BENTLEY SYSTEMS INC - Quarter Report: 2024 March (Form 10-Q)

) ) Repayments of term loan()()Payments of contingent and non-contingent consideration()()Payments of dividends()()Proceeds from stock purchases under employee stock purchase plan Proceeds from exercise of stock options Payments for shares acquired including shares withheld for taxes()()Repurchases of Class B common stock under approved program() Other()()

Net cash used in financing activities

()()Effect of exchange rate changes on cash and cash equivalents()

Increase in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of period

$ $

BENTLEY SYSTEMS, INCORPORATED

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

))))

Three Months Ended

March 31,

2024

2023

Supplemental information:

Cash paid for income taxes

Income tax refunds

Interest paid

Non-cash investing and financing activities:

Cost method investment

Deferred, non-contingent consideration, net

Foreign currency translation adjustments

()

Other adjustments

()

Balance, March 31, 2024

- years$ $()$ $ $()$ Customer relationships

- years

() () Trademarks

- years

() () Non-compete agreements

years

() () $

Note 7:

$ Equity method investments Total investments$ $

Cost Method Investments

The Company invests in technology development companies, generally in the form of equity interests or convertible notes. In March 2023, the Company acquired an equity interest in Worldsensing, a leading global connectivity hardware platform company for infrastructure monitoring, via contribution of its sensemetrics’ Thread connectivity device business (the “Thread business”) and cash. The non‑cash contribution of the Thread business resulted in an insignificant gain, which was recorded in Other income, net in the consolidated statements of operations for the three months ended March 31, 2023.

. During the three months ended March 31, 2023, the Company invested a total of $, including $ of cash and non-cash for its investment in Worldsensing. As of March 31, 2024 and December 31, 2023, the Company’s investment balance in Worldsensing was $.

Note 8:

to , some of which include one or more options to renew, with renewal terms from to and some of which include options to terminate the leases from less than to .

$ Variable lease cost Total operating lease cost$ $

(1)Operating lease cost includes rent cost related to operating leases for office facilities of $ and $ for the three months ended March 31, 2024 and 2023, respectively.

Right-of-use assets obtained in exchange for new operating lease liabilities (1)

$ $

(1)For the three months ended March 31, 2023, right‑of‑use assets obtained in exchange for new operating lease liabilities does not include the impact from an acquisition of $.

The weighted average remaining lease term for operating leases was years and years as of March 31, 2024 and December 31, 2023, respectively. The weighted average discount rate was % as of March 31, 2024 and December 31, 2023.

Note 9:

$ Accrued benefits Accrued compensation Due to customers Accrued indirect taxes Accrued acquisition stay bonus Accrued professional fees Accrued realignment costs Accrued cloud provisioning costs Employee stock purchase plan contributions Non-contingent consideration from acquisitions Deferred compensation plan liabilities )) ()$()

The weighted average interest rate on borrowings under the Credit Facility were % and % for the three months ended March 31, 2024 and 2023, respectively.

Note 11:

and $, respectively.

Note 12:

and $ for the three months ended March 31, 2024 and 2023, respectively.

For the three months ended March 31, 2024 and 2023, elective participant deferrals into the Company’s unfunded amended and restated Bentley Systems, Incorporated Nonqualified Deferred Compensation Plan (the “DCP”) were $ and $, respectively. discretionary contributions were made to the DCP during the three months ended March 31, 2024 and 2023. As of March 31, 2024 and December 31, 2023, and phantom shares of the Company’s Class B common stock were distributable under the DCP, respectively. As of March 31, 2024, shares of Class B common stock available for future issuance under the DCP were .

$ Deferred compensation plan liabilities Total DCP liabilities$ $

Note 13:

of the Company’s Class B common stock through June 30, 2024. In December 2022, the Company’s Board of Directors amended the Repurchase Program to allow the Company also to repurchase its outstanding convertible senior notes. This additional authorization did not increase the overall dollar limit of the Repurchase Program. Effective July 1, 2024, the Company’s Board of Directors extended the Repurchase Program, authorizing the Company to repurchase from such date up to $ of the Company’s Class B common stock and/or convertible senior notes through June 30, 2026. The Company’s current authorization under the Repurchase Program expires on June 30, 2024.

The shares and convertible senior notes proposed to be acquired in the Repurchase Program may be repurchased from time to time in open market transactions, through privately negotiated transactions, or by other means in accordance with federal securities laws. The Company intends to fund repurchases from available working capital and cash provided by operating activities. The timing, as well as the number and value of shares and/or convertible senior notes repurchased under the Repurchase Program, will be determined by the Company at its discretion and will depend on a variety of factors, including management’s assessment of the intrinsic value of the Company’s shares, the market price of the Company’s Class B common stock and outstanding convertible senior notes, general market and economic conditions, available liquidity, compliance with the Company’s debt and other agreements, and applicable legal requirements. The exact number of shares and/or convertible senior notes to be repurchased by the Company is not guaranteed, and the Repurchase Program may be suspended, modified, or discontinued at any time without prior notice.

During the three months ended March 31, 2024, the Company repurchased shares for $ under the Repurchase Program. The Company did repurchase shares under the Repurchase Program for the three months ended March 31, 2023. As of March 31, 2024, $ was available under the Company’s Board of Directors authorization for future repurchases of Class B common stock and/or outstanding convertible senior notes under the Repurchase Program.

shares of Class B common stock to DCP participants in connection with distributions from the plan. There were shares sold back to the Company as they were issued on a gross basis during the three months ended March 31, 2024. During the three months ended March 31, 2023, the Company issued shares of Class B common stock to DCP participants in connection with distributions from the plan, net of shares which were sold back to the Company in the same period to pay for applicable income tax withholdings of $.

During the three months ended March 31, 2024, the Company issued shares of Class B common stock in connection with Bonus Plan incentive compensation. There were shares sold back to the Company as they were issued on a gross basis during the three months ended March 31, 2024. During the three months ended March 31, 2023, the Company issued shares of Class B common stock in connection with Bonus Plan incentive compensation, net of shares were sold back to the Company in the same period to pay for applicable income tax withholdings of $.

During the three months ended March 31, 2024, the Company issued shares of Class B common stock to colleagues who exercised their stock options, net of shares withheld at exercise to pay for the cost of the stock options, as well as for $ of applicable income tax withholdings. The Company received $ in cash proceeds from the exercise of stock options. For the three months ended March 31, 2023, the Company issued shares of Class B common stock to colleagues who exercised their stock options, net of shares withheld at exercise to pay for the cost of the stock options, as well as for $ of applicable income tax withholdings. The Company received $ in cash proceeds from the exercise of stock options.

$ 2023: $

Stock‑based compensation expense is measured at the grant date fair value of the award and is recognized ratably over the requisite service period, which is generally the vesting period. Specifically for performance‑based RSUs, stock‑based compensation expense is measured at the grant date fair value of the award and is recognized ratably over the requisite service period based on the number of awards expected to vest at each reporting date. The Company accounts for forfeitures of equity awards as those forfeitures occur.

Bentley Systems, Incorporated 2020 Omnibus Incentive Plan

The Bentley Systems, Incorporated 2020 Omnibus Incentive Plan (the “2020 Plan”) provides for the granting of stock, stock options, restricted stock, RSUs, and other stock‑based or performance‑based awards to certain directors, officers, colleagues, consultants, and advisors of the Company, and terminates in September 2030. The 2020 Plan provides that shares of Class B common stock may be issued for equity awards. Equity awards that are expired, canceled, forfeited, or terminated for any reason will be available for future grant under the 2020 Plan. As of March 31, 2024, equity awards available for future grants under the 2020 Plan were .

to .

(3)

(4)

$ $ Granted

(1)

(5)

Vested()()() Forfeited and canceled()() Unvested, March 31, 2024

(2)

(3)

$ $

(1)For the three months ended March 31, 2024, the Company only granted RSUs.

(2)Includes RSUs which are expected to be settled in cash.

(3)Includes time‑based RSUs granted during the three months ended March 31, 2022 to certain officers and key employees, which cliff vest on January 31, 2025.

(4)Primarily relates to the 2023 annual performance period, except for performance‑based RSUs granted during the year ended December 31, 2022 with extraordinary terms, which are described below.

(5)Primarily relates to the 2024 annual performance period, except for additional shares earned based on the achievement of 2023 performance goals for performance-based RSUs granted during the year ended December 31, 2023.

During the year ended December 31, 2022, the Company granted performance‑based RSUs to certain officers and key employees, which vest subject to the achievement of certain performance goals over a three‑year performance period (the “Performance Period”). For each year of the Performance Period, one‑third of the performance‑based RSUs will be subject to a cliff, whereby no vesting of that portion will occur unless the Company’s applicable margin metrics (which, for 2022 was Adjusted EBITDA margin, and for 2023 was and 2024 will be Adjusted operating income inclusive of stock-based compensation expense (“Adjusted OI w/SBC”) margin, excluding the impact of foreign currency exchange fluctuations) also equals or exceeds the relevant target level for such year. Provided that the applicable margin targets are met, the total number of performance‑based RSUs that will vest is determined by the achievement of growth targets, which include growth in ARR, as well as actual bookings for perpetual licenses and non‑recurring services. Final actual vesting will be determined on January 31, 2025. The 2023 Adjusted OI w/SBC margin target, excluding the impact of foreign currency exchange fluctuations, and the 2022 Adjusted EBITDA margin target for the performance‑based RSUs were met.

The weighted average grant date fair values of RSUs granted were $ and $, for the three months ended March 31, 2024 and 2023, respectively.

For the three months ended March 31, 2024 and 2023, restricted stock and RSUs were issued net of and shares, respectively, which were sold back to the Company to settle applicable income tax withholdings of $ and $, respectively.

of unrecognized compensation expense related to unvested time‑based restricted stock and RSUs, which is expected to be recognized over a weighted average period of approximately years. As of March 31, 2024, there was $ of unrecognized compensation expense related to unvested performance‑based RSUs, which is expected to be recognized over a weighted average period of approximately years.

Stock Options

$ Exercised() Forfeited and expired() Outstanding, March 31, 2024 $ ) $

(1)Foreign exchange gain is primarily attributable to foreign currency translation derived mainly from U.S. dollar denominated cash and cash equivalents, account receivables, customer deposits, and intercompany balances held by foreign subsidiaries. Intercompany finance transactions primarily denominated in U.S. dollars resulted in unrealized foreign exchange (losses) gains of $() and $ for the three months ended March 31, 2024 and 2023, respectively.

Note 21:

for the year ended December 31, 2023 related to the aforementioned program, which represents termination benefits for colleagues whose roles were impacted. During the first quarter of 2024, the Company incurred realignment costs of $ for the three months ended March 31, 2024 related to the aforementioned program. The 2023 Program activities have been broadly implemented across the Company’s various businesses with the intention that all actions, including payment of the termination benefits, will be substantially complete by the end of the second quarter of 2024.)Cost of services Total cost of revenues()Operating expenses:Research and development()Selling and marketing General and administrative()Total operating expenses Total realignment costs$ Realignment costs Payments()

Adjustments (1)

()Balance, March 31, 2024$

(1)Adjustments include foreign currency translation.

Note 22:

and participating securities outstanding, respectively.

Undistributed net income allocated to participating securities are subtracted from net income in determining basic net income attributable to common stockholders. Basic net income per share is computed by dividing basic net income attributable to common stockholders by the weighted average number of shares, inclusive of undistributed shares held in the DCP as phantom shares of the Company’s Class B common stock.

Less: Net income attributable to participating securities

()()

Net income attributable to Class A and Class B common stockholders, basic

Add: Interest expense, net of tax, attributable to assumed conversion of convertible senior notes

Net income attributable to Class A and Class B common stockholders, diluted

$ $ Denominator:Weighted average shares, basic Dilutive effect of stock options, restricted stock, and RSUs Dilutive effect of ESPP Dilutive effect of assumed conversion of convertible senior notes Weighted average shares, diluted

Net income per share, basic

$ $

Net income per share, diluted

$ $ 1,454 131,682 $109,662

Further explanation of certain of our adjustments in arriving at Adjusted OI w/SBC and Adjusted operating income are as follows:

(1)Amortization of purchased intangibles. Amortization of purchased intangibles varies in amount and frequency and is significantly impacted by the timing and size of our acquisitions. Management finds it useful to exclude these non‑cash charges from our operating expenses to assist in budgeting, planning, and forecasting future periods. The use of intangible assets contributed to our revenues earned during the periods presented and will also contribute to our revenues in future periods. Amortization of purchased intangible assets will recur in future periods.

(2)Deferred compensation plan. We exclude Deferred compensation plan expense (income) when we evaluate our continuing operational performance because it is not reflective of our ongoing business and results of operation. We believe it is useful for investors to understand the effects of this item on our total operating expenses. Deferred compensation plan liabilities are marked to market at the end of each reporting period, with changes in the liabilities recorded as an expense (income) to Deferred compensation plan in the consolidated statements of operations.

(3)Acquisition expenses. We incur expenses for professional services rendered in connection with business combinations, which are included in our GAAP presentation of general and administrative expense (see Note 4 to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10‑Q). Also included in our acquisition expenses are retention incentives paid to executives of the acquired companies. We exclude these acquisition expenses when we evaluate our continuing operational performance as we would not have otherwise incurred these expenses in the periods presented as part of our continuing operations.

(4)Realignment expenses (income). We exclude these charges and subsequent adjustments to our estimates when we evaluate our continuing operational performance because they are not reflective of our ongoing business and results of operations. We believe it is useful for investors to understand the effects of these items on our total operating expenses. For the three months ended March 31, 2024, Realignment expenses were primarily associated with the 2023 Program (see Note 21 to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10‑Q). For the three months ended March 31, 2023, Realignment income was associated with the continued wind down of our Russian entities since we exited operations beginning in the second quarter of 2022.

(5)Stock‑based compensation expense. We exclude non-cash stock‑based compensation expenses from certain of our non‑GAAP measures because we believe this is useful to investors in making comparisons to other companies.

Constant Currency

Constant currency and constant currency growth rates are non-GAAP financial measures that present our results of operations excluding the estimated effects of foreign currency exchange rate fluctuations. A significant amount of our operations is conducted in foreign currencies. As a result, the comparability of the financial results reported in U.S. dollars is affected by changes in foreign currency exchange rates. We use constant currency and constant currency growth rates to evaluate the underlying performance of the business, and we believe it is helpful for investors to present operating results on a comparable basis period over period to evaluate its underlying performance.

In reporting period‑over‑period results, except for ARR as discussed above in “Key Business Metrics” section, we calculate the effects of foreign currency fluctuations and constant currency information by translating current and prior period results on a transactional basis to our reporting currency using prior period average foreign currency exchange rates in which the transactions occurred.

Reconciliation of consolidated revenues to consolidated revenues in constant currency:


	Three Months Ended March 31, 2024						Three Months Ended March 31, 2023
	Actual		Impact of Foreign Exchange at 2023 Rates		Constant Currency		Actual		Impact of Foreign Exchange at 2023 Rates		Constant Currency
Subscriptions	$	307,089	$	(761)	$	306,328	$	277,845	$	(142)	$	277,703
Perpetual licenses	9,512		115		9,627		9,547		7		9,554
Subscriptions and licenses	316,601		(646)		315,955		287,392		(135)		287,257
Services	21,162		(197)		20,965		27,019		10		27,029
Total revenues	$	337,763	$	(843)	$	336,920	$	314,411	$	(125)	$	314,286

Reconciliation of revenues by geographic region to revenues by geographic region in constant currency:


	Three Months Ended March 31, 2024						Three Months Ended March 31, 2023
	Actual		Impact of Foreign Exchange at 2023 Rates		Constant Currency		Actual		Impact of Foreign Exchange at 2023 Rates		Constant Currency
Americas	$	184,193	$	(453)	$	183,740	$	168,345	$	(82)	$	168,263
EMEA	94,714		(1,451)		93,263		92,832		4		92,836
APAC	58,856		1,061		59,917		53,234		(47)		53,187
Total revenues	$	337,763	$	(843)	$	336,920	$	314,411	$	(125)	$	314,286

Reconciliation of cost of revenues to cost of revenues in constant currency:


	Three Months Ended March 31, 2024						Three Months Ended March 31, 2023
	Actual		Impact of Foreign Exchange at 2023 Rates		Constant Currency		Actual		Impact of Foreign Exchange at 2023 Rates		Constant Currency
Cost of subscriptions and licenses	$	40,218	$	(89)	$	40,129	$	40,931	$	22	$	40,953
Cost of services	21,612		(249)		21,363		26,253		17		26,270
Total cost of revenues	$	61,830	$	(338)	$	61,492	$	67,184	$	39	$	67,223

Reconciliation of operating expenses to operating expenses in constant currency:


	Three Months Ended March 31, 2024						Three Months Ended March 31, 2023
	Actual		Impact of Foreign Exchange at 2023 Rates		Constant Currency		Actual		Impact of Foreign Exchange at 2023 Rates		Constant Currency
Research and development	$	68,371	$	(96)	$	68,275	$	67,800	$	19	$	67,819
Selling and marketing	54,386		(76)		54,310		52,141		27		52,168
General and administrative	46,482		(115)		46,367		46,807		13		46,820
Deferred compensation plan	5,799		—		5,799		4,146		—		4,146
Amortization of purchased intangibles	8,964		(24)		8,940		10,548		(1)		10,547
Total operating expenses	$	184,002	$	(311)	$	183,691	$	181,442	$	58	$	181,500

Liquidity and Capital Resources:

Cash and Cash Equivalents


	March 31, 2024		December 31, 2023
Cash and cash equivalents held domestically	$	52,286	$	3,693
Cash and cash equivalents held by foreign subsidiaries	89,315		64,719
Total cash and cash equivalents	$	141,601	$	68,412

Our primary source of operating cash is from the sale of our subscriptions, perpetual licenses, and services. Our primary use of cash is payment of our operating costs, which consist mainly of headcount‑related costs. In addition to operating expenses, we also use cash to service our debt obligations, to pay quarterly dividends, to repurchase our Class B common stock and convertible debt, and for capital expenditures in support of our operations. We also use cash to fund our acquisitions of software assets and businesses, and other investment activities.

We believe that cash generated from operations, together with existing cash and cash equivalent balances, and external borrowings including available liquidity under the Credit Facility, will be sufficient to meet our domestic and international working capital and capital expenditure requirements. We regularly review our capital structure and consider a variety of potential financing alternatives and planning strategies to ensure that we have the proper liquidity available in the locations in which it is needed and to fund our operations and growth investments with cash that has not been permanently reinvested outside the U.S. Our future capital requirements may be materially different than those currently planned in our budgeting and forecasting activities and depend on many factors, including our strategy of regularly acquiring and integrating specialized infrastructure engineering software businesses, our rate of revenue growth, the timing and extent of spending on research and development, the expansion of our sales and marketing activities, the timing of new product introductions, market acceptance of our products, competitive factors, our discretionary payments of dividends or repurchases of our Class B common stock and convertible debt, fund of our purchase commitments, currency fluctuations, and overall economic conditions, globally. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders, while the incurrence of additional debt financing, including convertible debt, would result in additional debt service obligations. Such debt instruments also could introduce new or modified covenants that might restrict our operations and/or our ability to pay dividends, consummate acquisitions, or otherwise pursue our business strategies. We cannot provide assurance that we could obtain additional financing on favorable terms or at all.

Cash Flows Activity


	Three Months Ended March 31,
	2024		2023
Net cash provided by (used in):
Operating activities	$	204,969	$	176,223
Investing activities	(3,849)		(20,761)
Financing activities	(126,435)		(134,241)

Operating Activities

For the three months ended March 31, 2024, compared to the same period in the prior year, net cash provided by operating activities was higher by $28,746 due to an increase in net income of $24,820 and a net increase in non‑cash adjustments of $5,104, partially offset by a decrease in net cash flows from the change in operating assets and liabilities of $1,178. The decrease in cash flows from the change in operating assets and liabilities was primarily due to a decrease in deferred revenues, an increase in other current assets, and the overall timing of tax payments period over period. Offsetting theses decreases were higher CSS deposits period over period.

In addition, we expect to substantially pay the remainder of termination benefits to colleagues in connection with our 2023 Program by the end of the second quarter of 2024. See Note 21 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10‑K for additional information related to realignment costs.

Investing Activities

Net cash used in investing activities was lower by $16,912 for the three months ended March 31, 2024, compared to the same period in the prior year, primarily due to lower acquisition related payments of $10,299, as no acquisitions were completed in the first quarter of 2024 compared to one acquisition in the first quarter of 2023, and to a lesser extent, lower purchases of investments of $5,928.

Financing Activities

Net cash used in financing activities was lower by $7,806 for the three months ended March 31, 2024, compared to the same period in the prior year, primarily due to lower net paydowns of the Credit Facility of $12,707, partially offset by higher dividend payments of $3,349, primarily due to an increase in our quarterly dividend per share to $0.06 from $0.05, and higher payments for shares acquired of $2,157, including shares repurchased under the Repurchase Program. Refer to the section titled “Stock Repurchases” below for further detail.

Long-Term Debt


	March 31, 2024		December 31, 2023
Current portion of long-term debt	$	10,000	$	10,000
Long-term debt	1,425,445		1,518,403
Total debt	$	1,435,445	$	1,528,403

As of March 31, 2024, we had $849,850 available under the Credit Facility. We were in compliance with all covenants in its Credit Facility, the 2026 Notes, and the 2027 Notes as of March 31, 2024. Any failure to comply with such covenants under the Credit Facility would prevent us from being able to borrow additional funds under the Credit Facility, and, as with any failure to comply with such covenants under the 2026 Notes and the 2027 Notes, could constitute a default that may cause all amounts outstanding to become due and immediately payable in full.

Stock Repurchases

BSY Stock Repurchase Program

Our Board of Directors has authorized us to repurchase up to $200,000 of our Class B common stock and/or outstanding convertible senior notes through June 30, 2024 under the Repurchase Program. Effective July 1, 2024, our Board of Directors extended the Repurchase Program, authorizing us to repurchase from such date up to $200,000 of our Class B common stock and/or convertible senior notes through June 30, 2026. Our current authorization under the Repurchase Program expires on June 30, 2024. We may use available working capital and cash provided by operations to make repurchases.

During the three months ended March 31, 2024, we repurchased 302,598 shares for $15,006 under the Repurchase Program. For the three months ended March 31, 2023, we did not repurchase shares under the Repurchase Program.

The timing, as well as the number and value of shares and/or convertible senior notes repurchased under the Repurchase Program, will be determined at our discretion and will depend on a variety of factors, including our assessment of the intrinsic value of our shares, the market price of our Class B common stock and outstanding convertible senior notes, general market and economic conditions, available liquidity, compliance with our debt and other agreements, and applicable legal requirements.

Withholding Taxes on Certain Equity Awards

We have the right to require that certain equity awardees receive gross or net quantities of shares of our Class B common stock, including distributions from the DCP and share issuances under our Bonus Plan. In the case of a gross issuance or distribution, an awardee is required to reimburse promptly to us the cash required for his or her tax withholding amounts. Conversely, under a net issuance or distribution, shares are withheld in consideration of remitting withholding taxes on behalf of an equity awardee, thereby requiring us to remit cash for the tax withholdings. During the three months ended March 31, 2024, we exercised our right to require that impacted equity awardees receive gross quantities of our Class B common stock during the first quarter. During the three months ended March 31, 2023, we allowed impacted awardees the option to receive net quantities of shares of our Class B common stock in the first quarter. We will continue to evaluate whether share awards will be required to be received by awardees on a gross basis, or if net settlement may be elected by awardees.

Dividend Payments

The declaration and payment of dividends is within the discretion of our Board of Directors. We paid quarterly dividends of $0.06 per share of common stock during the three months ended March 31, 2024 and $0.05 per share of common stock during the three months ended March 31, 2023. While we intend to continue paying quarterly dividends, any future determination will be subject to the discretion of our Board of Directors and will be dependent on a number of factors, including our results of operations, capital requirements, restrictions under Delaware law, and overall financial condition, as well as any other factors our Board of Directors considers relevant. In addition, the terms of the agreement governing the Credit Facility limit the amount of dividends we can pay.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our market risk exposure as described in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our 2023 Annual Report on Form 10‑K.

Item 4. Controls and Procedures

Evaluation of Effectiveness of Disclosure Controls and Procedures

Our management maintains disclosure controls and procedures as defined in Rules 13a‑15(e) and 15d‑15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is processed, recorded, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), as appropriate, to allow for timely decisions regarding required disclosure.

We evaluated, under the supervision and with the participation of management, including our principal executive and principal financial officers, the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2024, our disclosure controls and procedures were effective at the reasonable assurance level.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Bentley Systems, Incorporated have been detected.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a or 15d of the Exchange Act that occurred during the quarter ended March 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are subject from time to time to various legal proceedings and claims which arise in the ordinary course of our business. Although the outcome of these and other claims cannot be predicted with certainty, we do not believe that the ultimate resolution of pending matters will have a material adverse effect on our financial condition, results of operations, or cash flows. We currently believe that we do not have any material litigation pending against us.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A. Risk Factors in our 2023 Annual Report on Form 10‑K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Equity Securities

From January 1, 2024 to March 31, 2024, we issued 537,745 shares of our Class B common stock in connection with distributions from our DCP.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. Unless otherwise stated, the sales of the above securities were deemed to be exempt from registration under the Securities Act in reliance on Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer pursuant to benefit plans and contracts relating to compensation as provided under Rule 701. All recipients had adequate access, through their relationships with us, to information about us. The issuance of these securities were made without any general solicitation or advertising.

Issuer Purchases of Equity Securities

The following table reflects our Class B common stock we repurchased during the three months ended March 31, 2024:


				Total Number of	Approximate Dollar
				Shares Purchased as	Value of Shares that
	Total Number of	Average Price		Part of Publicly	May Yet Be Purchased
Period	Shares Purchased	Paid per Share		Announced Plan (1)	Under the Plan (2)
January 1, 2024 to January 31, 2024	—	$	—	—	$	169,751,743
February 1, 2024 to February 29, 2024	—	—		—	169,751,743
March 1, 2024 to March 31, 2024	302,598	49.57		302,598	154,751,754
	302,598	49.57		302,598

(1)Represents shares purchased in open‑market transactions under the Repurchase Program approved by our Board of Directors.

(2)These amounts correspond to the plan publicly announced and approved by our Board of Directors in May 2022 that authorizes the repurchase up to $200 million of our Class B common stock through June 30, 2024. In December 2022, our Board of Directors amended the plan to allow us also to repurchase our outstanding convertible senior notes. This additional authorization did not increase the overall dollar limit of the plan. Effective July 1, 2024, our Board of Directors extended the plan, authorizing us to repurchase from such date up to $200,000 of our Class B common stock and/or convertible senior notes through June 30, 2026.

Item 5. Other Information

Rule 10b5-1 Trading Plans

, the Company’s , a trading plan established pursuant to Rule 10b5‑1 of the Exchange Act, which is intended to satisfy the affirmative defense conditions of Rule 10b5‑1(c). The Company estimates that Mr. Campbell could sell up to an aggregate of shares of its Class B common stock under the plan, though the final number of shares sold will depend upon a variety of factors, including applicable tax rates. Mr. Campbell’s plan expires on October 15, 2024., , the Company’s , a trading plan established pursuant to Rule 10b5‑1 of the Exchange Act, which was intended to satisfy the affirmative defense conditions of Rule 10b5‑1(c) and was adopted effective June 8, 2023 to sell an aggregate of shares of our Class B common stock through March 31, 2024. On , Mr. Shaman a trading plan established pursuant to Rule 10b5‑1 of the Exchange Act, which is intended to satisfy the affirmative defense conditions of Rule 10b5‑1(c), to sell an aggregate of shares of our Class B common stock. Mr. Shaman’s plan expires on March 7, 2025.

During the three months ended March 31, 2024, there were no other Company directors or executive officers who or any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5‑1(c) or any “non-Rule 10b5‑1 trading arrangement.”

Item 6. Exhibits


Exhibit
Number						Description
31.1*						Certification of CEO pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
31.2*						Certification of CFO pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
32*						Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document
101.SCH						Inline XBRL Taxonomy Extension Schema
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase
104						Cover page formatted as Inline XBRL and contained in Exhibit 101


*			Filed or furnished herewith. The certification attached as Exhibit 32 that accompanies this Quarterly Report on Form 10‑Q is not deemed filed with the SEC and is not to be incorporated by reference into any filing of Bentley Systems, Incorporated under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10‑Q, irrespective of any general incorporation language contained in such filing.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Bentley Systems, Incorporated

Date: May 7, 2024	By:	/s/ WERNER ANDRE
		Werner Andre
		Chief Financial Officer
		(Principal Financial Officer)

BENTLEY SYSTEMS INC - Quarter Report: 2024 March (Form 10-Q)

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