Summary
Bentley Systems reported first quarter fiscal 2024 results on May 7, 2024. Total revenues were $337.8 million, up 7.4% year over year, or 7.2% on a constant currency basis. Subscriptions revenues grew 10.5% and represented 91% of total revenues. Annualized recurring revenues (ARR) were $1,186.5 million as of March 31, 2024, compared to $1,071.0 million as of March 31, 2023, a constant currency ARR growth rate of 11%. The last twelve-month recurring revenues dollar-based net retention rate was 108%, compared to 110% for the same period last year. Gross margin was 81.7%, up from 78.6%. Operating margin was 27.2%, up from 20.9%. Net income was $70.3 million, up 54.6%, and diluted EPS was $0.22, up from $0.14.
Profitability improved across the board. Gross profit was $275.9 million, up 11.6%. Operating income was $91.9 million, up 39.7%. Adjusted operating income inclusive of stock-based compensation expense (Adjusted OI w SBC) was $112.3 million, compared to $90.5 million, and its margin was 33.3%, compared to 28.8%. Adjusted EPS was $0.31, compared to $0.25. Operating cash flow was $205.0 million, up from $176.2 million. Capital expenditures were $3.6 million, down from $4.3 million. Deferred revenue was $257.2 million, up 2.6%. Remaining performance obligations (RPO) were $257.2 million, up 2.6%. The CFO said the strong operating margin and cash flow enabled de-levering by 0.5 times Adjusted EBITDA in the quarter, and by 1.7 times since the beginning of 2023.
Operational highlights were mixed. CEO Greg Bentley said year-over-year ARR growth of 11% (excluding China, 11.5%) is consistent with the recent financial outlook range for 2024. Subscription revenues were 91% of total. The digital integrator Cohesive's professional services business, unrelated to Bentley Systems software, declined significantly from 2023. Services revenues declined 21.7% (22.4% on a constant currency basis). Perpetual licenses revenues were flat. By region, Americas revenues rose 9.4%, EMEA rose 2.0%, and APAC rose 10.6%. New accounts contributed 4% growth. China revenues decreased due to geopolitical challenges, obstacles to cloud-deployed software, and a preference for license sales over subscriptions. The company said its 24Q1 results are consistent with trends seen in previous quarters, led by strong growth in Public Works Utilities, and solid growth in Resources. The company announced that COO Nicholas Cumins will succeed Greg Bentley as CEO on July 1, with Bentley becoming Executive Chair, coinciding with the company's 40th anniversary.
Guidance context and risks. The press release says the strong start puts the company in a good position to achieve its full-year outlook. Management noted ARR growth is consistent with the recent financial outlook range for 2024. Risks include adverse global economic and political conditions, sanctions and embargoes, failure to retain personnel or manage succession, competition, product quality, ability to develop new products, changes in capital markets and financing access, interest rates, and integration of acquisitions. China remains uncertain. Net retention fell to 108% from 110%, though account retention was 99%, compared to 98%. Recurring revenues were 90% of total revenues for the twelve months ended March 31, 2024. The E365 subscription offering represented 42% of total ARR. The company had $849.9 million available under its Credit Facility. The company expects to substantially pay the remainder of termination benefits from its 2023 Program by the end of the second quarter of 2024.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $337.8M | $310.6M | +8.7% | $314.4M | +7.4% |
| Gross profit | $275.9M | $242.8M | +13.6% | $247.2M | +11.6% |
| Gross margin | 81.7% | 78.2% | +3.5 pp | 78.6% | +3.1 pp |
| Research & development | $68.4M | $71.2M | -4.0% | $67.8M | +0.8% |
| Sales & marketing | $54.4M | $64.1M | -15.1% | $52.1M | +4.3% |
| General & administrative | $46.5M | $52.0M | -10.6% | $46.8M | -0.7% |
| Total operating expenses | $184.0M | $205.1M | -10.3% | $181.4M | +1.4% |
| Operating income (loss) | $91.9M | $37.8M | +143.4% | $65.8M | +39.7% |
| Operating margin | 27.2% | 12.2% | +15.1 pp | 20.9% | +6.3 pp |
| Net income (loss) | $70.3M | $179.6M | -60.8% | $45.5M | +54.6% |
| Net margin | 20.8% | 57.8% | -37.0 pp | 14.5% | +6.3 pp |
| Diluted EPS | $0.22 | $0.54 | -$0.32 | $0.14 | +$0.08 |
| Net retention rate | 108.0% | — | — | 110.0% | -2.0 pp |
Risks
Total revenues in China for the three months ended March 31, 2024 decreased compared to the same period in the prior year, primarily due to a decline in subscriptions revenues from existing accounts. Management states that future results in China remain uncertain because of continued geopolitical challenges, obstacles to cloud-deployed software there, and a local preference for license sales rather than subscriptions.
The last twelve-month recurring revenues dollar-based net retention rate was 108% as of March 31, 2024, down from 110% as of March 31, 2023, and the constant currency ARR growth rate was 11% versus 13% in the prior-year twelve-month period. Slower expansion within existing accounts could pressure the recurring revenue base that represents 90% of total revenues for the twelve months ended March 31, 2024.
Services revenues decreased 21.7% in the first quarter of 2024 compared to the prior year, driven by a decline in business performance of approximately $5.9 million ($6.1 million on a constant currency basis), primarily from weakness in Maximo-related work within the digital integrator Cohesive. This concentration in a single partner-related service line amplifies the impact of reduced demand on that business.
No acquisitions were completed in the first quarter of 2024 compared to one acquisition in the first quarter of 2023, and acquisition-related payments fell $10.3 million. The company states its future capital requirements depend on its strategy of regularly acquiring and integrating specialized infrastructure engineering software businesses, and it may need additional equity or debt financing that would dilute stockholders or add debt service obligations.
Headcount-related costs increased across selling and marketing (up approximately $3.4 million on a constant currency basis) and research and development, mainly from higher annual and other compensation costs, while general and administrative headcount costs rose approximately $0.9 million. Rising compensation expense could compress margins if not offset by revenue growth.
SaaS KPIs
All quarters →Account Retention Rate
Last Twelve-Months Recurring Revenues
ARR
ARR growth rate (constant currency)
Adjusted OI w/SBC margin
Recurring Revenues Dollar-Based Net Retention Rate
Recurring revenues as % of total revenues
ARR growth rate (constant currency, excluding China)
Summary, forecast, risks and KPIs are extracted from BENTLEY SYSTEMS INC's SEC filings for Q1 FY2024 (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.