Bentley Systems has announced its first quarter results for the period ending March 31st 2024. The results are strong, with total revenues growing 7.4% and subscription revenues up 10.5%.
CEO Greg Bentley commented, “We are pleased with our 24Q1 performance, as year-over-year ARR growth of 11% (excluding China, 11.5%) is consistent with our recent financial outlook range for 2024. Profitability and operating cash flow started the year ahead of our expected pace, with subscription revenues (91% of total) fully on pace. Although our digital integrator Cohesive’s professional services business unrelated to Bentley Systems software has declined significantly from 2023.”
The firm has seen significant growth across all regions with 58% of revenues now coming from outside the US. In Asia, India was the main driver for growth. In EMEA, Bentley revealed that the UK, which is its second-largest country in terms of revenues, saw the opening of a new office in London.
Key figures from the results included:
- Total revenues: $337.8 million, up 7.4% (7.2% in constant currency) year-over-year
- Subscription revenues: $307.1 million, up 10.5% (10.3% in constant currency) year-over-year
- ARR was $1,186.5 million as of March 31, 2024, up 10.3% year-over-year
- Net dollar-based Retention 108% (110% for Q1 2023)
- Total revenues: $337.8 million, up 7.4% (7.2% in constant currency) year-over-year
- Cash flows from operations was $205.0 million, compared to $176.2 million for the same period last year
Bentley explained the small decline in retention to the impact of China and Russia. Though China revenues stabilised in Q1 2024.
A new CEO
During the analyst call, Bentley also confirmed the transition of COO Nicholas Cumins to CEO on July 1st. Bentley will take up the role of executive chair. Cummins was appointed to the role of COO in 2022 as part of a planned transition. Many of the leadership has reported to him over the last few years, and Bentley expects a smooth transition. Enabling him to retire from the active founding CEO role at the age of 69.
Cumins commented, “I again thank the Board of Directors for entrusting me with the responsibility of following in Greg’s footsteps as CEO. With our singular focus on helping users improve infrastructure delivery and performance, Bentley is well positioned to address the infrastructure sectors’ biggest challenges, including the widening gap in engineering resource capacity. Our 24Q1 results are consistent with the trends we have seen in previous quarters, led by strong growth in Public Works / Utilities and solid growth in Resources.”
Looking forward
Looking forward, Bentley predicted that the revenue mix would be more subscription intensive, with 24Q1 starting the year off with 91%.
CFO Werner Andre said, “We are pleased with the strong start to the year, which puts us in a good position to achieve our full-year outlook. Our strong 24Q1 operating margin and cash flow performance enabled us to de-lever by 0.5 times Adjusted EBITDA in the quarter, and by 1.7 times since the beginning of 2023. With all remaining debt protected from high or rising interest rates through very low fixed coupons on our convertible notes and our interest rate swap, we are well positioned to maintain our dividend, share repurchases, and programmatic M&A readiness.”
The outlook for 2024 remains consistent with total revenues in the range of $1,350 million to $1,375 million and constant currency growth of 10% to 12%. The cash flow position looks strong as well. With the company fully paying off its revolving credit facility by the end of January 2024. It also paid $18 million in dividends and repurchased $23 million in shares. GAAP operating cash flows rose 16% year-over-year in 24Q1 to $205 million.
Enterprise Times: What does this mean
A strong performance from Bentley Systems as the company looks to complete the transition to its new CEO at the end of the next quarter. Are there going to be big changes? Probably not. Cummins commented, “I’ve been the COO for a little bit more than two years now. And before that, I was the CPO. So, you shouldn’t expect any major change, either from a strategic or an operational standpoint, and our priorities remain the same.
“When it comes to growth, E365, SMB, Digital Twins, from a product standpoint, operative remain the same as well as we move from far base to data centric book flows using Digital Twin technology. Using and, leveraging data for AI purposes, etc. So no major change, either in strategy and operations. The key word here is continuation.”
Bentley has found a safe pair of hands in Cummins and has managed his retirement well. It is not an easy task, as many leaders have recently found. It will, however be interesting to see how Bentley Systems evolves over the coming years with a new CEO.
