8,459 of applicable income tax withholdings. The Company received $6,855 in proceeds from the exercise of stock options.
For the ninethree months ended September 30, 2022,March 31, 2024. During the three months ended March 31, 2023, the Company issued 185,17879,804 shares of Class B Common Stock related to the exercise of acquisition options, net of 714,822 shares withheld at exercise to pay for the cost of the options. The Company did not receive any proceeds from the exercise of these options.
For the nine months ended September 30, 2023 and 2022, the Company issued 171,510 and 284,992 shares of Class B Common Stock, respectively,common stock in connection with Bonus Plan incentive compensation, net of shares withheld. Of the total 306,824 shares awarded for the nine months ended September 30, 2023, 135,31463,310 shares were sold back to the Company in the same period to pay for applicable income tax withholdings of $5,756. Of$2,425.
During the total 409,108 shares awarded for the ninethree months ended September 30, 2022, 124,116 shares were sold back to the Company in the same period to pay for applicable income tax withholdings of $5,197.
For the nine months ended September 30, 2023 and 2022,March 31, 2024, the Company issued 2,845,448 and 3,523,386844,283 shares of Class B Common Stock, respectively,common stock to DCP participants in connection with distributions from the plan. The distribution incolleagues who exercised their stock options, net of 67,146 shares for the nine months ended September 30, 2023 totaled 3,781,387 shares of which 935,939 shares were sold back to the Company in the same periodwithheld at exercise to pay for the cost of the stock options, as well as for $2,195 of applicable income tax withholdingswithholdings. The Company received $4,007 in cash proceeds from the exercise of $38,456. The distribution in shares forstock options. For the ninethree months ended September 30, 2022 totaled 4,023,718March 31, 2023, the Company issued 928,300 shares of which 500,332Class B common stock to colleagues who exercised their stock options, net of 73,822 shares were sold back to the Company in the same periodwithheld at exercise to pay for the cost of the stock options, as well as for $1,701 of applicable income tax withholdingswithholdings. The Company received $4,202 in cash proceeds from the exercise of $24,246.stock options.
19



Dividends
The Company declared cash dividends during the periods presented as follows:
Dividend
Per ShareAmount
2023:
Third quarter$0.05 $14,768 
Second quarter0.05 14,702 
First quarter0.05 14,522 
2022:
Third quarter$0.03 $8,592 
Second quarter0.03 8,678 
First quarter0.03 8,353 
Dividend
Per ShareAmount
2024:
First quarter$0.06 $17,871 
2023:
First quarter$0.05 $14,522 
24



Global Employee Stock Purchase Plan
During the ninethree months ended September 30, 2023,March 31, 2024, colleagues who elected to participate in the Bentley Systems, Incorporated Global Employee Stock Purchase Plan (the “ESPP”) purchased a total of 315,840122,020 shares of Class B Common Stock,common stock, net of shares withheld, resulting in cash proceeds to the Company of $9,988.$5,560. Of the total 333,324125,374 shares purchased, 17,4843,354 shares were sold back to the Company to pay for applicable income tax withholdings of $845.$175. During the ninethree months ended September 30, 2022,March 31, 2023, colleagues who elected to participate in the ESPP purchased a total of 307,406153,381 shares of Class B Common Stock,common stock, net of shares withheld, resulting in cash proceeds to the Company of $10,335.$4,557. Of the total 314,471159,377 shares purchased, 7,0655,996 shares were sold back to the Company to pay for applicable income tax withholdings of $273.$222. As of September 30, 2023March 31, 2024 and December 31, 2022, $2,9232023, $2,959 and $5,230$5,790 of ESPP withholdings via colleague payroll deduction were recorded in Accruals and other current liabilities in the consolidated balance sheets, respectively. As of September 30, 2023,March 31, 2024, shares of Class B Common Stockcommon stock available for future issuance under the ESPP were 24,272,038.24,150,018.
Note 14: Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss consists of the following during the three months ended September 30, 2023March 31, 2024 and 2022:2023:
ForeignActuarial (Loss)
CurrencyGain on
TranslationRetirement PlanTotal
Balance, June 30, 2023$(87,530)$(298)$(87,828)
Other comprehensive (loss) income, before taxes(7,294)(7,292)
Tax expense (8)(8)
Other comprehensive loss, net of taxes(7,294)(6)(7,300)
Balance, September 30, 2023$(94,824)$(304)$(95,128)
ForeignActuarial (Loss)
CurrencyGain on
TranslationRetirement PlanTotal
Balance, December 31, 2023$(84,634)$(353)$(84,987)
Other comprehensive (loss) income, before taxes(7,733)129 (7,604)
Tax expense (28)(28)
Other comprehensive (loss) income, net of taxes(7,733)101 (7,632)
Balance, March 31, 2024$(92,367)$(252)$(92,619)
ForeignActuarial (Loss)
CurrencyGain on
TranslationRetirement PlanTotal
Balance, June 30, 2022$(88,250)$(881)$(89,131)
Other comprehensive (loss) income, before taxes(12,809)16 (12,793)
Tax expense— (5)(5)
Other comprehensive (loss) income, net of taxes(12,809)11 (12,798)
Balance, September 30, 2022$(101,059)$(870)$(101,929)
ForeignActuarial (Loss)
CurrencyGain on
TranslationRetirement PlanTotal
Balance, December 31, 2022$(89,408)$(332)$(89,740)
Other comprehensive income, before taxes340 32 372 
Tax expense— (6)(6)
Other comprehensive income, net of taxes340 26 366 
Balance, March 31, 2023$(89,068)$(306)$(89,374)
2520



Accumulated other comprehensive loss consists of the following during the nine months ended September 30, 2023 and 2022:
ForeignActuarial (Loss)
CurrencyGain on
TranslationRetirement PlanTotal
Balance, December 31, 2022$(89,408)$(332)$(89,740)
Other comprehensive (loss) income, before taxes(5,416)43 (5,373)
Tax expense (15)(15)
Other comprehensive (loss) income, net of taxes(5,416)28 (5,388)
Balance, September 30, 2023$(94,824)$(304)$(95,128)
ForeignActuarial (Loss)
CurrencyGain on
TranslationRetirement PlanTotal
Balance, December 31, 2021$(90,867)$(907)$(91,774)
Other comprehensive (loss) income, before taxes(10,192)52 (10,140)
Tax expense— (15)(15)
Other comprehensive (loss) income, net of taxes(10,192)37 (10,155)
Balance, September 30, 2022$(101,059)$(870)$(101,929)
Note 15: Stock-Based Compensation
Total stock‑based compensation expense consists of the following:
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Three Months Ended
Three Months Ended
Three Months Ended
March 31,March 31,
202420242023
Restricted stock and restricted stock units (“RSUs”) expenseRestricted stock and restricted stock units (“RSUs”) expense$13,988 $10,441 $41,441 $25,003 
Bonus Plan expense (see Note 11)Bonus Plan expense (see Note 11)3,847 7,305 11,729 21,444 
ESPP expense (see Note 13)ESPP expense (see Note 13)634 565 1,809 2,394 
Stock grants expense— — 600 450 
Stock option expense
Stock option expense
Stock option expenseStock option expense— 395 343 1,762 
DCP elective participant deferrals expense (1) (see Note 12)
DCP elective participant deferrals expense (1) (see Note 12)
35 85 170 306 
Total stock-based compensation expense (2)
Total stock-based compensation expense (2)
$18,504 $18,791 $56,092 $51,359 
(1)DCP elective participant deferrals expense excludes deferred incentive bonus payable pursuant to the Bonus Plan.
(2)As of September 30, 2023March 31, 2024 and December 31, 2022, $4,6562023, $6,300 and $7,300$4,043 remained in Accruals and other current liabilities in the consolidated balance sheets, respectively.
26



Total stock‑based compensation expense is included in the consolidated statements of operations as follows:
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Three Months Ended
Three Months Ended
Three Months Ended
March 31,March 31,
202420242023
Cost of subscriptions and licensesCost of subscriptions and licenses$1,254 $757 $3,420 $1,927 
Cost of servicesCost of services671 460 2,385 1,407 
Research and developmentResearch and development4,977 6,754 14,687 17,693 
Selling and marketingSelling and marketing3,244 2,014 9,057 5,657 
General and administrativeGeneral and administrative8,358 8,806 26,543 24,675 
Total stock-based compensation expenseTotal stock-based compensation expense$18,504 $18,791 $56,092 $51,359 
Stock‑based compensation expense is measured at the grant date fair value of the award and is recognized ratably over the requisite service period, which is generally the vesting period. Specifically for performance‑based RSUs, stock‑based compensation expense is measured at the grant date fair value of the award and is recognized ratably over the requisite service period based on the number of awards expected to vest at each reporting date. The Company accounts for forfeitures of equity awards as those forfeitures occur.
Stock OptionsBentley Systems, Incorporated 2020 Omnibus Incentive Plan
The following is a summaryBentley Systems, Incorporated 2020 Omnibus Incentive Plan (the “2020 Plan”) provides for the granting of stock, option activitystock options, restricted stock, RSUs, and related informationother stock‑based or performance‑based awards to certain directors, officers, colleagues, consultants, and advisors of the Company, and terminates in September 2030. The 2020 Plan provides that 25,000,000 shares of Class B common stock may be issued for equity awards. Equity awards that are expired, canceled, forfeited, or terminated for any reason will be available for future grant under the Company’s applicable equity incentive plans:
Weighted
WeightedAverage
AverageRemainingAggregate
StockExercise PriceContractualIntrinsic
OptionsPer ShareLife (in years)Value
Outstanding, December 31, 20223,794,515 $5.57 
Exercised(2,656,554)5.50 
Forfeited and expired(17,500)5.68 
Outstanding, September 30, 20231,120,461 $5.74 0.5$49,771 
Exercisable, September 30, 20231,120,461 $5.74 0.5$49,771 
For the nine months ended September 30, 2023 and 2022, the Company received cash proceeds of $10,590 and $6,855, respectively, related to the exercise of stock options. The total intrinsic value of stock options exercised for the nine months ended September 30, 2023 and 2022 was $102,667 and $89,532, respectively.
2020 Plan. As of September 30, 2023, there was no remaining unrecognized compensation expense related to unvested stock options.March 31, 2024, equity awards available for future grants under the 2020 Plan were 20,273,484.
21



Restricted Stock and RSUs
Under the equity incentive plans, the Company may grant both time‑based and performance‑based shares of restricted Class B Common Stockcommon stock and RSUs to eligible colleagues. Time‑based awards generally vest ratably on each of the first four anniversaries of the grant date. Performance‑based awards vesting is determined by the achievement of certain business profitability and growth targets, includingwhich include growth in annualized recurring revenues (“ARR”), andas well as actual bookings for perpetual licenses and non‑recurring services, among others.services. Performance targets are generally set for performance periods of one year to three years.
27



The following is a summary of unvested restricted stock and RSU activity and related information under the Company’s applicable equity incentive plans:
Time-Performance-
BasedBased
Time-WeightedWeighted
TotalBasedAverageAverage
RestrictedRestrictedPerformance-Grant DateGrant Date
StockStockBasedFair ValueFair Value
and RSUsand RSUsRSUsPer SharePer Share
Unvested, December 31, 20223,068,851 2,706,078 (3)362,773 (4)$36.67 $38.21 
Time-Time-Performance-
BasedBasedBased
Time-Time-WeightedWeighted
TotalTotalBasedAverageAverage
RestrictedRestrictedPerformance-Grant Date
StockStockBasedFair Value
and RSUsand RSUsRSUsPer Share
Unvested, December 31, 2023
GrantedGranted1,199,644 (1)1,003,180 196,464 (5)41.1739.03Granted830,534 (1)(1)670,560 159,974 159,974 (5)(5)51.3648.60
VestedVested(780,084)(622,924)(157,160)33.46 38.20 
Forfeited and canceledForfeited and canceled(180,944)(143,620)(37,324)33.16 33.41 
Unvested, September 30, 20233,307,467 (2)2,942,714 364,753 39.06 39.15 
Unvested, March 31, 2024
(1)For the ninethree months ended September 30, 2023,March 31, 2024, the Company only granted RSUs.
(2)Includes 59,08951,638 RSUs which are expected to be settled in cash.
(3)Includes 199,076 time‑based RSUs granted during the three months ended March 31, 2022 to certain officers and key employees, which cliff vest on January 31, 2025.
(4)Primarily relates to the 20222023 annual performance period, except for 185,186 performance‑based RSUs granted during the year ended December 31, 2022 with extraordinary terms, which are described below.
(5)Primarily relates to the 20232024 annual performance period, except for 13,3671,335 additional shares earned based on the achievement of 20222023 performance goals for performance‑basedperformance-based RSUs granted during the year ended December 31, 2022.2023.
During the year ended December 31, 2022, the Company granted 185,186 performance‑based RSUs to certain officers and key employees, which vest subject to the achievement of certain performance goals over a three‑year performance period (the “Performance Period”). For each year of the Performance Period, one‑third of the performance‑based RSUs will be subject to a cliff, whereby no vesting of that portion will occur unless the Company’s applicable margin metrics (which, for 2022 was Adjusted EBITDA margin, and for 2023 was and 2024 will be Adjusted operating income inclusive of stock-based compensation expense (“Adjusted OI w/SBC”) margin, excluding the impact of foreign currency exchange fluctuations) also equals or exceeds the relevant target level for such year. Provided that the applicable margin targets are met, the total number of performance‑based RSUs that will vest is determined by the achievement of growth targets, which include growth in ARR, as well as actual bookings for perpetual licenses and non‑recurring services. Final actual vesting will be determined on January 31, 2025. The 2023 Adjusted OI w/SBC margin target, excluding the impact of foreign currency exchange fluctuations, and the 2022 Adjusted EBITDA margin target for the performance‑based RSUs waswere met.
In 2016, the Company granted RSUs subject to performance‑based vesting as determined by the achievement of certain business growth targets. Certain colleagues elected to defer delivery of such shares upon vesting. During the nine months ended September 30, 2023 and 2022, 1,562 and 10,888 shares, respectively, were delivered to colleagues, and 28 and 23 additional shares, respectively, were earned as a result of dividends. As of September 30, 2023 and December 31, 2022, 7,829 and 9,363 shares, respectively, of these vested and deferred RSUs remained outstanding.
The weighted average grant date fair values of RSUs granted were $40.82$50.83 and $38.68,$40.73, for the ninethree months ended September 30,March 31, 2024 and 2023, and 2022, respectively.
For the ninethree months ended September 30,March 31, 2024 and 2023, and 2022, restricted stock and RSUs were issued net of 137,675113,790 and 81,30178,993 shares, respectively, which were sold back to the Company to settle applicable income tax withholdings of $6,062$5,729 and $3,208,$3,025, respectively.
2822



As of September 30, 2023,March 31, 2024, there was $82,609$102,848 of unrecognized compensation expense related to unvested time‑based restricted stock and RSUs, which is expected to be recognized over a weighted average period of approximately 1.72.0 years. As of September 30, 2023,March 31, 2024, there was $5,648$9,208 of unrecognized compensation expense related to unvested performance‑based RSUs, which is expected to be recognized over a weighted average period of approximately 0.8 years.
Stock Options
Stock GrantsThe following is a summary of stock option activity and related information under the Company’s applicable equity incentive plans:
Weighted
Average
StockExercise Price
OptionsPer Share
Outstanding, December 31, 2023916,429 $5.74 
Exercised(911,429)5.74 
Forfeited and expired(5,000)5.74 
Outstanding, March 31, 2024— $— 
For the ninethree months ended September 30, 2023March 31, 2024 and 2022, the Company granted 12,639 and 13,632 fully vested shares of Class B Common Stock, respectively, with a fair value of $600 and $450, respectively.
Equity Awards Subsequent to September 30, 2023
In October 2023, the Company granted 265,759 time‑based RSUs, which generally vest ratably on eachreceived cash proceeds of $4,007 and $4,202, respectively, related to the first four anniversariesexercise of stock options. The total intrinsic value of stock options exercised for the grant date. Thethree months ended March 31, 2024 and 2023 was $40,775 and $35,076, respectively.
As of March 31, 2024, there was no remaining unrecognized compensation expense related to these RSUs is approximately $13,000, which is expected to be recognized over a weighted average period of approximately 4.0 years.unvested stock options.
Note 16: Income Taxes
The following is a summary of Income before income taxes, Provision for income taxes, and effective tax rate for the periods presented:
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Three Months Ended
Three Months Ended
Three Months Ended
March 31,March 31,
202420242023
Income before income taxesIncome before income taxes$69,585 $47,342 $169,353 $159,125 
Provision for income taxesProvision for income taxes$16,514 $9,664 $22,107 $8,221 
Effective tax rateEffective tax rate23.7 %20.4 %13.1 %5.2 %Effective tax rate24.0 %17.3 %
For the three months ended September 30, 2023,March 31, 2024, the effective tax rate was higher compared to the same period in the prior year period primarily due to an increase in the forecasted effective tax rate impact of the U.S. Global Intangible Low-Taxed Income (“GILTI”) inclusion due to the mandatory capitalization of research and development expenses for U.S. tax purposes. For the three months ended September 30, 2023 and 2022, the Company recorded discrete tax benefits of $4,428 and $4,280, respectively, primarily associated with windfall tax benefits from stock‑based compensation, net of the impact from officer compensation limitation provisions.
For the nine months ended September 30, 2023, the effective tax rate was higher compared to the prior year period primarily due to an increase in the forecasted effective tax rate impact of the GILTI inclusion due to the mandatory capitalization of research and development expenses for U.S. tax purposes and a decrease in discrete tax benefits recognized in the current year period. For the ninethree months ended September 30,March 31, 2024 and 2023, and 2022, the Company recorded discrete tax benefits of $31,895$2,138 and $36,032,$7,073, respectively, primarily associated with windfall tax benefits from stock‑based compensation, net of the impact from officer compensation limitation provisions.
2923



Note 17: Fair Value of Financial Instruments
A financial asset or liability classification is determined based on the lowest level input that is significant to the fair value measurement. The fair value hierarchy consists of the following three levels:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
Level 3 inputs are unobservable inputs based on management’s own assumptions used to measure assets and liabilities at fair value.
The Company’s financial instruments include cash equivalents, account receivables, certain other assets, accounts payable, accruals, certain other current and long‑term liabilities, and long‑term debt.
Current assetsAssets and current liabilitiesCurrent Liabilities — In general, the carrying amounts reported on the Company’s consolidated balance sheets for current assets and current liabilities approximate their fair values due to the short‑term nature of those instruments.
The following methods and assumptions were used by the Company in estimating its fair value measurements for Level 2 and Level 3 financial instruments as of September 30, 2023March 31, 2024 and December 31, 2022:
Acquisition contingent consideration — The fair value of these liabilities is generally determined using a cost or income approach and is measured based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration uses assumptions the Company believes would be made by a market participant.2023:
Interest rate swapRate Swap — The fair value of the Company’s interest rate swap asset or liability is determined using an income approach and is measured based on the implied forward rates for the remaining term of the interest rate swap. The Company considers these valuation inputs to be Level 2 inputs in the fair value hierarchy.
Long-term debtLong-Term Debt — The fair value of the Company’s borrowings under its Credit Facility approximated its carrying value based upon discounted cash flows at current market rates for instruments with similar remaining terms. The Company considers these valuation inputs to be Level 2 inputs in the fair value hierarchy. As of September 30,March 31, 2024, the estimated fair value of the 2026 Notes and 2027 Notes was $692,789 and $516,419, respectively. As of December 31, 2023, the estimated fair value of the 2026 Notes and 2027 Notes was $671,962$684,205 and $492,815, respectively. As of December 31, 2022, the estimated fair value of the 2026 Notes and 2027 Notes was $622,431 and $470,856,$516,051, respectively. The estimated fair value of the 2026 Notes and 2027 Notes is based on quoted market prices of the Company’s instrument in markets that are not active and are classified as Level 2 within the fair value hierarchy. Considerable judgment is necessary to interpret the market data and develop estimates of fair values. Accordingly, the estimates presented are not necessarily indicative of the amounts at which these instruments could be purchased, sold, or settled.
Deferred compensation plan liabilitiesCompensation Plan Liabilities — The fair value of deferred compensation plan liabilities, including the liability classified phantom investments in the DCP, are marked to market at the end of each reporting period.
3024



Financial assets and financial liabilities carried at fair value measured on a recurring basis consist of the following:
September 30, 2023Level 1Level 2Level 3Total
March 31, 2024
March 31, 2024
March 31, 2024Level 1Level 2Total
Assets:Assets:
Money market funds (1)
Money market funds (1)
Money market funds (1)
Money market funds (1)
$3,023 $— $— $3,023 
Interest rate swap (2)
Interest rate swap (2)
— 41,302 — 41,302 
Total assetsTotal assets$3,023 $41,302 $— $44,325 
Liabilities:Liabilities:
Acquisition contingent consideration (3)
$— $— $$
Deferred compensation plan liabilities (4)
81,719 — — 81,719 
Cash-settled equity awards (3)
715 — — 715 
Deferred compensation plan liabilities (3)
Deferred compensation plan liabilities (3)
Deferred compensation plan liabilities (3)
Cash-settled equity awards (4)
Total liabilitiesTotal liabilities$82,434 $— $$82,437 
December 31, 2022Level 1Level 2Level 3Total
December 31, 2023
December 31, 2023
December 31, 2023Level 1Level 2Total
Assets:Assets:
Money market funds (1)
Money market funds (1)
Money market funds (1)
Money market funds (1)
$19 $— $— $19 
Interest rate swap (2)
Interest rate swap (2)
— 37,200 — 37,200 
Total assetsTotal assets$19 $37,200 $— $37,219 
Liabilities:Liabilities:
Acquisition contingent consideration (3)
$— $— $1,196 $1,196 
Deferred compensation plan liabilities (4)
79,081 — — 79,081 
Cash-settled equity awards (3)
536 — — 536 
Deferred compensation plan liabilities (3)
Deferred compensation plan liabilities (3)
Deferred compensation plan liabilities (3)
Cash-settled equity awards (4)
Total liabilitiesTotal liabilities$79,617 $— $1,196 $80,813 
(1)Included in Cash and cash equivalents in the consolidated balance sheets.
(2)Included in Other assets in the consolidated balance sheets.
(3)Included in Accruals and other current liabilities in the consolidated balance sheets.
(4)Included in Deferred compensation plan liabilities, except for current liabilities of $2,182$2,460 and $2,067$2,355 as of September 30, 2023March 31, 2024 and December 31, 2022,2023, respectively, which are included in Accruals and other current liabilities in the consolidated balance sheets.
The following is a reconciliation of the changes(4)Included in fair value of the Company’s financialAccruals and other current liabilities which have been classified as Level 3 in the fair value hierarchy:
Nine Months EndedYear Ended
September 30, 2023December 31, 2022
Balance, beginning of year$1,196 $6,613 
Payments(1,206)(5,261)
Addition— 1,390 
Change in fair value— (1,427)
Foreign currency translation adjustments13 (119)
Balance, end of period$$1,196 
consolidated balance sheets.
The Company did not have any transfers between levels within the fair value hierarchy.
31



Note 18: Commitments and Contingencies
Purchase Commitments
In the normal course of business, the Company enters into various purchase commitments for goods and services. During the nine monthsyear ended September 30,December 31, 2023, the Company entered into approximately $158,000 of non‑cancelable future cash purchase commitments for services related to cloud provisioning of the Company’s software solutions and for other software costs through May 2026 and September 2028, respectively.costs. As of September 30, 2023, theMarch 31, 2024, total non‑cancelable future cash purchase commitments were approximately $137,000.$116,500 to be paid through September 2028. The Company expects to fully consume its contractual commitments in the ordinary course of operations.
Litigation
From time to time, the Company is involved in certain legal actions arising in the ordinary course of business. In management’s opinion, based upon the advice of counsel, the outcome of such actions is not expected to have a material adverse effect on the Company’s future financial position, results of operations, or cash flows.
25


Note 19: Geographic Data
Revenues by geographic region are presented in Note 3. Long‑lived assets (other than goodwill), net of depreciation and amortization by geographic region (see Notes 5, 6, and 8) are as follows:
September 30, 2023December 31, 2022
March 31, 2024March 31, 2024December 31, 2023
Americas (1)
Americas (1)
$152,822 $164,729 
EMEAEMEA37,103 32,372 
APACAPAC149,797 167,670 
Total long-lived assetsTotal long-lived assets$339,722 $364,771 
(1)Americas includes the U.S., Canada, and Latin America (including the Caribbean).
32


Note 20: Other Income, Net
Other income, net consists of the following:
Three Months Ended
Three Months Ended
Three Months Ended
March 31,March 31,
202420242023
Gain (loss) from:
Change in fair value of interest rate swap (see Note 17)
Change in fair value of interest rate swap (see Note 17)
Change in fair value of interest rate swap (see Note 17)
Foreign exchange (1)
Three Months EndedNine Months Ended
September 30,September 30,
Receipts related to interest rate swap
2023202220232022
Gain (loss) from:
Change in fair value of interest rate swap (see Note 17)$4,765 $9,828 $4,102 $29,318 
Foreign exchange (1)
(3,154)(11,027)404 (18,815)
Sale of aircraft (see Note 5)— — — 2,029 
Change in fair value of acquisition contingent consideration (see Note 17)— 506 — 
Receipts related to interest rate swapReceipts related to interest rate swap2,336 752 6,420 475 
Other income (expense), net (2)
2,006 873 (3,719)1,780 
Receipts related to interest rate swap
Other (expense) income, net
Total other income, netTotal other income, net$5,953 $932 $7,207 $14,793 
(1)Foreign exchange (loss) 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. Intercompany finance transactions primarily denominated in U.S. dollars resulted in unrealized foreign exchange (losses) gains of $(1,574)$(394) and $(5,730)$861 for the three months ended September 30,March 31, 2024 and 2023, respectively.
26


Note 21: Realignment Costs
During the fourth quarter of 2023, the Company approved a strategic realignment program to better serve the Company’s accounts and 2022, respectively, and $684 and $(12,293)to better align resources with the strategy of the business, including reinvestment in go-to-market functions, as well as in artificial intelligence product development (the “2023 Program”). The Company incurred realignment costs of $12,579 for the nine monthsyear ended September 30,December 31, 2023 and 2022, respectively.
(2)Other income (expense), net includes investment impairment chargesrelated to the aforementioned program, which represents termination benefits for colleagues whose roles were impacted. During the first quarter of $(7,318)2024, the Company incurred realignment costs of $24 for the nine months ended September 30, 2023, partially offset by gains on investments of $2,360 recorded during the three months ended September 30,March 31, 2024 related to the aforementioned program. The 2023 (see Note 7).Program activities have been broadly implemented across the Company’s various businesses with the intention that all actions, including payment of the termination benefits, will be substantially complete by the end of the second quarter of 2024.
Realignment costs by expense classification were as follows:
Three Months Ended
March 31, 2024
Cost of revenues:
Cost of subscriptions and licenses$(80)
Cost of services31 
Total cost of revenues(49)
Operating expenses:
Research and development(71)
Selling and marketing678 
General and administrative(534)
Total operating expenses73 
Total realignment costs$24 
Accruals and other current liabilities in the consolidated balance sheets included amounts related to the realignment activities as follows:
Balance, December 31, 2023$12,459 
Realignment costs24 
Payments(7,517)
Adjustments (1)
(272)
Balance, March 31, 2024$4,694 
(1)Adjustments include foreign currency translation.
Note 21:22: Net Income Per Share
The Company issues certain performance-based RSUs determined to be participating securities because holders of such shares have non-forfeitable dividend rights in the event of the Company’s declaration of a dividend for common shares. As of September 30,March 31, 2024 and 2023, and 2022, there were 364,753343,825 and 362,773387,237 participating securities outstanding, respectively.
Undistributed net income allocated to participating securities are subtracted from net income in determining basic net income attributable to common stockholders. Basic net income per share is computed by dividing basic net income attributable to common stockholders by the weighted average number of shares, inclusive of undistributed shares held in the DCP as phantom shares of the Company’s Class B Common Stock.common stock.
27


For the Company’s diluted net income per share numerator, interest expense, net of tax, attributable to the assumed conversion of the convertible senior notes is added back to basic net income attributable to common stockholders. For the Company’s diluted net income per share denominator, the basic weighted average number of shares is adjusted for the effect of dilutive securities, including awards under the Company’s equity compensation plans and ESPP, and for the dilutive effect of the assumed conversion of the convertible senior notes. Diluted net income per share attributable to common stockholders is computed by dividing diluted net income attributable to common stockholders by the weighted average number of fully diluted common shares.
Except with respect to voting and conversion, the rights of the holders of the Company’s Class A Common Stockcommon stock and the Company’s Class B Common Stockcommon stock are identical. Each class of shares has the same rights to dividends and allocation of income (loss) and, therefore, net income per share would not differ under the two‑class method.
33


The details of basic and diluted net income per share are as follows:
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Three Months EndedThree Months Ended
March 31,March 31,
202420242023
Numerator:Numerator:
Net income
Net income
Net incomeNet income$53,027 $36,997 $147,202 $149,058 
Less: Net income attributable to participating securitiesLess: Net income attributable to participating securities(18)(11)(56)(31)
Net income attributable to Class A and Class B common stockholders, basicNet income attributable to Class A and Class B common stockholders, basic53,009 36,986 147,146 149,027 
Add: Interest expense, net of tax, attributable to assumed conversion of convertible senior notesAdd: Interest expense, net of tax, attributable to assumed conversion of convertible senior notes1,716 832 5,157 5,116 
Net income attributable to Class A and Class B common stockholders, dilutedNet income attributable to Class A and Class B common stockholders, diluted$54,725 $37,818 $152,303 $154,143 
Denominator:Denominator:
Denominator:
Denominator:
Weighted average shares, basic
Weighted average shares, basic
Weighted average shares, basicWeighted average shares, basic313,069,132 310,116,104 311,915,808 308,959,801 
Dilutive effect of stock options, restricted stock, and RSUsDilutive effect of stock options, restricted stock, and RSUs2,115,802 4,126,936 2,534,773 5,278,839 
Dilutive effect of ESPPDilutive effect of ESPP6,466 168,518 60,526 171,571 
Dilutive effect of assumed conversion of convertible senior notesDilutive effect of assumed conversion of convertible senior notes17,633,786 10,758,825 17,633,786 17,667,623 
Weighted average shares, dilutedWeighted average shares, diluted332,825,186 325,170,383 332,144,893 332,077,834 
Net income per share, basicNet income per share, basic$0.17 $0.12 $0.47 $0.48 
Net income per share, basic
Net income per share, basic
Net income per share, dilutedNet income per share, diluted$0.16 $0.12 $0.46 $0.46 
The following potential common shares were excluded from the calculation of diluted net income per share attributable to common stockholders because their effect would have been anti‑dilutive for the periods presented:
Three Months EndedThree Months Ended
March 31,March 31,
202420242023
RSUs
Three Months EndedNine Months Ended
Total anti-dilutive securities
September 30,September 30,
Total anti-dilutive securities
2023202220232022
RSUs— 297,789 — 279,789 
Convertible senior notes— 6,908,798 — — 
Total anti-dilutive securitiesTotal anti-dilutive securities— 7,206,587 — 279,789 
3428


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto appearing in Part I, Item 1 of this Quarterly Report on Form 10‑Q and with our audited consolidated financial statements and notes thereto included in our 20222023 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. Minor differences in totals and percentage calculations may exist due to rounding.
Overview:
Overview
We are a leading global provider of software for Bentley Systems is the infrastructure engineering and enablesoftware company. Our purpose is to advance the world’s infrastructure professionals and their organizations, by “going digital” through our software and cloud services offerings,for better quality of life. We empower people to better design, build, and operate better infrastructure. Our users engineer, construct, and operate projectsmore resilient infrastructure through the adoption of our intelligent digital twin solutions. We manage our business globally within one reportable segment, the development and assets acrossmarketing of computer software and related services, which is consistent with how our CODM reviews and manages our business.
Executive Summary:
Total revenues were $337,763 for the following infrastructure sectors: public works/utilities, resources, industrial, and commercial/facilities.
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. We deliver our solutions via on‑premises, cloud, and hybrid environments. Our software enables digital workflows across engineering disciplines, across distributed project teams, and from officesthree months ended March 31, 2024, up 7.4% or 7.2% on a constant currency basis(1) compared to the field.three months ended March 31, 2023;
We believe thatSubscriptions revenues were $307,089 for the three months ended March 31, 2024, up 10.5% or 10.3% on a constant currency basis(1) compared to the three months ended March 31, 2023;
ARR(2) was $1,186,456 as of March 31, 2024, compared to $1,070,955 as of March 31, 2023, representing a constant currency(1) ARR growth rate(2) of 11.0%;
Last twelve-month recurring revenues dollar-based net retention rate(2) was 108% as of March 31, 2024, compared to 110% as of March 31, 2023;
Operating income was $91,931 for the three months ended March 31, 2024, compared to $65,785 for the three months ended March 31, 2023;
Adjusted OI w/SBC(1) was $112,345 for the three months ended March 31, 2024, compared to $90,464 for the three months ended March 31, 2023; and
Cash flows from operations were $204,969 for the three months ended March 31, 2024, compared to $176,223 for the three months ended March 31, 2023.
(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 offerings, in particulardefinitions and our infrastructure digital twin solutions, empoweruses of constant currency and Adjusted OI w/SBC.
(2)Refer to the achievement“Key Business Metrics” section for additional information, including our definitions and our uses of sustainable development goals by helping our users – infrastructure professionals – realize outcomes that are more sustainableARR, ARR growth rate, and resilient.recurring revenues dollar-based net retention rate.
3529


Results of OperationsOperations:
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Revenues:
Subscriptions$270,751 $235,307 $807,839 $708,731 
Perpetual licenses11,887 9,460 33,152 31,213 
Subscriptions and licenses282,638 244,767 840,991 739,944 
Services23,974 23,565 76,781 72,190 
Total revenues306,612 268,332 917,772 812,134 
Cost of revenues:
Cost of subscriptions and licenses42,088 37,371 124,175 107,904 
Cost of services22,588 21,812 74,111 66,758 
Total cost of revenues64,676 59,183 198,286 174,662 
Gross profit241,936 209,149 719,486 637,472 
Operating expense (income):
Research and development65,465 63,827 203,382 189,966 
Selling and marketing53,757 46,114 160,262 141,676 
General and administrative42,678 37,794 128,743 128,981 
Deferred compensation plan(3,160)(4,576)4,763 (21,873)
Amortization of purchased intangibles9,517 10,446 29,567 30,869 
Total operating expenses168,257 153,605 526,717 469,619 
Income from operations73,679 55,544 192,769 167,853 
Interest expense, net(10,047)(9,134)(30,623)(23,521)
Other income, net5,953 932 7,207 14,793 
Income before income taxes69,585 47,342 169,353 159,125 
Provision for income taxes(16,514)(9,664)(22,107)(8,221)
Loss from investments accounted for using the equity method, net of tax(44)(681)(44)(1,846)
Net income$53,027 $36,997 $147,202 $149,058 
Per share information:
Net income per share, basic$0.17 $0.12 $0.47 $0.48 
Net income per share, diluted$0.16 $0.12 $0.46 $0.46 
Weighted average shares, basic313,069,132 310,116,104 311,915,808 308,959,801 
Weighted average shares, diluted332,825,186 325,170,383 332,144,893 332,077,834 
Impact of Foreign Currency
36
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.


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. Refer to the “Non‑GAAP Financial Measures” section for additional information, including our definition and our use of constant currency.
Comparison of the Three and Nine Months Ended September 30, 2023 and 2022
Revenues
Comparison
Three Months EndedConstant
September 30,Currency
20232022Amount%
   %(1)
Subscriptions$270,751 $235,307 $35,444 15.1 %11.7 %
Perpetual licenses11,887 9,460 2,427 25.7 %23.1 %
Subscriptions and licenses282,638 244,767 37,871 15.5 %12.1 %
Services23,974 23,565 409 1.7 %(0.5 %)
Total revenues$306,612 $268,332 $38,280 14.3 %11.0 %
Consolidated Revenues
Comparison
Nine Months EndedConstant
September 30,Currency
20232022Amount%
   %(1)
% Change% Change
2023 to 20242023 to 2024
Three Months EndedThree Months EndedConstant
March 31,March 31,Currency
202420242023%
   %(1)
SubscriptionsSubscriptions$807,839 $708,731 $99,108 14.0 %13.6 %Subscriptions$307,089 $$277,845 10.5 10.5 %10.3 %
Perpetual licensesPerpetual licenses33,152 31,213 1,939 6.2 %6.5 %Perpetual licenses9,512 9,547 9,547 (0.4 (0.4 %)0.8 %
Subscriptions and licensesSubscriptions and licenses840,991 739,944 101,047 13.7 %13.3 %Subscriptions and licenses316,601 287,392 287,392 10.2 10.2 %10.0 %
ServicesServices76,781 72,190 4,591 6.4 %7.7 %Services21,162 27,019 27,019 (21.7 (21.7 %)(22.4 %)
Total revenuesTotal revenues$917,772 $812,134 $105,638 13.0 %12.8 %Total revenues$337,763 $$314,411 7.4 7.4 %7.2 %
(1)Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency.currency, and for a reconciliation of constant currency growth rates.
The increase in total revenues for the three and nine months ended September 30, 2023March 31, 2024 was primarily driven by increasesan increase in subscriptions revenues, and topartially offset by a lesser extent, perpetual licenses anddecrease in services revenues.
Subscriptions. For the three months ended September 30, 2023,March 31, 2024, the increase in subscriptions revenues was primarily driven by improvements in our business performance of approximately $35,444$29,244 ($27,43828,625 on a constant currency basis). 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.
For the nine months ended September 30, 2023, the increase in subscriptions revenues was primarily driven by improvements in our business performance of approximately $94,807 ($91,790 on a constant currency basis) and the impact from our platform acquisition of approximately $4,301 ($4,330 on a constant currency basis). The platform acquisition impact relates to our acquisition of PLS and is inclusive of PLS’ organic performance.
For the three and nine months ended September 30, 2023,March 31, 2024, the improvements in business performance were primarily driven by expansion from accounts with revenues in the same period in the prior periodyear (“existing accounts”), and growth of 3%4% attributable to new accounts, most notably smaller-small- and medium-sized accounts. Improvements in business performance for the three and nine months ended September 30, 2023March 31, 2024 were led by our civil and structural engineeringapplications, geoprofessionalapplications, and our Enterprise SystemsBentley Infrastructure Cloud for project delivery.
Perpetual licenses. For the three and nine months ended September 30, 2023, the increase inMarch 31, 2024, perpetual licenses revenues was driven by improvementswere flat compared to the same period in business performance of approximately $2,427 ($2,184 on a constant currency basis) and $1,939 ($2,026 on a constant currency basis), respectively.
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For the three and nine months ended September 30, 2023, the improvements in our business performance were primarily driven by growth in new accounts.prior year.
Services. For the three months ended September 30, 2023, services revenues increased by approximately $409 (decreased by approximately $107 on a constant currency basis) due to business performance.
ForMarch 31, 2024, the nine months ended September 30, 2023, the increasedecrease in services revenues was driven by improvementsdecline in our business performance of approximately $4,591$5,857 ($5,551 on a constant currency basis).
For the three and nine months ended September 30, 2023, the improvements in business performance were primarily driven by contributions from Cohesive digital integrator services of approximately $1,168 ($852 on a constant currency basis) and $6,347 ($7,2976,064 on a constant currency basis), respectively.driven primarily from weakness in Maximo-related work within our digital integrator, Cohesive.
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Revenues by Geographic Region
Revenue from external customers is attributed to individual countries based upon the location of the customer. Revenues by geographic region are as follows:
Comparison
Three Months EndedConstant
September 30,Currency
20232022Amount%
   %(1)
Americas$162,367 $141,599 $20,768 14.7 %13.9 %
EMEA86,956 75,416 11,540 15.3 %7.3 %
APAC57,289 51,317 5,972 11.6 %8.4 %
Total revenues$306,612 $268,332 $38,280 14.3 %11.0 %
Comparison
Nine Months EndedConstant
September 30,Currency
20232022Amount%
   %(1)
% Change% Change
2023 to 20242023 to 2024
Three Months EndedThree Months EndedConstant
March 31,March 31,Currency
202420242023%
   %(1)
AmericasAmericas$489,548 $440,218 $49,330 11.2 %11.0 %Americas$184,193 $$168,345 9.4 9.4 %9.2 %
EMEAEMEA263,232 227,696 35,536 15.6 %14.6 %EMEA94,714 92,832 92,832 2.0 2.0 %0.5 %
APACAPAC164,992 144,220 20,772 14.4 %15.2 %APAC58,856 53,234 53,234 10.6 10.6 %12.7 %
Total revenuesTotal revenues$917,772 $812,134 $105,638 13.0 %12.8 %Total revenues$337,763 $$314,411 7.4 7.4 %7.2 %
(1)Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency.currency, and for a reconciliation of constant currency growth rates.
Americas. For the three months ended September 30, 2023, the increase in revenues from the Americas was driven by improvements in our business performance of approximately $20,768 ($19,690 on a constant currency basis).
For the nine months ended September 30, 2023,March 31, 2024, the increase in revenues from the Americas was primarily driven by improvements in our business performance of approximately $45,640$15,848 ($44,86515,477 on a constant currency basis) and the impact from our platform acquisition of approximately $3,690 ($3,697 on a constant currency basis).
The improvements in business performance for the three and nine months ended September 30, 2023March 31, 2024 were primarily due to expansion of our subscriptions revenues from existing accounts in the U.S.
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EMEA. For the three and nine months ended September 30, 2023,March 31, 2024, the increase in revenues from EMEA was primarily driven by improvements in our business performance of approximately $11,540$1,882 ($5,529427 on a constant currency basis) and $35,087 ($32,694 on a constant currency basis), respectively..
The improvements in business performance for the three and nine months ended September 30, 2023March 31, 2024 were primarily due to expansion of our subscriptions revenues from existing accounts in the U.K., the Middle East and to a lesser extent South Africa, and Central Europe, partially offset by reductionsa decline in Russia due to exiting our operations beginningservices revenues in the second quarter of 2022.EMEA.
APAC. For the three and nine months ended September 30, 2023,March 31, 2024, the increase in revenues from APAC was primarily driven by improvements in our business performance of approximately $5,972$5,622 ($4,2946,730 on a constant currency basis) and $20,610 ($21,809 on a constant currency basis), respectively..
The improvements in business performance for the three and nine months ended September 30, 2023March 31, 2024 were primarily due to expansion of our subscriptions revenues from existing accounts in India, Australia and Southeast Asia.India, partially offset by declines in China.
RevenuesTotal revenues in China for the three and nine months ended September 30, 2023 increasedMarch 31, 2024 decreased as compared to the same periodsperiod in the prior year, primarily due to a decline in subscriptions revenues from existing accounts, partially offset by the expansion of our perpetual licenses revenues. The future results in China remain uncertain as a result of continued geopolitical challenges, the obstacles there to cloud‑deployed software, and the financial timing impact of the preference there for license sales, rather than subscriptions,subscriptions.
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Cost of locally-developed solutions based on our platforms.
Revenues and Operating Expenses
Cost of Revenues
Comparison
Three Months EndedConstant
September 30,Currency
20232022Amount%
   %(1)
Cost of subscriptions and licenses$42,088 $37,371 $4,717 12.6 %10.7 %
Cost of services22,588 21,812 776 3.6 %0.9 %
Total cost of revenues$64,676 $59,183 $5,493 9.3 %7.1 %
Comparison
Nine Months EndedConstant
September 30,Currency
20232022Amount%
   %(1)
% Change% Change
2023 to 20242023 to 2024
Three Months EndedThree Months EndedConstant
March 31,March 31,Currency
202420242023%
   %(1)
Cost of subscriptions and licensesCost of subscriptions and licenses$124,175 $107,904 $16,271 15.1 %15.6 %Cost of subscriptions and licenses$40,218 $$40,931 (1.7 (1.7 %)(2.0 %)
Cost of servicesCost of services74,111 66,758 7,353 11.0 %13.0 %Cost of services21,612 26,253 26,253 (17.7 (17.7 %)(18.7 %)
Total cost of revenuesTotal cost of revenues$198,286 $174,662 $23,624 13.5 %14.6 %Total cost of revenues$61,830 $$67,184 (8.0 (8.0 %)(8.5 %)
(1)Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency.currency, and for a reconciliation of constant currency growth rates.
Cost of subscriptions and licenses. For the three months ended September 30, 2023,March 31, 2024, on a constant currency basis, cost of subscriptions and licenses increaseddecreased primarily due to an increase in headcount‑related costs of approximately $2,871, mainly due to increases in headcount and annual compensation costs, and an increasea decrease in channel partner compensation of approximately $767.
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For the nine months ended September 30, 2023, on$840 and a constant currency basis, costdecrease in amortization of subscriptions and licenses increased primarily due to an increasecapitalized costs under our Accelerated Commercial Development Program of approximately $780, partially offset by increases in headcount‑relatedcloud-related costs of approximately $11,103, mainly due to increases in headcount and annual compensation costs, an increase in cloud‑related costs of approximately $2,987, and an increase in channel partner compensation of approximately $1,963.$1,077.
Cost of services. For the three months ended September 30, 2023,March 31, 2024, on a constant currency basis, cost of services increaseddecreased primarily due to an increasea decrease in headcount-relatedheadcount‑related costs of approximately $484,$4,995, mainly due to increasesa reduction in headcount, partially offset bythird‑party personnel costs, and to a lesser extent, lower acquisition-related retention incentives.
For the nine months ended September 30, 2023, on a constant currency basis, cost of services increased primarily due to an increase in headcount-related costs of approximately $8,790, mainly due to third-party personnel cost, and to a lesser extent, increases in headcount, partially offset by lower acquisition-related retention incentives.
Operating Expense (Income)Expenses
Comparison
Three Months EndedConstant
September 30,Currency
20232022Amount%
   %(1)
Research and development$65,465 $63,827 $1,638 2.6 %1.7 %
Selling and marketing53,757 46,114 7,643 16.6 %15.0 %
General and administrative42,678 37,794 4,884 12.9 %11.3 %
Deferred compensation plan(3,160)(4,576)1,416 (30.9 %)NM
Amortization of purchased intangibles9,517 10,446 (929)(8.9 %)(9.7 %)
Total operating expenses$168,257 $153,605 $14,652 9.5 %8.3 %
Comparison
Nine Months EndedConstant
September 30,Currency
20232022Amount%
   %(1)
% Change% Change
2023 to 20242023 to 2024
Three Months EndedThree Months EndedConstant
March 31,March 31,Currency
202420242023%
   %(1)
Research and developmentResearch and development$203,382 $189,966 $13,416 7.1 %8.8 %Research and development$68,371 $$67,800 0.8 0.8 %0.7 %
Selling and marketingSelling and marketing160,262 141,676 18,586 13.1 %14.3 %Selling and marketing54,386 52,141 52,141 4.3 4.3 %4.1 %
General and administrativeGeneral and administrative128,743 128,981 (238)(0.2 %)0.2 %General and administrative46,482 46,807 46,807 (0.7 (0.7 %)(1.0 %)
Deferred compensation planDeferred compensation plan4,763 (21,873)26,636 NMNMDeferred compensation plan5,799 4,146 4,146 39.9 39.9 %39.9 %
Amortization of purchased intangiblesAmortization of purchased intangibles29,567 30,869 (1,302)(4.2 %)(3.7 %)Amortization of purchased intangibles8,964 10,548 10,548 (15.0 (15.0 %)(15.2 %)
Total operating expensesTotal operating expenses$526,717 $469,619 $57,098 12.2 %13.3 %Total operating expenses$184,002 $$181,442 1.4 1.4 %1.2 %
Percentage changes that are considered not meaningful are denoted with NM.
(1)Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency.currency, and for a reconciliation of constant currency growth rates.
Research and development. For the three and nine months ended September 30, 2023,March 31, 2024, on a constant currency basis, research and development expenses increased primarily due to an increase in headcount-relatedheadcount‑related costs of approximately $1,358 and $16,652, respectively,$250, mainly due to increasesan increase in annual and other compensation costs, and headcount, partially offset by a decrease in stock‑based compensation expense.expense, lower acquisition-related retention incentives, and lower travel-related costs.
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Selling and marketing. For the three and nine months ended September 30, 2023,March 31, 2024, on a constant currency basis, selling and marketing expenses increased primarily due to an increase in headcount-relatedheadcount‑related costs of approximately $6,094 and $18,716, respectively,$3,394, mainly due to increases in headcount and annual compensation costs, and to a lesser extent, an increase in stock‑basedannual and other compensation expense.costs, partially offset by a decrease in promotional costs of $1,344.
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General and administrative. For the three months ended September 30, 2023,March 31, 2024, on a constant currency basis, general and administrative expenses increaseddecreased primarily due to lower acquisition costs of approximately $4,986. Partially offsetting this decrease was an increase in headcount‑related costs of approximately $962, mainly due to an increase in headcount-related costs of approximately $2,009, mainly due to increases in annualstock‑based compensation costs and headcount,expense, and to a lesser extent, increases in third-partythird‑party personnel costs, and higher acquisition expenses of approximately $931.
For the ninecosts. The three months ended September 30,March 31, 2023 on a constant currency basis, general and administrative expenses increased primarilyincluded approximately $1,799 of income recorded due to an increase in headcount-related costs of approximately $13,685, mainly due to increases in headcount and annual compensation costs. Partially offsetting these increases were lower non‑income related taxes of approximately $5,328 and lower acquisition expenses of approximately $4,920. Costs resulting from our decision tothe continued wind down business and exit theof our Russian marketentities since we exited operations beginning in the second quarter of 2022 were approximately $2,758 lower in the current year period.
2022.
Deferred compensation plan. For the three and nine months ended September 30,March 31, 2024 and 2023, and 2022, deferred compensation plan (income) expense was attributable to the marked to market impact on deferred compensation plan liability balances period over period.
Amortization of purchased intangibles. For the three and nine months ended September 30, 2023,March 31, 2024, on a constant currency basis, amortization of purchased intangibles decreased primarily due to previously acquired intangible assets that continue to become fully amortized and lower acquisition activity as compared to the prior year.periods.
Interest Expense, Net
Three Months EndedComparison
September 30,
20232022Amount%
Interest expense$(10,548)$(9,243)$(1,305)14.1 %
Interest income501 109 392 NM
Interest expense, net$(10,047)$(9,134)$(913)10.0 %
Nine Months EndedComparison
September 30,
20232022Amount%
Three Months EndedThree Months Ended% Change
March 31,March 31,2023 to
2024202420232024
Interest expenseInterest expense$(31,863)$(23,794)$(8,069)33.9 %Interest expense$(7,303)$$(11,321)(35.5 (35.5 %)
Interest incomeInterest income1,240 273 967 NMInterest income783 229 229 NMNM
Interest expense, netInterest expense, net$(30,623)$(23,521)$(7,102)30.2 %Interest expense, net$(6,520)$$(11,092)(41.2 (41.2 %)
Percentage changes that are considered not meaningful are denoted with NM.
For the three and nine months ended September 30, 2023,March 31, 2024, interest expense, net increaseddecreased primarily due to a higher weighted average interest rate on borrowings under the revolving loan facility and on the Term Loan, partially offset by lower weighted average debt outstanding.outstanding, as compared to the same period in the prior year, primarily related to the pay down of our revolving loan borrowings under the Credit Facility in January 2024.
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Other Income, Net
Three Months Ended
Three Months Ended
Three Months Ended
March 31,March 31,
202420242023
Gain (loss) from:
Change in fair value of interest rate swap
Change in fair value of interest rate swap
Change in fair value of interest rate swap
Foreign exchange (1)
Three Months EndedNine Months Ended
September 30,September 30,
Receipts related to interest rate swap
2023202220232022
Gain (loss) from:
Change in fair value of interest rate swap$4,765 $9,828 $4,102 $29,318 
Foreign exchange (1)
(3,154)(11,027)404 (18,815)
Sale of aircraft— — — 2,029 
Change in fair value of acquisition contingent consideration— 506 — 
Receipts related to interest rate swapReceipts related to interest rate swap2,336 752 6,420 475 
Other income (expense), net (2)
2,006 873 (3,719)1,780 
Receipts related to interest rate swap
Other (expense) income, net
Total other income, netTotal other income, net$5,953 $932 $7,207 $14,793 
(1)Foreign exchange (loss) 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. Intercompany finance transactions primarily denominated in U.S. dollars resulted in unrealized foreign exchange (losses) gains of $(1,574)$(394) and $(5,730)$861 for the three months ended September 30,March 31, 2024 and 2023, and 2022, respectively, and $684 and $(12,293) for the nine months ended September 30, 2023 and 2022, respectively.
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(2)Other income (expense), net includes investment impairment charges of $(7,318) for the nine months ended September 30, 2023, partially offset by gains on investments of $2,360 recorded during the three months ended September 30, 2023.
Provision for Income Taxes
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Three Months Ended
Three Months Ended
Three Months Ended
March 31,March 31,
202420242023
Income before income taxesIncome before income taxes$69,585 $47,342 $169,353 $159,125 
Provision for income taxesProvision for income taxes$16,514 $9,664 $22,107 $8,221 
Effective tax rateEffective tax rate23.7 %20.4 %13.1 %5.2 %Effective tax rate24.0 %17.3 %
For the three months ended September 30, 2023,March 31, 2024, the effective tax rate was higher compared to the same period in the prior year period primarily due to an increasethe decrease in discrete tax benefits recognized in the forecasted effective tax rate impact of the GILTI inclusion due to the mandatory capitalization of research and development expenses for U.S. tax purposes.current year period. For the three months ended September 30,March 31, 2024 and 2023, and 2022, we recorded discrete tax benefits of $4,428$2,138 and $4,280,$7,073, respectively, primarily associated with windfall tax benefits from stock‑based compensation, net of the impact from officer compensation limitation provisions.
For the nine months ended September 30, 2023, the effective tax rate was higher compared to the prior year period primarily due to an increase in the forecasted effective tax rate impact of the GILTI inclusion due to the mandatory capitalization of research and development expenses for U.S. tax purposes and a decrease in discrete tax benefits recognized in the current year period. For the nine months ended September 30, 2023 and 2022, we recorded discrete tax benefits of $31,895 and $36,032, respectively, primarily associated with windfall tax benefits from stock‑based compensation, net of the impact from officer compensation limitation provisions.
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Key Business MetricsMetrics:
In addition to our results of operations discussed above, we believe the following presentation of key business metrics provides additional useful information to investors regarding our results of operations. To the extent material, we disclose below the additional purposes, if any, for which our management uses these key business metrics. Our key business metrics may vary significantly from period to period for reasons unrelated to our operating performance and may differ from similarly titled measures presented by other companies.
September 30,
20232022
March 31,March 31,
202420242023
ARRARR$1,124,774 $983,656 
Last twelve-months recurring revenuesLast twelve-months recurring revenues$1,076,434 $950,367 
Twelve-months ended constant currency (1):
Twelve-months ended constant currency (1):
ARR growth rateARR growth rate12.5 %14 %
ARR growth rate
ARR growth rate11 %13 %
Account retention rateAccount retention rate97 %99 %Account retention rate99 %98 %
Recurring revenues dollar-based net retention rateRecurring revenues dollar-based net retention rate110 %110 %Recurring revenues dollar-based net retention rate108 %110 %
(1)Constant currency is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency.
Recurring revenuesRevenues
Recurring revenues are the basis for our other revenue-related key business metrics. We believe this measure is useful in evaluating our ability to consistently retain and grow our revenues within our existing accounts.
Recurring revenues are subscriptions revenues that recur monthly, quarterly, or annually with specific or automatic renewal clauses and professional services revenues in which the underlying contract is based on a fixed fee and contains automatic annual renewal provisions.
ARR
ARR is a key business metric that we believe is useful in evaluating the scale and growth of our business as well as to assist in the evaluation of underlying trends in our business. Furthermore, we believe ARR, considered in connection with our last twelve‑month recurring revenues dollar‑based net retention rate, is a leading indicator of revenue growth.
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ARR is defined as the sum of the annualized value of our portfolio of contracts that produce recurring revenues as of the last day of the reporting period, and the annualized value of the last three months of recognized revenues for our contractually recurring consumption‑based software subscriptions with consumption measurement durations of less than one year, calculated using the spot foreign currency exchange rates. We believe that the last three months of recognized revenues, on an annualized basis, for our recurring software subscriptions with consumption measurement period durations of less than one year is a reasonable estimate of the annual revenues, given our consistently high retention rate and stability of usage under such subscriptions.
ARR resulting from the annualization of recurring contracts with consumption measurement durations of less than one year, as a percentage of total ARR, was 46%48% and 41%44% as of September 30,March 31, 2024 and 2023, and 2022, respectively. Within our consumption‑measured ARR, the continued transition torespectively, with our E365 subscription offering has increased daily consumption‑measured ARR, representing 39%42% and 33%36% of total ARR as of September 30,March 31, 2024 and 2023, and 2022, respectively. For the nine months ended September 30, 2022, ARR was reduced by $11,190 due to our decision to exit the Russian market.
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Constant currency ARR growth rate is the growth rate of ARR measured on a constant currency basis. During the twelve months ended September 30, 2022, ourIn reporting period‑over‑period ARR growth rate was favorably impactedrates in constant currency, we calculate constant currency growth rates by 2.5% duetranslating current and prior period ARR on a transactional basis to the ARR onboarding from our platform acquisition of PLS.reporting currency using current year budget exchange rates. We believe that ARR growth is an important metric indicating the scale and growth of our business.
Last twelve‑months recurring revenuesTwelve‑Months Recurring Revenues
Last twelve‑month recurring revenues is a key business metric that we believe is useful in evaluating our ability to consistently retain and grow our recurring revenues. 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.
Last twelve‑months recurring revenues is calculated as recurring revenues recognized over the preceding twelve‑month period.
The last twelve‑months recurring revenues for the periods ended September 30, 2023March 31, 2024 compared to the last twelve‑months of the comparative twelve‑month period increased by $126,067.$111,444. 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, including the favorable impact from our platform acquisition of PLS.acquisitions. For the twelve months ended September 30,March 31, 2024 and 2023, 90% and 2022, 89% and 88%, respectively, of our revenues were recurring revenues.
Account retention rateRetention Rate
Account retention rate is a key business metric that we believe is useful in evaluating 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.
Account retention rate for any given twelve-month period is calculated using the average foreign 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.
Our account retention rate as of September 30, 2023 was negatively impacted due to our decision to exit the Russian market by approximately 1%.
Recurring revenues dollar‑based net retention rateRevenues Dollar‑Based Net Retention Rate
Recurring revenues dollar‑based net retention rate is a key business metric that we believe is useful in evaluating our ability to consistently retain and grow our recurring revenues.
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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. Related to our platform acquisitions, recurring revenues into new accounts will be captured as existing accounts starting with the second anniversary of the acquisition when such data conforms to the calculation methodology. This may cause variability in the comparison.
Given that recurring revenues represented 90% and 89% of our total revenues for the twelve months ended September 30,March 31, 2024 and 2023, respectively, this metric helps explain our revenue performance excluding the impact from acquisitions, as primarily growth intofrom existing accounts.
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Non-GAAP Financial MeasuresMeasures:
In addition to our results determined in accordance with GAAP discussed above, we believe the following presentation of financial measures not in accordance with GAAP provides useful information to investors regarding our results of operations. To the extent material, we disclose below the additional purposes, if any, for which our management uses these non‑GAAP financial measures and provide reconciliations between these non‑GAAP financial measures and their most directly comparable GAAP financial measures. Non‑GAAP financial information should be considered in addition to, not as a substitute for, or in isolation from, the financial information prepared in accordance with GAAP, including operating income, or other measures of performance. Our non‑GAAP financial measures may vary significantly from period to period for reasons unrelated to our operating performance and may differ from similarly titled measures presented by other companies.
Adjusted OI w/SBC
Adjusted OI w/SBC is a non-GAAP financial measure and is used to measure the operational strength and performance of our business, as well as to assist in the evaluation of underlying trends in our business.
Adjusted OI w/SBC is our primary performance measure, which excludes certain expenses and charges, including the non-cash amortization expense resulting from the acquisition of intangible assets, as we believe these may not be indicative of the Company’sour core business operating results. We intentionally include stock-based compensation expense in this measure as we believe it better captures the economic costs of our business.
Management uses this non-GAAP financial measure to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, to evaluate financial performance, and in our comparison of our financial results to those of other companies. It is also a significant performance measure in certain of our executive incentive compensation programs.
Adjusted OI w/SBC is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, and realignment expenses (income), for the respective periods.
Adjusted operating incomeOperating Income
Adjusted operating income is a non-GAAP financial measure that we believe is useful to investors in making comparisons to other companies, although this measure may not be directly comparable to similar measures used by other companies.
Adjusted operating income is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, realignment expenses (income), and stock‑based compensation expense, for the respective periods.
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Reconciliation of operating income to Adjusted OI w/SBC and to Adjusted operating income:
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Three Months Ended
Three Months Ended
Three Months Ended
March 31,March 31,
202420242023
Operating incomeOperating income$73,679 $55,544 $192,769 $167,853 
Amortization of purchased intangibles (1)
Amortization of purchased intangibles (1)
12,678 13,575 39,038 40,174 
Deferred compensation plan (2)
Deferred compensation plan (2)
(3,160)(4,576)4,763 (21,873)
Acquisition expenses (3)
Acquisition expenses (3)
2,980 3,203 15,278 21,056 
Realignment expenses (income) (4)
Realignment expenses (income) (4)
150 (971)(1,800)2,223 
Adjusted OI w/SBCAdjusted OI w/SBC86,327 66,775 250,048 209,433 
Stock-based compensation expense (5)
Stock-based compensation expense (5)
18,039 18,626 54,907 50,974 
Adjusted operating incomeAdjusted operating income$104,366 $85,401 $304,955 $260,407 
Further explanation of certain of our adjustments in arriving at Adjusted OI w/SBC and Adjusted operating income are as follows:
(1)Amortization of purchased intangibles. Amortization of purchased intangibles varies in amount and frequency and is significantly impacted by the timing and size of our acquisitions. 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 contributed to our revenues earned during the periods presented and will also contribute to our revenues in future periods. Amortization of purchased intangible assets will recur in future periods.
(2)Deferred compensation plan. We exclude Deferred compensation plan expense (income) when we evaluate our continuing operational performance because it is not reflective of our ongoing business and results of operation. We believe it is useful for investors to understand the effects of this item on our total operating expenses. 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.
(3)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 (See(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. For the three and nine months ended September 30, 2022, $350 and $10,149, respectively, of our acquisition expenses related to our platform acquisition of PLS.
(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. In the ordinary course of operating our business, we incur severance expenses that are not included in this adjustment. For the three and nine months ended September 30, 2022,March 31, 2024, Realignment expenses (income) were comprisedprimarily associated with the 2023 Program (see Note 21 to our consolidated financial statements included in Part I, Item 1 of asset impairments and termination benefits as a resultthis Quarterly Report on Form 10‑Q). For the three months ended March 31, 2023, Realignment income was associated with the continued wind down of our decision to wind down business and exit the Russian marketentities since we exited operations beginning in the second quarter of 2022. For the three and nine months ended September 30, 2023, Realignment expenses (income) primarily relates to the continued wind down of our Russian entities.
(5)Stock‑based compensation expense. We exclude non-cash stock‑based compensation expenses from certain of our non‑GAAP measures because we believe this is useful to investors in making comparisons to other companies.
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Constant currencyCurrency
Constant currency and constant currency growth rates are non-GAAP financial measures that present our results of operations excluding the estimated effects of foreign currency exchange rate fluctuations. We haveA significant amount of our operations outside the U.S. that areis conducted in localforeign currencies. As a result, the comparability of the financial results reported in U.S. dollars is affected by changes in foreign currency exchange rates. We use constant currency and constant currency growth rates to evaluate the underlying performance of the business, and we believe it is helpful for investors to present operating results on a comparable basis period over period to evaluate its underlying performance.
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In reporting period‑over‑period results, except for ARR as discussed above in “Key Business Metrics” section, we calculate the effects of foreign currency fluctuations and constant currency information by translating current and prior period results on a transactional basis to our reporting currency using prior period average foreign currency exchange rates.rates in which the transactions occurred.
Reconciliation of consolidated revenues to consolidated revenues in constant currency:
Three Months Ended March 31, 2024Three Months Ended March 31, 2023
ActualImpact of Foreign Exchange at 2023 RatesConstant CurrencyActualImpact of Foreign Exchange at 2023 RatesConstant Currency
Subscriptions$307,089 $(761)$306,328 $277,845 $(142)$277,703 
Perpetual licenses9,512 115 9,627 9,547 9,554 
Subscriptions and licenses316,601 (646)315,955 287,392 (135)287,257 
Services21,162 (197)20,965 27,019 10 27,029 
Total revenues$337,763 $(843)$336,920 $314,411 $(125)$314,286 
Reconciliation of revenues by geographic region to revenues by geographic region in constant currency:
Three Months Ended March 31, 2024Three Months Ended March 31, 2023
ActualImpact of Foreign Exchange at 2023 RatesConstant CurrencyActualImpact of Foreign Exchange at 2023 RatesConstant Currency
Americas$184,193 $(453)$183,740 $168,345 $(82)$168,263 
EMEA94,714 (1,451)93,263 92,832 92,836 
APAC58,856 1,061 59,917 53,234 (47)53,187 
Total revenues$337,763 $(843)$336,920 $314,411 $(125)$314,286 
Reconciliation of cost of revenues to cost of revenues in constant currency:
Three Months Ended March 31, 2024Three Months Ended March 31, 2023
ActualImpact of Foreign Exchange at 2023 RatesConstant CurrencyActualImpact of Foreign Exchange at 2023 RatesConstant Currency
Cost of subscriptions and licenses$40,218 $(89)$40,129 $40,931 $22 $40,953 
Cost of services21,612 (249)21,363 26,253 17 26,270 
Total cost of revenues$61,830 $(338)$61,492 $67,184 $39 $67,223 
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Reconciliation of operating expenses to operating expenses in constant currency:
Three Months Ended March 31, 2024Three Months Ended March 31, 2023
ActualImpact of Foreign Exchange at 2023 RatesConstant CurrencyActualImpact of Foreign Exchange at 2023 RatesConstant Currency
Research and development$68,371 $(96)$68,275 $67,800 $19 $67,819 
Selling and marketing54,386 (76)54,310 52,141 27 52,168 
General and administrative46,482 (115)46,367 46,807 13 46,820 
Deferred compensation plan5,799 — 5,799 4,146 — 4,146 
Amortization of purchased intangibles8,964 (24)8,940 10,548 (1)10,547 
Total operating expenses$184,002 $(311)$183,691 $181,442 $58 $181,500 
Liquidity and Capital ResourcesResources:
Cash and Cash Equivalents
March 31, 2024December 31, 2023
Cash and cash equivalents held domestically$52,286 $3,693 
Cash and cash equivalents held by foreign subsidiaries89,315 64,719 
Total cash and cash equivalents$141,601 $68,412 
Our primary source of operating cash is from the sale of our subscriptions, perpetual licenses, and services. Our primary use of cash is payment of our operating costs, which consist primarilymainly of headcount‑related costs. In addition to operating expenses, we also use cash to service our debt obligations, to pay quarterly dividends, to repurchase our Class B Common Stockcommon stock and convertible debt, and for capital expenditures in support of our operations. We also use cash to fund our acquisitions of software assets and businesses, and other investment activities, including our iTwin Ventures initiative which makes seed, early, and growth stage investments in technology companies with promising and emerging opportunities for infrastructure digital twin solutions potentially relevant to our business.
We have the right to require that certain equity awardees receive gross or net quantities of shares of our Class B Common Stock, including in connection with share issuances under our Bonus Plan and distributions from the DCP. In the case of a gross issuance or distribution, an awardee is required to reimburse promptly to us the cash required for his or her tax withholding amounts. Conversely, under a net issuance or distribution, shares are withheld in consideration of remitting withholding taxes on behalf of an equity awardee, thereby requiring us to remit cash for the tax withholdings. During the nine months ended September 30, 2023, we allowed impacted equity awardees the option to receive net quantities of shares of our Class B Common Stock. During the nine months ended September 30, 2022, we permitted impacted awardees to elect to receive net quantities of shares of our Class B Common Stock in the first quarter, but exercised our right to require that these awardees receive gross quantities of our Class B Common Stock during the second and third quarters. We will continue to evaluate whether share awards will be required to be received by awardees on a gross basis, or if net settlement may be elected by awardees.
activities.
We believe that cash generated from operations, together with existing domestic and international cash and cash equivalent balances, together with cash generated from operations, and external borrowings including available liquidity under the Credit Facility, will be sufficient to meet our domestic and international working capital and capital expenditure requirements throughrequirements. We regularly review our capital structure and consider a variety of potential financing alternatives and planning strategies to ensure that we have the next twelve months. However,proper liquidity available in the locations in which it is needed and to fund our operations and growth investments with cash that has not been permanently reinvested outside the U.S. Our future capital requirements may be materially different than those currently planned in our budgeting and forecasting activities and depend on many factors, including our strategy of regularly acquiring and integrating specialized infrastructure engineering software businesses, our rate of revenue growth, the timing and extent of spending on research and development, the expansion of our sales and marketing activities, the timing of new product introductions, market acceptance of our products, competitive factors, our discretionary payments of dividends or repurchases of our Class B Common Stockcommon stock and convertible debt, fund of our purchase commitments, currency fluctuations, and overall economic conditions, globally. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders, while the incurrence of additional debt financing, including convertible debt, would result in additional debt service obligations. Such debt instruments also could introduce new or modified covenants that might restrict our operations and/or our ability to pay dividends, consummate acquisitions, or otherwise pursue our business strategies. We cannot provide assurance that we could obtain additional financing on favorable terms or at all.
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Cash and cash equivalentsFlows Activity
September 30, 2023December 31, 2022
Cash and cash equivalents held domestically$2,679 $3,883 
Cash and cash equivalents held by foreign subsidiaries64,284 67,801 
Total cash and cash equivalents$66,963 $71,684 
Three Months Ended March 31,
20242023
Net cash provided by (used in):
Operating activities$204,969 $176,223 
Investing activities(3,849)(20,761)
Financing activities(126,435)(134,241)
Long-term debtOperating Activities
September 30, 2023December 31, 2022
Current portion of long-term debt$8,750 $5,000 
Long-term debt1,580,752 1,775,696 
Total debt$1,589,502 $1,780,696 
Comparison ofFor the Nine Months Ended September 30, 2023 and 2022
Our cash flow activities for the ninethree months ended September 30, 2023 and 2022 consist of the following:
Nine Months Ended September 30,
20232022
Net Cash Provided By (Used In):
Operating activities$329,643 $238,198 
Investing activities(51,245)(740,445)
Financing activities(280,019)254,692 
Operating activities
Net cash provided by operating activities was $329,643 for the nine months ended September 30, 2023. ComparedMarch 31, 2024, compared to the same period in the prior year, net cash provided by operating activities was higher by $91,445$28,746 due to an increase in net income of $24,820 and a net increase in non‑cash adjustments of $5,104, partially offset by a decrease in net cash flows from the change in operating assets and liabilities of $51,510, a net increase in non‑cash adjustments of $41,791, partially offset by a$1,178. The decrease in net income of $1,856. The increase in cash flows from the change in operating assets and liabilities was primarily due to a decrease in accounts receivabledeferred revenues, an increase in other current assets, and the overall timing of tax payments period over period due to the timing of collections from accounts andperiod. Offsetting theses decreases were higher CSS deposits.deposits period over period.
ForIn addition, we expect to substantially pay the nine months ended September 30, 2022, net cash providedremainder of termination benefits to colleagues in connection with our 2023 Program by operating activities was $238,198 resulting from net incomethe end of $149,058, changesthe second quarter of 2024. See Note 21 to our consolidated financial statements included in operating assets and liabilitiesPart II, Item 8 of $24,892, and non‑cash adjustments of $64,248.this Annual Report on Form 10‑K for additional information related to realignment costs.
Investing activitiesActivities
Net cash used in investing activities was $51,245lower by $16,912 for the ninethree months ended September 30, 2023March 31, 2024, compared to the same period in the prior year, primarily due to $23,110 inlower acquisition related payments net of cash acquired,$10,299, as no acquisitions were completed in the first quarter of 2024 compared to complete two acquisitions, $18,906 relatedone acquisition in the first quarter of 2023, and to a lesser extent, lower purchases of property and equipment and investment in capitalized software, and $11,352 for purchasesinvestments of investments.
For the nine months ended September 30, 2022, net cash used in investing activities was $740,445 primarily due to $719,539 in acquisition related payments, net of cash acquired, to complete four acquisitions.
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$5,928.
Financing activitiesActivities
Net cash used in financing activities was $280,019lower by $7,806 for the ninethree months ended September 30, 2023March 31, 2024, compared to the same period in the prior year, primarily due to thelower net paydownpaydowns of the Credit Facility of $195,902, payments for shares acquired of $57,527, and$12,707, partially offset by higher dividend payments of dividends of $43,992.
For the nine months ended September 30, 2022, net cash provided by financing activities was $254,692$3,349, primarily due to an increase in net borrowings under the Credit Facility of $340,912, partially offset by netour quarterly dividend per share to $0.06 from $0.05, and higher payments for shares acquired of $70,463,$2,157, including shares repurchased under the Repurchase Program. Refer to the section titled “Stock Repurchases” below for further detail.
Long-Term Debt
March 31, 2024December 31, 2023
Current portion of long-term debt$10,000 $10,000 
Long-term debt1,425,445 1,518,403 
Total debt$1,435,445 $1,528,403 
As of March 31, 2024, we had $849,850 available under the Credit Facility. We were in compliance with all covenants in its Credit Facility, the 2026 Notes, and the 2027 Notes as of March 31, 2024. Any failure to comply with such covenants under the Credit Facility would prevent us from being able to borrow additional funds under the Credit Facility, and, as with any failure to comply with such covenants under the 2026 Notes and the 2027 Notes, could constitute a default that may cause all amounts outstanding to become due and immediately payable in full.
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Stock Repurchases
BSY Stock Repurchase Program
Our Board of Directors has authorized us to repurchase up to $200,000 of our Class B common stock and/or outstanding convertible senior notes through June 30, 2024 under the Repurchase Program. Effective July 1, 2024, our Board of Directors extended the Repurchase Program, authorizing us to repurchase from such date up to $200,000 of our Class B common stock and/or convertible senior notes through June 30, 2026. Our current authorization under the Repurchase Program expires on June 30, 2024. We may use available working capital and paymentscash provided by operations to make repurchases.
During the three months ended March 31, 2024, we repurchased 302,598 shares for $15,006 under the Repurchase Program. For the three months ended March 31, 2023, we did not repurchase shares under the Repurchase Program.
The timing, as well as the number and value of shares and/or convertible senior notes repurchased under the Repurchase Program, will be determined at our discretion and will depend on a variety of factors, including our assessment of the intrinsic value of our shares, the market price of our Class B common stock and outstanding convertible senior notes, general market and economic conditions, available liquidity, compliance with our debt and other agreements, and applicable legal requirements.
Withholding Taxes on Certain Equity Awards
We have the right to require that certain equity awardees receive gross or net quantities of shares of our Class B common stock, including distributions from the DCP and share issuances under our Bonus Plan. In the case of a gross issuance or distribution, an awardee is required to reimburse promptly to us the cash required for his or her tax withholding amounts. Conversely, under a net issuance or distribution, shares are withheld in consideration of remitting withholding taxes on behalf of an equity awardee, thereby requiring us to remit cash for the tax withholdings. During the three months ended March 31, 2024, we exercised our right to require that impacted equity awardees receive gross quantities of our Class B common stock during the first quarter. During the three months ended March 31, 2023, we allowed impacted awardees the option to receive net quantities of shares of our Class B common stock in the first quarter. We will continue to evaluate whether share awards will be required to be received by awardees on a gross basis, or if net settlement may be elected by awardees.
Dividend Payments
The declaration and payment of dividends is within the discretion of $25,828.our Board of Directors. We paid quarterly dividends of $0.06 per share of common stock during the three months ended March 31, 2024 and $0.05 per share of common stock during the three months ended March 31, 2023. 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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in our market risk exposure as described in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our 20222023 Annual Report on Form 10‑K.
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Item 4. Controls and Procedures
Evaluation of Effectiveness of Disclosure Controls and Procedures
Our management maintains disclosure controls and procedures as defined in Rules 13a‑15(e) and 15d‑15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is processed, recorded, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), as appropriate, to allow for timely decisions regarding required disclosure.
We evaluated, under the supervision and with the participation of management, including our principal executive and principal financial officers, the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, 2023,March 31, 2024, our disclosure controls and procedures were effective at the reasonable assurance level.
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Bentley Systems, Incorporated have been detected.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a or 15d of the Exchange Act that occurred during the quarter ended September 30, 2023March 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. 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 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in Part I, Item 1A. Risk Factors in our 20222023 Annual Report on Form 10‑K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Purchases of Equity Securities
Recent Sales of Unregistered Equity Securities
From JulyJanuary 1, 20232024 to September 30, 2023,March 31, 2024, we issued 218,438537,745 shares of our Class B Common Stock pursuant to the vesting of restrictedcommon stock and RSUs.
From July 1, 2023 to September 30, 2023, we issued 63,267 shares of our Class B Common Stock in connection with distributions from our DCP.
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.
Issuer Purchases of Equity Securities
The following table reflects our Class B common stock we repurchased during the three months ended March 31, 2024:
Total Number ofApproximate Dollar
Shares Purchased asValue of Shares that
Total Number ofAverage PricePart of PubliclyMay Yet Be Purchased
PeriodShares PurchasedPaid per Share
Announced Plan (1)
Under the Plan (2)
January 1, 2024 to January 31, 2024— $— — $169,751,743 
February 1, 2024 to February 29, 2024— — — 169,751,743 
March 1, 2024 to March 31, 2024302,598 49.57 302,598 154,751,754 
302,598 49.57 302,598 
(1)Represents shares purchased in open‑market transactions under the Repurchase Program approved by our Board of Directors.
(2)These amounts correspond to the plan publicly announced and approved by our Board of Directors in May 2022 that authorizes the repurchase up to $200 million of our Class B common stock through June 30, 2024. In December 2022, our Board of Directors amended the plan to allow us also to repurchase our outstanding convertible senior notes. This additional authorization did not increase the overall dollar limit of the plan. Effective July 1, 2024, our Board of Directors extended the plan, authorizing us to repurchase from such date up to $200,000 of our Class B common stock and/or convertible senior notes through June 30, 2026.
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Item 5. Other Information
Rule 10b5-1 Trading Plans
On March 1, 2024, Michael M. Campbell, the Company’s Chief Product Officer, adopted a trading plan established pursuant to Rule 10b5‑1 of the Exchange Act, which is intended to satisfy the affirmative defense conditions of Rule 10b5‑1(c). The Company estimates that Mr. Campbell could sell up to an aggregate of 17,000 shares of its Class B common stock under the plan, though the final number of shares sold will depend upon a variety of factors, including applicable tax rates. Mr. Campbell’s plan expires on October 15, 2024.
On March 13, 2024, David R. Shaman, the Company’s Chief Legal Officer and Secretary, terminated a trading plan established pursuant to Rule 10b5‑1 of the Exchange Act, which was intended to satisfy the affirmative defense conditions of Rule 10b5‑1(c) and was adopted effective June 8, 2023 to sell an aggregate of 127,942 shares of our Class B common stock through March 31, 2024. On March 14, 2024, Mr. Shaman adopted a trading plan established pursuant to Rule 10b5‑1 of the Exchange Act, which is intended to satisfy the affirmative defense conditions of Rule 10b5‑1(c), to sell an aggregate of 127,942 shares of our Class B common stock. Mr. Shaman’s plan expires on March 7, 2025.
During the three months ended September 30, 2023, none of the Company’sMarch 31, 2024, there were no other Company directors or executive officers who adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5‑1(c) or any “non-Rule 10b5‑1 trading arrangement.”
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Item 6. Exhibits
Exhibit
NumberDescription
   31.1*
   31.2*
   32*
 101.INSInline XBRL Instance Document—the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document
 101.SCHInline XBRL Taxonomy Extension Schema
 101.CALInline XBRL Taxonomy Extension Calculation Linkbase
 101.DEFInline XBRL Taxonomy Extension Definition Linkbase
 101.LABInline XBRL Taxonomy Extension Label Linkbase
 101.PREInline XBRL Taxonomy Extension Presentation Linkbase
 104Cover page formatted as Inline XBRL and contained in Exhibit 101
*Filed or furnished herewith. The certification attached as Exhibit 32 that accompanies this Quarterly Report on Form 10‑Q is not deemed filed with the U.S. Securities and Exchange CommissionSEC and is not to be incorporated by reference into any filing of Bentley Systems, Incorporated under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10‑Q, irrespective of any general incorporation language contained in such filing.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Bentley Systems, Incorporated
Date: NovemberMay 7, 20232024By:
/s/ WERNER ANDRE
Werner Andre
Chief Financial Officer and Chief Accounting Officer
(Principal Financial Officer and Principal Accounting Officer)
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