Bentley Systems Announces First Quarter 2026 Results

Key Terms

annualized recurring revenues financial

Annualized recurring revenues (ARR) is a financial metric that converts a company’s predictable, repeatable income—usually from subscriptions, service contracts, or memberships—into a standardized yearly amount. Investors use ARR as a quick measure of the steady cash a business can expect each year, similar to annualizing a monthly paycheck to see how much you’d earn over twelve months; it helps assess growth, predictability and the value of the business.

non-gaap financial measures financial

Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.

form 8-k regulatory

A Form 8-K is a report that companies file with the government to share important news quickly, such as changes in leadership, major business deals, or financial updates. It matters because it helps investors stay informed about significant events that could affect the company's value or stock price.

stock-based compensation financial

Stock-based compensation is when a company pays employees, directors or consultants with shares or the right to buy shares instead of or in addition to cash. It matters to investors because issuing stock or options spreads ownership thinner (like cutting a pie into more slices), which can reduce each existing share’s claim on profits and can also change reported earnings; investors watch it to assess true cost of running the business and how management is incentivized.

term loan a financial

Term Loan A is a portion of a company’s syndicated bank loan that is paid down with regular principal installments over a set period, usually carries lower interest and a shorter maturity than other loan tranches. It matters to investors because its scheduled repayments and interest cost affect a company’s cash flow and borrowing needs; heavy near‑term payments can reduce cash available for dividends, investment or increase refinancing risk, much like a mortgage with larger monthly payments limits household flexibility.

credit facility financial

A credit facility is a flexible loan arrangement that allows a borrower to access funds up to a set limit whenever needed, similar to a company having an overdraft option on a bank account. It matters to investors because it indicates how easily a business can secure cash when required, affecting its ability to manage expenses, invest, or respond to financial challenges.

term sofr rate financial

Term SOFR rate is a forward-looking interest rate for a set period (for example one or three months) based on the overnight cost of borrowing cash using Treasury securities as collateral. Think of it as a quoted, agreed-upon lending rate for a future interval, like locking in the expected short-term borrowing cost ahead of time. Investors care because it is used to price loans, bonds and derivatives as a transparent replacement for older benchmarks, affecting interest payments and valuation.

net leverage ratio financial

The net leverage ratio measures how much debt a company has compared to its available assets or earnings, after accounting for its cash and liquid assets. It helps investors understand how heavily a company relies on borrowed money to finance its operations and growth. A higher ratio indicates greater financial risk, while a lower ratio suggests a more cautious approach to borrowing.

EXTON, Pa.--(BUSINESS WIRE)-- Bentley Systems, Incorporated (Nasdaq: BSY), the infrastructure engineering software company, today announced results for the quarter ended March 31, 2026.

First Quarter 2026 Results

• Total revenues were $424.2 million, up 14.5% or 11.9% on a constant currency basis, year-over-year;
• Subscriptions revenues were $392.5 million, up 14.7% or 12.2% on a constant currency basis, year-over-year;
• Annualized Recurring Revenues (“ARR”) were $1,494.5 million as of March 31, 2026, compared to $1,319.3 million as of March 31, 2025; Constant currency ARR growth rate was 11.5%;
• Last twelve-month recurring revenues dollar-based net retention rate was 109%, compared to 110% for the same period last year;
• Operating income margin was 29.8%, compared to 31.1% for the same period last year;
• Adjusted operating income less operating stock-based compensation expense (“AOI less Operating SBC”) margin was 33.2%, compared to 34.6% for the same period last year;
• Net income per diluted share was $0.30, compared to $0.28 for the same period last year;
• Adjusted net income per diluted share (“Adjusted EPS”) was $0.38, compared to $0.35 for the same period last year;
• Cash flows from operating activities were $193.4 million, compared to $219.4 million for the same period last year; and
• Free cash flow was $187.9 million, compared to $216.4 million for the same period last year.

Executive Chair Greg Bentley said, “Along with distinctively consistent and commendable performance as in 2026’s first quarter, BSY characteristically prioritizes the enhancement of future value. I am continually amazed by the pace and potential of our AI advancements, especially behind-the-scenes, across every front. Our most committed contingent of accounts are the world’s top design firms. BSY’s multi-faceted AI initiatives are shaped to enable each such firm to competitively accelerate, for its own economic advantage, an individualized AI strategy to leverage its proprietary investments in engineering knowledge and data.”

CEO Nicholas Cumins said, “We are pleased to report a strong start to 2026, reflecting both solid market fundamentals and strong execution by our team. The quarter was highlighted by the performance of our Resources business, which continues to be our fastest-growing sector, and by the steady demand from Public Works / Utilities. This gives us a solid foundation for the year.

“In parallel, we continue to execute on our AI initiatives across the portfolio, including instrumenting our engineering applications to support AI-driven workflows, paving the way for a new, long-term economic engine where Bentley Systems software is leveraged by AI agents at machine scale.”

CFO Werner Andre said, “Our first-quarter results mark a strong start to the year across every key financial metric, positioning us well within our full-year financial outlook. We delivered constant-currency ARR growth of 11.5% and constant-currency subscriptions revenue growth of 12%, along with robust profitability and cashflow.

“On the balance sheet, we repaid the 2026 convertible notes at maturity, and subsequent to quarter-end we closed on a $550 million Term Loan A under our credit facility’s ‘accordion’ feature. Along with lowering interest costs, this provides increased financial flexibility to support strategic priorities, including programmatic acquisitions and returning capital to shareholders through dividends and share repurchases. Our disciplined approach to capital allocation is evidenced by quarter-end net debt leverage under 2x.”

Recent Developments

On April 23, 2026, we amended our credit facility to provide for a new $550 million term loan, which matures on October 18, 2029, subject to a “springing” maturity date. As a result, the total borrowing capacity under the credit facility increased to $1.85 billion. We used the term loan borrowings to repay portions of revolving indebtedness outstanding under the credit facility.

Call Details

Bentley Systems will host a live Zoom video webinar on May 7, 2026 at 8:15 a.m. Eastern time to discuss results for its first quarter ended March 31, 2026.

Those wishing to participate should access the live Zoom video webinar of the event through a direct registration link at https://bentley-com.zoom.us/webinar/register/WN_l4PXoJPcTeGtUGu1Oxd1BA#/registration. Alternatively, the event can be accessed from the Events & Presentations page on Bentley Systems’ Investor Relations website at https://investors.bentley.com. In addition, a replay and transcript will be available after the conclusion of the live event on Bentley Systems’ Investor Relations website for one year.

Non-GAAP Financial Measures

In this press release, we sometimes refer to financial measures that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these measures are considered non‑GAAP financial measures under the United States Securities and Exchange Commission (“SEC”) regulations. Those rules require the supplemental explanations and reconciliations that are in Bentley Systems’ Form 8‑K (Quarterly Earnings Release) furnished to the SEC.

During the first quarter of 2026, we changed our primary performance measure to AOI less Operating SBC from Adjusted operating income less stock‑based compensation expense (“AOI less SBC”), as management believes AOI less Operating SBC better captures the Company’s core business operating results. The nature of the change to AOI less Operating SBC reflects the inclusion of equity‑settled retention incentives provided to key employees of acquired companies within the adjustment for acquisition expenses, whereas such expenses were not previously included in the AOI less SBC acquisition expenses adjustment. Prior period amounts have been revised to conform to the current period presentation using the updated AOI less Operating SBC definition.

Forward-Looking Statements

This press release includes forward-looking statements regarding the future results of operations and financial condition, 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: adverse changes in global economic and/or political conditions; the impact of tariffs and related policies on our business and the businesses of the industries we serve; the impact of current and future sanctions, embargoes and other similar laws at the state and/or federal level that impose restrictions on our counterparties or upon our ability to operate our business within the subject jurisdictions; 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; failure to effectively manage succession; 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; the impact of changing or uncertain interest rates on us and on the industries we serve; our ability to integrate acquired businesses successfully; and our ability to identify and consummate future investments and/or acquisitions on terms satisfactory to us or at all.

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 Form 10‑Qs, which are on file with the SEC. 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

Around the world, infrastructure professionals rely on software from Bentley Systems to help them design, build, and operate better and more resilient infrastructure for transportation, water, energy, cities, and more. Founded in 1984 by engineers for engineers, Bentley is the partner of choice for engineering firms and owner-operators worldwide, with software that spans engineering disciplines, industry sectors, and all phases of the infrastructure lifecycle. Through our digital twin solutions, we help infrastructure professionals unlock the value of their data to transform project delivery and asset performance.

© 2026 Bentley Systems, Incorporated. Bentley and the Bentley logo 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
Consolidated Balance Sheets
(in thousands)
(unaudited)
		March 31, 2026				December 31, 2025
Assets
Current assets:
Cash and cash equivalents		$	105,159			$	123,278
Accounts receivable			344,098				350,299
Allowance for credit losses			(8,081	)			(7,609	)
Prepaid income taxes			16,770				19,805
Prepaid and other current assets			60,283				53,260
Total current assets			518,229				539,033
Property and equipment, net			36,791				36,031
Operating lease right-of-use assets			45,717				31,141
Intangible assets, net			180,719				193,018
Goodwill			2,474,746				2,482,154
Investments			27,878				27,920
Deferred income taxes			163,011				170,368
Other assets			76,624				75,502
Total assets		$	3,523,715			$	3,555,167
Liabilities and Equity
Current liabilities:
Accounts payable		$	21,269			$	26,952
Accruals and other current liabilities			170,655				173,255
Cloud Services Subscription deposits			525,718				463,312
Deferred revenues			265,981				278,244
Operating lease liabilities			13,312				13,669
Income taxes payable			9,931				4,778
Current portion of long-term debt			—				—
Total current liabilities			1,006,866				960,210
Long-term debt			1,115,269				1,248,912
Deferred compensation plan liabilities			105,209				106,831
Long-term operating lease liabilities			36,982				22,150
Deferred revenues			18,438				18,410
Deferred income taxes			4,657				4,368
Other liabilities			10,406				4,794
Total liabilities			2,297,827				2,365,675
Equity:
Common stock			3,036				3,024
Additional paid-in capital			1,325,977				1,301,205
Accumulated other comprehensive loss			(80,727	)			(74,558	)
Accumulated deficit			(22,439	)			(40,258	)
Total Bentley Systems stockholders’ equity			1,225,847				1,189,413
Noncontrolling interest			41				79
Total equity			1,225,888				1,189,492
Total liabilities and equity		$	3,523,715			$	3,555,167

BENTLEY SYSTEMS, INCORPORATED
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
		Three Months Ended
		March 31,
			2026				2025
Revenues:
Subscriptions		$	392,484			$	342,318
Perpetual licenses			9,057				10,792
Subscriptions and licenses			401,541				353,110
Services			22,640				17,432
Total revenues			424,181				370,542
Cost of revenues:
Cost of subscriptions and licenses			53,098				46,498
Cost of services			20,676				19,161
Total cost of revenues			73,774				65,659
Gross profit			350,407				304,883
Operating expense (income):
Research and development			83,005				72,450
Selling and marketing			75,272				63,059
General and administrative			58,509				47,228
Deferred compensation plan			(1,074	)			(1,246	)
Amortization of purchased intangibles			8,435				8,208
Total operating expenses			224,147				189,699
Income from operations			126,260				115,184
Interest expense, net			(8,200	)			(3,808	)
Other income, net			497				449
Income before income taxes			118,557				111,825
Provision for income taxes			(23,155	)			(20,488	)
Equity in net (losses) income of investees, net of tax			(53	)			1
Net income			95,349				91,338
Less: Net income (loss) attributable to noncontrolling interest			(37	)			(30	)
Net income attributable to Bentley Systems		$	95,386			$	91,368
Net income per share attributable to Bentley Systems stockholders:
Basic		$	0.31			$	0.29
Diluted		$	0.30			$	0.28
Weighted average shares:
Basic			312,593,358				315,130,071
Diluted			321,836,470				333,441,006

BENTLEY SYSTEMS, INCORPORATED
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
		Three Months Ended
		March 31,
			2026				2025
Cash flows from operating activities:
Net income		$	95,349			$	91,338
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			16,141				15,640
Deferred income taxes			8,207				(1,216	)
Stock-based compensation expense			20,192				17,402
Deferred compensation plan			(1,074	)			(1,246	)
Amortization of deferred debt issuance costs			1,135				1,894
Change in fair value of derivative			(76	)			4,372
Foreign currency remeasurement loss (gain)			180				(25	)
Other			665				175
Changes in assets and liabilities, net of effect from acquisitions:
Accounts receivable			4,886				14,346
Prepaid and other assets			(5,251	)			2,942
Accounts payable, accruals, and other liabilities			(11,056	)			(8,356	)
Cloud Services Subscription deposits			65,852				74,489
Deferred revenues			(9,994	)			(6,538	)
Income taxes payable, net of prepaid income taxes			8,252				14,198
Net cash provided by operating activities			193,408				219,415
Cash flows from investing activities:
Purchases of property and equipment and investment in capitalized software			(5,551	)			(3,044	)
Net cash used in investing activities			(5,551	)			(3,044	)
Cash flows from financing activities:
Proceeds from credit facility			820,537				122,249
Repayments of credit facility			(277,126	)			(257,565	)
Repayment of convertible senior notes			(677,830	)			(9,797	)
Payments of dividends			(21,225	)			(21,198	)
Proceeds from stock purchases under employee stock purchase plan			5,500				5,312
Payments for shares acquired including shares withheld for taxes			(14,226	)			(9,436	)
Repurchases of Class B common stock under approved program			(40,021	)			(30,014	)
Other			(50	)			(359	)
Net cash used in financing activities			(204,441	)			(200,808	)
Effect of exchange rate changes on cash and cash equivalents			(1,535	)			4,065
(Decrease) increase in cash and cash equivalents			(18,119	)			19,628
Cash and cash equivalents, beginning of period			123,278				64,009
Cash and cash equivalents, end of period		$	105,159			$	83,637

BENTLEY SYSTEMS, INCORPORATED
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except share and per share data)
(unaudited)
Reconciliation of operating income to AOI less Operating SBC and to Adjusted operating income:
		Three Months Ended
		March 31,
			2026				2025
Operating income		$	126,260			$	115,184
Amortization of purchased intangibles			12,057				11,444
Deferred compensation plan			(1,074	)			(1,246	)
Acquisition expenses(1)			3,680				2,926
AOI less Operating SBC			140,923				128,308
Operating stock-based compensation expense			17,972				15,217
Adjusted operating income		$	158,895			$	143,525

_______________________________
(1)	During the first quarter of 2026, we changed our primary performance measure to AOI less Operating SBC from AOI less SBC. Prior period amount has been revised to conform to the current period presentation using the updated AOI less Operating SBC definition. Refer to the section titled “Non‑GAAP Financial Measures” for details.

Reconciliation of net income attributable to Bentley Systems to Adjusted net income:
	Three Months Ended
	March 31,
	2026								2025
	$				EPS(1)				$				EPS(1)
Net income attributable to Bentley Systems	$	95,386			$	0.30			$	91,368			$	0.28
Non-GAAP adjustments, prior to income taxes:
Amortization of purchased intangibles		12,057				0.04				11,444				0.03
Operating stock-based compensation expense		17,972				0.06				15,217				0.05
Deferred compensation plan		(1,074	)			—				(1,246	)			—
Acquisition expenses(3)		3,680				0.01				2,926				0.01
Other income, net		(497	)			—				(449	)			—
Total non-GAAP adjustments, prior to income taxes		32,138				0.10				27,892				0.08
Income tax effect of non-GAAP adjustments		(4,970	)			(0.02	)			(4,682	)			(0.01	)
Equity in net losses (income) of investees, net of tax		53				—				(1	)			—
Adjusted net income(2)	$	122,607			$	0.38			$	114,577			$	0.35
Adjusted diluted weighted average shares	321,836,470								333,441,006

_______________________________
(1)	Adjusted EPS was computed independently for each reconciling item presented; therefore, the sum of Adjusted EPS for each line item may not equal total Adjusted EPS due to rounding.
(2)	Adjusted EPS numerator includes $1,009 and $1,569 for the three months ended March 31, 2026 and 2025, respectively, related to interest expense, net of tax, attributable to the convertible senior notes using the if‑converted method.
(3)	During the first quarter of 2026, we changed our primary performance measure to AOI less Operating SBC from AOI less SBC. Prior period amounts have been revised to conform to the current period presentation using the updated AOI less Operating SBC definition. Refer to the section titled “Non‑GAAP Financial Measures” for details.

Reconciliation of cash flows from operating activities to free cash flow:
	Three Months Ended
	March 31,
		2026				2025
Cash flows from operating activities	$	193,408			$	219,415
Purchases of property and equipment and investment in capitalized software		(5,551	)			(3,044	)
Free cash flow	$	187,857			$	216,371

Reconciliation of cash flows from operating activities to Adjusted EBITDA:
	Three Months Ended
	March 31,
		2026				2025
Cash flows from operating activities	$	193,408			$	219,415
Cash interest		7,365				2,150
Cash taxes		6,587				7,963
Cash deferred compensation plan distributions		587				526
Cash acquisition expenses		697				1,727
Changes in operating assets and liabilities		(43,749	)			(81,775	)
Other(1)		(1,529	)			(1,864	)
Adjusted EBITDA	$	163,366			$	148,142

_______________________________
(1)	Includes receipts related to interest rate swap.

Reconciliation of total revenues and subscriptions revenues to total revenues and subscriptions revenues in constant currency:
	Three Months Ended March 31, 2026									Three Months Ended March 31, 2025
	Actual			Impact of Foreign Exchange at 2025 Rates			Constant Currency			Actual			Impact of Foreign Exchange at 2025 Rates			Constant Currency
Total revenues	$	424,181		$	(9,288)		$	414,893		$	370,542		$	67		$	370,609
Subscriptions revenues	$	392,484		$	(8,373)		$	384,111		$	342,318		$	59		$	342,377

Explanation of Non-GAAP and Other Financial Measures

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 further below, 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.

Recurring revenues

Recurring revenues are the basis for our other revenue-related key business metrics. We believe this measure is useful in evaluating our ability to consistently retain and grow our revenues from accounts with revenues in the prior period (“existing accounts”).

Recurring revenues are subscriptions revenues that recur monthly, quarterly, or annually with specific or automatic renewal clauses and professional services revenues in which the underlying contract is based on a fixed fee and contains automatic annual renewal provisions.

Annualized recurring revenues (“ARR”)

ARR is a key business metric that we believe is useful in evaluating the scale and growth of our business as well as to assist in the evaluation of underlying trends in our business. Furthermore, we believe ARR, considered in connection with our last twelve‑month recurring revenues dollar‑based net retention rate, is a leading indicator of revenue growth.

ARR is defined as the sum of the annualized value of our portfolio of contracts that produce recurring revenues as of the last day of the reporting period, and the annualized value of the last three months of recognized revenues for our contractually recurring consumption‑based software subscriptions with consumption measurement durations of less than one year, calculated using the spot foreign currency exchange rates. We believe that the last three months of recognized revenues, on an annualized basis, for our recurring software subscriptions with consumption measurement period durations of less than one year is a reasonable estimate of the annual revenues, given our consistently high retention rate and stability of usage under such subscriptions.

Constant currency ARR growth rate is the growth rate of ARR measured on a constant currency basis. In reporting period‑over‑period ARR growth rates in constant currency, we calculate constant currency growth rates by translating current and prior period ARR on a transactional basis to our reporting currency using current year budget exchange rates. Constant currency ARR growth rate from business performance excludes the ARR onboarding of our platform acquisitions and includes the impact from the ARR onboarding of programmatic acquisitions, which generally are immaterial, individually and in the aggregate. We believe these ARR growth rates are important metrics indicating the scale and growth of our business.

Last twelve‑month recurring revenues dollar‑based net retention rate

Last twelve‑month recurring revenues dollar‑based net retention rate is a key business metric that we believe is useful in evaluating our ability to consistently retain and grow our recurring revenues.

Last twelve‑month recurring revenues dollar‑based net retention rate is calculated, using the average exchange rates for the prior period, as follows: the recurring revenues for the current period, including any growth or reductions from existing accounts, but excluding recurring revenues from any new accounts added during the current period, divided by the total recurring revenues from all accounts during the prior period. A period is defined as any trailing twelve months. Related to our platform acquisitions, recurring revenues into new accounts will be captured as existing accounts starting with the second anniversary of the acquisition when such data conforms to the calculation methodology. This may cause variability in the comparison.

Adjusted operating income less operating stock-based compensation expense (“AOI less Operating SBC”)

AOI less Operating SBC is a non-GAAP financial measure and is used to measure the operational strength and performance of our business, as well as to assist in the evaluation of underlying trends in our business.

AOI less Operating SBC is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses (inclusive of cash- and equity-settled retention incentives provided to key employees of acquired companies), and realignment expenses (income), for the respective periods.

AOI less Operating SBC is our primary performance measure, which excludes certain expenses and charges, including cash- and equity-settled retention incentives provided to key employees of acquired companies, as we believe these may not be indicative of the Company’s core business operating results. We intentionally include operating stock-based compensation expense (non‑cash stock‑based compensation expense less equity‑settled retention incentives provided to key employees of acquired companies) in this measure as we believe it better captures the economic costs of our business.

Management uses this non-GAAP financial measure to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, to evaluate financial performance, and in our comparison of our financial results to those of other companies. It is also a significant performance measure in certain of our executive incentive compensation programs.

AOI less Operating SBC margin is calculated by dividing AOI less Operating SBC by total revenues.

Adjusted operating income (“AOI”)

Adjusted operating income is a non-GAAP financial measure that we believe is useful to investors in making comparisons to other companies, although this measure may not be directly comparable to similar measures used by other companies.

Adjusted operating income is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses (inclusive of cash- and equity-settled retention incentives provided to key employees of acquired companies), realignment expenses (income), and operating stock‑based compensation expense (non‑cash stock‑based compensation expense less equity‑settled retention incentives provided to key employees of acquired companies), for the respective periods.

Adjusted net income and Adjusted EPS

Adjusted net income and Adjusted EPS are non-GAAP financial measures presenting the earnings generated by our ongoing operations that we believe is useful to investors in making meaningful comparisons to other companies, although these measures may not be directly comparable to similar measures used by other companies, and period-over-period comparisons.

Adjusted net income is defined as net income attributable to Bentley Systems adjusted for the following: amortization of purchased intangibles, operating stock‑based compensation expense (non‑cash stock‑based compensation expense less equity‑settled retention incentives provided to key employees of acquired companies), expense (income) relating to deferred compensation plan liabilities, acquisition expenses (inclusive of cash- and equity-settled retention incentives provided to key employees of acquired companies), realignment expenses (income), other non‑operating (income) expense, net, the tax effect of the above adjustments to net income, and equity in net (income) losses of investees, net of tax, for the respective periods. The income tax effect of non‑GAAP adjustments was determined using the applicable rates in the taxing jurisdictions in which income or expense occurred, and represent both current and deferred income tax expense or benefit based on the nature of the non‑GAAP adjustments, including the tax effects of non‑cash operating stock‑based compensation expense.

Adjusted EPS is calculated as Adjusted net income, less net income attributable to Bentley Systems allocated to participating securities, plus interest expense, net of tax, attributable to the convertible senior notes using the if‑converted method, if applicable, (numerator) divided by Adjusted diluted weighted average shares (denominator). Adjusted diluted weighted average shares is calculated by adding incremental shares related to the dilutive effect of convertible senior notes using the if‑converted method, if applicable, to diluted weighted average shares.

Free cash flow

Free cash flow is a non-GAAP financial measure and our primary liquidity measure that we believe provides a meaningful measure of liquidity and a useful basis for assessing our ability to service our debt obligations, make strategic acquisitions and investments, and return capital to investors through dividends and stock repurchases. Additionally, we believe free cash flow is useful to investors as a basis for comparing our results with other companies in our industries, although our measure of free cash flow may not be directly comparable to similar measures used by other companies. Free cash flow has certain limitations, including that it does not represent the residual cash flow available for discretionary expenditures since other non-discretionary payments, such as mandatory debt repayments, are not deducted from the measure.

Free cash flow is defined as cash flows from operating activities less purchases of property and equipment and investment in capitalized software.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure that we believe provides a meaningful measure of liquidity and a useful basis for assessing our ability to repay debt, make strategic acquisitions and investments, and return capital to investors.

Adjusted EBITDA is defined as cash flows from operating activities adjusted for the following: cash interest, cash taxes, cash deferred compensation plan distributions, cash acquisition expenses, cash realignment costs, changes in operating assets and liabilities, and other cash items (such as those related to our interest rate swap). From time to time, we may exclude from Adjusted EBITDA the impact of certain cash receipts or payments that affect period-to-period comparability.

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For more information, contact:
Investors: Eric Boyer, IR@bentley.com

Source: Bentley Systems, Incorporated