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.