Bentley Systems, Incorporated (BSY) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

May 9, 2023 8:15 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Eric Boyer

Good morning and thank you for joining Bentley Systems' Q1 2023 Operating Results. I'm Eric Boyer, Bentley's Investor Relations Officer. On the webcast today, we have Bentley Systems' Chief Executive Officer, Greg Bentley; Chief Operating Officer, Nicholas Cumins; and Chief Financial Officer, Werner Andre.

This webcast includes forward-looking statements made as of May 9th, 2023, regarding the future results of operations and financial position, business strategy and plans, and objectives for future operations of Bentley Systems Incorporated.

All such statements made in or containing during this webcast, other than statements of historical fact, are forward-looking statements. This webcast will be available for replay on Bentley Systems' Investor Relations website at investors.bentley.com. After our presentation, we will conclude with Q&A.

Just a quick administrative matter before we begin. You can now find our 2022 annual report along with the CEO letter and our inaugural ESG report on our Investor Relations website.

And with that, let me introduce the CEO of Bentley Systems, Greg Bentley.

Greg Bentley

Good morning and thanks to each of you for your interest and attention. With the retirement of our Chief Investment Officer, David Hollister, and the division of his responsibilities among the rest of us, our presentation sequence starting this quarter is meant to be simpler and more concise. I will offer observations about directions in our business, we'll report on corporate developments, and provide updates on our capital allocation.

Then Chief Operating Officer, Nicholas Cumins, will provide expanded operating perspectives, now including in my stead, tone of business by sector and commercial model as well as by region and by brand. CFO, Werner Andre, will conclude with our financial performance, as usual.

Robust operating results for 2023 Q1 echo what I think has come to be expected of Bentley Systems end market resilience, predictably accretive business model, and the consistency of our execution and thankfully, absent last year's unfavorable drama in Russia and China.

We met or surpassed expectations for our financial performance metrics, most significantly including operating margins measured now by adjusted operating income with stock-based compensation.

Our operating cash flows were even higher than expected, but as Werner will explain, we expect consistency here on a trailing 12-month basis.

As Nicholas will elaborate, all operating trends remain directionally strong. And as he will explain, even though this year has started appreciably better in China than in other recent years, that probably will serve to accelerate our intentional localization pivot there at some increasing cost to existing ARR.