Bentley(BSY)2022-05-10 17:16Financial Data and Key Metrics Changes - Total revenues for Q1 2022 were 56.6 million, up 2% from Q1 2021, with adjusted EBITDA growth of 18% reflecting a margin of 35% [51][52] Business Line Data and Key Metrics Changes - The acquisition of Seequent and Power Line Systems contributed significantly to growth, with PLS showing a 25% ARR growth over the prior year within just two months of acquisition [36][45] - Professional Services revenues increased by 3% year-over-year, while perpetual license revenues remained flat, indicating a shift in preference towards subscription offerings [46][48] Market Data and Key Metrics Changes - New business accelerated in the Middle East, Australia, New Zealand, and India, while Europe saw a decline due to lower consumption growth in E365 accounts [12][13] - The impact of geopolitical tensions, particularly the war in Ukraine, led to a pause in marketing efforts in Russia, which represented about 1% of global ARR, resulting in a reduction of $5 million in ARR [12][49] Company Strategy and Development Direction - The company is focusing on enhancing its digital offerings and expanding its presence in the SMB segment, which has shown significant growth potential [18][19] - Strategic acquisitions, such as ADINA and PLS, are aimed at strengthening the product portfolio and enhancing R&D capabilities [14][28] - The company is adapting to local market conditions in China through joint ventures to better align with local preferences and regulations [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business despite geopolitical challenges and economic uncertainties, maintaining the full-year 2022 financial outlook [27][49] - The company anticipates that the rebound in industrial CapEx driven by energy security imperatives will positively impact ARR and revenue growth [9][24] Other Important Information - The company reported a cash conversion ratio from adjusted EBITDA of 104%, indicating strong cash flow efficiency [56] - The net debt senior leverage was 1.4 times as of March 31, 2022, reflecting a decrease from the previous quarter [58][59] Q&A Session Summary Question: How to interpret performance in the quarter regarding organic business? - Management clarified that the impact from Russia and China was less than 200 basis points, with a more significant effect on ARR than on revenue [61][62] Question: Insights on the strength of PLS and its implications for infrastructure investment? - Management noted that while PLS showed strong growth, it is too early to extrapolate broader trends from just two months of performance [65][66] Question: How did Bentley perform during prior economic downturns? - Historical performance showed resilience, with revenues declining only slightly during past crises, indicating a shift towards more stable revenue streams [70][71] Question: Outlook for the business pipeline and demand? - Management expressed optimism about the demand for digital solutions among civil and structural engineers, despite geopolitical disruptions [81][82]