Summary
Bentley Systems closed its first full year as a public company with strong top-line growth but softer GAAP profitability. Fourth-quarter revenue rose 23.7% to $271.63 million from the prior-year quarter, and full-year revenue increased 20.4% to $965.05 million. The company reported last twelve-month recurring revenues of $834.2 million, up 19.7%, and annualized recurring revenue of $921.2 million as of December 31, 2021, up 26% on a constant currency basis from December 31, 2020. The recurring revenue base remains the core of the story: last twelve-month recurring revenues dollar-based net retention was 109%, compared with 107% for the same period last year, and account retention was 98%, consistent with the same period last year.
Profitability showed a split between gross margin and operating margin. Fourth-quarter gross profit rose 25.5% to $212.06 million, and gross margin was 78.1%, up 1.1 percentage points from the prior-year quarter. For the full year, gross profit grew 18.0% to $748.51 million, but gross margin slipped to 77.6%, down 1.6 percentage points. Operating income declined 13.1% in the fourth quarter to $47.17 million, and operating margin fell to 17.4%, down 7.4 percentage points. Full-year operating income dropped 37.0% to $94.59 million, with operating margin at 9.8%, down 8.9 percentage points. Net income followed a similar path, falling 20.3% in the fourth quarter to $41.40 million and 26.3% for the full year to $93.19 million. Diluted EPS for the full year was $0.30, down $0.12 from the prior year.
Cash generation and recurring contract metrics remained sturdy. Fourth-quarter operating cash flow was $80.61 million, down 2.1% from the prior-year quarter, while full-year operating cash flow rose 11.5% to $288.02 million. Capital expenditures were $6.39 million in the fourth quarter, up 119.2%, and $17.54 million for the full year, up 6.6%. Deferred revenue and remaining performance obligations both stood at $232.59 million at December 31, 2021, up 11.1% from a year earlier. On a non-GAAP basis, fourth-quarter adjusted EBITDA was $88.2 million, compared with $77.4 million for the same period last year, and adjusted EBITDA margin was 32.9%, compared with 35.2%. Full-year adjusted EBITDA was $324.9 million, compared with $266.4 million, while adjusted net income was $266.9 million, compared with $192.8 million. Adjusted net income per diluted share was $0.85, compared with $0.64 for the same period last year.
Management offered a 2022 full-year outlook and framed the year around continued ARR expansion and margin discipline. The company guided constant currency ARR growth of 14% to 16%, including 2.5% from the initial inclusion of Power Line Systems and 11.5% to 13.5% from business performance. Adjusted EBITDA is expected to be $370 million to $380 million, representing growth of 13.9% to 16.9%, or 16.3% to 19.5% in constant currency, with adjusted EBITDA margin of approximately 33% and an effective tax rate of less than 15%. That outlook is for the full fiscal year, and the company does not provide quarterly guidance. Recent portfolio moves include the January 31, 2022 closing of Power Line Systems for approximately $700 million in cash, net of cash acquired, and the June 17, 2021 acquisition of Seequent for approximately $883.336 million in cash, net of cash acquired, plus 3,141,342 shares of Class B common stock.
The quarter and outlook come with familiar risks. Bentley operates in 186 countries, and 47% of 2021 total revenues were denominated in foreign currencies, so currency swings can move reported results. COVID-19 continues to affect usage patterns and project timing, though recurring contracts have limited the revenue impact. Management also flagged geopolitical complications as an added uncertainty. Integration risk remains after a heavy stretch of acquisitions, including Seequent and Power Line Systems. The company faces competition, public-company compliance costs, and the need to retain personnel. On a GAAP basis, the full-year results include a one-time compensation charge tied to the deferred compensation plan. The 2022 outlook depends on sustained demand for infrastructure engineering software, further digital twin adoption, and the company's ability to convert a growing ARR base into revenue and cash flow.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $271.6M | $248.5M | +9.3% | $219.6M | +23.7% |
| Gross profit | $212.1M | $194.2M | +9.2% | $169.0M | +25.5% |
| Gross margin | 78.1% | 78.2% | -0.1 pp | 77.0% | +1.1 pp |
| Research & development | $63.0M | $57.3M | +9.9% | $45.9M | +37.1% |
| Sales & marketing | $47.4M | $44.4M | +6.8% | $36.2M | +30.8% |
| General & administrative | $39.9M | $35.3M | +12.9% | $28.2M | +41.5% |
| Total operating expenses | $164.9M | $234.7M | -29.7% | $114.7M | +43.7% |
| Operating income (loss) | $47.2M | -$40.4M | +216.6% | $54.3M | -13.1% |
| Operating margin | 17.4% | -16.3% | +33.6 pp | 24.7% | -7.4 pp |
| Net income (loss) | $41.4M | -$50.1M | +182.6% | $51.9M | -20.3% |
| Net margin | 15.2% | -20.2% | +35.4 pp | 23.6% | -8.4 pp |
| Diluted EPS | $0.13 | -$0.16 | +$0.29 | $0.17 | -$0.04 |
| Net retention rate | 107.0% | 106.0% | +1.0 pp | 107.0% | ±0.0 pp |
Risks
The filing states supply chain disruption, inflationary pressures, and a global labor shortage are currently impacting the pace of recovery, and COVID-19 variants or renewed lockdowns could slow growth. Usage rates fluctuated modestly in 2020 and 2021, and certain accounts delayed new projects, which modestly impacted services revenues.
The company completed 13 acquisitions in 2021 and six in 2020, including Seequent for approximately $883.3 million in cash plus 3,141,342 Class B shares. On January 31, 2022, it completed the Power Line Systems acquisition for approximately $700 million in cash, and failure to integrate acquisitions or achieve anticipated synergies could harm results.
The Credit Facility requires a net leverage ratio not to exceed 3.50 to 1.00 and a fixed charge coverage ratio of not less than 3.00 to 1.00. If the Bentley Family ceases to collectively own at least 20% of aggregate voting power, that change is an event of default allowing commitments to terminate and loans to become immediately due.
Approximately 59% of total revenues were from outside the U.S. for the year ended December 31, 2021, and 47% of total revenues were denominated in currencies other than the U.S. Dollar. A strengthening U.S. Dollar adversely affects revenues and results, and the company does not hedge foreign currency exposure other than natural hedges.
Approximately 19% of total revenues for the years ended December 31, 2021 and 2020 related to infrastructure projects in APAC, including China. Decreased investment or spending reductions in APAC may negatively affect the business.
The company issued $690 million of 2026 Notes and $575 million of 2027 Notes. The if-converted method for diluted EPS reduces reported diluted earnings per share, and full conversion would dilute existing stockholders, with 10,759,395 and 6,908,567 Class B shares issuable for the 2026 and 2027 Notes, respectively, under stated stock price assumptions.
The company must comply with evolving data protection laws including the GDPR, China's PIPL, and U.S. state privacy laws. Noncompliance with GDPR could result in fines up to the greater of 20 million euros or 4% of global turnover, and cross-border transfer restrictions may cause accounts to require local data hosting or choose competitors.
The company amended its Deferred Compensation Plan to let certain active executives reallocate up to 1,500,000 phantom Class B shares, with executives diversifying 24% of their phantom shares. The filing states this opportunity was offered to encourage retention because otherwise executives could only materially diversify by terminating employment, and it resulted in a one-time $90.7 million compensation charge.
Demand is subject to volatility in infrastructure sectors, and infrastructure projects typically have long timelines. The company relies heavily on a direct sales force, and reorganizations of sales leadership or the sales force may cause a temporary lack of sales production and adversely impact revenues in future quarters.
Sales through independent regional channel partners accounted for 8% of total revenues for the years ended December 31, 2021, 2020, and 2019. Channel partners may terminate relationships, fail to meet payment obligations, or misrepresent solutions, which could cause loss, liability, or reputational harm.
SaaS KPIs
All quarters →Adjusted EBITDA
Constant Currency ARR Growth Rate
Adjusted EBITDA margin
Last Twelve-Month Recurring Revenues Dollar-Based Net Retention Rate
Last Twelve-Month Recurring Revenues
Summary, forecast, risks and KPIs are extracted from BENTLEY SYSTEMS INC's SEC filings for Q4 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.