Summary
Bentley Systems reported first quarter fiscal 2021 revenue of $222.0 million, up 14.0% from $194.7 million in the prior-year quarter. Gross profit rose 9.7% to $172.7 million, but gross margin slipped to 77.8% from 80.9%, a decline of 3.1 percentage points. Operating income increased 21.1% to $55.6 million, and operating margin improved to 25.1% from 23.6%. Net income climbed 92.1% to $57.0 million, while diluted earnings per share were $0.18, up from $0.10. Operating cash flow was $132.8 million, up 82.9% from $72.6 million, and capital expenditures fell to $2.7 million from $4.5 million. Deferred revenue and remaining performance obligations were each $193.5 million at March 31, 2021.
The non-GAAP picture was similarly strong. Adjusted EBITDA was $82.8 million, compared with $57.9 million, and adjusted EBITDA margin was 37.3%, compared with 29.8%. Adjusted net income was $64.0 million, compared with $43.2 million, and adjusted net income per diluted share was $0.20, compared with $0.15. Annualized recurring revenue stood at $760.2 million as of March 31, 2021, with a constant currency ARR growth rate of 10% from March 31, 2020. Last twelve-month recurring revenues were $716.9 million, up 10.7% year over year. The last twelve-month recurring revenues dollar-based net retention rate was 107%, compared with 109% for the same period last year, while the account retention rate was 98%, compared with 98%. Recurring revenues were 86% of revenues for the twelve months ended March 31, 2021.
Management pointed to several operational highlights. Virtuosity subscriptions have attracted over a thousand accounts new to Bentley Systems since inception less than a year ago. The company also announced programmatic acquisitions of INRO to add multi-modal and dynamic simulation capabilities for mobility digital twins, and of sensemetrics and Vista Data Vision to extend the iTwin platform for infrastructure IoT. The largest deal is Seequent, a geological and geophysical modeling software provider. Bentley agreed on March 11, 2021 to acquire Seequent for approximately $900.0 million in cash, net of cash acquired, plus 3,141,361 shares of Class B common stock. The transaction is subject to regulatory approvals and is expected to close during the second quarter of 2021. After quarter end, in April 2021, Bentley completed two acquisitions and entered a definitive agreement for a third, totaling approximately $54.2 million in cash, net of cash acquired, and committed approximately $954.2 million in cash plus 3,141,361 shares for four acquisitions.
Financing activities were active. In January 2021 Bentley completed a private offering of $690.0 million of 0.125% convertible senior notes due 2026. It incurred $18.1 million of transaction costs and paid $25.5 million for capped call options. The company also amended its credit facility to increase the senior secured revolving loan facility from $500.0 million to $850.0 million and extended the maturity date to November 15, 2025. Management said the first quarter operating results were broadly consistent with mildly improving application usage trends and with its previously expressed outlook for full-year 2021. The company plans to update its full-year 2021 financial outlook when it reports second quarter results, to reflect acquisition impacts.
Risks remain. The Seequent deal depends on regulatory approvals and carries integration risk, and Bentley has said the quarter's unprecedented operating margins and operating cash flows benefited from circumstances likely unique to this unusual year. Revenue growth also received a lift from foreign currency, with constant currency total revenues up 9.4%. The COVID-19 pandemic continues to affect usage patterns, though the company said usage was approximately flat in the first quarter compared with the prior-year period and trending upward. Perpetual license revenue declined, and some accounts delayed purchase decisions or shifted spend to subscription solutions. The company also expects general and administrative expenses to increase as a public company. Guidance remains tied to the pending acquisitions, so the second quarter update will be important for calibrating the rest of fiscal 2021.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2021 | Q4 FY2020 | QoQ | Q1 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $222.0M | $219.6M | +1.1% | $222.0M | ±0.0% |
| Gross profit | $172.7M | $169.0M | +2.2% | $172.7M | ±0.0% |
| Gross margin | 77.8% | 77.0% | +0.8 pp | 77.8% | ±0.0 pp |
| Research & development | $47.8M | $45.9M | +4.0% | $47.8M | ±0.0% |
| Sales & marketing | $32.4M | $36.2M | -10.5% | $32.4M | ±0.0% |
| General & administrative | $33.4M | $28.2M | +18.5% | $33.4M | ±0.0% |
| Total operating expenses | $117.1M | $114.7M | +2.0% | $117.1M | ±0.0% |
| Operating income (loss) | $55.6M | $54.3M | +2.5% | $55.6M | ±0.0% |
| Operating margin | 25.1% | 24.7% | +0.4 pp | 25.1% | ±0.0 pp |
| Net income (loss) | $57.0M | $51.9M | +9.8% | $57.0M | ±0.0% |
| Net margin | 25.7% | 23.6% | +2.0 pp | 25.7% | ±0.0 pp |
| Diluted EPS | $0.18 | $0.17 | +$0.01 | $0.18 | ±$0.00 |
| Net retention rate | 107.0% | 107.0% | ±0.0 pp | 107.0% | ±0.0 pp |
Risks
The company entered a definitive agreement on March 11, 2021 to acquire Seequent for approximately $900 million in cash plus 3,141,361 Class B shares, subject to regulatory approvals and expected to close in Q2 2021. Funding depends on readily available cash, a portion of the 2026 Notes proceeds, and borrowings under the Credit Facility, and integration and financing risks are elevated given subsequent commitments of approximately $954.2 million in cash across four acquisitions through the filing date.
On January 26, 2021 the company issued $690 million of 0.125% convertible senior notes due 2026 and incurred $18,055 of transaction costs, and it paid $25,530 of premiums for capped call options intended to reduce dilution. Amortization and write-off of deferred debt issuance costs increased interest expense, net to $2,319 for the three months ended March 31, 2021 from $1,388 in the prior-year quarter, and remaining proceeds are earmarked for the Seequent acquisition.
Usage of the company's applications was approximately flat but trending upward in the three months ended March 31, 2021 versus the same period in 2020. Perpetual licenses revenues declined 6.5% and services organic performance continued to be impacted by COVID-19 related delays in new projects, while certain accounts shifted spend to subscription solutions or delayed purchase decisions.
Cost savings from active spending management during the pandemic, including reduced travel and recharacterized promotional spending, are unlikely to be fully sustainable prospectively as compensation levels and incentive plan payouts returned to normal for 2021. Gross margin fell to 77.8% in the three months ended March 31, 2021 from 80.9% in the prior-year quarter, down 3.1 percentage points.
In 2020, 43% of revenues and 47% of operating expenses were denominated in foreign currencies including the Euro, British Pound, Australian Dollar, Canadian Dollar, and Chinese Yuan Renminbi, and the company does not currently hedge foreign currency exposure other than through a natural hedge from matching revenues and expenses in the same currencies.
The company is prioritizing transitioning ELS subscribers to E365 subscriptions, which are charged based on daily usage. To the extent the transition succeeds, a greater proportion of revenues will be recognized on a quarterly basis rather than substantially upfront, which changes revenue timing, and daily consumption-measured ARR already represented 27% of total ARR as of March 31, 2021.
SaaS KPIs
All quarters →ARR growth rate (constant currency)
Adjusted EBITDA margin
Annualized Recurring Revenue (ARR)
Account Retention Rate (LTM)
Adjusted Net Income margin
Summary, forecast, risks and KPIs are extracted from BENTLEY SYSTEMS INC's SEC filings for Q1 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.