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Bentley Systems’ Q2 2021 results, 2021 Financial Outlook updates

Bentley Systems announced operating results for its second quarter and six months ended June 30, 2021.

Remco Takken August 19, 2021
Bentley Systems' Operating Results for the Second Quarter of 2021

CEO Greg Bentley said, “Amidst the fits and starts which characterize the global resumption of growth for infrastructure engineering in 2021, going digital has remained an overarching priority that continues to benefit our software users, infrastructure projects and assets, and our operating results. A highlight for us this quarter has been the inclusion of Seequent, and subsurface digital twins, into our company and into our new financial outlook. Somewhat restrained favorable directions continue in the preponderance of our business, with usage growth beyond the pre-pandemic levels of 2019, resulting uptrends in ARR and new business and subscription revenues, and continued upward inflections in SMB subscriptions and resulting business from new accounts. Our growth bottlenecks continue to be ever more localized to industrial and resources ‘capex,’ and to the geographies (especially Middle East and Southeast Asia) most dependent on this sector—with a new concern brought on by unanticipated subscription attrition within mid-size enterprise accounts in greater China, despite an otherwise healthy demand environment in that territory.” Mr. Bentley continued, “Our updated financial outlook for the full year 2021 contemplates surpassing the milestones of one billion-dollars in revenue (pro forma for the acquisition of Seequent as if it had occurred at the beginning of 2021), double-digit ARR growth even exclusive of Seequent, and, importantly, maintaining our 32% Adjusted EBITDA margin target for 2021 while absorbing at the same time our incremental investments in growth initiatives, our incremental public company operating costs, and our increasing pace of programmatic growth acquisitions, along with the financially material acquisition of Seequent.”

Second Quarter 2021 Financial Results
• Total revenues were $222.9 million, up 21.0% year-over-year;
• Subscriptions revenues were $185.5 million, up 17.6% year-over-year;
• Last twelve-month recurring revenues were $746.2 million, up 12.1% year-over-year;
• Last twelve-month recurring revenues dollar-based net retention rate was 106% (calculated under Topic 606),
compared to 110% (calculated under Topic 605) for the same period last year;
• Last twelve-month account retention rate was 98% (calculated under Topic 606), compared to 98%
(calculated under Topic 605) for the same period last year;
• Annualized Recurring Revenue (“ARR”) was $882.4 million as of June 30, 2021, representing a constant
currency ARR growth rate of 23% from June 30, 2020;
• GAAP operating income was $32.2 million, compared to $44.6 million for the same period last year;
• GAAP net income was $44.9 million, compared to $39.1 million for the same period last year. GAAP net
income per diluted share was $0.14, compared to $0.13 for the same period last year;
• Adjusted Net Income was $74.3 million, compared to $46.0 million for the same period last year. Adjusted Net
Income per diluted share was $0.23 compared to $0.16 for the same period last year;
• Adjusted EBITDA was $69.1 million, compared to $57.6 million for the same period last year. Adjusted
EBITDA margin was 30.9%, compared to 31.2% for the same period last year;
• Cash flow from operations was $16.2 million, compared to $63.6 million for the same period last year.

Six Months Ended June 30, 2021 Financial Results
• Total revenues were $444.9 million, up 17.4% year-over-year;
• Subscriptions revenues were $373.6 million, up 14.0% year-over-year;
• GAAP operating income was $87.9 million, compared to $90.6 million for the same period last year;
• GAAP net income was $101.9 million, compared to $68.7 million for the same period last year. GAAP net
income per diluted share was $0.32, compared to $0.23 for the same period last year;
• Adjusted Net Income was $138.3 million, compared to $89.2 million for the same period last year. Adjusted
Net Income per diluted share was $0.43 compared to $0.30 for the same period last year;
• Adjusted EBITDA was $151.9 million, compared to $115.5 million for the same period last year. Adjusted
EBITDA margin was 34.1%, compared to 30.5% for the same period last year;
• Cash flow from operations was $149.0 million, compared to $136.2 million for the same period last year

2021 Financial Outlook
While Bentley Systems does not provide quarterly guidance, they update their full-year financial outlook when announcing quarterly operating results to the extent expectations materially change. Accordingly, the following update to the outlook according to the company for the year ending December 31, 2021, reflects first half performance, current business developments, and notably, the Seequent acquisition. The 2021 guidance herein is premised on COVID‑19 pandemic-related business impacts generally abating gradually by year end; however, the ultimate impacts of COVID‑19 on the financial outlook remain uncertain.

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