Geotechnical Focus for Bentley Systems’ Corporate Update

Bentley Systems CEO Greg Bentley kicked off the Bentley Corporate Update webinar last week with a discussion of how the annual corporate update is different than in previous years. Journalists in 28 countries attended the 2017 Year In Infrastructure Thought Leadership Conference and Awards held in Singapore.

Leighton Asia Hong Kong Boundary Crossing – BIM Advancements in Construction – Be Inspired Award Winner (photo courtesy of Bentley Systems)

The distribution of projects nominated for 2017 YII awards was interesting as there was greater dispersion of countries from most entries. In terms of winners, most were from China, while none of the jurors were from China. Users in greater China have been first, most advanced and at larger scale than others. “We have almost 200 colleagues in greater China,” said Bentley. “China is the third largest source of revenues after the U.S. and UK.”

During 2015 Bentley Systems filed for initial public offering of their stock after 31 years as private company. “We were obliged to maintain a quiet period in advance of the contemplated IPO,” said Bentley. “For the first time in our history we did not publish a report nor hold this call. That remains true through 2016 and the beginning of 2017 as well as we maintained the state of readiness of our IPO paperwork with the securities and exchange commission. When the IPO window closed again last fall we then stood down the process and so have freed ourselves from the quiet period consideration. Moreover, although there is nothing to preclude a public listing of our stock ultimately, and even though present conditions could be seen as receptive, we’re not currently working on or waiting for an IPO. So, to catch up on the subject we traditionally covered each spring, we’re here to reintroducing the annual conference call and will not reissue the corporate update which you received yesterday. We can’t call it an annual report because it’s been so long since the last.

“Our objective in 2015 was not to raise capital, as our business generates cash flow which is more than sufficient to finance our continued and accelerated growth. Our stock pays dividends now. Rather our priority has been to create a reasonably transparent market for the sale of shares by the hundreds of our colleagues who have collectively earned about 1/3 of the company’s ownership through our program of grants from the outset. And to provide retirement for many of them who have been at Bentley Systems for now approaching 30 years. That’s an objective liquidity for option holders that we share with many other software and technology companies, for those founded more recently than Bentley Systems, but who also anticipate remaining as private held companies for the foreseeable future, given the abundance of private capital sources. Some of them are uniformed. NASDAQ has created private markets to facilitate transactions between private sellers and private buyers, so these days Bentley Systems shares trade twice a year on the NASDAQ market and Siemens has been a steadfast buyer. In fact, through this private market access of private markets wishing to sell, stock options, Siemens invests 9% shares in Bentley.”

Siemens and Bentley are co-investing in several ventures that will come to market.

Going Digital is a phrase used by Bentley Systems, and by that Greg Bentley doesn’t mean a “one-time transformation that would come and go.” For Bentley, the advantages of digital modeling for engineering information as opposed to paper drawings is that other computer programs can query, find, and apply engineering intelligence for purposes beyond that for which it was created. Such processes include what we would now call machine learning, predictive analytics, artificial intelligence, mixed reality.  These processes are already benefiting the consumer line.

The advancement in business processes is made possible through digital alignment, immersive visibility, and cloud design services.

Within infrastructure project delivery, it is comprehensiveness of modeling environment shared across disciplines for Bentley’s new geotechnical acquisition. Users can leverage digital engineering models that are created within project delivery as the digital DNA for infrastructure asset performance operations and maintenance.

ARC Advisory Group has correspondingly broadened its own research coverage, to include BIM infrastructure and smart cities.

“In the GIS category the example we show shows how broadly our software offerings are applied for geocoordination,” said Bentley. “Sanborn Map Company 3D HD maps created through ContextCapture software are ready for us for testing software for autonomous vehicles. Geospatial infuses everything. Our global marketshare ranking for GIS is #2. The milestone that is most significant to us, is we reached in 2017 #1 on ARC’s table for reliability software, in penetration of our AssetWise platform, leading all the categories.”

Bentley said they track their own penetration with ProjectWise, the hybrid cloud service in ConnectEdition.

Geotechnical services and software company Plaxis software has been acquired by Bentley, as geotechnical modeling missed being part of digital workflows in BIM. This has to do with its being less graphically dependent at the outset, but the opportunities of geotechnical engineers to be an iterative part of design workflows is significant for project delivery.

News of the day earthquakes, landslides and floods, and the opportunity to improve resilience, means much can be expected on integrating geotechnical through Plaxis and Soil Vision and allow geotechnical engineers to increase the value of their contribution.

CFO David Hollister talked about how Bentley Systems is well capitalized to invest in the future. Their private firm status can provide full clarity of the company’s financial goals.

Bentley anticipates attaining $700 M USD in revenue in the next couple of quarters.

Most business is in contract and recurring revenues. The company grew 20% with continued migration to subscription-based business. 11% in ARR is unusually strong for Bentley.

“We continue to deemphasize our days and rates professional services, for subscription revenue and less episodic revenue,” said Hollister.

“With the level of growth, we saw in 2017, if we have an account under contract we keep it, rate of 98%. 80% of our revenue comes from accounts that have been with us 10 years or more, and 90% come from accounts that have been with us for 5 years or more.

“We are profitable in cash flow, and that cash flow gets reinvested in our business. Our cost structure is disciplined. We have more than 3500 colleagues globally.”

20% of growth in revenue run is in Africa and in China. The dollars of growth were eclipsed only by number of territories.

With products, Bentley leads the way with ProjectWise solutions AssetWise, ContextCapture, and the first-year launch of OpenRoads Designer product.

Bentley has made five geotechnical acquisitions in the last three months. Action Modular was added to round out Haestad structural portfolio.

Chief Product Officer Bhupinder Singh talked about the highlights in the product portfolio, namely, the ConnectEdition portfolio of applications available, providing digital workflows with context and components.

“What makes solutions from Bentley different is our focus on full lifecycle solutions from planning to performance, as you’ll see in the Corporate Update,” said Singh. “We introduced last year OpenRoads ConnectEdition for Design and Construction of road networks. OpenRoads is the successor brand for GEOPAK, OpenRoads and MX. OpenRoads provides a comprehensive modeling environment, for ConceptStation design, OpenRoads Designer for detailed design, and OpenRoads truly digital workflows, that can drive autonomous vehicles on the jobsite.”

The growth of OpenRoads has spread to hundreds of organizations and the majority of DOTs. ConnectEdition applications have an auto update that delivers new capabilities seamlessly to users.

Bentley Systems introduced OpenRail ConnectEdition in Singapore. OpenRail is transforming how rail infrastructure is planned, from rail network assets from design all the way to operations.

Newest capabilities in our solution for OpenRail, in ConceptStation, is allowing users to rapidly evaluate design alternatives with real time visualization and at any point they can understand the financial implications of the decisions that are being made. Designers are able to make better decisions on their project profitability.

OpenRoads Designer and OpenBridge stations are key to every rail station, said Singh. “We’re going to imminently release a new application called Station Designer based on AECOSim to be used for detailed station and platform design.”

In the digital context, ContextCapture continues to be a strong Bentley solution for reality capture and modeling. Every infrastructure project is geolocated somewhere on the planet and it is valuable to be able to easily and rapidly capture the condition and provide that for design construction and operations. ContextCapture includes a new Azure Cloud service to render the solution truly scalable.

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