In addition to our results determined in accordance with GAAP, we have calculated adjusted cost of subscriptions and licenses, adjusted cost of services, adjusted research and development, adjusted selling and marketing, adjusted general and administrative, adjusted income from operations, Adjusted Net Income, Adjusted Net Income per diluted share, Adjusted EBITDA, and Adjusted EBITDA margin, each of which are non‑GAAP financial measures. We have provided tabular reconciliations of each of these non‑GAAP financial measures to such measure’s most directly comparable GAAP financial measure.
Management uses these non‑GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate financial performance and liquidity. Our non‑GAAP financial measures are presented as supplemental disclosure as we believe they provide useful information to investors and others in understanding and evaluating our results, prospects, and liquidity period-over-period without the impact of certain items that do not directly correlate to our operating performance and that may vary significantly from period to period for reasons unrelated to our operating performance, as well as to compare our financial results to those of other companies. Our definitions of these non‑GAAP financial measures may differ from similarly titled measures presented by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, our non‑GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, the financial information prepared in accordance with GAAP, and should be read in conjunction with the financial statements included in our Annual Report on Form 10‑K to be filed with the SEC.
We calculate these non‑GAAP financial measures as follows:
- Adjusted cost of subscriptions and licenses is determined by adding back to GAAP cost of subscriptions and licenses, amortization of purchased intangibles and developed technologies, stock-based compensation, and realignment expenses, for the respective periods;
- Adjusted cost of services is determined by adding back to GAAP cost of services, stock-based compensation, acquisition expenses, and realignment expenses, for the respective periods;
- Adjusted research and development is determined by adding back to GAAP research and development, stock-based compensation, acquisition expenses, and realignment expenses, for the respective periods;
- Adjusted selling and marketing is determined by adding back to GAAP selling and marketing, stock-based compensation, acquisition expenses, and realignment expenses, for the respective periods;
- Adjusted general and administrative is determined by adding back to GAAP general and administrative, stock-based compensation, acquisition expenses, and realignment expenses, for the respective periods;
- Adjusted income from operations is determined by adding back to GAAP operating income, amortization of purchased intangibles and developed technologies, stock-based compensation, acquisition expenses, realignment expenses, and expenses associated with IPO for the respective periods;
- Adjusted Net Income is defined as net income adjusted for the following: amortization of purchased intangibles and developed technologies, stock-based compensation, acquisition expenses, realignment expenses, expenses associated with IPO, other non-operating income and expense (primarily foreign exchange gain (loss)), net, the tax effect of the above adjustments to net income, and loss from investment accounted for using the equity method, net of tax. The tax effect of adjustments to net income is based on the estimated marginal effective tax rates in the jurisdictions impacted by such adjustments;
- Adjusted Net Income per diluted share is determined by dividing Adjusted Net Income by the weighted average diluted shares outstanding;
- Adjusted EBITDA is defined as net income adjusted for interest expense, net, provision for income taxes, depreciation and amortization, stock-based compensation, acquisition expenses, realignment expenses, expenses associated with IPO, other non-operating income and expense (primarily foreign exchange gain (loss)), net, and loss from investment accounted for using the equity method, net of tax;
- Adjusted EBITDA margin is determined by dividing Adjusted EBITDA by total revenues.
We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure, and to view these non‑GAAP financial measures in conjunction with the related GAAP financial measures.
BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES |
||||||||
Consolidated Balance Sheets |
||||||||
(in thousands) |
||||||||
(unaudited) |
||||||||
December 31, |
||||||||
2020 |
|
2019 |
||||||
Assets |
|
|
|
|||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
122,006 |
|
|
$ |
121,101 |
|
|
Accounts receivable |
|
195,782 |
|
|
211,775 |
|
||
Allowance for doubtful accounts |
|
(5,759 |
) |
|
|
(7,274 |
) |
|
Prepaid income taxes |
|
3,535 |
|
|
4,543 |
|
||
Prepaid and other current assets |
|
24,694 |
|
|
|
23,413 |
|
|
Total current assets |
|
340,258 |
|
|
353,558 |
|
||
Property and equipment, net |
|
28,414 |
|
|
|
29,632 |
|
|
Operating lease right-of-use assets |
|
46,128 |
|
|
— |
|
||
Intangible assets, net |
|
45,627 |
|
|
|
46,313 |
|
|
Goodwill |
|
581,174 |
|
|
480,065 |
|
||
Investments |
|
5,691 |
|
|
|
1,725 |
|
|
Deferred income taxes |
|
39,224 |
|
|
51,068 |
|
||
Other assets |
|
39,519 |
|
|
|
32,238 |
|
|
Total assets |
$ |
1,126,035 |
|
$ |
994,599 |
|
||
Liabilities and Stockholders’ Equity |
|
|
|
|||||
Current liabilities: |
||||||||
Accounts payable |
$ |
16,492 |
|
|
$ |
17,669 |
|
|
Accruals and other current liabilities |
|
226,793 |
|
|
167,517 |
|
||
Deferred revenues |
|
202,294 |
|
|
|
204,991 |
|
|
Operating lease liabilities |
|
16,610 |
|
|
— |
|
||
Income taxes payable |
|
3,366 |
|
|
|
2,236 |
|
|
Total current liabilities |
|
465,555 |
|
|
392,413 |
|
||
Long-term debt |
|
246,000 |
|
|
|
233,750 |
|
|
Long-term operating lease liabilities |
|
31,767 |
|
|
— |
|
||
Deferred revenues |
|
7,020 |
|
|
|
8,154 |
|
|
Deferred income taxes |
|
10,849 |
|
|
8,260 |
|
||
Income taxes payable |
|
7,883 |
|
|
|
8,140 |
|
|
Other liabilities |
|
15,362 |
|
|
9,263 |
|
||
Total liabilities |
|
784,436 |
|
|
|
659,980 |
|
|
Stockholders’ equity: |
|
|
|
|||||
Common stock |
|
2,722 |
|
|
2,548 |
|
||
Additional paid-in capital |
|
741,113 |
|
|
|
408,667 |
|
|
Accumulated other comprehensive loss |
|
(26,233 |
) |
|
(23,927 |
) |
||
Accumulated deficit |
|
(376,003 |
) |
|
|
(52,669 |
) |
|
Total stockholders’ equity |
|
341,599 |
|
|
334,619 |
|
||
Total liabilities and stockholders’ equity |
$ |
1,126,035 |
|
|
$ |
994,599 |
|
BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES |
||||||||||||||||
Consolidated Statements of Operations |
||||||||||||||||
(in thousands, except share and per share data) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Three Months Ended |
|
Year Ended |
||||||||||||||
December 31, |
|
December 31, |
||||||||||||||
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||
Revenues: |
|
|
|
|
|
|
|
|||||||||
Subscriptions | $ |
178,262 |
|
$ |
162,962 |
|
$ |
679,273 |
|
$ |
608,300 |
|
||||
Perpetual licenses |
|
21,362 |
|
|
|
21,438 |
|
|
|
57,382 |
|
|
|
59,693 |
|
|
Subscriptions and licenses |
|
199,624 |
|
|
184,400 |
|
|
736,655 |
|
|
667,993 |
|
||||
Services |
|
19,943 |
|
|
|
18,522 |
|
|
|
64,889 |
|
|
|
68,661 |
|
|
Total revenues |
|
219,567 |
|
|
202,922 |
|
|
801,544 |
|
|
736,654 |
|
||||
Cost of revenues: |
|
|
|
|
|
|
|
|||||||||
Cost of subscriptions and licenses |
|
29,337 |
|
|
23,377 |
|
|
95,803 |
|
|
71,578 |
|
||||
Cost of services |
|
21,226 |
|
|
|
16,524 |
|
|
|
71,352 |
|
|
|
72,572 |
|
|
Total cost of revenues |
|
50,563 |
|
|
39,901 |
|
|
167,155 |
|
|
144,150 |
|
||||
Gross profit |
|
169,004 |
|
|
|
163,021 |
|
|
|
634,389 |
|
|
|
592,504 |
|
|
Operating expenses: |
||||||||||||||||
Research and development |
|
45,945 |
|
|
|
46,935 |
|
|
|
185,515 |
|
|
|
183,552 |
|
|
Selling and marketing |
|
36,240 |
|
|
43,405 |
|
|
143,791 |
|
|
155,294 |
|
||||
General and administrative |
|
28,176 |
|
|
|
26,165 |
|
|
|
113,451 |
|
|
|
97,580 |
|
|
Amortization of purchased intangibles |
|
4,368 |
|
|
3,811 |
|
|
15,352 |
|
|
14,213 |
|
||||
Expenses associated with initial public offering |
|
— |
|
|
|
— |
|
|
|
26,130 |
|
|
|
— |
|
|
Total operating expenses |
|
114,729 |
|
|
120,316 |
|
|
484,239 |
|
|
450,639 |
|
||||
Income from operations |
|
54,275 |
|
|
|
42,705 |
|
|
|
150,150 |
|
|
|
141,865 |
|
|
Interest expense, net |
|
(3,026 |
) |
|
(1,696 |
) |
|
(7,476 |
) |
|
(8,199 |
) |
||||
Other income (expense), net |
|
18,190 |
|
|
|
8,496 |
|
|
|
24,946 |
|
|
|
(5,557 |
) |
|
Income before income taxes |
|
69,439 |
|
|
49,505 |
|
|
167,620 |
|
|
128,109 |
|
||||
Provision for income taxes |
|
(16,480 |
) |
|
|
(11,979 |
) |
|
|
(38,625 |
) |
|
|
(23,738 |
) |
|
Loss from investment accounted for using the equity method, net of tax |
|
(1,027 |
) |
|
(1,275 |
) |
|
(2,474 |
) |
|
(1,275 |
) |
||||
Net income |
|
51,932 |
|
|
|
36,251 |
|
|
|
126,521 |
|
|
|
103,096 |
|
|
Less: Net income attributable to participating securities |
|
(230 |
) |
|
2 |
|
|
(234 |
) |
|
(8 |
) |
||||
Net income attributable to Class A and Class B common stockholders |
$ |
51,702 |
|
|
$ |
36,253 |
|
|
$ |
126,287 |
|
|
$ |
103,088 |
|
|
Per share information: |
||||||||||||||||
Net income per share, basic |
$ |
0.17 |
|
|
$ |
0.13 |
|
|
$ |
0.44 |
|
|
$ |
0.36 |
|
|
Net income per share, diluted | $ |
0.17 |
|
$ |
0.13 |
|
$ |
0.42 |
|
$ |
0.35 |
|
||||
Weighted average shares outstanding, basic |
|
297,192,775 |
|
|
|
285,349,414 |
|
|
|
289,863,272 |
|
|
|
284,625,642 |
|
|
Weighted average shares outstanding, diluted |
|
309,096,405 |
|
|
289,242,127 |
|
|
299,371,129 |
|
|
293,796,707 |
|
BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES |
||||||||
Consolidated Statements of Cash Flows |
||||||||
(in thousands) |
||||||||
(unaudited) |
||||||||
|
||||||||
Year Ended December 31, |
||||||||
2020 |
|
2019 |
||||||
Cash flows from operating activities: |
|
|
|
|||||
Net income |
$ |
126,521 |
|
$ |
103,096 |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|||||
Depreciation and amortization |
|
36,117 |
|
|
32,160 |
|
||
Bad debt (recovery) allowance |
|
(1,000 |
) |
|
|
862 |
|
|
Deferred income taxes |
|
16,246 |
|
|
732 |
|
||
Deferred compensation plan activity |
|
3,706 |
|
|
|
3,994 |
|
|
Stock-based compensation expense |
|
32,114 |
|
|
8,091 |
|
||
Amortization and write-off of deferred debt issuance costs |
|
985 |
|
|
|
553 |
|
|
Change in fair value of derivative |
|
(347 |
) |
|
159 |
|
||
Change in fair value of contingent consideration |
|
(1,340 |
) |
|
|
62 |
|
|
Foreign currency remeasurement (gain) loss |
|
(24,502 |
) |
|
5,311 |
|
||
Loss from investment accounted for using the equity method, net of tax |
|
2,474 |
|
|
|
1,275 |
|
|
Changes in assets and liabilities, net of effect from acquisitions: |
||||||||
Accounts receivable |
|
12,388 |
|
|
|
(21,152 |
) |
|
Prepaid and other assets |
|
11,705 |
|
|
(668 |
) |
||
Accounts payable, accruals and other liabilities |
|
47,656 |
|
|
|
41,880 |
|
|
Deferred revenues |
|
(565 |
) |
|
(268 |
) |
||
Income taxes payable |
|
(3,818 |
) |
|
|
(5,314 |
) |
|
Net cash provided by operating activities |
|
258,340 |
|
|
170,773 |
|
||
Cash flows from investing activities: |
|
|
|
|||||
Purchases of property and equipment and investment in capitalized software |
|
(15,496 |
) |
|
(15,804 |
) |
||
Capitalization of costs to translate software products into foreign languages |
|
(951 |
) |
|
|
(835 |
) |
|
Acquisitions, net of cash acquired of $5,266 and $2,523, respectively |
|
(93,032 |
) |
|
(34,054 |
) |
||
Other investing activities |
|
(7,854 |
) |
|
|
(3,000 |
) |
|
Net cash used in investing activities |
|
(117,333 |
) |
|
(53,693 |
) |
||
Cash flows from financing activities: |
|
|
|
|||||
Proceeds from credit facilities |
|
550,875 |
|
|
191,250 |
|
||
Payments of credit facilities |
|
(538,625 |
) |
|
|
(216,250 |
) |
|
Proceeds from term loan |
|
125,000 |
|
|
— |
|
||
Repayment of term loan |
|
(125,000 |
) |
|
— |
|
||
Payments of debt issuance costs |
|
(432 |
) |
|
|
— |
|
|
Payments of financing leases |
|
(189 |
) |
|
— |
|
||
Payments of acquisition debt and other consideration |
|
(3,425 |
) |
|
|
(11,029 |
) |
|
Proceeds from Class B Common Stock follow-on offering, net of underwriters’ discounts and commissions |
|
295,802 |
|
|
|
— |
|
|
Payments of Class B Common Stock follow-on offering expenses |
|
(1,373 |
) |
|
|
— |
|
|
Payments of dividends |
|
(422,646 |
) |
|
(24,989 |
) |
||
Payments for shares acquired including shares withheld for taxes |
|
(83,975 |
) |
|
|
(24,166 |
) |
|
Proceeds from Common Stock Purchase Agreement |
|
58,349 |
|
|
4,510 |
|
||
Proceeds from exercise of stock options |
|
9,128 |
|
|
|
3,626 |
|
|
Net cash used in financing activities |
|
(136,511 |
) |
|
(77,048 |
) |
||
Effect of exchange rate changes on cash and cash equivalents |
|
(3,591 |
) |
|
|
(114 |
) |
|
Increase in cash and cash equivalents |
|
905 |
|
|
39,918 |
|
||
Cash and cash equivalents, beginning of year |
|
121,101 |
|
|
|
81,183 |
|
|
Cash and cash equivalents, end of year |
$ |
122,006 |
|
$ |
121,101 |
|
BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES |
||||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures |
||||||||||||||||
For the Three Months and Year Ended December 31, 2020 and 2019 |
||||||||||||||||
(in thousands) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Reconciliation of net income to Adjusted EBITDA: |
||||||||||||||||
|
Three Months Ended |
|
Year Ended |
|||||||||||||
|
December 31, |
|
December 31, |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
Net income |
$ |
51,932 |
|
|
$ |
36,251 |
|
|
$ |
126,521 |
|
|
$ |
103,096 |
|
|
Interest expense, net |
3,026 |
|
|
1,696 |
|
|
7,476 |
|
|
8,199 |
|
|||||
Provision for income taxes |
16,480 |
|
|
11,979 |
|
|
38,625 |
|
|
23,738 |
|
|||||
Depreciation and amortization |
10,281 |
|
|
8,826 |
|
|
36,117 |
|
|
32,160 |
|
|||||
Stock-based compensation |
9,354 |
|
|
2,040 |
|
|
32,114 |
|
|
8,091 |
|
|||||
Acquisition expenses |
3,168 |
|
|
2,494 |
|
|
11,666 |
|
|
6,597 |
|
|||||
Realignment expenses |
10 |
|
|
(92 |
) |
|
10,022 |
|
|
(584 |
) |
|||||
Expenses associated with IPO |
— |
|
|
— |
|
|
26,130 |
|
|
— |
|
|||||
Other (income) expense, net |
(18,190 |
) |
|
(8,496 |
) |
|
(24,946 |
) |
|
5,557 |
|
|||||
Loss from investment accounted for using the equity method, net of tax |
1,027 |
|
|
1,275 |
|
|
2,474 |
|
|
1,275 |
|
|||||
Adjusted EBITDA |
$ |
77,088 |
|
|
$ |
55,973 |
|
|
$ |
266,199 |
|
|
$ |
188,129 |
Reconciliation of net income to Adjusted Net Income: |
||||||||||||||||
|
Three Months Ended |
|
Year Ended |
|||||||||||||
|
December 31, |
|
December 31, |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
Net income |
$ |
51,932 |
|
|
$ |
36,251 |
|
|
$ |
126,521 |
|
|
$ |
103,096 |
|
|
Non-GAAP adjustments, prior to income taxes: |
|
|
|
|
|
|
|
|||||||||
Amortization of purchased intangibles and developed technologies |
6,027 |
|
|
5,032 |
|
|
20,721 |
|
|
18,731 |
|
|||||
Stock-based compensation |
9,354 |
|
|
2,040 |
|
|
32,114 |
|
|
8,091 |
|
|||||
Acquisition expenses |
3,168 |
|
|
2,494 |
|
|
11,666 |
|
|
6,597 |
|
|||||
Realignment expenses |
10 |
|
|
(92 |
) |
|
10,022 |
|
|
(584 |
) |
|||||
Expenses associated with IPO |
— |
|
|
— |
|
|
26,130 |
|
|
— |
|
|||||
Other (income) expense, net |
(18,190 |
) |
|
(8,496 |
) |
|
(24,946 |
) |
|
5,557 |
|
|||||
Total non-GAAP adjustments, prior to income taxes |
369 |
|
|
978 |
|
|
75,707 |
|
|
38,392 |
|
|||||
Income tax effect of non-GAAP adjustments |
(1,239 |
) |
|
(2,733 |
) |
|
(12,024 |
) |
|
(7,714 |
) |
|||||
Loss from investment accounted for using the equity method, net of tax |
1,027 |
|
|
1,275 |
|
|
2,474 |
|
|
1,275 |
|
|||||
Adjusted Net Income |
$ |
52,089 |
|
|
$ |
35,771 |
|
|
$ |
192,678 |
|
|
$ |
135,049 |
|
Reconciliation of GAAP Financial Statement Line Items to Non-GAAP Adjusted Financial Statement Line Items: |
||||||||||||||||
Three Months Ended |
|
Year Ended |
||||||||||||||
December 31 |
|
December 31 |
||||||||||||||
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||
Cost of subscriptions and licenses |
|
$ |
29,337 |
|
|
$ |
23,377 |
|
|
$ |
95,803 |
|
|
$ |
71,578 |
|
Amortization of purchased intangibles and developed technologies |
|
(1,659 |
) |
|
(1,221 |
) |
|
(5,369 |
) |
|
(4,518 |
) |
||||
Stock-based compensation |
|
|
(17 |
) |
|
|
(55 |
) |
|
|
(925 |
) |
|
|
(115 |
) |
Realignment expenses |
|
8 |
|
|
— |
|
|
(42 |
) |
|
51 |
|
||||
Adjusted cost of subscriptions and licenses |
|
$ |
27,669 |
|
|
$ |
22,101 |
|
|
$ |
89,467 |
|
|
$ |
66,996 |
|
Cost of services |
|
$ |
21,226 |
|
|
$ |
16,524 |
|
|
$ |
71,352 |
|
|
$ |
72,572 |
|
Stock-based compensation |
|
(156 |
) |
|
(159 |
) |
|
(2,857 |
) |
|
(522 |
) |
||||
Acquisition expenses |
|
|
(866 |
) |
|
|
(22 |
) |
|
|
(1,916 |
) |
|
|
(22 |
) |
Realignment expenses |
|
126 |
|
|
— |
|
|
(1,422 |
) |
|
185 |
|
||||
Adjusted cost of services |
|
$ |
20,330 |
|
|
$ |
16,343 |
|
|
$ |
65,157 |
|
|
$ |
72,213 |
|
|
||||||||||||||||
Research and development |
|
$ |
45,945 |
|
|
$ |
46,935 |
|
|
$ |
185,515 |
|
|
$ |
183,552 |
|
Stock-based compensation |
|
(3,951 |
) |
|
(801 |
) |
|
(11,769 |
) |
|
(3,107 |
) |
||||
Acquisition expenses |
|
|
(1,492 |
) |
|
|
(1,653 |
) |
|
|
(6,605 |
) |
|
|
(4,736 |
) |
Realignment expenses |
|
62 |
|
|
92 |
|
|
(848 |
) |
|
171 |
|
||||
Adjusted research and development |
|
$ |
40,564 |
|
|
$ |
44,573 |
|
|
$ |
166,293 |
|
|
$ |
175,880 |
|
Selling and marketing |
|
$ |
36,240 |
|
|
$ |
43,405 |
|
|
$ |
143,791 |
|
|
$ |
155,294 |
|
Stock-based compensation |
|
(652 |
) |
|
(453 |
) |
|
(6,259 |
) |
|
(2,210 |
) |
||||
Acquisition expenses |
|
|
(75 |
) |
|
|
(76 |
) |
|
|
(318 |
) |
|
|
(240 |
) |
Realignment expenses |
|
(762 |
) |
|
— |
|
|
(5,945 |
) |
|
263 |
|
||||
Adjusted selling and marketing |
|
$ |
34,751 |
|
|
$ |
42,876 |
|
|
$ |
131,269 |
|
|
$ |
153,107 |
|
General and administrative |
|
$ |
28,176 |
|
|
$ |
26,165 |
|
|
$ |
113,451 |
|
|
$ |
97,580 |
|
Stock-based compensation |
|
(4,578 |
) |
|
(572 |
) |
|
(10,304 |
) |
|
(2,137 |
) |
||||
Acquisition expenses |
|
|
(617 |
) |
|
|
(501 |
) |
|
|
(2,228 |
) |
|
|
(1,047 |
) |
Realignment expenses |
|
556 |
|
|
— |
|
|
(1,765 |
) |
|
(86 |
) |
||||
Adjusted general and administrative |
|
$ |
23,537 |
|
|
$ |
25,092 |
|
|
$ |
99,154 |
|
|
$ |
94,310 |
|
Income from operations |
|
$ |
54,275 |
|
|
$ |
42,705 |
|
|
$ |
150,150 |
|
|
$ |
141,865 |
|
Amortization of purchased intangibles and developed technologies |
|
6,027 |
|
|
5,032 |
|
|
20,721 |
|
|
18,731 |
|
||||
Stock-based compensation |
|
|
9,354 |
|
|
|
2,040 |
|
|
|
32,114 |
|
|
|
8,091 |
|
Acquisition expenses |
|
3,168 |
|
|
2,494 |
|
|
11,666 |
|
|
6,597 |
|
||||
Realignment expenses |
|
|
10 |
|
|
|
(92 |
) |
|
|
10,022 |
|
|
|
(584 |
) |
Expenses associated with IPO |
|
— |
|
|
— |
|
|
26,130 |
|
|
— |
|
||||
Adjusted income from operations |
|
$ |
72,834 |
|
|
$ |
52,179 |
|
|
$ |
250,803 |
|
|
$ |
174,700 |
|