Bentley Systems Announces Fourth Quarter and Full Year 2020 Results, and its 2021 Financial Outlook

Use and Reconciliation of Non-plane Financial Measures

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

 


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