Bentley’s Q1 revenue up 14%, cites SMB progress
Bentley reported results way back on May 11 but I haven’t had time to finish a deeper analysis — so here’s a quick piece on those results and a little bit on what it all means. Even more quickly: Bentley’s off to a great start for 2021.
- Bentley reported total Q1 revenue of $222 million, up 14% (up 9% in constant currencies, cc) from a year ago, and 3% above Wall Street expectations
- Subscription revenue was $188 million, up 11% (up 6% cc), on strong growth in ProjectWise, asset and network performance, civil, and geotechnical products (but not yet including Seequent; that acquisition hasn’t closed)
- Perpetual license revenue was $10 million, down 6% as customers’ procurement processes were delayed due to COVID-related challenges and others shifted spend to subscriptions
- Services revenue was $24 million, up 74% (largely due to the acquired Maximo implementation services business acquired last year, Cohesive)
- By geo, revenue from the Americas was $109 million, up 11% (up 10% cc); from EMEA, $74 million, up 19%: and from Asia, up 13%. The company said growth in EMEA was due to “modest organic growth in subscription revenues led by Russia, with a notable partially offsetting reduction in the Middle East” while growth in Asia was primarily due to “expansion of our recurring subscription revenues from accounts in China“.
So what drove Bentley to this strong Q1? Many factors but one highlighted by CEO Greg Bentley was the mid-market. Bentley, a long time ago, sold via resellers and was able to point those resources at small/medium companies, keeping the largest for its direct sales teams. Over the years, Bentley acquired many of those resellers and effectively lost its way of reaching small and medium-sized businesses (SMBs) in many parts of the world. Last year, Bentley created its Virtuosity business, which packages software subscriptions with expert support to win over SMBs via online sales — and it seems to be working. These SMBs have the same technical requirements as larger companies (designing the same bridges, for example) but don’t have the same in-house IT resources, training, and other capabilities. They need a more out-of-the-box-with-help buying experience, and that’s what Virtuosity is aiming for. (I spoke with Virtuosity CEO Allan Murphy last year; read about it here.)
For those keeping track, Bentley’s partner revenue is now 8% of total revenue.
Mr. Bentley told investors that SMBs are “one of our growth initiatives for the 2020s … [and, as large account usage levels off], the application usage of our SMB accounts has increased appreciably over the past year. Even though SMB accounts represent only about a third of our revenues, in 21Q1, about two-thirds of our new business growth occurred within SMB accounts”. That SMB growth is likely to continue, though it’s difficult to predict.
Bentley did not update its guidance for 2021, saying that it would do so after the close of the Seequent deal later this quarter (Q2).
For much more, see Bentley’s investor relations site, here.