We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure, and to view these non-GAAP financial measures in conjunction with the related GAAP financial measures. During the third quarter of 2021, the Company modified its definitions of Adjusted EBITDA and Adjusted Net Income to adjust for expense (income) relating to deferred compensation plan liabilities and amounts for all periods herein reflect application of the modified definition.

Forward-Looking Statements

This press release includes forward-looking statements regarding the future results of operations and financial position, business strategy, and plans and objectives for future operations of Bentley Systems, Incorporated (the “Company,” “we,” “us,” and words of similar import). All such statements contained in this press release, other than statements of historical facts, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations, projections, and assumptions about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, and there are a significant number of factors that could cause actual results to differ materially from statements made in this press release including: current and potential future impacts of the COVID-19 pandemic on the global economy and our business, and consolidated financial statements; adverse changes in global economic and/or political conditions; political, economic, regulatory and public health and safety risks and uncertainties in the countries and regions in which we operate; failure to retain personnel necessary for the operation of our business or those that we acquire; changes in the industries in which our accounts operate; the competitive environment in which we operate; the quality of our products; our ability to develop and market new products to address our accounts’ rapidly changing technological needs; changes in capital markets and our ability to access financing on terms satisfactory to us or at all; and our ability to integrate acquired businesses successfully.

Further information on potential factors that could affect the financial results of the Company are included in the Company’s Form 10-K and subsequent Forms 10-Q, which are on file with the United States Securities and Exchange Commission. The Company disclaims any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

About Bentley Systems

Bentley Systems (Nasdaq: BSY) is the infrastructure engineering software company. We provide innovative software to advance the world’s infrastructure – sustaining both the global economy and environment. Our industry-leading software solutions are used by professionals, and organizations of every size, for the design, construction, and operations of roads and bridges, rail and transit, water and wastewater, public works and utilities, buildings and campuses, mining, and industrial facilities. Our offerings include MicroStation-based applications for modeling and simulation, ProjectWise for project delivery, AssetWise for asset and network performance, Seequent’s leading geosciences software portfolio, and the iTwin platform for infrastructure digital twins. Bentley Systems employs more than 4,000 colleagues and generates annual revenues of more than $800 million in 172 countries.

www.bentley.com

^{© 2021 Bentley Systems, Incorporated. Bentley, the Bentley logo, AssetWise, iTwin, MicroStation, ProjectWise, and Seequent are either registered or unregistered trademarks or service marks of Bentley Systems, Incorporated or one of its direct or indirect wholly owned subsidiaries. All other brands and product names are trademarks of their respective owners.}

BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
(unaudited)
		September 30, 2021				December 31, 2020
Assets
Current assets:
Cash and cash equivalents		$	155,755			$	122,006
Accounts receivable		194,682				195,782
Allowance for doubtful accounts		(6,355		)		(5,759		)
Prepaid income taxes		20,958				3,535
Prepaid and other current assets		35,062				24,694
Total current assets		400,102				340,258
Property and equipment, net		31,103				28,414
Operating lease right-of-use assets		48,642				46,128
Intangible assets, net		251,467				45,627
Goodwill		1,592,399				581,174
Investments		5,429				5,691
Deferred income taxes		77,418				39,224
Other assets		47,523				39,519
Total assets		$	2,454,083			$	1,126,035
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	12,502			$	16,492
Accruals and other current liabilities		317,271				226,793
Deferred revenues		189,683				202,294
Operating lease liabilities		18,003				16,610
Income taxes payable		11,974				3,366
Total current liabilities		549,433				465,555
Long-term debt		1,302,845				246,000
Deferred compensation plan liabilities		89,174				2,422
Long-term operating lease liabilities		32,583				31,767
Deferred revenues		6,614				7,020
Deferred income taxes		69,471				10,849
Income taxes payable		7,613				7,883
Other liabilities		17,352				12,940
Total liabilities		2,075,085				784,436
Stockholders’ equity:
Common stock		2,820				2,722
Additional paid-in capital		921,410				741,113
Accumulated other comprehensive loss		(81,880		)		(26,233		)
Accumulated deficit		(463,352		)		(376,003		)
Total stockholders’ equity		378,998				341,599
Total liabilities and stockholders’ equity		$	2,454,083			$	1,126,035

BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
Revenues:
Subscriptions		$	212,227			$	173,174			$	585,804			$	501,011
Perpetual licenses		11,866				12,827				33,373				36,020
Subscriptions and licenses		224,093				186,001				619,177				537,031
Services		24,387				16,996				74,239				44,946
Total revenues		248,480				202,997				693,416				581,977
Cost of revenues:
Cost of subscriptions and licenses		31,056				23,338				89,882				66,466
Cost of services		23,176				19,290				67,090				50,126
Total cost of revenues		54,232				42,628				156,972				116,592
Gross profit		194,248				160,369				536,444				465,385
Operating expense (income):
Research and development		57,334				50,217				157,913				139,570
Selling and marketing		44,392				41,824				114,846				107,551
General and administrative		35,329				32,956				110,233				85,390
Deferred compensation plan		88,965				50				89,327				(115		)
Amortization of purchased intangibles		8,676				3,869				16,703				10,984
Expenses associated with initial public offering		—				26,130				—				26,130
Total operating expenses		234,696				155,046				489,022				369,510
(Loss) income from operations		(40,448		)		5,323				47,422				95,875
Interest expense, net		(3,836		)		(1,934		)		(8,608		)		(4,450		)
Other (expense) income, net		(957		)		13,741				9,748				6,756
(Loss) income before income taxes		(45,241		)		17,130				48,562				98,181
(Provision) benefit for income taxes		(4,223		)		(10,705		)		6,165				(22,145		)
Loss from investment accounted for using the equity method, net of tax		(664		)		(581		)		(2,939		)		(1,447		)
Net (loss) income		(50,128		)		5,844				51,788				74,589
Less: Net (loss) income attributable to participating securities		(3		)		(4		)		(6		)		(4		)
Net (loss) income attributable to Class A and Class B common stockholders		$	(50,131	)		$	5,840			$	51,782			$	74,585
Per share information:
Net (loss) income per share, basic		$	(0.16	)		$	0.02			$	0.17			$	0.26
Net (loss) income per share, diluted		$	(0.16	)		$	0.02			$	0.16			$	0.25
Weighted average shares, basic		308,195,379				289,318,391				305,119,985				287,063,892
Weighted average shares, diluted		308,195,379				299,634,961				314,658,136				297,251,349

BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
		Nine Months Ended
		September 30,
		2021				2020
Cash flows from operating activities:
Net income		$	51,788			$	74,589
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		35,946				25,836
Bad debt allowance (recovery)		466				(541		)
Deferred income taxes		(17,788		)		7,853
Stock-based compensation expense		32,853				23,617
Amortization and write-off of deferred debt issuance costs		4,160				430
Change in fair value of derivative		(9,198		)		3,365
Change in fair value of contingent consideration		—				(1,340		)
Foreign currency remeasurement loss (gain)		103				(9,067		)
Loss from investment accounted for using the equity method, net of tax		2,939				1,447
Changes in assets and liabilities, net of effect from acquisitions:
Accounts receivable		26,305				46,661
Prepaid and other assets		11,310				8,907
Accounts payable, accruals, and other liabilities		31,766				31,486
Deferred compensation plan liabilities		86,608				2,487
Deferred revenues		(36,598		)		(35,134		)
Income taxes payable, net of prepaid income taxes		(13,243		)		(4,571		)
Net cash provided by operating activities		207,417				176,025
Cash flows from investing activities:
Purchases of property and equipment and investment in capitalized software		(11,152		)		(13,533		)
Acquisitions, net of cash acquired of $37,837 and $2,064, respectively		(1,033,695		)		(68,920		)
Other investing activities		(3,000		)		(6,355		)
Net cash used in investing activities		(1,047,847		)		(88,808		)
Cash flows from financing activities:
Proceeds from credit facilities		682,083				432,375
Payments of credit facilities		(860,228		)		(201,125		)
Proceeds from convertible senior notes, net of discounts and commissions		1,233,377				—
Payments of debt issuance costs		(5,643		)		(432		)
Purchase of capped call options		(51,555		)		—
Proceeds from term loan		—				125,000
Payments of financing leases		(147		)		(141		)
Payments of acquisition debt and other consideration		(741		)		(2,034		)
Payments of dividends		(25,076		)		(412,852		)
Payments for shares acquired including shares withheld for taxes		(111,306		)		(72,476		)
Proceeds from Common Stock Purchase Agreement		—				58,349
Proceeds from stock purchases under employee stock purchase plan		3,846				—
Proceeds from exercise of stock options		5,039				3,206
Net cash provided by (used in) financing activities		869,649				(70,130		)
Effect of exchange rate changes on cash and cash equivalents		4,530				(590		)
Increase in cash and cash equivalents		33,749				16,497
Cash and cash equivalents, beginning of year		122,006				121,101
Cash and cash equivalents, end of period		$	155,755			$	137,598

BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Measures
For the Three and Nine Months Ended September 30, 2021 and 2020
(in thousands)
(unaudited)
Reconciliation of net (loss) income to Adjusted EBITDA:
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
Net (loss) income		$	(50,128	)		$	5,844			$	51,788			$	74,589
Interest expense, net		3,836				1,934				8,608				4,450
Provision (benefit) for income taxes		4,223				10,705				(6,165		)		22,145
Depreciation and amortization		16,666				9,172				35,946				25,836
Stock-based compensation		11,588				19,548				32,186				22,760
Deferred compensation plan		88,965				50				89,327				(115		)
Acquisition expenses		7,697				3,489				31,897				8,498
Realignment expenses		—				9,943				—				10,012
Expenses associated with IPO		—				26,130				—				26,130
Other expense (income), net		957				(13,741		)		(9,748		)		(6,756		)
Loss from investment accounted for using the equity method, net of tax		664				581				2,939				1,447
Adjusted EBITDA		$	84,468			$	73,655			$	236,778			$	188,996

Reconciliation of net (loss) income to Adjusted Net Income:
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
Net (loss) income		$	(50,128	)		$	5,844			$	51,788			$	74,589
Non-GAAP adjustments, prior to income taxes:
Amortization of purchased intangibles and developed technologies		11,539				5,236				22,003				14,694
Stock-based compensation		11,588				19,548				32,186				22,760
Deferred compensation plan		88,965				50				89,327				(115		)
Acquisition expenses		7,697				3,489				31,897				8,498
Realignment expenses		—				9,943				—				10,012
Expenses associated with IPO		—				26,130				—				26,130
Other expense (income), net		957				(13,741		)		(9,748		)		(6,756		)
Total non-GAAP adjustments, prior to income taxes		120,746				50,655				165,665				75,223
Income tax effect of non-GAAP adjustments		(14,993		)		(5,656		)		(25,421		)		(10,757		)
Loss from investment accounted for using the equity method, net of tax		664				581				2,939				1,447
Adjusted Net Income		$	56,289			$	51,424			$	194,971			$	140,502

Reconciliation of GAAP Financial Statement Line Items to Non-GAAP Adjusted Financial Statement Line Items:
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
Total revenues		$	248,480			$	202,997			$	693,416			$	581,977
Fair value adjustment of acquired deferred revenues		2,914				288				3,924				483
Adjusted total revenues		$	251,394			$	203,285			$	697,340			$	582,460
Subscriptions revenues		$	212,227			$	173,174			$	585,804			$	501,011
Fair value adjustment of acquired deferred revenues		2,914				288				3,924				483
Adjusted subscriptions revenues		$	215,141			$	173,462			$	589,728			$	501,494
Cost of subscriptions and licenses		$	31,056			$	23,338			$	89,882			$	66,466
Amortization of purchased intangibles and developed technologies		(2,863		)		(1,367		)		(5,300		)		(3,710		)
Stock-based compensation		(320		)		(861		)		(809		)		(908		)
Acquisition expenses		(7		)		—				(7		)		—
Realignment expenses		—				(50		)		—				(50		)
Adjusted cost of subscriptions and licenses		$	27,866			$	21,060			$	83,766			$	61,798
Cost of services		$	23,176			$	19,290			$	67,090			$	50,126
Stock-based compensation		(227		)		(2,526		)		(615		)		(2,701		)
Acquisition expenses		(1,835		)		(614		)		(4,380		)		(1,050		)
Realignment expenses		—				(1,548		)		—				(1,548		)
Adjusted cost of services		$	21,114			$	14,602			$	62,095			$	44,827
Research and development		$	57,334			$	50,217			$	157,913			$	139,570
Stock-based compensation		(5,178		)		(6,661		)		(13,893		)		(7,817		)
Acquisition expenses		(1,537		)		(1,969		)		(4,882		)		(5,112		)
Realignment expenses		—				(841		)		—				(910		)
Adjusted research and development		$	50,619			$	40,746			$	139,138			$	125,731
Selling and marketing		$	44,392			$	41,824			$	114,846			$	107,551
Stock-based compensation		(1,481		)		(4,803		)		(3,484		)		(5,607		)
Acquisition expenses		(421		)		(86		)		(603		)		(243		)
Realignment expenses		—				(5,183		)		—				(5,183		)
Adjusted selling and marketing		$	42,490			$	31,752			$	110,759			$	96,518
General and administrative		$	35,329			$	32,956			$	110,233			$	85,390
Stock-based compensation		(4,382		)		(4,697		)		(13,385		)		(5,727		)
Acquisition expenses		(983		)		(532		)		(18,101		)		(1,610		)
Realignment expenses		—				(2,321		)		—				(2,321		)
Adjusted general and administrative		$	29,964			$	25,406			$	78,747			$	75,732

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
(Loss) income from operations		$	(40,448	)		$	5,323			$	47,422			$	95,875
Amortization of purchased intangibles and developed technologies		11,539				5,236				22,003				14,694
Stock-based compensation		11,588				19,548				32,186				22,760
Deferred compensation plan		88,965				50				89,327				(115		)
Acquisition expenses		7,697				3,489				31,897				8,498
Realignment expenses		—				9,943				—				10,012
Expenses associated with IPO		—				26,130				—				26,130
Adjusted income from operations		$	79,341			$	69,719			$	222,835			$	177,854

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