Bentley Systems (BSY) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues reached $335.2M, up 9.3% year-over-year, with subscription revenues growing 12% and ARR accelerating to $1.27B, driven by E365, SMB, and Virtuosity initiatives.

• Completed the acquisition of Cesium, enhancing 3D geospatial capabilities and strategic partnerships, notably with Google.

• Maintained high visibility and predictability in revenue streams due to contract structures and strong recurring revenue base.

• Delivered robust profitability and cash flow, supported by recurring revenues and high retention rates.

• Continued focus on open data ecosystems, AI-driven digital twins, and expanding the SMB customer base.

Financial highlights

• Subscription revenues represented 91% of total revenues, up from 88% last year.

• Total revenues grew 9.3% year-over-year to $335.2M in Q3; recurring revenues increased 11% and accounted for 91% of total revenues.

• GAAP operating income for Q3 was $69M; adjusted operating income with SBC was $90M (26.7% margin).

• Operating cash flow for Q3 was $86M, and $354M for the nine months ended September 30, 2024.

• Net income for Q3 was $42.3M, with diluted EPS of $0.13; adjusted EPS was $0.24.

Outlook and guidance

• Trending above the midpoint of the 10.5%-13% constant currency ARR growth outlook for 2024.

• Full-year 2024 revenue expected between $1,350M and $1,375M, with growth at the lower end of the outlook due to professional services weakness.

• Expecting 100 basis points of annual margin expansion and cash flow conversion raised to 85% of adjusted EBITDA.

• Management plans to reinvest realignment savings into AI product development and go-to-market functions.