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

Non-GAAP Financial ~~Measures:~~Measures

In addition to our results determined in accordance with ~~U.S.~~ GAAP discussed above, we ~~also use~~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’s core business operating results. We intentionally include stock-based compensation expense in this measure as we believe it better captures the economic costs of our business.

Management uses this non-GAAP financial measure to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, to evaluate financial performance, and in our ~~ongoing operations and for internal planning and forecasting purposes.~~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.

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Adjusted EBITDA $ 89,740 $ 84,468 $ 273,877 $ 236,778
Adjusted Net Income 61,825 56,289 215,189 194,971

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

Adjusted operating income

Adjusted operating income ~~taxes, depreciation and~~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 ~~stock‑based compensation,~~of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, realignment expenses (income), ~~other non‑operating (income) expense, net,~~ and ~~(income) loss from investment accounted for using the equity method, net of tax.~~

~~Adjusted Net Income. We define Adjusted Net Income as net income (loss) adjusted for the following: amortization of purchased intangibles and developed technologies,~~ stock‑based compensation expense, ~~(income) relating to deferred compensation plan liabilities, acquisition expenses, realignment expenses (income), other non‑operating (income) expense, net,~~for the tax effect of the above adjustments to net income (loss), and (income) loss from investment accounted for using the equity method, net of tax. The income tax effect of non‑GAAP adjustments was determined using the applicable rates in the taxing jurisdictions in which income or expense occurred, and represent both current and deferred income tax expense or benefit based on the nature of the non‑GAAP adjustments, including the tax effects of non‑cash stock‑based compensation expense.respective periods.

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Adjusted EBITDA and Adjusted Net Income are not presentations made in accordance with U.S. GAAP, and our use of the terms Adjusted EBITDA and Adjusted Net Income may vary from the use of similarly titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation. We believe the presentation of Adjusted EBITDA and Adjusted Net Income provides useful information to management and investors regarding financial and business trends related to our results of operations and that when non‑GAAP financial information is viewed with U.S. GAAP financial information, investors are provided with a more meaningful understanding of our ongoing operating performance. We also use Adjusted EBITDA and Adjusted Net Income to compare our results to those of our competitors and to consistently measure our performance from period to period. During the second quarter of 2022, we modified our definitions of Adjusted EBITDA and Adjusted Net Income to adjust for realignment expenses (income) relating to our Russian market exit costs as described further below. Amounts for all periods herein reflect application of the aforementioned definitions modification.

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

~~Reconciliation of net income (loss) to Adjusted EBITDA:~~

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Net income (loss) $ 36,997 $ (48,022) $ 149,058 $ 54,611
Interest expense, net 8,382 3,836 23,046 8,608
Provision (benefit) for income taxes 9,664 5,025 8,221 (5,090)
Depreciation and amortization 17,914 16,666 53,644 35,946
Stock-based compensation (2)
18,626 11,588 50,974 32,186
Deferred compensation plan (3)
(4,576) 88,965 (21,873) 89,327
Acquisition expenses (4)
3,203 4,789 21,056 27,999
Realignment (income) expenses (5)
(971) — 2,223 —
Other (income) expense, net (6)
(180) 957 (14,318) (9,748)
Loss from investment accounted for using the equity method, net of tax 681 664 1,846 2,939
Adjusted EBITDA $ 89,740 $ 84,468 $ 273,877 $ 236,778

Reconciliation of ~~net~~operating income ~~(loss)~~ to Adjusted ~~Net Income:~~OI w/SBC and to Adjusted operating income:

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Net income (loss) $ 36,997 $ (48,022) $ 149,058 $ 54,611
Non-GAAP adjustments, prior to income taxes:
Amortization of purchased intangibles and developed technologies (1)
13,575 11,539 40,174 22,003
Stock-based compensation (2)
18,626 11,588 50,974 32,186
Deferred compensation plan (3)
(4,576) 88,965 (21,873) 89,327
Acquisition expenses (4)
3,203 4,789 21,056 27,999
Realignment (income) expenses (5)
(971) — 2,223 —
Other (income) expense, net (6)
(180) 957 (14,318) (9,748)
Total non-GAAP adjustments, prior to income taxes 29,677 117,838 78,236 161,767
Income tax effect of non-GAAP adjustments (5,530) (14,191) (13,951) (24,346)
Loss from investment accounted for using the equity method, net of tax 681 664 1,846 2,939
Adjusted Net Income $ 61,825 $ 56,289 $ 215,189 $ 194,971


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Operating income	$	73,679	$	55,544	$	192,769	$	167,853
Amortization of purchased intangibles (1)	12,678		13,575		39,038		40,174
Deferred compensation plan (2)	(3,160)		(4,576)		4,763		(21,873)
Acquisition expenses (3)	2,980		3,203		15,278		21,056
Realignment expenses (income) (4)	150		(971)		(1,800)		2,223
Adjusted OI w/SBC	86,327		66,775		250,048		209,433
Stock-based compensation expense (5)	18,039		18,626		54,907		50,974
Adjusted operating income	$	104,366	$	85,401	$	304,955	$	260,407

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

(1)Amortization of purchased intangibles ~~and developed technologies~~. Amortization of purchased intangibles varies in amount and frequency and is significantly impacted by the timing and size of our acquisitions. Management finds it useful to exclude these non‑cash charges from our operating expenses to assist in budgeting, planning, and forecasting future periods. The use of intangible assets ~~and developed technologies~~ contributed to our revenues earned during the periods presented and will also contribute to our revenues in future periods. Amortization of purchased intangible assets ~~and developed technologies~~ will recur in future periods.

~~(2)Stock‑based compensation~~. We exclude certain stock‑based compensation expenses from our non‑GAAP measures primarily because they are non‑cash expenses and management finds it useful to exclude certain non‑cash charges to assess the appropriate level of various operating expenses to assist in budgeting, planning, and forecasting future periods. Moreover, because of the variety of award types and subjective assumptions that companies can use under Financial Accounting Standards Board Accounting Standards Codification Topic 718, ~~Compensation—Stock Compensation, we believe excluding stock‑based compensation expenses allows investors to make meaningful comparisons between our recurring core business results of operations and those of other companies.~~

~~(3)~~(2)Deferred compensation plan. In August 2021, our board of directors approved an amendment to the amended and restated Bentley Systems, Incorporated Nonqualified Deferred Compensation Plan (the “DCP”), which offered to certain active executives in the DCP a one‑time, short‑term election to reallocate a limited portion of their DCP holdings from phantom shares of the Company’s Class B Common Stock into other phantom investment funds. The offer to reallocate was subject to a proration mechanism which adjusted the aggregate elections to a maximum of 1,500,000 phantom shares of the Company’s Class B Common Stock. This one‑time reallocation opportunity was offered only to certain active executives (but not to Directors or Bentley family members) in order to encourage retention, as otherwise these executives could only have materially diversified their investments in Company equity (primarily held in the DCP) by voluntarily terminating employment to trigger DCP distributions. These executives in aggregate accordingly diversified 24% of their phantom shares of the Company’s Class B Common Stock. While DCP participants’ investments in phantom shares remain equity classified, as they will be settled in shares of Class B Common Stock upon eventual distribution, the amendment and elections resulted in a change to liability classification for the reallocated phantom investments, as they will be settled in cash upon eventual distribution. As a result, during the three and nine months ended September 30, 2021, we recognized a one‑time compensation charge of $90,721 to ~~Deferred compensation plan~~ expenses in the consolidated statements of operations to record the reallocated deferred compensation plan liabilities at their fair value. Deferred compensation plan liabilities are marked to market at the end of each reporting period, with changes in the liabilities recorded as an expense (income) to ~~Deferred compensation plan~~ ~~in the consolidated statements of operations.~~ We exclude 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.

~~(4)~~(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 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. 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 Power Line Systems. For the three and nine months ended September 30, 2021, $389 and $16,285, respectively, of our acquisition expenses related to our platform acquisition of Seequent. 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.

~~(5)~~(4)Realignment expenses (income) ~~expenses~~. During the second quarter of 2022, the marked shifts in the Russian business environment and economic outlook led us to conclude it was no longer viable for us to continue operations in Russia. Accordingly, we made the decision to wind down business and exit the Russian market. As a result, we incurred exit costs, which were comprised of termination benefits for colleagues whose positions were eliminated and asset impairments (“Russian market exit costs”). 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.

~~(6)Other (income) expense, net. The table below contains the details of~~ ~~Other (income) expense, net~~. We exclude these items 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 results of operations.

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
(Gain) loss from:
Change in fair value of interest rate swap $ (9,828) $ (1,463) $ (29,318) $ (9,198)
Foreign exchange (a)
11,027 2,446 18,815 248
Sale of aircraft — — (2,029) —
Change in fair value of acquisition contingent consideration (506) — (6) —
Other income, net (873) (26) (1,780) (798)
Total other (income) expense, net $ (180) $ 957 $ (14,318) $ (9,748)

~~(a)~~Foreign exchange loss is primarily attributable to foreign currency translation derived mainly from United States (“U.S.”) Dollar denominated cash and cash equivalents, account receivables, customer deposits, and intercompany balances held by foreign subsidiaries. Intercompany finance transactions denominated in U.S. Dollars resulted in unrealized foreign exchange losses of $5,730 and $2,741 for the three months ended September 30, 2022 and 2021, respectively, and $12,293 and $1,298 for the nine months ended September 30, 2022 and 2021, respectively.

~~Key Factors Impacting Comparability and Performance:~~

~~Acquisitions.~~ Since our founding, we have purposefully pursued a strategy of regularly acquiring and integrating specialized infrastructure engineering software businesses. As a public company, we have been able to make platform acquisitions which appreciably increase our scale and/or the scope of our platform capabilities. Our relatively numerous and frequent programmatic acquisitions, which most often “fill white space” within our ecosystem and add their particular value principally by virtue of our existing platform comprehensiveness, and accordingly we consider this programmatic aspect of our growth as characteristically within our mainstream business performance (unlike platform acquisitions).

We completed four and 12 acquisitions for the nine months ended September 30, 2022 and 2021, respectively. Our three and nine months ended September 30, 2022 consolidated financial statements were meaningfully impacted by our platform acquisition of Power Line Systems, which was completed on January 31, 2022 for $695,968 in cash, net of cash acquired. Our three and nine months ended September 30, 2022 and 2021 consolidated financial statements were meaningfully impacted by our platform acquisition of Seequent, which was completed on June 17, 2021 for $883,336 in cash, net of cash acquired, plus 3,141,342 shares of our Class B Common Stock. For the three and nine months ended September 30, 2022, ~~$350~~Realignment expenses (income) were comprised of asset impairments and ~~$10,149, respectively,~~termination benefits as a result of our ~~acquisition expenses related~~decision to wind down business and exit the ~~acquisition~~Russian market beginning in the second quarter of ~~Power Line Systems.~~2022. For the three and nine months ended September 30, ~~2021, $389 and $16,285, respectively,~~2023, Realignment expenses (income) primarily relates to the continued wind down of our ~~acquisition expenses related to the acquisition of Seequent.~~Russian entities.

~~DCP Amendment~~(5)Stock‑based compensation expense. ~~In August 2021, our board of directors approved an amendment to the DCP, which offered to~~We exclude non-cash stock‑based compensation expenses from certain ~~active executives in the DCP a one‑time, short‑term election to reallocate a limited portion of their DCP holdings from phantom shares~~ of our Class B Common Stock into other phantom investment funds. The offer to reallocate was subject to a proration mechanism which adjusted the aggregate elections to a maximum of 1,500,000 phantom shares of the Company’s Class B Common Stock. This one‑time reallocation opportunity was offered only to certain active executives (but not to Directors or Bentley family members) in order to encourage retention, as otherwise these executives could only have materially diversified their investments in Company equity (primarily held in the DCP) by voluntarily terminating employment to trigger DCP distributions. These executives in aggregate accordingly diversified 24% of their phantom shares of the Company’s Class B Common Stock. While DCP participants’ investments in phantom shares remain equity classified, as they will be settled in shares of Class B Common Stock upon eventual distribution, the amendment and elections resulted in a change to liability classification for the reallocated phantom investments, as they will be settled in cash upon eventual distribution. As a result, during the three and nine months ended September 30, 2021, we recognized a one‑time compensation charge of $90,721 to ~~Deferred compensation plan~~ expenses in the consolidated statements of operations to record the reallocated deferred compensation plan liabilities at their fair value. Subsequent to the one‑time reallocation, these diversified deferred compensation plan liabilities are marked to market at the end of each reporting period, with changes in the liabilities recorded as an expense (income) to ~~Deferred compensation plan~~ ~~in the consolidated statements of operations.~~

~~BSY Stock Repurchase Program~~. On May 11, 2022, we announced that our board of directors approved the BSY Stock Repurchase Program (the “Repurchase Program”) authorizing us to repurchase up to $200,000 of our Class B Common Stock through June 30, 2024. The Repurchase Program is used to offset dilution from the issuance of our Class B Common Stock under our stock‑based plans to enhance stockholder value. For the nine months ended September 30, 2022, we repurchased 896,126 shares for $28,250.

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

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

5646

~~Results of Operations:~~Constant currency

~~Our selected consolidated statements~~Constant currency and constant currency growth rates are non-GAAP financial measures that present our results of operations ~~data for each~~excluding the estimated effects of foreign currency exchange rate fluctuations. We have operations outside the U.S. that are conducted in local currencies. As a result, the comparability of the ~~periods indicated are as follows:~~

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Revenues:
Subscriptions $ 235,307 $ 215,135 $ 708,731 $ 589,702
Perpetual licenses 9,460 11,866 31,213 33,373
Subscriptions and licenses 244,767 227,001 739,944 623,075
Services 23,565 24,387 72,190 74,239
Total revenues 268,332 251,388 812,134 697,314
Cost of revenues:
Cost of subscriptions and licenses 37,371 31,056 107,904 89,882
Cost of services 21,812 23,176 66,758 67,090
Total cost of revenues 59,183 54,232 174,662 156,972
Gross profit 209,149 197,156 637,472 540,342
Operating expense (income):
Research and development 63,827 57,334 189,966 157,913
Selling and marketing 46,114 44,392 141,676 114,846
General and administrative 37,794 35,329 128,981 110,233
Deferred compensation plan (4,576) 88,965 (21,873) 89,327
Amortization of purchased intangibles 10,446 8,676 30,869 16,703
Total operating expenses 153,605 234,696 469,619 489,022
Income (loss) from operations 55,544 (37,540) 167,853 51,320
Interest expense, net (8,382) (3,836) (23,046) (8,608)
Other income (expense), net 180 (957) 14,318 9,748
Income (loss) before income taxes 47,342 (42,333) 159,125 52,460
(Provision) benefit for income taxes (9,664) (5,025) (8,221) 5,090
Loss from investment accounted for using the equity method, net of tax (681) (664) (1,846) (2,939)
Net income (loss) 36,997 (48,022) 149,058 54,611
Less: Net income (loss) attributable to participating securities (11) (3) (31) (6)
Net income (loss) attributable to Class A and Class B common stockholders $ 36,986 $ (48,025) $ 149,027 $ 54,605
Per share information:
Net income (loss) per share, basic $ 0.12 $ (0.16) $ 0.48 $ 0.18
Net income (loss) per share, diluted $ 0.12 $ (0.16) $ 0.46 $ 0.17
Weighted average shares, basic 310,116,104 308,195,379 308,959,801 305,119,985
Weighted average shares, diluted 325,170,383 308,195,379 332,077,834 314,658,136

financial results reported in U.S. dollars is affected by changes in foreign currency exchange rates. We use constant currency and constant currency growth rates to evaluate the underlying performance of the business, and we believe it is helpful for investors to present operating results on a comparable basis period over period to evaluate its underlying performance.

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

~~Comparison of the Three and Nine Months Ended September 30, 2022 and 2021~~

~~Revenues~~

Comparison
Three Months Ended Constant
September 30, Currency
2022 2021 Amount % %
Subscriptions $ 235,307 $ 215,135 $ 20,172 9.4 % 17.6 %
Perpetual licenses 9,460 11,866 (2,406) (20.3 %) (12.6 %)
Subscriptions and licenses 244,767 227,001 17,766 7.8 % 16.0 %
Services 23,565 24,387 (822) (3.4 %) 1.9 %
Total revenues $ 268,332 $ 251,388 $ 16,944 6.7 % 14.7 %

Comparison
Nine Months Ended Constant
September 30, Currency
2022 2021 Amount % %
Subscriptions $ 708,731 $ 589,702 $ 119,029 20.2 % 26.6 %
Perpetual licenses 31,213 33,373 (2,160) (6.5 %) 0.4 %
Subscriptions and licenses 739,944 623,075 116,869 18.8 % 25.2 %
Services 72,190 74,239 (2,049) (2.8 %) 0.8 %
Total revenues $ 812,134 $ 697,314 $ 114,820 16.5 % 22.6 %

The increase in total revenues for the three and nine months ended September 30, 2022 was primarily driven by improvements in our business performance and the impact from our platform acquisitions in subscriptions revenues, partially offset by the overall negative foreign currency effects due to a stronger U.S. Dollar relative to our other currencies. We define business performance as our organic growth results inclusive of the impact from certain programmatic acquisitions, which generally are immaterial, individually and in the aggregate.

•~~Subscriptions~~. For the three months ended September 30, 2022, the increase in subscriptions revenues was primarily driven by improvements in our business performance, on a constant currency basis, of approximately $27,500 and the impact from our platform acquisition of approximately $10,400.

For the nine months ended September 30, 2022, the increase in subscriptions revenues was primarily driven by the impact from our platform acquisitions of approximately $84,900 and improvements in our business performance, on a constant currency basis, of approximately $69,000.

For the three months ended September 30, 2022, the acquisition impact relates to our platform acquisition of Power Line Systems and is inclusive of its organic performance. For the nine months ended September 30, 2022, the acquisition impact relates to our platform acquisitions of Seequent and Power Line Systems and is inclusive of their respective organic performance.

The improvements in business performance, on a constant currency basis, were primarily driven by expansion within our existing accounts, and growth of 3% attributable to new accounts exclusive of platform acquisitions, most notability smaller- and medium-sized accounts. Improvements in business performance for the three months ended September 30, 2022 were led by our engineering applications. Improvements in business performance for the nine months ended September 30, 2022 were led by our structural and civil engineering applications and our Enterprise Systems for project delivery.

•~~Perpetual licenses~~. For the three months ended September 30, 2022, the decrease in perpetual licenses revenues was primarily driven by a reduction in business performance, due to continued efforts to migrating users to subscription offerings.

For the nine months ended September 30, 2022, perpetual licenses revenues were impacted by our Seequent platform acquisition by approximately $1,800, partially offset by a reduction in business performance, on a constant currency basis, of approximately $1,700.

•~~Services.~~ For the nine months ended September 30, 2022, services revenues were impacted by our Seequent and Power Line Systems platform acquisitions by approximately $1,200, partially offset by a reduction in business performance, on a constant currency basis, of approximately $700.

For the nine months ended September 30, 2022, the reduction in business performance, on a constant currency basis, was impacted by the ongoing transition of historically classified services revenues into subscriptions revenues for accounts converting to our E365 subscription offering with embedded Success Services, partially offset by favorable contributions from Cohesive digital integrator services of approximately $6,300.

~~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 Ended Constant
September 30, Currency
2022 2021 Amount % %
Americas $ 141,599 $ 127,996 $ 13,603 10.6 % 12.2 %
Europe, the Middle East, and Africa (“EMEA”) 75,416 76,502 (1,086) (1.4 %) 13.9 %
Asia-Pacific (“APAC”) 51,317 46,890 4,427 9.4 % 22.8 %
Total revenues $ 268,332 $ 251,388 $ 16,944 6.7 % 14.7 %

Comparison
Nine Months Ended Constant
September 30, Currency
2022 2021 Amount % %
Americas $ 440,218 $ 349,752 $ 90,466 25.9 % 27.0 %
EMEA 227,696 219,507 8,189 3.7 % 15.2 %
APAC 144,220 128,055 16,165 12.6 % 22.9 %
Total revenues $ 812,134 $ 697,314 $ 114,820 16.5 % 22.6 %

•~~Americas.~~ For the three months ended September 30, 2022, the increase in revenues from the Americas was primarily driven by improvements in our business performance, on a constant currency basis, of approximately $8,600 and an increase in subscriptions revenues from our Power Line Systems platform acquisition of approximately $6,800.

For the nine months ended September 30, 2022, the increase in revenues from the Americas was primarily driven by an increase in subscriptions revenues from our Seequent and Power Line Systems platform acquisitions of approximately $53,600 and improvements in our business performance, on a constant currency basis, of approximately $38,900.

The improvements in business performance, on a constant currency basis, for the three and nine months ended September 30, 2022 were primarily due to expansion of our subscriptions revenues from existing accounts in the U.S.

•~~EMEA.~~ ~~For the three months ended September 30, 2022, EMEA revenues were impacted by improvements in our business performance, on a constant currency basis, of approximately $8,000.~~

The improvements in business performance, on a constant currency basis, for the three months ended September 30, 2022 were primarily due to expansion of our subscriptions revenues from existing accounts in Central Europe, the Middle East, and Africa, partially offset by reductions in Russia.

For the nine months ended September 30, 2022, the increase in revenues from EMEA was primarily driven by an increase in subscriptions revenues from our Seequent and Power Line Systems platform acquisitions of approximately $16,900 and improvements in our business performance, on a constant currency basis, of approximately $14,900.

The improvements in business performance, on a constant currency basis, for the nine months ended September 30, 2022 were primarily due to expansion of our subscriptions revenues from existing accounts in Central Europe, the United Kingdom, the Middle East, and Africa, partially offset by reductions in Russia.

•~~APAC.~~ For the three months ended September 30, 2022, the increase in revenues from APAC was primarily driven by improvements in our business performance, on a constant currency basis, of approximately $9,600.

For the nine months ended September 30, 2022, the increase in revenues from APAC was primarily driven by an increase in subscriptions revenues from our Seequent and Power Line Systems platform acquisitions of approximately $14,500 and improvements in our business performance, on a constant currency basis, of approximately $12,900.

~~Cost of Revenues~~

Comparison
Three Months Ended Constant
September 30, Currency
2022 2021 Amount % %
Cost of subscriptions and licenses $ 37,371 $ 31,056 $ 6,315 20.3 % 27.9 %
Cost of services 21,812 23,176 (1,364) (5.9 %) 1.2 %
Total cost of revenues $ 59,183 $ 54,232 $ 4,951 9.1 % 16.5 %

Comparison
Nine Months Ended Constant
September 30, Currency
2022 2021 Amount % %
Cost of subscriptions and licenses $ 107,904 $ 89,882 $ 18,022 20.1 % 25.7 %
Cost of services 66,758 67,090 (332) (0.5 %) 4.4 %
Total cost of revenues $ 174,662 $ 156,972 $ 17,690 11.3 % 16.6 %

~~Cost of subscriptions and licenses.~~ For the three months ended September 30, 2022, on a constant currency basis, cost of subscriptions and licenses increased primarily due to an increase in headcount‑related costs of approximately $3,300, mainly due to annual salary adjustments and additional headcount, an increase in cloud‑related costs of approximately $2,200, and an increase in channel partner compensation and royalties of approximately $2,000.

For the nine months ended September 30, 2022, on a constant currency basis, cost of subscriptions and licenses increased primarily due to an increase in headcount‑related costs of approximately $10,300, mainly due to our platform acquisition of Seequent and annual salary adjustments, an increase in amortization expense for software and technology of approximately $4,500, and an increase in cloud‑related costs of approximately $3,900.

~~Cost of services.~~ For the nine months ended September 30, 2022, on a constant currency basis, cost of services increased primarily due to an increase in headcount‑related costs of approximately $3,900, mainly due to digital integrator business acquisitions and annual salary adjustments, partially offset by a decrease in facilities costs of approximately $700.

~~Operating Expense (Income)~~

Comparison
Three Months Ended Constant
September 30, Currency
2022 2021 Amount % %
Research and development $ 63,827 $ 57,334 $ 6,493 11.3 % 18.0 %
Selling and marketing 46,114 44,392 1,722 3.9 % 11.0 %
General and administrative 37,794 35,329 2,465 7.0 % 11.9 %
Deferred compensation plan (4,576) 88,965 (93,541) * *
Amortization of purchased intangibles 10,446 8,676 1,770 20.4 % 24.9 %
Total operating expenses $ 153,605 $ 234,696 $ (81,091) (34.6 %) (30.7 %)

*~~Not meaningful~~

Comparison
Nine Months Ended Constant
September 30, Currency
2022 2021 Amount % %
Research and development $ 189,966 $ 157,913 $ 32,053 20.3 % 25.5 %
Selling and marketing 141,676 114,846 26,830 23.4 % 28.9 %
General and administrative 128,981 110,233 18,748 17.0 % 20.1 %
Deferred compensation plan (21,873) 89,327 (111,200) * *
Amortization of purchased intangibles 30,869 16,703 14,166 84.8 % 92.9 %
Total operating expenses $ 469,619 $ 489,022 $ (19,403) (4.0 %) 0.0 %

*~~Not meaningful~~

~~Research and development.~~ For the three months ended September 30, 2022, on a constant currency basis, research and development expenses increased primarily due to an increase in headcount-related costs of approximately $9,000. The increase in headcount-related costs was primarily comprised of approximately $6,500 of increases in salaries, mainly due to annual salary adjustments and additional headcount, and variable compensation costs.

For the nine months ended September 30, 2022, on a constant currency basis, research and development expenses increased primarily due to an increase in headcount-related costs of approximately $35,200. The increase in headcount-related costs was primarily comprised of approximately $29,600 of increases in salaries, mainly due to our platform acquisition of Seequent, annual salary adjustments, and variable compensation costs, as well as an increase in stock-based compensation expense of approximately $4,100.

~~Selling and marketing.~~ For the three months ended September 30, 2022, on a constant currency basis, selling and marketing expenses increased primarily due to an increase in headcount-related costs of approximately $4,100. The increase in headcount-related costs was primarily comprised of approximately $2,400 of increases in salaries, mainly due to annual salary adjustments, and variable compensation costs, an increase in travel-related costs of approximately $1,100, and increase in stock-based compensation expense of approximately $600.

For the nine months ended September 30, 2022, on a constant currency basis, selling and marketing expenses increased primarily due to an increase in headcount-related costs of approximately $27,300 and an increase in promotional costs of approximately $3,500. The increase in headcount-related costs was primarily comprised of approximately $21,400 of increases in salaries, mainly due to our platform acquisition of Seequent and annual salary adjustments, and variable compensation costs, an increase in travel-related costs of approximately $3,800, and an increase in stock-based compensation expense of approximately $2,100.

~~General and administrative.~~ For the three months ended September 30, 2022, on a constant currency basis, general and administrative expenses increased primarily due to an increase in headcount-related costs of approximately $7,700. The increase in headcount-related costs was primarily comprised of an increase in stock‑based compensation expense of approximately $4,700 and an increase in salaries costs of approximately $3,300, mainly due to annual salary adjustments. Partially offsetting this increase were a decrease in facilities costs of approximately $1,700 and lower acquisition expenses of approximately $1,400.

For the nine months ended September 30, 2022, on a constant currency basis, general and administrative expenses increased primarily due to an increase in headcount-related costs of approximately $26,400. The increase in headcount-related costs was primarily comprised of an increase in salaries costs of approximately $12,700, mainly due to our platform acquisition of Seequent and annual salary adjustments, and an increase in stock‑based compensation expense of approximately $11,800. Partially offsetting these increases were lower acquisition expenses of approximately $7,200, primarily due to expenses of $10,149 related to the acquisition of Power Line Systems for the nine months ended September 30, 2022 as compared to expenses of $16,285 related to the acquisition of Seequent for the nine months ended September 30, 2021.

~~Deferred compensation plan~~. For the three and nine months ended September 30, 2022, deferred compensation plan income was $4,576 and $21,873, respectively. These amounts were attributable to the marked to market impact on deferred compensation plan liability balances period-over-period. For the three and nine months ended September 30, 2021, deferred compensation plan expense was $88,965 and $89,327, respectively. These amounts were primarily attributable to a one‑time compensation charge of $90,721 as discussed further below, partially offset by the marked to market impact on deferred compensation plan liability balances period-over-period.

In August 2021, our board of directors approved an amendment to the DCP, which offered to certain active executives in the DCP a one‑time, short‑term election to reallocate a limited portion of their DCP holdings from phantom shares of the Company’s Class B Common Stock into other phantom investment funds. The offer to reallocate was subject to a proration mechanism which adjusted the aggregate elections to a maximum of 1,500,000 phantom shares of the Company’s Class B Common Stock. This one‑time reallocation opportunity was offered only to certain active executives (but not to Directors or Bentley family members) in order to encourage retention, as otherwise these executives could only have materially diversified their investments in Company equity (primarily held in the DCP) by voluntarily terminating employment to trigger DCP distributions. These executives in aggregate accordingly diversified 24% of their phantom shares of the Company’s Class B Common Stock. While DCP participants’ investments in phantom shares remain equity classified, as they will be settled in shares of Class B Common Stock upon eventual distribution, the amendment and elections resulted in a change to liability classification for the reallocated phantom investments, as they will be settled in cash upon eventual distribution. As a result, during the three and nine months ended September 30, 2021, we recognized a one‑time compensation charge of $90,721 to ~~Deferred compensation plan~~ ~~expenses in the consolidated statements of operations to record the reallocated deferred compensation plan liabilities at their fair value.~~

~~Amortization of purchased intangibles.~~ For the three and nine months ended September 30, 2022, on a constant currency basis, amortization of purchased intangibles increased primarily due to amortization from recently acquired purchased intangibles.

~~Interest Expense, Net~~

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Interest expense $ (8,491) $ (3,861) $ (23,319) $ (8,844)
Interest income 109 25 273 236
Interest expense, net $ (8,382) $ (3,836) $ (23,046) $ (8,608)

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Revolving loan facility $ (4,441) $ (911) $ (10,206) $ (2,490)
Term loan (2,119) — (4,577) —
Interest rate swap 752 (325) 475 (942)
Convertible senior notes, coupon interest (785) (772) (2,309) (1,155)
Amortization and write-off of deferred debt issuance costs (1,822) (1,789) (5,468) (4,160)
Other, net 33 (39) (961) 139
Interest expense, net $ (8,382) $ (3,836) $ (23,046) $ (8,608)

For the three and nine months ended September 30, 2022, interest expense, net increased primarily due to a higher outstanding average balance combined with a higher average interest rate under the revolving loan facility, and interest expense on the term loan, which we entered into on December 22, 2021.

~~Other Income (Expense), Net~~

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Gain (loss) from:
Change in fair value of interest rate swap $ 9,828 $ 1,463 $ 29,318 $ 9,198
Foreign exchange (1)
(11,027) (2,446) (18,815) (248)
Sale of aircraft — — 2,029 —
Change in fair value of acquisition contingent consideration 506 — 6 —
Other income, net 873 26 1,780 798
Total other income (expense), net $ 180 $ (957) $ 14,318 $ 9,748

~~(1)~~Foreign exchange loss is primarily attributable to foreign currency translation derived mainly from U.S. Dollar denominated cash and cash equivalents, account receivables, customer deposits, and intercompany balances held by foreign subsidiaries. Intercompany finance transactions denominated in U.S. Dollars resulted in unrealized foreign exchange losses of $5,730 and $2,741 for the three months ended September 30, 2022 and 2021, respectively, and $12,293 and $1,298 for the nine months ended September 30, 2022 and 2021, respectively.

~~Provision (Benefit) for Income Taxes~~

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Income (loss) before income taxes $ 47,342 $ (42,333) $ 159,125 $ 52,460
Provision (benefit) for income taxes $ 9,664 $ 5,025 $ 8,221 $ (5,090)
Effective tax rate 20.4 % (11.9) % 5.2 % (9.7) %

For the three months ended September 30, 2022, the effective tax rate was higher as compared to the three months ended September 30, 2021 primarily due to the 2021 tax effect, net of officer compensation limitation provisions, related to the 2021 compensation charge of $90,721 to ~~Deferred compensation plan~~ expenses to record reallocated deferred compensation plan liabilities at fair value. For the three months ended September 30, 2022 and 2021, we also recorded discrete tax benefits of $4,280 and $6,920, 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, 2022, the effective tax rate was higher as compared to the nine months ended September 30, 2021 primarily due to the 2021 tax effect, net of officer compensation limitation provisions, related to the 2021 compensation charge of $90,721 to ~~Deferred compensation plan~~ expenses to record reallocated deferred compensation plan liabilities at fair value. For the nine months ended September 30, 2022 and 2021, we also recorded discrete tax benefits of $36,032 and $42,825, respectively, primarily associated with windfall tax benefits from stock‑based compensation, net of the impact from officer compensation limitation provisions.

~~Net Income (Loss)~~

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Net income (loss) $ 36,997 $ (48,022) $ 149,058 $ 54,611

For the three months ended September 30, 2022, net income (loss) increased by $85,019, or 177.0%, compared to the three months ended September 30, 2021. For the nine months ended September 30, 2022, net income (loss) increased by $94,447, or 172.9%, compared to the nine months ended September 30, 2021. Net income as a percentage of total revenues was 13.8% and (19.1)% for the three months ended September 30, 2022 and 2021, respectively, and 18.4% and 7.8% for the nine months ended September 30, 2022 and 2021. The changes are due to the factors described above.

~~Adjusted EBITDA and Adjusted Net Income~~

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Adjusted EBITDA $ 89,740 $ 84,468 $ 273,877 $ 236,778
Adjusted Net Income $ 61,825 $ 56,289 $ 215,189 $ 194,971

For the three and nine months ended September 30, 2022, Adjusted EBITDA increased by $5,272 and $37,099 compared to the three and nine months ended September 30, 2021, respectively. For the three months ended September 30, 2022 and 2021, Adjusted EBITDA as a percentage of total revenues was 33.4% and 33.6%, respectively. For the nine months ended September 30, 2022 and 2021, Adjusted EBITDA as a percentage of total revenues was 33.7% and 34.0%, respectively.

For the three and nine months ended September 30, 2022, Adjusted Net Income increased by $5,536 and $20,218 compared to the three and nine months ended September 30, 2021, respectively. For the three months ended September 30, 2022 and 2021, Adjusted Net Income as a percentage of total revenues was 23.0% and 22.4%, respectively. For the nine months ended September 30, 2022 and 2021, Adjusted Net Income as a percentage of total revenues was 26.5% and 28.0%, respectively.

For additional information, including the limitations of using non‑GAAP financial measures, and reconciliations of the non‑GAAP financial measures to the most directly comparable financial measures stated in accordance with U.S. GAAP, see the section titled “—Non‑GAAP Financial Measures.”

Liquidity and Capital ~~Resources:~~Resources

Our primary source of operating cash is from the sale of subscriptions, perpetual licenses, and services. Our primary use of cash is payment of our operating costs, which consist primarily of ~~colleague-related expenses, such as compensation and benefits, as well as general operating expenses for marketing, facilities, and overhead~~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 Stock ~~(discussed further below),~~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, of ~~BSY Investments~~, including our iTwin Ventures ~~for~~initiative which ~~over a period of approximately 5 years, we expect to invest up to $100 million of corporate venture capital funding for~~makes seed, early, and growth stage investments in technology companies with promising and emerging opportunities for infrastructure digital twin solutions ~~strategically~~potentially relevant to our business. ~~In connection with the acquisition of Power Line Systems in January 2022, we used available cash and borrowings under our Credit Facility (described below) to fund the transaction.~~

~~On May 11, 2022, we announced that our board of directors approved~~We have the Repurchase Program authorizing us to repurchase up to $200,000 of our Class B Common Stock through June 30, 2024. The Repurchase Program is used to offset dilution from the issuance of our Class B Common Stock under our stock‑based plans to enhance stockholder value. The shares 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. We intend to fund repurchases from available working capital and cash provided by operating activities. The timing, as well as the number and value of shares repurchased under the Repurchase Program, will be determined at our discretion and will depend on a variety of factors, including management’s assessment of the intrinsic value of our shares, the market price of our Class B Common Stock, general market and economic conditions, available liquidity, compliance with our debt and other agreements, and applicable legal requirements. The exact number of shares to be repurchased by us is not guaranteed, and the Repurchase Program may be suspended, modified, or discontinued at any time without prior notice. For the nine months ended September 30, 2022, we repurchased 896,126 shares for $28,250.

~~Additionally, during the second quarter of 2022, we exercised our~~ right to require that certain equity awardees receive gross or net quantities of shares of our Class B Common Stock, ~~most meaningfully for the issuance of shares~~including in connection with share issuances under our ~~Executive~~ Bonus Plan ~~incentive compensation~~ and distributions from the ~~DCP, and~~DCP. In the case of a gross issuance or distribution, an awardee is required to reimburse promptly ~~reimburse~~ to us the cash required for ~~their~~his or her tax withholding amounts. ~~Historically, these shares were issued on~~Conversely, under a net ~~basis, holding back~~issuance or distribution, shares are withheld in consideration of remitting withholding taxes on behalf of an equity ~~awardees,~~awardee, thereby requiring us to remit cash for the tax withholdings.

~~Our cash and cash equivalent balances are concentrated in a few locations around~~ During the ~~world, with substantial amounts held outside of the U.S. As of~~nine months ended September 30, ~~2022 and December 31, 2021, 94% and 48%, respectively,~~2023, we allowed impacted equity awardees the option to receive net quantities of shares of our ~~total cash and cash equivalents were located outside of the U.S.~~Class B Common Stock. During the nine months ended September 30, 2022, we ~~repatriated $150,000~~permitted impacted awardees to elect to receive net quantities of ~~undistributed previously taxed earnings generated by~~shares of our foreign subsidiaries to the U.S. The repatriations were used to fund the acquisition of Power Line Systems. We expect to meet our U.S. liquidity needs through ongoing cash flows or external borrowings including available liquidity under the Credit Facility. We regularly review our capital structure and consider a variety of potential financing alternatives and planning strategies to ensure that we have the proper liquidity availableClass B Common Stock in the ~~locations in which it is needed~~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 ~~fund our operations and growth investments with cash that has not been permanently reinvested outside the U.S.~~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.

We believe that existing domestic and international cash and cash equivalent balances, together with cash generated from operations, and liquidity under the Credit Facility, will be sufficient to meet our domestic and international working capital and capital expenditure requirements through the next twelve months. However, 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 Stock and convertible debt, 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.~~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.

~~Cash and cash equivalents~~

~~We consider all highly liquid investments with an original maturity of~~three months or less at the date of purchase to be cash equivalents. Our cash and cash equivalents consisted of cash held in checking accounts and money market funds maintained at various financial institutions. Our domestic and foreign holdings of cash and cash equivalents are as follows:

September 30, December 31,
2022 2021
Cash and cash equivalents held domestically $ 4,349 $ 170,267
Cash and cash equivalents held by foreign subsidiaries 68,507 159,070
Total cash and cash equivalents $ 72,856 $ 329,337

The amount of cash and cash equivalents held by foreign subsidiaries is subject to translation adjustments caused by changes in foreign currency exchange rates as of the end of each respective reporting period, the offset to which is recorded in ~~Accumulated other comprehensive loss~~ ~~on our consolidated balance sheets.~~

6747

~~Bank Credit Facility~~Cash and cash equivalents

We have an amended and restated Credit Agreement, which provides for an $850,000 senior secured revolving loan facility with a maturity date of November 15, 2025 and a $200,000 senior secured term loan as described further below (the “Credit Facility”).


	September 30, 2023		December 31, 2022
Cash and cash equivalents held domestically	$	2,679	$	3,883
Cash and cash equivalents held by foreign subsidiaries	64,284		67,801
Total cash and cash equivalents	$	66,963	$	71,684

Our $200,000 senior secured term loan has a maturity of November 15, 2025 (the “2021 Term Loan”). The 2021 Term Loan requires principal repayment at the end of each calendar quarter. Beginning with March 31, 2022 and ending with December 31, 2023, we are required to repay $1,250 per quarter. Beginning with March 31, 2024 and ending with the last such date prior to the maturity date, we are required to repay $2,500 per quarter. We incurred $540 ofLong-term debt issuance costs related to the 2021 Term Loan. We used borrowings under the 2021 Term Loan to pay down borrowings under the swingline sub‑facility and revolving loan facility under the Credit Facility.

In addition to the senior secured revolving loan facility, the Credit Facility also provides up to $50,000 of letters of credit and other borrowings subject to availability, including a $85,000 U.S. Dollar swingline sub‑facility and a $200,000 incremental “accordion” sub‑facility. We had $150 of letters of credit and surety bonds outstanding as of September 30, 2022 and December 31, 2021. As of September 30, 2022 and December 31, 2021, we had $505,189 and $849,850, respectively, available under the Credit Facility.


	September 30, 2023		December 31, 2022
Current portion of long-term debt	$	8,750	$	5,000
Long-term debt	1,580,752		1,775,696
Total debt	$	1,589,502	$	1,780,696

Borrowings under the Credit Facility are guaranteed by all of our first tier domestic subsidiaries and are secured by a first priority security interest in substantially all of our and the guarantors’ U.S. assets and 65% of the stock of their directly owned foreign subsidiaries. The Credit Facility contains both affirmative and negative covenants, including maximum net leverage ratios. As of September 30, 2022 and December 31, 2021, we were in compliance with all covenants in our Credit Facility.

Interest rate risk associated with the Credit Facility is managed through an interest rate swap which has a termination date of April 2, 2030. Under the terms of the interest rate swap, we fixed our London Interbank Offered Rate borrowing rate at 0.73% on a notional amount of $200,000. The interest rate swap is not designated as a hedging instrument for accounting purposes. We account for the interest rate swap as either an asset or a liability in the consolidated balance sheets and carry the derivative at fair value. Gains and losses from the change in fair value are recognized in ~~Other income (expense), net~~ ~~in the consolidated statements of operations. As of September 30, 2022 and December 31, 2021, we recorded a swap related asset at fair value of $39,435 and $10,117, respectively, in~~ ~~Other assets~~ ~~in the consolidated balance sheets.~~

The weighted average interest rate under the Credit Facility was 4.34% and 2.33% for the three months ended September 30, 2022 and 2021, respectively, and 3.20% and 2.02% for the nine months ended September 30, 2022 and 2021, respectively.

~~Convertible Senior Notes~~

~~2027 Notes.~~ On June 28, 2021, we completed a private offering of $575,000 of 0.375% convertible senior notes due 2027 (the “2027 Notes”). The 2027 Notes were issued pursuant to an indenture, dated as of June 28, 2021, between the Company and Wilmington Trust, National Association, as trustee (the “2027 Indenture”). Interest will accrue from June 28, 2021 and will be payable semi‑annually in arrears in cash on January 1 and July 1 of each year, with the first payment due on January 1, 2022. The 2027 Notes will mature on July 1, 2027, unless earlier converted, redeemed or repurchased. We incurred $15,065 of expenses in connection with the 2027 Notes offering consisting of the payment of initial purchasers’ discounts and commissions, professional fees, and other expenses (“transaction costs”). We used $25,875 of the net proceeds from the sale of the 2027 Notes to pay the premiums of the capped call options described further below, and $536,062 to repay outstanding indebtedness under the Credit Facility and to pay related fees and expenses.

Prior to April 1, 2027, the 2027 Notes will be convertible at the option of the holder only under the following circumstances: (1) during any calendar quarter (and only during such quarter) commencing after the calendar quarter ending on September 30, 2021, if the last reported sale price per share of our Class B Common Stock exceeds 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any ten consecutive trading day period (such ten consecutive trading day period, the “measurement period”) in which the trading price per $1 principal amount of 2027 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of our Class B Common Stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on our Class B Common Stock, as described in the 2027 Indenture; and (4) if we call the 2027 Notes for redemption. On or after April 1, 2027 until 5:00 p.m., New York City time, on the second scheduled trading day immediately before the maturity date, the 2027 Notes will be convertible at the option of the holder at any time.

We will settle conversions by paying or delivering, as applicable, cash, shares of our Class B Common Stock or a combination of cash and shares of our Class B Common Stock, at our election, based on the applicable conversion rate. The initial conversion rate is 12.0153 shares of our Class B Common Stock per $1 principal amount of 2027 Notes, which represents an initial conversion price of approximately $83.23 per share, and is subject to adjustment as described in the 2027 Indenture. If a “make-whole fundamental change” (as defined in the 2027 Indenture) occurs, then we will, in certain circumstances, increase the conversion rate for a specified period of time.

We will have the option to redeem the 2027 Notes in whole or in part at any time on or after July 5, 2024 and on or before the 40th scheduled trading day immediately before the maturity date if the last reported sale price per share of our Class B common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during any 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (2) the trading day immediately before the date we send such notice. The redemption price will be equal to the principal amount of the 2027 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

Upon a fundamental change (as defined in the 2027 Indenture), holders may, subject to certain exceptions, require us to purchase their 2027 Notes in whole or in part for cash at a price equal to the principal amount of the 2027 Notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date (as defined in the 2027 Indenture). In addition, upon a Make‑Whole Fundamental Change (as defined in the 2027 Indenture), we will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its 2027 Notes in connection with such Make‑Whole Fundamental Change. No adjustment to the conversion rate will be made if the stock price in such Make‑Whole Fundamental Change is either less than $61.65 per share or greater than $325.00 per share. We will not increase the conversion rate to an amount that exceeds 16.2206 shares per $1 principal amount of 2027 Notes, subject to adjustment. The 2027 Indenture also contains a customary merger covenant.

The 2027 Notes were accounted for as debt, with no bifurcation of the embedded conversion feature. Transaction costs were recorded as a direct deduction from the related debt liability in the consolidated balance sheet and are amortized to interest expense over the term of the 2027 Notes. The effective interest rate for the 2027 Notes is 0.864%.

~~As of September 30, 2022, none of the conditions of the 2027 Notes to early convert has been met.~~

~~The 2027 Notes contain both affirmative and negative covenants. As of September 30, 2022, we were in compliance with all covenants in the 2027 Notes.~~

~~Capped Call Options.~~ In connection with the pricing of the 2027 Notes, we entered into capped call options with certain of the initial purchasers or their respective affiliates and certain other financial institutions. We incurred $50 of expenses in connection with the capped call options. The capped call options are expected to reduce potential dilution to our Class B Common Stock upon any conversion of 2027 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the capped call options is initially $95.5575 per share, which represents a premium of 55% above the last reported sale price per share of our Class B Common Stock on the Nasdaq Global Select Market on June 23, 2021 and is subject to customary adjustments under the terms of the capped call options.

The capped call options were entered into in conjunction with the issuance of the 2027 Notes, however, they are legally separate agreements that can be separately exercised, with the receipt of shares under the capped call options having no effect on the 2027 Notes, and are legally detachable. As the capped call options are both legally detachable and separately exercisable from the 2027 Notes, we account for the capped call options separately from the 2027 Notes. The capped call options are indexed to our own common stock and classified in stockholders’ equity. As such, the premiums paid for the capped call options have been included as a net reduction to ~~Additional paid-in capital~~ ~~in the consolidated balance sheet.~~

~~2026 Notes.~~ On January 26, 2021, we completed a private offering of $690,000 of 0.125% convertible senior notes due 2026 (the “2026 Notes”). The 2026 Notes were issued pursuant to an indenture, dated as of January 26, 2021, between the Company and Wilmington Trust, National Association, as trustee (the “2026 Indenture”). Interest will accrue from January 26, 2021 and will be payable semi‑annually in arrears in cash on January 15 and July 15 of each year, with the first payment due on July 15, 2021. The 2026 Notes will mature on January 15, 2026, unless earlier converted, redeemed or repurchased. We incurred $18,055 of expenses in connection with the 2026 Notes offering consisting of transaction costs. We used $25,530 of the net proceeds from the sale of the 2026 Notes to pay the premiums of the capped call options described further below, and approximately $250,500 to repay outstanding indebtedness under the Credit Facility and to pay related fees and expenses. We used the remainder of the net proceeds from the sale of the 2026 Notes for general corporate purposes and towards funding certain acquisitions, including Seequent.

Prior to October 15, 2025, the 2026 Notes will be convertible at the option of the holder only under the following circumstances: (1) during any calendar quarter (and only during such quarter) commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per share of our Class B Common Stock exceeds 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any ten consecutive trading day period (such ten consecutive trading day period, the “measurement period”) in which the trading price per $1 principal amount of 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of our Class B Common Stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on our Class B Common Stock, as described in the 2026 Indenture; and (4) if we call the 2026 Notes for redemption. On or after October 15, 2025 until 5:00 p.m., New York City time, on the second scheduled trading day immediately before the maturity date, the 2026 Notes will be convertible at the option of the holder at any time.

We will settle conversions by paying or delivering, as applicable, cash, shares of our Class B Common Stock or a combination of cash and shares of our Class B Common Stock, at our election, based on the applicable conversion rate. The initial conversion rate is 15.5925 shares of our Class B Common Stock per $1 principal amount of 2026 Notes, which represents an initial conversion price of approximately $64.13 per share, and is subject to adjustment as described in the 2026 Indenture. If a “make-whole fundamental change” (as defined in the 2026 Indenture) occurs, then we will, in certain circumstances, increase the conversion rate for a specified period of time.

We will have the option to redeem the 2026 Notes in whole or in part at any time on or after January 20, 2024 and on or before the 40th scheduled trading day immediately before the maturity date if the last reported sale price per share of our Class B common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during any 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (2) the trading day immediately before the date we send such notice. The redemption price will be equal to the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

Upon a fundamental change (as defined in the 2026 Indenture), holders may, subject to certain exceptions, require us to purchase their 2026 Notes in whole or in part for cash at a price equal to the principal amount of the 2026 Notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date (as defined in the 2026 Indenture). In addition, upon a Make‑Whole Fundamental Change (as defined in the 2026 Indenture), we will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its 2026 Notes in connection with such Make‑Whole Fundamental Change. No adjustment to the conversion rate will be made if the stock price in such Make‑Whole Fundamental Change is either less than $44.23 per share or greater than $210.00 per share. We will not increase the conversion rate to an amount that exceeds 22.6090 shares per $1 principal amount of 2026 Notes, subject to adjustment. The 2026 Indenture also contains a customary merger covenant.

The 2026 Notes were accounted for as debt, with no bifurcation of the embedded conversion feature. Transaction costs were recorded as a direct deduction from the related debt liability in the consolidated balance sheet and are amortized to interest expense over the term of the 2026 Notes. The effective interest rate for the 2026 Notes is 0.658%.

~~As of September 30, 2022, none of the conditions of the 2026 Notes to early convert has been met.~~

~~The 2026 Notes contain both affirmative and negative covenants. As of September 30, 2022, we were in compliance with all covenants in the 2026 Notes.~~

~~Capped Call Options~~. In connection with the pricing of the 2026 Notes, we entered into capped call options with certain of the initial purchasers or their respective affiliates and certain other financial institutions. We incurred $150 of expenses in connection with the capped call options. The capped call options are expected to reduce potential dilution to our Class B Common Stock upon any conversion of 2026 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the capped call options is initially $72.9795 per share, which represents a premium of 65% above the last reported sale price per share of our Class B Common Stock on the Nasdaq Global Select Market on January 21, 2021 and is subject to customary adjustments under the terms of the capped call options.

The capped call options were entered into in conjunction with the issuance of the 2026 Notes, however, they are legally separate agreements that can be separately exercised, with the receipt of shares under the capped call options having no effect on the 2026 Notes, and are legally detachable. As the capped call options are both legally detachable and separately exercisable from the 2026 Notes, we account for the capped call options separately from the 2026 Notes. The capped call options are indexed to our own common stock and classified in stockholders’ equity. As such, the premiums paid for the capped call options have been included as a net reduction to ~~Additional paid-in capital~~ ~~in the consolidated balance sheet.~~

Comparison of the Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022

Our cash flow activities for the nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 consist of the following:


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2022		2021			2023		2022
Net Cash Provided By (Used In):	Net Cash Provided By (Used In):					Net Cash Provided By (Used In):
Operating activities	Operating activities	$	238,198	$	207,417	Operating activities	$	329,643	$	238,198
Investing activities	Investing activities	(740,445)		(1,047,847)		Investing activities	(51,245)		(740,445)
Financing activities	Financing activities	254,692		869,649		Financing activities	(280,019)		254,692


(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, ~~2022~~2023
OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to


Delaware						95-3936623
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

685 Stockton Drive
Exton, Pennsylvania						19341
(Address of principal executive offices)						(Zip Code)


Large accelerated filer ☒			Accelerated filer ☐
Non-accelerated filer ☐			Smaller reporting company ☐
			Emerging growth company ☐


						Page
Cautionary Note Regarding Forward-Looking Statements						3

PART I. FINANCIAL INFORMATION
Item 1. Unaudited Consolidated Financial Statements
Consolidated Balance Sheets ~~as of September 30, 2022 and December 31, 2021~~						3
~~Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021~~						4
Consolidated Statements of ~~Comprehensive Income (Loss) for the three and nine months ended September 30, 2022 and 2021~~Operations						5
Consolidated Statements of ~~Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021~~Comprehensive Income						6
Consolidated Statements of ~~Cash Flows for the nine months ended September 30, 2022 and 2021~~Stockholders’ Equity						87
Consolidated Statements of Cash Flows						9
Notes to Consolidated Financial Statements						1011
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						4635
Item 3. Quantitative and Qualitative Disclosures About Market Risk						7349
Item 4. Controls and Procedures						7349

PART II. OTHER INFORMATION
Item 1. Legal Proceedings						7450
Item 1A. Risk Factors						7450

Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities						7450
Item 5. Other Information						7550
Item 6. Exhibits						7551

SIGNATURE						7652


	September 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	72,856	$	329,337
Accounts receivable	214,459		241,807
Allowance for doubtful accounts	(10,802)		(6,541)
Prepaid income taxes	17,414		16,880
Prepaid and other current assets	32,224		34,348
Total current assets	326,151		615,831
Property and equipment, net	30,753		31,823
Operating lease right-of-use assets	41,499		50,818
Intangible assets, net	301,173		245,834
Goodwill	2,193,053		1,588,477
Investments	21,690		6,438
Deferred income taxes	52,751		71,376
Other assets	74,367		48,646
Total assets	$	3,041,437	$	2,659,243
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	16,860	$	16,483
Accruals and other current liabilities	337,442		323,603
Deferred revenues	186,358		224,610
Operating lease liabilities	15,078		17,482
Income taxes payable	8,405		6,696
Current portion of long-term debt	5,000		5,000
Total current liabilities	569,143		593,874
Long-term debt	1,776,610		1,430,992
Deferred compensation plan liabilities	71,013		94,890
Long-term operating lease liabilities	28,776		35,274
Deferred revenues	15,252		7,983
Deferred income taxes	43,817		65,014
Income taxes payable	8,893		7,725
Other liabilities	7,734		14,269
Total liabilities	2,521,238		2,250,021
Commitments and contingencies (Note 18)
Stockholders’ equity:
Preferred stock, $0.01 par value, authorized 100,000,000 shares; none issued or outstanding as of September 30, 2022 and December 31, 2021	—		—
Class A Common Stock, $0.01 par value, authorized 100,000,000 shares; issued and outstanding 11,601,757 shares as of September 30, 2022 and December 31, 2021, and Class B Common Stock, $0.01 par value, authorized 1,800,000,000 shares; issued and outstanding 276,816,008 and 270,924,962 shares as of September 30, 2022 and December 31, 2021, respectively	2,884		2,825
Additional paid-in capital	1,005,075		937,805
Accumulated other comprehensive loss	(101,929)		(91,774)
Accumulated deficit	(385,831)		(439,634)
Total stockholders’ equity	520,199		409,222
Total liabilities and stockholders’ equity	$	3,041,437	$	2,659,243


	Three Months Ended September 30, 2022
						Accumulated
	Class A and Class B			Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
	Shares	Par Value		Capital		Loss		Deficit		Equity
Balance, June 30, 2022	288,154,159	$	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 plan	97,591	1		(1)		—		—		—
Deferred compensation plan elective participant deferrals	—	—		1,586		—		—		1,586
Shares issued in connection with Executive Bonus Plan	125,195	1		4,416		—		—		4,417
Shares issued in connection with employee stock purchase plan	197,657	2		5,722		—		(152)		5,572
Stock option exercises, net	218,018	2		992		—		(59)		935


Stock-based compensation expense	—	—		11,158		—		—		11,158
Shares related to restricted stock, net	58,270	—		(1)		—		(1,060)		(1,061)
Repurchase of Class B Common Stock under approved program	(433,125)	(4)		—		—		(15,004)		(15,008)
Balance, September 30, 2022	288,417,765	$	2,884	$	1,005,075	$	(101,929)	$	(385,831)	$	520,199


	Nine Months Ended September 30, 2022
						Accumulated
	Class A and Class B			Additional		Other				Total
	Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’
	Shares	Par Value		Capital		Loss		Deficit		Equity
Balance, December 31, 2021	282,526,719	$	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, net	3,523,386	35		(27)		—		(24,254)		(24,246)
Deferred compensation plan elective participant deferrals	—	—		4,694		—		—		4,694
Shares issued in connection with Executive Bonus Plan, net	284,992	3		16,307		—		(5,197)		11,113
Shares issued in connection with employee stock purchase plan	307,406	3		10,332		—		(273)		10,062
Stock option exercises, net	2,272,603	23		6,832		—		(8,459)		(1,604)
Acquisition option exercises, net	185,178	2		(2)		—		—		—
Shares issued for stock grants, net	13,632	—		450		—		—		450
Stock-based compensation expense	—	—		28,687		—		—		28,687
Shares related to restricted stock, net	199,975	2		(3)		—		(3,208)		(3,209)
Repurchase of Class B Common Stock under approved program	(896,126)	(9)		—		—		(28,241)		(28,250)
Balance, September 30, 2022	288,417,765	$	2,884	$	1,005,075	$	(101,929)	$	(385,831)	$	520,199


		Three Months Ended September 30, 2021												Three Months Ended September 30, 2023
							Accumulated												Accumulated
		Class A and Class B			Additional		Other				Total			Class A and Class B			Additional		Other				Non-		Total
		Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’			Common Stock			Paid-In		Comprehensive		Accumulated		Controlling		Stockholders’
		Shares	Par Value		Capital		Loss		Deficit		Equity			Shares	Par Value		Capital		Loss		Deficit		Interest		Equity
Balance, June 30, 2021		281,189,127	$	2,812	$	910,951	$	(54,886)	$	(386,346)	$	472,531
Net loss		—	—		—		—		(48,022)		(48,022)
Balance, June 30, 2023													Balance, June 30, 2023	294,712,983	$	2,947	$	1,085,066	$	(87,828)	$	(357,117)	$	704	$	643,772
Net income													Net income	—	—		—		—		53,027		—		53,027
Other comprehensive loss	Other comprehensive loss	—	—		—		(26,994)		—		(26,994)		Other comprehensive loss	—	—		—		(7,300)		—		—		(7,300)

Dividends declared	Dividends declared	—	—		—		—		(8,485)		(8,485)		Dividends declared	—	—		—		—		(14,768)		—		(14,768)
Shares issued in connection with deferred compensation plan, net	Shares issued in connection with deferred compensation plan, net	88,920	1		—		—		(3,773)		(3,772)		Shares issued in connection with deferred compensation plan, net	63,267	—		—		—		(2,127)		—		(2,127)
Deferred compensation plan elective participant deferrals	Deferred compensation plan elective participant deferrals	—	—		527		—		—		527		Deferred compensation plan elective participant deferrals	—	—		61		—		—		—		61
Deferred compensation plan modification		—	—		(4,739)		—		—		(4,739)
Shares issued in connection with Executive Bonus Plan, net		41,172	—		4,292		—		(1,870)		2,422
Shares issued in connection with employee stock purchase plan		104,716	1		3,845		—		(438)		3,408
Shares issued in connection with executive bonus plan, net													Shares issued in connection with executive bonus plan, net	34,313	—		3,251		—		(1,430)		—		1,821
Shares issued and repurchased in connection with employee stock purchase plan, net													Shares issued and repurchased in connection with employee stock purchase plan, net	162,459	2		5,429		—		(623)		—		4,808
Stock option exercises, net	Stock option exercises, net	612,277	6		699		—		(5,951)		(5,246)		Stock option exercises, net	185,255	2		888		—		(419)		—		471

Stock-based compensation expense	Stock-based compensation expense	—	—		5,835		—		—		5,835		Stock-based compensation expense	—	—		14,122		—		—		—		14,122
Shares related to restricted stock, net	Shares related to restricted stock, net	2,352	—		—		—		(5,644)		(5,644)		Shares related to restricted stock, net	85,929	1		(1)		—		(1,726)		—		(1,726)
Balance, September 30, 2021		282,038,564	$	2,820	$	921,410	$	(81,880)	$	(460,529)	$	381,821

Balance, September 30, 2023													Balance, September 30, 2023	295,244,206	$	2,952	$	1,108,816	$	(95,128)	$	(325,183)	$	704	$	692,161


		Nine Months Ended September 30, 2021												Nine Months Ended September 30, 2023
							Accumulated												Accumulated
		Class A and Class B			Additional		Other				Total			Class A and Class B			Additional		Other				Non-		Total
		Common Stock			Paid-in		Comprehensive		Accumulated		Stockholders’			Common Stock			Paid-In		Comprehensive		Accumulated		Controlling		Stockholders’
		Shares	Par Value		Capital		Loss		Deficit		Equity			Shares	Par Value		Capital		Loss		Deficit		Interest		Equity
Balance, December 31, 2020		272,154,504	$	2,722	$	741,113	$	(26,233)	$	(376,003)	$	341,599
Balance, December 31, 2022													Balance, December 31, 2022	289,014,487	$	2,890	$	1,030,466	$	(89,740)	$	(370,866)	$	704	$	573,454
Net income	Net income	—	—		—		—		54,611		54,611		Net income	—	—		—		—		147,202		—		147,202
Other comprehensive loss	Other comprehensive loss	—	—		—		(55,647)		—		(55,647)		Other comprehensive loss	—	—		—		(5,388)		—		—		(5,388)
Shares issued related to acquisition		3,141,342	31		182,359		—		—		182,390
Purchase of capped call options, net of tax of $12,584		—	—		(39,021)		—		—		(39,021)
Dividends declared	Dividends declared	—	—		—		—		(25,076)		(25,076)		Dividends declared	—	—		—		—		(43,992)		—		(43,992)
Shares issued in connection with deferred compensation plan, net	Shares issued in connection with deferred compensation plan, net	2,290,999	23		—		—		(65,707)		(65,684)		Shares issued in connection with deferred compensation plan, net	2,845,448	28		(28)		—		(38,456)		—		(38,456)
Deferred compensation plan elective participant deferrals	Deferred compensation plan elective participant deferrals	—	—		2,020		—		—		2,020		Deferred compensation plan elective participant deferrals	—	—		1,712		—		—		—		1,712
Deferred compensation plan modification		—	—		(4,739)		—		—		(4,739)
Shares issued in connection with Executive Bonus Plan, net		190,619	2		16,013		—		(6,586)		9,429
Shares issued in connection with employee stock purchase plan		104,716	1		3,845		—		(438)		3,408
Shares issued in connection with executive bonus plan, net													Shares issued in connection with executive bonus plan, net	171,510	2		13,055		—		(5,756)		—		7,301
Shares issued in connection with employee stock purchase plan, net													Shares issued in connection with employee stock purchase plan, net	315,840	3		9,985		—		(845)		—		9,143
Stock option exercises, net	Stock option exercises, net	4,269,335	42		4,987		—		(34,978)		(29,949)		Stock option exercises, net	2,422,082	24		10,566		—		(6,408)		—		4,182
Shares issued for stock grants		7,824	—		450		—		—		450
Shares issued for stock grants, net													Shares issued for stock grants, net	12,639	—		600		—		—		—		600
Stock-based compensation expense	Stock-based compensation expense	—	—		14,383		—		—		14,383		Stock-based compensation expense	—	—		42,465		—		—		—		42,465
Shares related to restricted stock, net	Shares related to restricted stock, net	(120,775)	(1)		—		—		(6,352)		(6,353)		Shares related to restricted stock, net	462,200	5		(5)		—		(6,062)		—		(6,062)
Balance, September 30, 2021		282,038,564	$	2,820	$	921,410	$	(81,880)	$	(460,529)	$	381,821

Balance, September 30, 2023													Balance, September 30, 2023	295,244,206	$	2,952	$	1,108,816	$	(95,128)	$	(325,183)	$	704	$	692,161


	Acquisitions Completed during
	Nine Months Ended
	September 30,
	2023		2022


Number of acquisitions	2		4
Cash paid at closing (1)	$	23,375	$	738,810
Cash acquired	(265)		(19,271)
Net cash paid	$	23,110	$	719,539


	Acquisitions Completed in
	Nine Months Ended		Year Ended
	September 30, 2022		December 31, 2021


Number of acquisitions	4		13
Cash paid at closing (1)	$	738,810	$	1,072,820
Cash acquired	(19,271)		(37,837)
Net cash paid	$	719,539	$	1,034,983


Balance, December 31, ~~2021~~2022	$	~~1,588,477~~2,237,184
Acquisitions	~~639,509~~17,511

Foreign currency translation adjustments	~~(32,556)~~(3,179)
Other adjustments	~~(2,377)~~(204)
Balance, September 30, ~~2022~~2023	$	~~2,193,053~~2,251,312


	September 30, 2023		December 31, 2022


Cost method investments	$	27,957	$	22,174
Equity method investments	2,375		96
Total investments	$	30,332	$	22,270


	September 30, 2022
Remainder of 2022	$	4,552
2023	14,841
2024	9,906
2025	6,918
2026	4,402
Thereafter	6,238
Total future lease payments	46,857
Less: Imputed interest	(3,003)
Total operating lease liabilities	$	43,854


	~~December 31, 2021~~


~~Property and equipment~~	$	~~484~~
~~Accumulated depreciation~~	~~(453)~~
~~Property and equipment, net~~	$	31



~~Total financing lease liabilities included in~~ ~~Accruals and other current liabilities~~	$	98


	September 30, 2022		December 31, 2021


Bank credit facility:
Revolving loan facility	$	344,661	$	—
Term loan:
Principal	196,250		200,000
Unamortized debt issuance costs	(431)		(534)
Term loan net carrying value	195,819		199,466
Bank credit facility net carrying value	540,480		199,466
2026 Notes:
Principal	690,000		690,000
Unamortized debt issuance costs	(11,953)		(14,677)
2026 Notes net carrying value	678,047		675,323
2027 Notes:
Principal	575,000		575,000
Unamortized debt issuance costs	(11,917)		(13,797)
2027 Notes net carrying value	563,083		561,203
Total net carrying value	1,781,610		1,435,992
Less: Current portion of long-term debt	(5,000)		(5,000)
Total long-term debt	$	1,776,610	$	1,430,992


	September 30, 2023		December 31, 2022


Credit facility:
Revolving loan facility due November 2025	$	153,445	$	345,597
Term loan due November 2025	191,250		195,000
Convertible senior notes due January 2026 (the “2026 Notes”)	687,830		687,830
Convertible senior notes due July 2027 (the “2027 Notes”)	575,000		575,000
Unamortized debt issuance costs	(18,023)		(22,731)
Total debt	1,589,502		1,780,696
Less: Current portion of long-term debt	(8,750)		(5,000)
Long-term debt	$	1,580,752	$	1,775,696


		Dividend					Dividend
		Per Share		Amount (1)			Per Share		Amount
2023:						2023:
Third quarter						Third quarter	$	0.05	$	14,768
Second quarter						Second quarter	0.05		14,702
First quarter						First quarter	0.05		14,522
2022:	2022:					2022:
Third quarter	Third quarter	$	0.03	$	8,592	Third quarter	$	0.03	$	8,592
Second quarter	Second quarter	0.03		8,678		Second quarter	0.03		8,678
First quarter	First quarter	0.03		8,353		First quarter	0.03		8,353
2021:
Third quarter		$	0.03	$	8,485
Second quarter		0.03		8,372
First quarter		0.03		8,219


	Foreign		Actuarial (Loss)
	Currency		Gain on
	Translation		Retirement Plan		Total
Balance, June 30, 2023	$	(87,530)	$	(298)	$	(87,828)
Other comprehensive (loss) income, before taxes	(7,294)		2		(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)


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Stock	Exercise Price		Contractual	Intrinsic
	Options	Per Share		Life (in years)	Value
Outstanding, December 31, 2021	6,917,925	$	5.26
Exercised	(2,635,429)	4.77
Forfeited and expired	(105,500)	5.64
Outstanding, September 30, 2022	4,176,996	$	5.56	1.1	$	104,542
Exercisable, September 30, 2022	3,225,496	$	5.51	1.0	$	80,897


								Time-		Performance-									Time-		Performance-
								Based		Based									Based		Based
				Time-		Performance-		Weighted		Weighted					Time-				Weighted		Weighted
		Total		Based		Based		Average		Average			Total		Based				Average		Average
		Restricted		Restricted		Restricted		Grant Date		Grant Date			Restricted		Restricted		Performance-		Grant Date		Grant Date
		Stock		Stock		Stock		Fair Value		Fair Value			Stock		Stock		Based		Fair Value		Fair Value
		and RSUs		and RSUs		and RSUs		Per Share		Per Share			and RSUs		and RSUs		RSUs		Per Share		Per Share
Unvested, December 31, 2021		1,708,545		1,611,862		96,683	(4)	$	32.81	$	49.93
Unvested, December 31, 2022												Unvested, December 31, 2022	3,068,851		2,706,078	(3)	362,773	(4)	$	36.67	$	38.21
Granted	Granted	1,598,661	(1)	1,235,888	(3)	362,773	(5)	38.82		38.21		Granted	1,199,644	(1)	1,003,180		196,464	(5)	41.17		39.03
Vested	Vested	(477,283)		(386,113)		(91,170)	(4)	26.40		49.93		Vested	(780,084)		(622,924)		(157,160)		33.46		38.20
Forfeited and canceled	Forfeited and canceled	(147,816)		(142,303)		(5,513)		33.64		49.93		Forfeited and canceled	(180,944)		(143,620)		(37,324)		33.16		33.41
Unvested, September 30, 2022		2,682,107	(2)	2,319,334		362,773		37.02		38.21
Unvested, September 30, 2023												Unvested, September 30, 2023	3,307,467	(2)	2,942,714		364,753		39.06		39.15


September 30, 2022		Level 1		Level 2		Level 3		Total
September 30, 2023										September 30, 2023	Level 1		Level 2		Level 3		Total
Assets:	Assets:									Assets:
Money market funds (1)	Money market funds (1)	$	18	$	—	$	—	$	18	Money market funds (1)	$	3,023	$	—	$	—	$	3,023
Interest rate swap (2)	Interest rate swap (2)	—		39,435		—		39,435		Interest rate swap (2)	—		41,302		—		41,302
Total assets	Total assets	$	18	$	39,435	$	—	$	39,453	Total assets	$	3,023	$	41,302	$	—	$	44,325
Liabilities:	Liabilities:									Liabilities:
Acquisition contingent consideration (3)	Acquisition contingent consideration (3)	$	—	$	—	$	1,244	$	1,244	Acquisition contingent consideration (3)	$	—	$	—	$	3	$	3
Deferred compensation plan liabilities (4)	Deferred compensation plan liabilities (4)	72,990		—		—		72,990		Deferred compensation plan liabilities (4)	81,719		—		—		81,719
Cash-settled equity awards ~~(5)~~(3)	Cash-settled equity awards ~~(5)~~(3)	279		—		—		279		Cash-settled equity awards ~~(5)~~(3)	715		—		—		715
Total liabilities	Total liabilities	$	73,269	$	—	$	1,244	$	74,513	Total liabilities	$	82,434	$	—	$	3	$	82,437


					Comparison
	Three Months Ended								Constant
	September 30,								Currency
	2023		2022		Amount		%		%(1)
Subscriptions	$	270,751	$	235,307	$	35,444	15.1	%	11.7	%
Perpetual licenses	11,887		9,460		2,427		25.7	%	23.1	%
Subscriptions and licenses	282,638		244,767		37,871		15.5	%	12.1	%
Services	23,974		23,565		409		1.7	%	(0.5	%)
Total revenues	$	306,612	$	268,332	$	38,280	14.3	%	11.0	%


	September 30,		December 31,

	2022		2021
Cash and cash equivalents held domestically	$	4,349	$	170,267
Cash and cash equivalents held by foreign subsidiaries	68,507		159,070
Total cash and cash equivalents	$	72,856	$	329,337


				Total Number of	Approximate Dollar
				Shares Purchased as	Value of Shares that
	Total Number of	Average Price		Part of Publicly	May Yet Be Purchased
Period	Shares Purchased	Paid per Share		Announced Plan (1)	Under the Plan (2)
July 1, 2022 to July 31, 2022	—	$	—	—	$	186,767,654
August 1, 2022 to August 31, 2022	—	—		—	186,767,654
September 1, 2022 to September 30, 2022	433,125	34.63		433,125	171,767,665
	433,125	34.63		433,125


Exhibit
Number						Description
10.1*						~~Amendment No. 1 to the Bentley Systems, Incorporated Bonus Pool Plan, as amended and restated effective as of September 22, 2020~~
31.1*						Certification of CEO pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
31.2*						Certification of CFO pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
32.132						Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						Inline 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.SCH						Inline XBRL Taxonomy Extension Schema
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase
104						Cover page formatted as Inline XBRL and contained in Exhibit 101


*			Filed or furnished herewith. The certification attached as Exhibit ~~32.1~~32 that accompanies this Quarterly Report on Form 10‑Q is not deemed filed with the U.S. Securities and Exchange Commission 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.


	Bentley Systems, Incorporated

Date: November ~~8, 2022~~7, 2023	By:	/s/ WERNER ANDRE
		Werner Andre
		Chief Financial Officer and Chief Accounting Officer
		(Principal Financial Officer and Principal Accounting Officer)