On August 6, 2024, Bentley Systems Inc (BSY, Financial) released its 8-K filing for the second quarter of 2024, showcasing impressive financial results that surpassed analyst estimates. The infrastructure engineering software company reported total revenues of $330.3 million, an 11.3% increase year-over-year, and a net income per diluted share of $0.22, compared to $0.15 for the same period last year.
Company Overview
Bentley Systems is a software vendor that caters to engineers, architects, constructors, and geospatial professionals by enabling design, modeling, simulation, and project and data management of infrastructure assets. The firm delivers solutions via the cloud, desktop, and hybrid environments. While Bentley is relatively small in comparison with peers like Autodesk, it shines in core specialty areas, like bridge or rail design, as opposed to being more broad-based in its applications. As of fiscal 2022, approximately 58% of revenue is derived from outside the U.S. (with 28% of revenue coming from EMEA and 18% coming from APAC as of fiscal 2022). Bentley's largest end market is the public works and utilities sector, which represents approximately two-thirds of revenue.
Performance Highlights
Bentley Systems Inc (BSY, Financial) reported total revenues of $330.3 million for Q2 2024, up 11.3% year-over-year, surpassing the analyst estimate of $325.07 million. Subscription revenues were a significant driver, reaching $297.4 million, a 14.7% increase year-over-year. The company's Annualized Recurring Revenues (ARR) grew to $1,215.9 million, reflecting an 11% growth rate on a constant currency basis.
Net income per diluted share was $0.22, exceeding the analyst estimate of $0.16. Adjusted net income per diluted share was $0.31, compared to $0.24 for the same period last year. Operating income margin improved to 24.3%, up from 18.0% in Q2 2023, while adjusted operating income margin inclusive of stock-based compensation expense was 28.8%, compared to 24.7% last year.
Financial Achievements and Metrics
Bentley Systems Inc (BSY, Financial) demonstrated strong financial performance with significant improvements in key metrics:
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenues | $330.3 million | $296.7 million |
| Subscription Revenues | $297.4 million | $259.2 million |
| Net Income per Diluted Share | $0.22 | $0.15 |
| Adjusted Net Income per Diluted Share | $0.31 | $0.24 |
| Operating Income Margin | 24.3% | 18.0% |
| Adjusted Operating Income Margin | 28.8% | 24.7% |
Income Statement and Cash Flow
The company's gross profit for Q2 2024 was $267.1 million, up from $230.3 million in Q2 2023. Operating expenses totaled $187.0 million, resulting in an operating income of $80.2 million, a significant increase from $53.3 million in the same period last year. Cash flows from operations were $62.6 million, compared to $80.6 million for Q2 2023.
Commentary and Analysis
Executive Chair Greg Bentley stated, "We are pleased to report broadly favorable operating results for 24Q2. Our confidence in sustaining commendable performance is reinforced by the enduring—and if anything, broadening— vitality of our infrastructure engineering end markets, met with BSY’s competitive advantages and reliably efficient execution."
CEO Nicholas Cumins added, "Our performance in 24Q2 and the first half provides a solid foundation for the full year, with very positive end-market and operational momentum. Our year-over-year ARR growth of 11% on a constant currency basis (11.5% excluding China) is consistent with the previous quarter."
CFO Werner Andre commented, "24Q2 financial performance positions us solidly within our annual outlook range for ARR growth, profitability, and operating cash flow. While our mainstay subscription revenues are exceeding expectations, year-over-year growth in total revenues is being impacted by the expected prevalence of lower non-recurring professional services for our Cohesive digital integrator."
Conclusion
Bentley Systems Inc (BSY, Financial) has delivered a robust performance in Q2 2024, exceeding analyst expectations in both revenue and earnings. The company's strong subscription growth and improved operating margins highlight its competitive advantages and efficient execution in the infrastructure engineering software market. With a solid foundation for the full year, Bentley Systems Inc (BSY) is well-positioned to continue its growth trajectory.
Explore the complete 8-K earnings release (here) from Bentley Systems Inc for further details.
