Bentley ‘hits stride’ and $550m in revenue

Bentley Systems today gave a glimpse into how the company fared in 2012 and what it thinks 2013 will hold. Bentley is privately held so this disclosure is unusual but, as CEO Greg Bentley told us, his customers prefer a company without drama. It would appear that they also like disclosure. Mr. Bentley provided the following update on the company’s progress in 2012:

• Total revenue was $550 million, up 5% as reported, up 8% in constant currency and up 6% in constant currency excluding acquisitions. Mr. Bentley said that 2102 represents the ‘new normal’ of economic activity and that the company ‘hit [its] stride’ during the year.
• 74% of revenue came from software subscriptions, up from 72% in 2011. That recurring revenue cushion is great, but makes it difficult for total revenue to grow much faster than it did in 2012.
• By geography, 45% of revenue came from the Americas, 36% from EMEA and 19% from Asia. This breakdown was exactly the same a year ago, reflecting the consistency of the subscription revenue model and, likely, the ups and downs of Bentley’s diverse industry and customer base canceling out any shifts.
• That said, the company saw fastest growth in the Middle East and Africa, which were up over 25%. In China, which had featured prominently in 2011, Bentley concentrated on growing subscription revenue and building out its staff.
• The company reported operating cash flow of over $100 million in 2012. This isn’t the same as profit — so don’t compare it to net income for any other company — but does show that Bentley is more than able to support and grow its  operations.
• Bentley invested roughly $130 million in R&D, close to 25% of revenue in 2012. Including acquisitions, Bentley invested $199 million in building out its product portfolio.
• Mr. Bentley said that the company has a “vibrant” bank network and $160 million in available liquidity, giving it a great deal of flexibility for the future. Given the company’s track record, I take that to mean more acquisitions are coming.

Mr. Bentley made a point of telling us that 98% of the company is now owned by the Bentley family and colleagues (employees), up from 92% in early 2012 as a result of the stock buyback program discussed last year. Left unsaid were the reasons and benefits of such a program: better control, stronger motivation and higher rewards. Bentley tracks utilization of its products and in 2012, it noted more than 1 million users in over 165 countries of its desktop apps and a total of near 2 million including users of Passports and iWare apps. The company is about to announce a new licensing plan that will reset every quarter based on the prior quarter’s usage; the next generation of i-model, which is based on SQLite for mobile devices; Bentley Map for Android; and will soon release the OpenRoads platform that will unite the company’s disparate civil offerings. A new Navigator Mobile app is available today in the iTunes app store. Mr. Bentley said that the company entered 2013 with significant momentum and utilization rates that are up 20% year/year. He expects revenue to grow 7% in 2013. Today’s call was more relaxed than the last two. Mr. Bentley walked listeners through the prepared material and often used phrases like “we have an obligation to”, “in service [of]”, “useful”. He didn’t talk about selling but about partnering, making the point that Bentley doesn’t have customers (a one-time transaction) but subscribers (long-term relationships). He sets a unique tone in an industry that is often about selling stuff — and it’s clearly an approach that resonates with Bentley’s customers. Note: Bentley publishes an “annual report” with this data and other information and made a review copy available to media and analysts. The final should be available soon and I’ll post a link once I get it.