Bentley Systems, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone Q4 report. Financial amounts below are in U.S. dollars; millions unless noted.
Business context and reporting period
Bentley provides infrastructure engineering software and cloud services, including design, project delivery, asset performance, and digital-twin solutions. It reports one operating segment and serves customers in 194 countries. Subscriptions accounted for 87% of FY2022 revenue; management classified 89% of revenue as recurring. No customer represented more than 2% of revenue.
Key financial metrics
| Metric | FY2022 | FY2021 | Change / note |
|---|---|---|---|
| Revenue | $1,099.1 | $965.0 | +13.9% reported; +19.8% constant currency |
| Subscriptions | $960.2 | $812.8 | +18.1% reported; +24.3% constant currency |
| Gross profit / margin | $862.1 / 78.4% | $748.5 / 77.6% | Margin improved about 0.8 percentage points |
| Operating income / margin | $208.6 / 19.0% | $94.6 / 9.8% | FY2021 included a large deferred-compensation charge |
| Net income / diluted EPS | $174.8 / $0.55 | $93.2 / $0.30 | Net income +87.5% |
| Adjusted EBITDA / margin | $366.4 / 33.3% | $324.9 / 33.7% | +12.8%; margin down about 0.4 points |
| Adjusted net income | $274.5 | $267.9 | +2.5%; non-GAAP |
| Operating cash flow | $274.3 | $288.0 | Down $13.7 |
| Cash and cash equivalents | $71.7 | $329.3 | At December 31 |
| Debt carrying value | $1,780.7 | $1,436.0 | Includes revolving borrowings, term loan, and convertible notes |
| Available credit facility | $504.3 | $849.9 | At December 31; company reported covenant compliance |
| ARR | $1,036.5 | $921.2 | 15% constant-currency growth rate |
Current assets were $415.9 and current liabilities $628.4 at year-end. Approximately 95% of cash was held outside the U.S. The company repurchased $28.3 of shares and $2.0 of 2026 notes in 2022, and paid $34.5 in dividends.
Material changes versus the prior comparable period
- Reported revenue growth was held below constant-currency growth by foreign-exchange headwinds. Subscription growth reflected existing-account expansion, acquisitions, and new customers; platform acquisitions contributed approximately $92.9 to subscription revenue growth.
- Power Line Systems was acquired in January 2022 for approximately $696.0 cash, net of cash acquired. Acquisition-related investing outflows totaled $743.0 for six acquisitions.
- Perpetual-license revenue fell 18.3%, while services revenue fell 3.7% as some services shifted into subscriptions through the E365 offering.
- Net income rose substantially in part because FY2021 included a $90.7 one-time deferred-compensation charge. FY2022 operating results also included a $15.8 deferred-compensation income credit.
- Interest expense, net increased to $34.6 from $11.2, primarily reflecting higher average revolving borrowings and interest rates, and the term loan.
- Cash declined by $257.7, with acquisition spending the principal investing use. Revolving-facility borrowings increased; year-end cash and liquidity were also affected by the Power Line Systems acquisition.
Outlook, management commentary, risks, and unusual items
- Management expects continued recurring-revenue growth, citing account retention, expansion within existing accounts, and new accounts. It states that cash, operating cash generation, and credit-facility availability should meet working-capital and capital-expenditure needs for the next 12 months. No specific FY2023 revenue or earnings guidance is provided in the filing.
- Key risks include macroeconomic or infrastructure-spending weakness, foreign-exchange movements, subscription renewals and adoption, cybersecurity and cloud-service interruptions, privacy regulation, acquisition integration, and competition.
- The company paused sales in Russia and Belarus and decided to exit Russia; related actions reduced ARR by approximately $11.2 in 2022. China revenue faced geopolitical, COVID-related, and preference-for-local/on-premises-software pressures.
- Other income included a $27.1 gain from the interest-rate swap fair-value change, partly offset by a $9.9 foreign-exchange loss; the company also recorded a $2.0 gain on sale of half its aircraft interest to an entity controlled by the CEO.
- Debt includes $690.0 principal of 0.125% convertible notes due 2026 (reduced by 2022 repurchases) and $575.0 of 0.375% notes due 2027. Conversion may create dilution or cash needs; credit-facility covenants and the family control-change provision are additional considerations.
- The board declared a quarterly dividend of $0.05 per share in January 2023, up from $0.03 per share paid quarterly in 2022. The company reported no material pending litigation and no goodwill impairment in 2022.
Important facts for investors to verify
- Separate organic growth from acquisition contributions and currency effects; review ARR, retention, and net-revenue-retention definitions and trends.
- Assess cash conversion, working-capital movements, the decline in cash, and the sustainability of the 33.3% Adjusted EBITDA margin, including excluded or volatile items.
- Review debt maturities, interest-rate exposure, available facility capacity, covenant headroom, and potential cash settlement or dilution from convertible notes.
- Evaluate Power Line Systems integration, purchase-accounting estimates, goodwill concentration, and returns on acquisition and venture investments.
- Monitor Russia exit effects, China and broader APAC demand, foreign-exchange sensitivity, and the concentration of cash outside the U.S.
- Consider the dual-class voting structure: Class A shares carry 29 votes each, and the Bentley Control Group held approximately 54.8% of voting power at year-end 2022.