16 unchanged sentences
Other Information
−Removed: On February 22, 2023, the sustainability committee (the “Committee”) of the Company’s board of directors, pursuant to the authority delegated to it by the board of directors, approved a policy to provide for the immediate and fully accelerated vesting of equity awards granted under the Company’s 2020 Omnibus Incentive Plan (the “Plan”) in the event of an award holder’s termination of employment following a Change in Control (as defined in the Plan) as described more fully below.
−Removed: Pursuant to this policy, if a Qualifying Termination (as defined below) occurs during the period beginning 120 days prior to the date of a Change in Control and ending on the first anniversary of such Change in Control, then immediate and fully accelerated vesting of all of such award holder’s outstanding unvested equity awards granted under the Plan and that are assumed in connection with the Change in Control will occur.
−Removed: If the award is subject to performance-based vesting conditions that continue to apply following the Change in Control, then vesting will occur at the target level (i.e., 100%) of performance.
−Removed: For the purposes of this policy:
−Removed: • A “Qualifying Termination” is a termination by the Company of an award holder’s employment other than for Cause (as defined in the Plan) or, in the case of an Executive (as defined below) only, by the Executive award holder for Good Reason;
−Removed: • “Good Reason” means the occurrence of any one or more of the following events without the award holder’s prior written consent:
−Removed: (i) material diminution in the award holder’s duties or responsibilities;
−Removed: (ii) a material reduction in the award holder’s total on-target compensation as in effect for the 12-month period immediately prior to such reduction;
−Removed: or (iii) relocation of the award holder’s principal place of business that will require the award holder to travel a materially greater distance on a regular basis (as compared with the award holder’s prior practice), excluding for the avoidance of doubt any travel for business in the course of performing the award holder’s duties for the Company;
−Removed: • “Executive” means any Company officer or employee who at the time of the Change in Control had been designated as an eligible executive of the Company under this policy by the Committee, with such designation remaining in effect until revoked by the Committee.
−Removed: Unless otherwise determined by the Committee, this policy will apply to future awards granted under the Plan and all outstanding awards, including awards held by Werner Andre, the Company’s Chief Financial Officer, and Nicholas H.
−Removed: Cumins, the Company’s Chief Operating Officer, each of whom the Committee has designated an Executive.
−Removed: Except as set forth above, the terms of the equity awards granted to the Company’s named executive officers have not changed.
−Removed: The Company intends to provide additional information regarding these compensatory matters in the Company’s Proxy Statement.
+Added: Rule 10b5-1 Trading Plans
+Added: Effective November 8, 2023 , Keith A.
+Added: Bentley , Director , adopted a trading plan established pursuant to Rule 10b5‑1 of the Exchange Act, which is intended to satisfy the affirmative defense conditions of Rule 10b5‑1(c), to sell an aggregate of 1,000,000 shares of our Class B common stock through June 30, 2024.
+Added: During the three months ended December 31, 2023, there were no other Company directors or executive officers who adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5‑1(c) or any “non-Rule 10b5‑1 trading arrangement.”
+Added: Dividends Declared Subsequent to December 31, 2023
+Added: On February 21, 2024, our Board of Directors declared a $0.06 per share dividend for the first quarter of 2024.
+Added: The cash dividend will be payable on March 28, 2024 to all stockholders of record of Class A and Class B common stock as of the close of business on March 20, 2024.
+Added: The Company publicly announced the dividend declaration on February 27, 2024.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
1 unchanged sentence
Directors, Executive Officers and Corporate Governance
−Removed: The information required by this item is incorporated by reference to our definitive proxy statement for our 2023 Annual Meeting of Stockholders (the “2023 Proxy Statement”), which will be filed with the SEC not later than 120 days subsequent to December 31, 2022.
+Added: The information required by this item is incorporated by reference to our 2024 Proxy Statement, which will be filed with the SEC not later than 120 days subsequent to December 31, 2023.
Information About Our Executive Officers
2 unchanged sentences
Chief Executive Officer and President
−Removed: Chief Technology Officer
Werner Andre 54 Chief Financial Officer and Chief Accounting Officer
3 unchanged sentences
Chief Operating Officer
−Removed: Chief Investment Officer
Shaman 58 Chief Legal Officer and Secretary
6 unchanged sentences
in Finance and Decision Sciences from the Wharton School, University of Pennsylvania.
−Removed: Bentley co-founded our Company and has served as our Chief Technology Officer since 2000.
−Removed: Bentley previously served as our President from 1984 to 1995 and as the Chief Executive Officer from 1984 to 2000.
−Removed: Bentley is the principal architect of our technology directions and is the primary inventor on numerous Company patents.
−Removed: He holds a Bachelor’s degree in Electrical Engineering from the University of Delaware and an M.S.
−Removed: in Electrical Engineering from the University of Florida.
Werner Andre has served as our Chief Financial Officer since January 1, 2022 and is responsible for all aspects of finance including worldwide accounting, financial planning and analysis, tax, and treasury.
23 unchanged sentences
He holds Maîtrise de Droit (Law) and Maîtrise de Sciences de Gestion (Business) degrees from University Paris II Panthéon-Assas, Paris, France.
−Removed: Hollister has served as our Chief Investment Officer since January 1, 2022.
−Removed: Hollister previously served as our Chief Financial Officer since 2007 and Chief Operations Advancement Officer since 2016.
−Removed: As Chief Investment Officer, Mr.
−Removed: Hollister is responsible for our acquisition and investment activities, including our iTwin Ventures corporate venture capital fund, our Cohesive Companies digital integrator business, and certain other Bentley Acceleration activities.
−Removed: Prior to joining us, Mr.
−Removed: Hollister was the chief financial officer and a member of the board of directors of Broder Bros., Co.
−Removed: from 2004 to 2007.
−Removed: Hollister previously served as a director in the M&A Transaction Services practice at PricewaterhouseCoopers LLP, where he specialized in international transactions.
−Removed: He holds a Bachelor’s degree in Business Administration from the University of Northern Colorado and an M.B.A.
−Removed: from the University of Michigan.
Shaman , our Chief Legal Officer, has led our legal team since 2015 and is responsible for legal, regulatory compliance, government relations, and license compliance activities.
16 unchanged sentences
Financial Statements:
−Removed: Reports of Independent Registered Public Accounting Firm
−Removed: Consolidated Balance Sheets as of December 31, 2022 and 2021
−Removed: Consolidated Statements of Operations for the years ended December 31, 2022, 2021, and 2020
−Removed: Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021, and 2020
−Removed: Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2022, 2021, and 2020
−Removed: Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021, and 2020
+Added: Reports of Independent Registered Public Accounting Firm ( KPMG LLP , Philadelphia, Pennsylvania , PCAOB ID:
+Added: Consolidated Balance Sheets
+Added: Consolidated Statements of Operations
+Added: Consolidated Statements of Comprehensive Income
+Added: Consolidated Statements of Stockholders’ Equity
+Added: Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
33 unchanged sentences
001-39548) and incorporated herein by reference)
+Added: 10.9 Sixth Amendment to Amended and Restated Credit Agreement, dated as of June 21, 2023 (filed as Exhibit 10.1 to our Current Report on Form 8-K filed on June 23, 2023 (File No.
+Added: 001-39548) and incorporated herein by reference)
10.10† Bentley Systems, Incorporated 2015 Equity Incentive Plan, as amended and restated effective as of May 29, 2018 (filed as Exhibit 10.6 to our Registration Statement on Form S-1 filed on August 21, 2020 (File No.
5 unchanged sentences
001-39548) and incorporated herein by reference)
−Removed: 10.12†* Form of Restricted Stock Unit Award Agreement under the Bentley Systems, Incorporated 2020 Omnibus Incentive Plan (as amended)
+Added: 10.13† Form of Restricted Stock Unit Award Agreement under the Bentley Systems, Incorporated 2020 Omnibus Incentive Plan (as amended) (filed as Exhibit 10.12 to our Annual Report on Form 10-K filed on February 28, 2023 (File No.
+Added: 001-39548) and incorporated herein by reference)
10.14† Bentley Systems, Incorporated Global Employee Stock Purchase Plan (filed as Exhibit 10.2 to our Current Report on Form 8-K filed on September 25, 2020 (File No.
9 unchanged sentences
001-39548) and incorporated herein by reference)
−Removed: 10.18† Am endment No.
−Removed: 1 to the Bentley Systems, Incorporated Bonus Pool Plan, as amended and restated effective as of Se ptember 22, 2020 (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on November 8 , 202 2 (File No.
+Added: 10.19† Amendment No.
+Added: 1 to the Bentley Systems, Incorporated Bonus Pool Plan, as amended and restated effective as of September 22, 2020 (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on November 8, 2022 (File No.
001-39548) and incorporated herein by reference)
1 unchanged sentence
333-248246) and incorporated herein by reference)
−Removed: Side Letter Agreement, dated as of March 11, 2021, by and among Bentley Systems, Incorporated, Seequent Holdings Limited and the Sellers named therein (filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on May 11, 2021 (File No.
−Removed: 001-39548) and incorporated herein by reference)
−Removed: 10.21 Amendment to Side Letter Agreement, dated as of March 11, 2021, by and between Bentley Systems, Incorporated and Accel-KKR Capital Partners V, LP (filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on May 11, 2021 (File No.
−Removed: 001-39548) and incorporated herein by reference)
21* List of Subsidiaries
4 unchanged sentences
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
+Added: 97* Bentley Systems, Incorporated Incentive Compensation Clawback Policy, as Adopted on August 17, 2023 Pursuant to Nasdaq Rule 5608
101.INS Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document
6 unchanged sentences
† Management contract or compensatory plan or arrangement.
−Removed: + Certain portions of this exhibit have been omitted.
* Filed or furnished herewith.
−Removed: The certification attached as Exhibit 32.1 that accompanies this Annual Report on Form 10‑K is not deemed filed with the U.S.
−Removed: Securities and Exchange Commission and is not to be incorporated by reference into any filing of Bentley Systems, Incorporated under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10‑K, irrespective of any general incorporation language contained in such filing.
+Added: The certification attached as Exhibit 32 that accompanies this Annual Report on Form 10‑K is not deemed filed with the SEC and is not to be incorporated by reference into any filing of Bentley Systems, Incorporated under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10‑K, irrespective of any general incorporation language contained in such filing.
(b) Exhibits:
15 unchanged sentences
Werner Andre (Principal Financial Officer and Principal Accounting Officer)
−Removed: /s/ K EITH A.
/s/ B ARRY J.
+Added: /s/ K EITH A.
/s/ R AYMOND B.
50 unchanged sentences
The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
−Removed: Evaluation of the fair value of certain customer relationships acquired in a business combination
−Removed: As discussed in Notes 1 and 4 to the consolidated financial statements, the Company acquired Power Line Systems on January 31, 2022 for $ 695,968 thousand in cash, net of cash acquired.
−Removed: This acquisition was accounted for under the acquisition method of accounting for business combinations and the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, which included a fair value allocated to customer relationships determined using an income approach.
−Removed: The determination of the acquisition date fair value of customer relationships required the Company to make assumptions regarding estimated future cash flows and discount rates.
−Removed: During the year ended December 31, 2022, the Company acquired customer relationships in various business combinations with an aggregate fair value of $ 82,278 thousand, a portion of which related to the Power Line Systems acquisition.
−Removed: We identified the evaluation of the fair value of customer relationships acquired in the Power Line Systems business combination as a critical audit matter.
−Removed: Specifically, a high degree of subjective auditor judgment was required to evaluate the estimated future revenues, future operating margins, and the discount rate used to value these customer relationships due to their estimation uncertainty.
−Removed: Additionally, assessment of the discount rate assumption required valuation professionals with specialized skills and knowledge.
−Removed: The following are the primary procedures we performed to address this critical audit matter.
−Removed: We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s acquisition‑date valuation processes for customer relationships, including controls related to the development of the assumptions related to estimated future revenues, future operating margins, and the discount rate.
−Removed: We evaluated the reasonableness of management’s estimated future revenues and operating margins assumptions by comparing the estimates to historical results and to information included in analyst reports and selected peer company reports.
−Removed: We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the Company’s discount rate by independently developing a range of discount rates based on publicly available market data for comparable entities and comparing them to the Company’s discount rate.
−Removed: Evaluation of the standalone selling price for certain term license subscriptions and portfolio balancing material rights
−Removed: As discussed in Note 3 to the consolidated financial statements, the Company recognized subscriptions revenues of $ 960,220 thousand for the year ended December 31, 2022, a portion of which relates to certain term license subscriptions and portfolio balancing material rights.
−Removed: The Company allocates the transaction price to each distinct performance obligation, including portfolio balancing material rights, based upon their relative standalone selling prices (SSPs).
−Removed: In instances where a performance obligation, including portfolio balancing material rights, does not have directly observable SSPs, the Company maximizes the use of other observable inputs to estimate SSPs.
−Removed: For the portfolio balancing material rights, the Company uses historical user elections to estimate future user elections, which are used to estimate the SSPs.
−Removed: We identified the evaluation of the SSPs for certain term license subscriptions and portfolio balancing material rights as a critical audit matter.
−Removed: Specifically, a high degree of subjective auditor judgment was required to assess the nature and sufficiency of the evidence obtained to support the Company’s determination of SSPs for certain term licenses and the portfolio balancing material rights.
+Added: Evaluation of the standalone selling price for certain term license subscriptions and the portfolio balancing material right
+Added: As discussed in Note 3 to the consolidated financial statements, the Company recognized subscriptions revenues of $ 1,080,307 thousand for the year ended December 31, 2023, a portion of which relates to certain term license subscriptions and the portfolio balancing material right.
+Added: The Company allocates the transaction price to each distinct
+Added: performance obligation, including the portfolio balancing material right, based upon their relative standalone selling prices (SSPs).
+Added: In instances where a performance obligation, including a portfolio balancing material right, does not have directly observable SSPs, the Company maximizes the use of other observable inputs to estimate SSPs.
+Added: For the portfolio balancing material right, the Company uses historical user elections to estimate future user elections, which are used to estimate the SSPs.
+Added: We identified the evaluation of the SSPs for certain term license subscriptions and the portfolio balancing material right as a critical audit matter.
+Added: Specifically, a high degree of subjective auditor judgment was required to assess the nature and sufficiency of the evidence obtained to support the Company’s determination of SSPs for certain term licenses and the portfolio balancing material right.
The following are the primary procedures we performed to address this critical audit matter.
−Removed: We applied auditor judgment to determine the nature and extent of procedures to be performed over the Company’s determination of SSPs, including those related to term license subscriptions and portfolio balancing material rights.
+Added: We applied auditor judgment to determine the nature and extent of procedures to be performed over the Company’s determination of SSPs, including those related to term license subscriptions and the portfolio balancing material right.
We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s revenue process, including controls related to the development of SSPs.
1 unchanged sentence
For certain term licenses, we also obtained the Company’s pricing policies and practices and compared them to the SSPs determined.
−Removed: We tested the historical user elections for the portfolio balancing material rights by sampling user elections and comparing them to signed revenue contracts.
+Added: We tested the historical user elections for the portfolio balancing material right by sampling user elections and comparing them to signed revenue contracts.
We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature of such evidence.
+Added: Evaluation of intra‑entity transactions
+Added: As discussed in Note 16 to the consolidated financial statements, during the fourth quarter of 2023 the Company recognized a net discrete income tax benefit of $ 170,784 thousand attributable to internal legal entity restructuring and related intra‑entity transactions.
+Added: These transactions resulted in the recognition of deferred tax benefits arising from the net increase in deferred tax assets related to intangibles and goodwill of $ 171,622 thousand.
+Added: We identified the evaluation of the Company’s accounting for income taxes attributable to internal legal entity restructuring and related intra‑entity transactions as a critical audit matter.
+Added: A high degree of auditor judgment and the use of income tax professionals with specialized skills and knowledge were required to evaluate the interpretation and application of income tax regulations in various jurisdictions and the Company’s accounting for income taxes attributable to its internal legal entity restructuring and related intra-entity transactions.
+Added: The following are the primary procedures we performed to address this critical audit matter.
+Added: We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s income tax process, including controls related to the interpretation and application of tax regulations, and the Company’s accounting for income taxes attributable to its internal legal entity restructuring and related intra‑entity transactions.
+Added: We involved income tax professionals with specialized skills and knowledge in various tax jurisdictions who assisted in evaluating the underlying documentation, the Company’s interpretation and application of jurisdictional tax regulations, and accounting for income taxes attributable to its internal legal entity restructuring and related intra‑entity transactions.
We have served as the Company’s auditor since 2002.
1 unchanged sentence
February 27, 2024
−Removed: BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
+Added: BENTLEY SYSTEMS, INCORPORATED
Consolidated Balance Sheets
37 unchanged sentences
Class A common stock, $ 0.01 par value, authorized 100,000,000 shares;
−Removed: issued and outstanding 11,601,757 shares as of December 31, 2022 and 2021, and Class B Common Stock, $ 0.01 par value, authorized 1,800,000,000 shares;
issued and outstanding 11,537,627 and 11,601,757 shares as of December 31, 2023 and 2022, respectively
+Added: Class B common stock, $ 0.01 par value, authorized 1,800,000,000 shares;
+Added: issued and outstanding 284,728,210 and 277,412,730 shares as of December 31, 2023 and 2022, respectively
Additional paid-in capital 1,127,234 1,030,466
7 unchanged sentences
See accompanying notes to consolidated financial statements.
−Removed: BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
+Added: BENTLEY SYSTEMS, INCORPORATED
Consolidated Statements of Operations
18 unchanged sentences
Amortization of purchased intangibles 38,515 41,114 25,601
−Removed: Expenses associated with initial public offering
Total operating expenses 731,788 653,457 653,918
2 unchanged sentences
Interest expense, net ( 39,793 ) ( 34,635 ) ( 11,221 )
−Removed: Other income, net
+Added: Other (expense) income, net
( 7,222 ) 24,298 9,961
1 unchanged sentence
183,527 198,275 93,329
−Removed: (Provision) benefit for income taxes
−Removed: ( 21,283 ) 3,448 ( 38,625 )
−Removed: Loss from investments accounted for using the equity method, net of tax
−Removed: ( 2,212 ) ( 3,585 ) ( 2,474 )
+Added: Benefit (provision) for income taxes
143,241 ( 21,283 ) 3,448
−Removed: Net income attributable to participating securities
+Added: Gain (loss) from investments accounted for using the equity method, net of tax
19 ( 2,212 ) ( 3,585 )
−Removed: Net income attributable to Class A and Class B common stockholders
$ 326,787 $ 174,780 $ 93,192
7 unchanged sentences
See accompanying notes to consolidated financial statements.
−Removed: BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
+Added: BENTLEY SYSTEMS, INCORPORATED
Consolidated Statements of Comprehensive Income
5 unchanged sentences
Foreign currency translation adjustments 4,774 1,459 ( 65,648 )
−Removed: Actuarial gain on retirement plan, net of tax effect of $( 245 ), $( 44 ), and $( 1 ), respectively
+Added: Actuarial (loss) gain on retirement plan, net of tax effect of $( 89 ), $( 245 ), and $( 44 ), respectively
+Added: ( 21 ) 575 107
Total other comprehensive income (loss), net of taxes
3 unchanged sentences
See accompanying notes to consolidated financial statements.
−Removed: BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
+Added: BENTLEY SYSTEMS, INCORPORATED
Consolidated Statements of Stockholders’ Equity
7 unchanged sentences
— — — ( 65,541 ) — — ( 65,541 )
−Removed: Class B Common Stock follow-on offering, net of expenses of $ 12,898
+Added: Shares issued related to acquisition 3,141,342 31 182,359 — — — 182,390
+Added: Purchase of capped call options, net of tax of $ 12,871
— — ( 38,734 ) — — — ( 38,734 )
Dividends declared — — — — ( 33,537 ) — ( 33,537 )
−Removed: Profit-sharing plan shares, net ( 549,834 ) ( 5 ) — — ( 6,965 ) — ( 6,970 )
−Removed: Shares issued in connection with deferred compensation plan, net 3,081,607 31 — — ( 4,656 ) — ( 4,625 )
−Removed: Deferred compensation plan elective participant deferrals — — 3,530 — — — 3,530
−Removed: Payment of shareholder Put and Call rights ( 128,007 ) ( 1 ) — — ( 1,453 ) — ( 1,454 )
−Removed: Common Stock Purchase Agreement, net — — — — ( 57 ) — ( 57 )
+Added: Shares issued in connection with DCP, net 2,378,645 24 — — ( 69,031 ) — ( 69,007 )
+Added: DCP elective participant deferrals — — 2,619 — — — 2,619
+Added: DCP modification — — ( 4,739 ) — — — ( 4,739 )
+Added: Shares issued in connection with Bonus Plan, net 238,755 2 20,951 — ( 8,739 ) — 12,214
+Added: Shares issued and repurchased in connection with employee stock purchase plan, net 104,716 1 3,845 — ( 438 ) — 3,408
Stock option exercises, net 4,587,053 46 5,559 — ( 37,785 ) — ( 32,180 )
4 unchanged sentences
— — — — 174,780 — 174,780
−Removed: Other comprehensive loss
−Removed: — — — ( 65,541 ) — — ( 65,541 )
−Removed: Shares issued related to acquisition 3,141,342 31 182,359 — — — 182,390
−Removed: Purchase of capped call options, net of tax of $ 12,871
+Added: Other comprehensive income
— — — 2,034 — — 2,034
Dividends declared — — — — ( 34,353 ) — ( 34,353 )
−Removed: Shares issued in connection with deferred compensation plan, net 2,378,645 24 — — ( 69,031 ) — ( 69,007 )
−Removed: Deferred compensation plan elective participant deferrals — — 2,619 — — — 2,619
−Removed: Deferred compensation plan modification — — ( 4,739 ) — — — ( 4,739 )
−Removed: Shares issued in connection with Executive Bonus Plan, net 238,755 2 20,951 — ( 8,739 ) — 12,214
−Removed: Shares issued in connection with employee stock purchase plan 104,716 1 3,845 — ( 438 ) — 3,408
+Added: Shares issued in connection with DCP, net 3,541,375 35 ( 27 ) — ( 24,254 ) — ( 24,246 )
+Added: DCP elective participant deferrals — — 6,580 — — — 6,580
+Added: Shares issued in connection with Bonus Plan, net 445,050 5 21,920 — ( 5,197 ) — 16,728
+Added: Shares issued and repurchased in connection with employee stock purchase plan, net 307,406 3 10,332 — ( 273 ) — 10,062
Stock option exercises, net 2,613,659 26 8,312 — ( 9,188 ) — ( 850 )
−Removed: Shares issued for stock grants 7,824 — 450 — — — 450
+Added: Acquisition option exercises, net 185,178 2 ( 2 ) — — — —
+Added: Shares issued for stock grants, net 13,632 — 450 — — — 450
Stock-based compensation expense — — 45,100 — — — 45,100
Shares related to restricted stock, net 277,594 3 ( 4 ) — ( 4,491 ) — ( 4,492 )
+Added: Repurchases of Class B common stock under approved program ( 896,126 ) ( 9 ) — — ( 28,241 ) — ( 28,250 )
+Added: Other — — — — ( 15 ) — ( 15 )
+Added: Non-controlling interest acquired — — — — — 704 704
Balance, December 31, 2022 289,014,487 2,890 1,030,466 ( 89,740 ) ( 370,866 ) 704 573,454
3 unchanged sentences
Dividends declared — — — — ( 58,756 ) — ( 58,756 )
−Removed: Shares issued in connection with deferred compensation plan, net 3,541,375 35 ( 27 ) — ( 24,254 ) — ( 24,246 )
−Removed: Deferred compensation plan elective participant deferrals — — 6,580 — — — 6,580
−Removed: Shares issued in connection with Executive Bonus Plan, net 445,050 5 21,920 — ( 5,197 ) — 16,728
−Removed: Shares issued in connection with employee stock purchase plan 307,406 3 10,332 — ( 273 ) — 10,062
+Added: Shares issued in connection with DCP, net
+Added: 3,410,006 34 ( 34 ) — ( 38,456 ) — ( 38,456 )
+Added: DCP elective participant deferrals — — 1,765 — — — 1,765
+Added: Shares issued in connection with Bonus Plan, net
+Added: 247,867 3 16,788 — ( 5,756 ) — 11,035
+Added: Shares issued and repurchased in connection with employee stock purchase plan, net
+Added: 315,840 3 9,985 — ( 845 ) — 9,143
Stock option exercises, net 2,621,959 26 11,689 — ( 6,581 ) — 5,134
−Removed: Acquisition option exercises, net 185,178 2 ( 2 ) — — — —
Shares issued for stock grants, net 12,639 — 600 — — — 600
1 unchanged sentence
Shares related to restricted stock, net 643,039 7 ( 7 ) — ( 7,299 ) — ( 7,299 )
−Removed: Repurchases of Class B Common Stock under approved program ( 896,126 ) ( 9 ) — — ( 28,241 ) — ( 28,250 )
Other — — — — ( 160 ) — ( 160 )
−Removed: Non-controlling interest acquired — — — — — 704 704
Balance, December 31, 2023 296,265,837 $ 2,963 $ 1,127,234 $ ( 84,987 ) $ ( 161,932 ) $ 704 $ 883,982
See accompanying notes to consolidated financial statements.
−Removed: BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
+Added: BENTLEY SYSTEMS, INCORPORATED
Consolidated Statements of Cash Flows
5 unchanged sentences
Adjustments to reconcile net income to net cash provided by operating activities:
−Removed: Depreciation and amortization 71,537 52,793 36,117
+Added: Depreciation, amortization, and impairment 71,861 71,537 52,793
Deferred income taxes ( 198,878 ) ( 5,126 ) ( 19,745 )
3 unchanged sentences
Change in fair value of derivative 5,038 ( 27,083 ) ( 9,770 )
−Removed: Foreign currency remeasurement loss (gain)
+Added: Foreign currency remeasurement (gain) loss
( 452 ) 6,000 64
−Removed: Other non-cash items, net 2,593 5,338 134
+Added: Other 21,047 2,593 5,338
Changes in assets and liabilities, net of effect from acquisitions:
10 unchanged sentences
Acquisitions, net of cash acquired ( 26,023 ) ( 743,007 ) ( 1,034,983 )
−Removed: Other investing activities ( 10,954 ) ( 4,081 ) ( 7,854 )
+Added: Purchases of investments ( 11,602 ) ( 10,954 ) ( 4,081 )
+Added: Proceeds from investments 2,123 — —
Net cash used in investing activities
7 unchanged sentences
Settlement of convertible senior notes — ( 1,998 ) —
−Removed: Proceeds from term loans — 199,505 125,000
−Removed: Repayments from term loans ( 5,000 ) — ( 125,000 )
−Removed: Payments of acquisition debt and other consideration ( 8,460 ) ( 2,371 ) ( 3,425 )
−Removed: Proceeds from Class B Common Stock follow-on offering, net of underwriters’ discounts and commissions — — 295,802
−Removed: Payments of Class B Common Stock follow-on offering expenses — — ( 1,373 )
+Added: Proceeds from term loan — — 199,505
+Added: Repayments of term loan ( 5,000 ) ( 5,000 ) —
+Added: Payments of contingent and non-contingent consideration ( 4,324 ) ( 8,460 ) ( 2,371 )
Payments of dividends ( 58,756 ) ( 34,493 ) ( 33,396 )
2 unchanged sentences
Payments for shares acquired including shares withheld for taxes ( 58,937 ) ( 43,561 ) ( 120,539 )
−Removed: Proceeds from Common Stock Purchase Agreement — — 58,349
−Removed: Repurchase of Class B Common Stock under approved program ( 28,250 ) — —
−Removed: Other financing activities 525 ( 197 ) ( 189 )
−Removed: Net cash provided by (used in) financing activities
+Added: Repurchases of Class B common stock under approved program — ( 28,250 ) —
+Added: Other ( 191 ) 525 ( 197 )
+Added: Net cash (used in) provided by financing activities
( 359,074 ) 243,034 982,582
5 unchanged sentences
$ 68,412 $ 71,684 $ 329,337
−Removed: BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
+Added: BENTLEY SYSTEMS, INCORPORATED
Consolidated Statements of Cash Flows
7 unchanged sentences
Non-cash investing and financing activities:
−Removed: Cost method investment, non-cash exchange 5,936 — —
+Added: Cost method investment 3,500 5,936 —
Shares issued related to acquisition — — 182,390
2 unchanged sentences
Term loan expenses included in Accruals and other current liabilities
−Removed: Share-settled Executive Bonus Plan awards 21,925 20,953 —
−Removed: Deferred compensation plan elective participant deferrals 6,580 2,619 3,530
+Added: Share-settled Bonus Plan awards 16,791 21,925 20,953
+Added: DCP elective participant deferrals 1,765 6,580 2,619
See accompanying notes to consolidated financial statements.
−Removed: BENTLEY SYSTEMS, INCORPORATED AND SUBSIDIARIES
+Added: BENTLEY SYSTEMS, INCORPORATED
Notes to Consolidated Financial Statements
1 unchanged sentence
Description of Business and Summary of Significant Accounting Policies
−Removed: Business and Operations — Bentley Systems, Incorporated (“Bentley” or the “Company”) is a Delaware corporation that was founded in 1984 and is headquartered in Exton, Pennsylvania.
−Removed: The Company, together with its subsidiaries, is a leading global provider of infrastructure engineering software solutions for professionals and organizations involved in the project delivery and operational performance of infrastructure assets.
−Removed: The Company is dedicated to advancing infrastructure through its comprehensive software solutions that span engineering disciplines, assets, and lifecycle processes.
−Removed: The Company’s integrated software platform encompasses both the design and construction of infrastructure, which the Company refers to as project delivery, and the operation of infrastructure assets, which the Company refers to as asset performance.
−Removed: The Company’s software solutions are designed to enable information mobility for a more complete flow of information among applications, across distributed project teams, from offices to the field, and throughout the infrastructure lifecycle.
−Removed: The Company believes its solutions extend the reach and scope of digital engineering models from the project delivery phase into the asset performance phase of the infrastructure lifecycle, which enables engineers to make infrastructure assets more intelligent and sustainable.
−Removed: Users of the Company’s solutions include engineers and construction professionals who collaborate on project delivery, and owner‑operators who maintain, adapt, and optimize the performance of infrastructure assets.
−Removed: Basis of Presentation and Consolidation — The consolidated financial statements and accompanying notes have been prepared in United States (“U.S.”) Dollars and in accordance with accounting principles generally accepted in the United States of America (“U.S.
+Added: Business and Operations
+Added: Bentley Systems is the infrastructure engineering software company.
+Added: The Company’s purpose is to advance the world’s infrastructure for better quality of life.
+Added: The Company’s products and solutions empower people to design, build, and operate better and more resilient infrastructure through the adoption of Bentley Systems’ intelligent digital twin solutions.
+Added: The Company serves enterprises and professionals across the infrastructure lifecycle by improving project delivery and asset performance.
+Added: The Company’s engineering and geoprofessional applications are primarily desktop modeling and applications that support the breadth of engineering and geoprofessional disciplines.
+Added: Bentley Infrastructure Cloud , provided via cloud and hybrid environments, extends enterprise collaboration during project delivery, and helps manage engineering information during operations and maintenance.
+Added: Powering these products and solutions is iTwin Platform , the Company’s cloud‑native technology platform to create, curate, and leverage infrastructure digital twins.
+Added: Basis of Presentation and Consolidation
+Added: The consolidated financial statements and accompanying notes have been prepared in U.S.
+Added: dollars and in accordance with GAAP.
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.
1 unchanged sentence
All intercompany accounts and transactions have been eliminated in consolidation.
+Added: Gains and losses resulting from foreign currency transactions denominated in currencies other than the functional currency are included in Other income (expense), net in the consolidated statements of operations.
+Added: The assets and liabilities of foreign subsidiaries are translated from their respective functional currencies into U.S.
+Added: dollars at the rates in effect at the balance sheet date, and revenue and expense amounts are translated at average rates during the period.
+Added: Foreign currency translation adjustments are recorded as a component of Other comprehensive income (loss), net of taxes in the consolidated statements of comprehensive income.
+Added: Reclassifications
Certain reclassifications of prior period amounts have been made to conform to the current period presentation.
−Removed: For the year ended December 31, 2022, payments related to the Company’s interest rate swap were recognized in Other income (expense), net in the consolidated statements of operations and the corresponding prior period amounts, which were previously recognized in Interest expense, net , were reclassified to conform to the current period presentation.
−Removed: For the years ended December 31, 2021 and 2020, the amounts reclassified were not material, and Income before income taxes and Net income in the consolidated statements of operations did not change as a result of these reclassifications.
−Removed: Use of Estimates — The preparation of consolidated financial statements and related disclosures in conformity with U.S.
−Removed: GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.
+Added: Accounting Policies
+Added: The Company’s consolidated financial statements are prepared in accordance with GAAP, which require us to select accounting policies and make estimates that affect the reported amount of assets, liabilities, revenues, and expenses, and the related disclosure of contingent assets and contingent liabilities.
Actual results could differ materially from these estimates.
−Removed: Examples of significant estimates and assumptions made by management include revenue recognition, the fair value of acquired assets and liabilities, the fair value of stock consideration in conjunction with business combinations, the fair value of deferred compensation plan liabilities, the fair value of derivative financial instruments, the fair value of common stock (prior to the Company’s initial public offering (“IPO”)), operating lease assets and liabilities, useful lives for depreciation and amortization, impairment of goodwill and intangible assets, valuation allowances for tax assets, and accruals for uncertain tax positions.
−Removed: Segment — Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) to allocate resources and assess performance.
+Added: Information on other accounting policies and methods that we use in the preparation of our consolidated financial statements are included, where applicable, in their respective footnotes that follow.
+Added: Below is a discussion of accounting policies and methods used in our consolidated financial statements that are not presented within other footnotes.
+Added: Segment — Reportable segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the CODM to allocate resources and assess performance.
The Company defines its CODM to be its chief executive officer.
The chief executive officer reviews the financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating the Company’s financial performance.
−Removed: Accordingly, the Company has determined it operates and manages its business in a single reportable operating segment, the development and marketing of computer software and related services.
+Added: Accordingly, the Company has determined it operates and manages its business in a single reportable segment, the development and marketing of computer software and related services.
The Company markets its products and services through the Company’s offices in the U.S.
and its wholly‑owned branches and subsidiaries internationally.
−Removed: Business Combinations — The Company allocates the purchase price for each acquisition to the net tangible and intangible assets acquired and liabilities assumed based on their estimated fair value at the respective acquisition date.
−Removed: Goodwill is measured as the excess of the purchase price over the value of net identifiable assets acquired.
−Removed: While best estimates and assumptions are used to accurately value assets acquired and liabilities assumed at the acquisition date, as well as contingent and non‑contingent consideration, where applicable, the Company’s estimates are inherently uncertain and subject to refinement.
−Removed: Any adjustments to estimated fair value are recorded to goodwill, provided that the Company is within the measurement period (up to one year from the acquisition date) and that the Company continues to collect information to determine estimated fair value.
−Removed: Subsequent to the measurement period or the Company’s final determination of estimated fair value, whichever comes first, adjustments are recorded in the consolidated statements of operations.
−Removed: On January 31, 2022, the Company completed the acquisition of Power Line Systems, a leader in software for the design of overhead electric power transmission lines and their structures, for $ 695,968 in cash, net of cash acquired.
−Removed: On June 17, 2021, the Company completed the acquisition of Seequent Holdings Limited (“Seequent”), a leader in software for geological and geophysical modeling, geotechnical stability, and cloud services for geodata management and collaboration, for $ 883,336 in cash, net of cash acquired, plus 3,141,342 shares of the Company’s Class B Common Stock (see Note 4).
−Removed: Revenue Recognition — The Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the expected consideration received in exchange for those goods or services.
−Removed: The Company generates revenues from subscriptions, perpetual licenses, and services (see Note 3).
−Removed: The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year.
−Removed: The contract costs are amortized based on the economic life of the goods and services to which the contract costs relate.
−Removed: The Company has determined that costs under certain sales incentive programs meet the requirements to be capitalized.
−Removed: The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less.
−Removed: These costs include the Company’s internal sales force compensation program and certain channel partner sales incentive programs for which the annual compensation is commensurate with annual sales activities.
−Removed: Cost of Revenues — Cost of subscriptions and licenses includes salaries and other related costs, including the depreciation of property and equipment and the amortization of capitalized software costs associated with servicing software subscriptions, the amortization of intangible assets associated with acquired software and technology, channel partner compensation for providing sales coverage to subscribers, as well as cloud‑related costs incurred for servicing the Company’s customers using cloud deployed hosted solutions and those using the Company’s SELECT subscription offering.
−Removed: Cost of services includes salaries for internal and third‑party personnel and related overhead costs, including depreciation of property and equipment and amortization of capitalized software costs, for providing training, implementation, configuration, and customization services to customers.
+Added: Cost of Revenues — Cost of subscriptions and licenses expenses primarily include headcount‑related costs, as well as depreciation of property and equipment and amortization of capitalized software costs associated with servicing software subscriptions, amortization of intangible assets associated with acquired software and technology, channel partner compensation for providing sales coverage to users, as well as cloud‑related costs incurred for servicing the Company’s customers using cloud provisioned solutions and the Company’s license administration platform.
+Added: Cost of services expenses primarily include headcount‑related costs, as well as depreciation of property and equipment and amortization of capitalized software costs, used for providing training, implementation, configuration, and customization services to customers.
Software Development Costs — The Company’s software development costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external accounts, before technological feasibility is reached, are included in Research and development in the consolidated statements of operations.
−Removed: Research and development expenses, which are generally expensed as incurred, primarily consist of personnel and related costs of the Company’s research and development staff, including colleagues’ salaries, incentives, and benefits, and costs of certain third‑party contractors, as well as allocated overhead costs.
+Added: Research and development expenses, which are generally expensed as incurred, primarily consist of headcount‑related costs.
In general, technological feasibility is reached shortly before the release of such products.
4 unchanged sentences
Additionally, for the years ended December 31, 2023, 2022, and 2021, total ACDP related amortization recorded in Cost of subscriptions and licenses in the consolidated statements of operations was $ 7,711 , $ 6,626 , and $ 7,020 , respectively.
−Removed: Stock‑Based Compensation — The Company records all stock‑based compensation as an expense in the consolidated statements of operations measured at the grant date fair value of the award and is recognized ratably over the requisite service period, which is generally the vesting period.
−Removed: The fair value of stock option awards is determined using the Black‑Scholes option pricing model.
−Removed: For all other equity‑based arrangements, the stock‑based compensation expense is based on the share price at the grant date (see Note 15).
−Removed: Deferred Compensation — Under the Company’s unfunded amended and restated Bentley Systems, Incorporated Nonqualified Deferred Compensation Plan (the “DCP”), certain officers and key employees may defer all or any part of their incentive compensation, and the Company may make discretionary awards on behalf of such participants.
−Removed: Elective participant deferrals and discretionary Company awards are received in the form of phantom shares of the Company’s Class B Common Stock, which are valued for tax and accounting purposes in the same manner as actual shares of Class B Common Stock, and are recorded as stock‑based compensation expense in the consolidated statements of operations (see Note 15).
−Removed: In August 2021, the Company’s board of directors approved an amendment to the DCP, which offered to certain active executives in the DCP a one‑time, short‑term election to reallocate a limited portion of their DCP holdings from phantom shares of the Company’s Class B Common Stock into other phantom investment funds.
−Removed: The offer to reallocate was subject to a proration mechanism which adjusted the aggregate elections to a maximum of 1,500,000 phantom shares of the Company’s Class B Common Stock.
−Removed: This resulted in a reduction of 1,500,000 shares in both the basic and diluted count of Company shares.
−Removed: While DCP participants’ investments in phantom shares remain equity classified, as they will be settled in shares of Class B Common Stock upon eventual distribution, the amendment and elections resulted in a change to liability classification for the reallocated phantom investments, as they will be settled in cash upon eventual distribution.
−Removed: As a result, during the year ended December 31, 2021, the Company reclassified cumulative compensation cost of $ 4,739 from Additional paid-in capital to Accruals and other current liabilities or Deferred compensation plan liabilities in the consolidated balance sheet and recognized a compensation charge of $ 90,721 to Deferred compensation plan expenses in the consolidated statement of operations to record the reallocated deferred compensation plan liabilities at their fair value of $ 95,460 .
−Removed: Subsequent to the one‑time reallocation, these diversified deferred compensation plan liabilities are marked to market at the end of each reporting period, with changes in the liabilities recorded as an expense (income) to Deferred compensation plan in the consolidated statements of operations (see Note 12).
+Added: The Company evaluates the recoverability of capitalized ACDP costs whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable.
+Added: During the year ended December 31, 2023, the Company recognized impairment charges of $ 1,835 related to certain ACDP projects, which were recorded as amortization expense in Cost of subscriptions and licenses in the consolidated statements of operations.
+Added: No impairment of capitalized ACDP costs occurred for the years ended December 31, 2022 or 2021.
Advertising Expense — The Company expenses advertising costs as incurred.
Advertising expense of $ 5,365 , $ 6,888 , and $ 2,396 is included in Selling and marketing in the consolidated statements of operations for the years ended December 31, 2023, 2022, and 2021, respectively.
−Removed: Derivative Arrangements — The Company records derivative instruments as an asset or liability measured at fair value and depending on the nature of the hedge, the corresponding changes in the fair value of these instruments are recorded in the consolidated statements of operations or comprehensive income.
−Removed: If the derivative is determined to be a hedge, changes in the fair value of the derivative are offset against the change in the fair value of the hedged assets or liabilities through the consolidated statements of operations or recognized in Other comprehensive income (loss), net of taxes until the hedged item is recognized in the consolidated statements of operations.
−Removed: The ineffective portion of a derivative’s change in fair value is recognized in earnings.
−Removed: Also, changes in the entire fair value of a derivative that is not designated as a hedge are recognized in earnings.
−Removed: On March 31, 2020, the Company entered into an interest rate swap with a notional amount of $ 200,000 and a ten‑year term to reduce the interest rate risk associated with the Company’s credit facility (see Note 10).
−Removed: The interest rate swap is not designated as a hedging instrument for accounting purposes.
−Removed: The Company accounts for the interest rate swap as either an asset or a liability on the consolidated balance sheets and carries the derivative at fair value (see Note 17).
−Removed: Gain (loss) from the change in fair value and payments related to the interest rate swap are recognized in Other income (expense), net in the consolidated statements of operations (see Note 21).
−Removed: The bank counterparty to the derivative potentially exposes the Company to credit-related losses in the event of nonperformance.
−Removed: To mitigate that risk, the Company only contracts with counterparties who meet the Company’s minimum requirements under its counterparty risk assessment process.
−Removed: The Company monitors counterparty risk on at least a quarterly basis and adjusts its exposure as necessary.
−Removed: The Company does not enter into derivative instrument transactions for trading or speculative purposes.
−Removed: Foreign Currency Translation — Gains and losses resulting from foreign currency transactions denominated in currencies other than the functional currency are included in Other income (expense), net in the consolidated statements of operations.
−Removed: The assets and liabilities of foreign subsidiaries are translated from their respective functional currencies into U.S.
−Removed: Dollars at the rates in effect at the balance sheet date, and revenue and expense amounts are translated at average rates during the period.
−Removed: Foreign currency translation adjustments are recorded as a component of Other comprehensive income (loss), net of taxes in the consolidated statements of comprehensive income.
−Removed: Income Taxes — The Company recognizes deferred income tax assets and liabilities for the expected future tax consequences of net operating loss carryforwards, credit carryforwards, and temporary differences between financial statement carrying amounts of assets and liabilities and their respective tax bases, using enacted tax rates in effect for the year in which the items are expected to reverse.
−Removed: A valuation allowance is required when it is more likely than not that all or a portion of deferred tax assets will not be realized.
−Removed: The Company assesses the available positive and negative evidence to estimate whether the existing deferred tax assets will be realized.
−Removed: Tax Cuts and Jobs Act (the “JOBS Act”) requires certain Global Intangible Low‑Taxed Income (“GILTI”) earned by a controlled foreign corporation (“CFC”) to be included in the gross income of the CFC’s U.S.
−Removed: The Company has elected the “period cost method” and treats taxes due on future U.S.
−Removed: inclusions in taxable income related to GILTI as a current‑period expense when incurred.
−Removed: The JOBS Act allows a U.S.
−Removed: corporation a deduction equal to a certain percentage of its foreign‑derived intangible income (“FDII”).
−Removed: The Company and its subsidiaries are subject to income taxes in the U.S.
−Removed: (federal and state) and numerous foreign jurisdictions.
−Removed: Significant judgment is required in evaluating the Company’s tax positions and determining the provision for income taxes.
−Removed: During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain.
−Removed: The Company establishes reserves for tax‑related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due.
−Removed: These reserves are established when the Company believes that certain positions might be challenged despite its belief that the Company’s tax return positions are fully supportable.
−Removed: The tax benefit recognized is based on the largest amount that is greater than 50 percent likely of being realized upon ultimate settlement.
−Removed: The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of tax audits.
−Removed: The Provision for income taxes in the consolidated statements of operations includes the impact of reserve provisions and changes to reserves that are considered appropriate.
−Removed: The Company records interest and/or penalties, where applicable, related to uncertain tax positions, as part of the Provision for income taxes in the consolidated statements of operations.
−Removed: The Company records the amount of uncertain taxes expected to be paid in the next 12 months as a current liability and records the remaining amount in Other liabilities in the consolidated balance sheets.
−Removed: Net Income Per Share — Net income per share of Class A and Class B Common Stock amounts are computed using the two‑class method required for participating securities, using the treasury stock method for awards under the Company’s equity compensation plans and global employee stock purchase plan, and using the if‑converted method for the convertible senior notes.
−Removed: In addition, the weighted average number of shares of the Company’s Class A and Class B Common Stock is inclusive of undistributed shares held in the DCP as phantom shares of the Company’s Class B Common Stock (see Note 22).
−Removed: Fair Value Measurements — The Company categorizes its assets and liabilities measured at fair value into a three‑level hierarchy, based on the priority of the inputs to the respective valuation technique.
−Removed: The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).
−Removed: An asset or liability’s classification within the fair value hierarchy is based on the lowest level of significant input to its valuation.
−Removed: The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.
Cash and Cash Equivalents — The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents.
1 unchanged sentence
Cash equivalents are recorded at cost, which approximates fair value.
−Removed: Accounts Receivable and Allowance for Doubtful Accounts — Accounts receivable represent receivables from customers for products and services invoiced by the Company for which payment is outstanding.
+Added: Accounts Receivable and Allowance for Doubtful Accounts — Accounts receivable primarily represent receivables from customers for products and services invoiced by the Company for which payment is outstanding and also unbilled revenues (see Note 3).
Receivables are recorded at the invoiced amount and do not bear interest.
The Company establishes an allowance for doubtful accounts for expected losses during the accounts receivable collection process.
−Removed: The allowance for doubtful accounts is presented separately in the consolidated balance sheets and reduces the accounts receivable balance to the net realizable value of the outstanding accounts receivables.
+Added: The allowance for doubtful accounts is presented separately in the consolidated balance sheets and reduces the accounts receivable balance to the net realizable value of the outstanding accounts receivable.
The development of the allowance for doubtful accounts is based on an expected loss model which considers historical write‑off and recovery experience, aging trends affecting specific accounts, and general operational factors affecting all accounts.
1 unchanged sentence
The Company considers current economic trends and takes into account reasonable and supportable forecasts of future conditions when evaluating the adequacy of the allowance for doubtful accounts.
−Removed: If circumstances relating to specific customers change or unanticipated changes occur in the general business environment, the Company’s estimate of the recoverability of receivables could be further adjusted.
+Added: If circumstances relating to specific customers change or unexpected changes occur in the general business environment, the Company’s estimate of the recoverability of receivables could be further adjusted.
Activity related to the Company’s allowance for doubtful accounts was as follows:
1 unchanged sentence
Balance, beginning of year $ 9,303 $ 6,541
−Removed: Bad debt allowance
−Removed: Write-offs ( 2,317 ) ( 700 )
+Added: Additions to reserve 6,651 5,549
+Added: Write-offs, net of recoveries ( 7,106 ) ( 2,317 )
Foreign currency translation adjustments 117 ( 470 )
4 unchanged sentences
The Company maintains an allowance for potential credit losses, but historically has not experienced any significant losses related to individual customers or groups of customers in any particular industry or geographic region.
−Removed: No single customer accounted for more than 2.0% of the Company’s total revenues for the year ended December 31, 2022, or more than 2.5% of the Company’s total revenues for the years ended 2021 or 2020.
+Added: No single customer accounted for more than 2.0% of the Company’s total revenues for the years ended December 31, 2023 and 2022, or more than 2.5% of the Company’s total revenues for the year ended 2021.
The Company’s cash and cash equivalents are deposited with financial institutions and invested in money market funds that the Company believes are of high credit quality.
−Removed: Property and Equipment — Property and equipment are recorded at cost less accumulated depreciation.
−Removed: Depreciation is calculated using the straight‑line method over the estimated useful lives of the assets, which range from three to 25 years.
−Removed: Leasehold improvements are depreciated over the shorter of the estimated useful life of the leasehold improvements or the lease term.
−Removed: Land is not depreciated.
−Removed: Depreciation for equipment commences once it is placed in service and depreciation for buildings and leasehold improvements commences once they are ready for their intended use.
−Removed: Estimated useful lives of property and equipment are as follows:
−Removed: Building and improvements 25 years
−Removed: Computer equipment and software 3 years
−Removed: Furniture, fixtures, and equipment 5 years
−Removed: Aircraft 6 years
−Removed: Automobiles 3 years
−Removed: Cost of maintenance and repairs is charged to expense as incurred.
−Removed: Upon retirement or other disposition, the cost of the asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in Other income (expense), net in the consolidated statements of operations.
−Removed: Leases — The Company determines if an arrangement is a lease at inception.
−Removed: Operating leases are included in Operating lease right‑of‑use assets, Operating lease liabilities , and Long‑term operating lease liabilities in the consolidated balance sheets.
−Removed: Operating lease right‑of‑use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease.
−Removed: Operating lease right‑of‑use assets and operating lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.
−Removed: The Company uses its incremental borrowing rate, if the Company’s leases do not provide an implicit rate, based on the information available at the commencement date in determining the present value of lease payments.
−Removed: The incremental borrowing rate is determined based on the Company’s estimated credit rating, the term of the lease, economic environment where the asset resides, and full collateralization.
−Removed: The operating lease right‑of‑use assets also include any lease payments made and are reduced by any lease incentives.
−Removed: Options to extend or terminate the lease are considered in determining the lease term when it is reasonably certain that the option will be exercised.
−Removed: Lease expense for lease payments is recognized on a straight‑line basis over the lease term.
−Removed: The Company’s operating leases are primarily for office facilities, office equipment, and automobiles .
−Removed: The Company’s finance lease is included in Property and equipment, net , Accruals and other current liabilities , and Other liabilities in the consolidated balance sheets.
−Removed: For contracts with lease and non‑lease components, the Company has elected not to allocate the contract consideration, and account for the lease and non-lease components as a single lease component.
−Removed: Payments under the Company’s lease arrangements are primarily fixed, however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the operating lease assets and liabilities.
−Removed: Variable lease cost may include common area maintenance, property taxes, utilities, and fluctuations in rent due to a change in an index or rate.
−Removed: The Company has elected not to recognize a right‑of‑use asset or lease liability for short‑term leases (leases with a term of twelve months or less).
−Removed: Short‑term leases are recognized in the consolidated statements of operations on a straight‑line basis over the lease term.
−Removed: Goodwill and Other Intangible Assets — Intangible assets arise from acquisitions and principally consist of goodwill, trademarks, customer relationships, in‑process research and development, and acquired software and technology.
−Removed: Intangible assets, other than goodwill and in‑process research and development, are amortized on a straight‑line basis over their estimated useful lives, which range from three to ten years .
−Removed: Goodwill consists of the excess of cost over the fair value of net assets acquired in business combinations.
−Removed: Goodwill is not amortized, but instead is tested annually for impairment on October 1, or more frequently if events occur or circumstances change that would more likely than not reduce its fair value below its carrying amount.
−Removed: The Company allocates goodwill to reporting units on a relative fair value basis.
−Removed: In testing for goodwill impairment, the Company may first qualitatively assess whether it is more likely than not (a likelihood of more than 50 percent) that a goodwill impairment exists.
−Removed: If it is determined that a quantitative assessment is required, the Company will recognize goodwill impairment as the difference between the carrying amount of the reporting unit and it’s fair value, but not to exceed the carrying amount of goodwill within the reporting unit.
−Removed: There was no impairment of goodwill as a result of the Company’s annual impairment assessments conducted for the years ended December 31, 2022, 2021, and 2020.
−Removed: Long‑Lived Assets — The Company evaluates the recoverability of long‑lived assets, such as property and equipment, operating lease right‑of‑use assets, and amortizable intangible assets, in accordance with authoritative guidance on accounting for the impairment or disposal of long‑lived assets, which includes evaluating long‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable.
−Removed: If circumstances require a long‑lived asset to be tested for possible impairment, the Company first compares the undiscounted cash flows expected to be generated by that asset to its carrying value.
−Removed: If the carrying value of the long‑lived asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value.
−Removed: No impairment of long‑lived assets occurred for the years ended December 31, 2022, 2021, and 2020.
−Removed: Investments — The Company applies the cost method of accounting for its investment in which it does not have the ability to exercise significant influence over operating and financial policies.
−Removed: Under the cost method, the Company records the investment based on original cost less impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same investee.
−Removed: The Company’s share of income or loss of such companies is not included in the Company’s consolidated statements of operations.
−Removed: The Company applies the equity method of accounting for its investment in which it does have the ability to exercise significant influence over operating and financial policies.
−Removed: Under the equity method, the Company recognizes its initial investment at cost and updates the carrying value of its investment by its proportional share of income or losses from the investment.
−Removed: In addition, the Company decreases the carrying value by any dividends received from the investee.
−Removed: The Company does not otherwise adjust the carrying value to reflect changes to the fair market value of the investment.
−Removed: The Company’s equity method investments in joint ventures are considered related parties.
−Removed: For the years ended December 31, 2022 and 2021, transactions between the Company and its joint ventures were not material to the Company’s consolidated financial statements.
−Removed: The Company tests its investments for impairment whenever circumstances indicate that the carrying value of the investment may not be recoverable.
−Removed: No impairment of investments occurred for the years ended December 31, 2022, 2021, and 2020.
−Removed: Guarantees — The Company’s software license agreements typically provide for indemnification of customers for intellectual property infringement claims.
−Removed: The Company also warrants to customers, when requested, that its software products operate substantially in accordance with standard specifications for a limited period of time.
−Removed: The Company has not incurred significant obligations under customer indemnification or warranty provisions historically and does not expect to incur significant obligations in the future.
−Removed: Accordingly, the Company does not maintain accruals for potential customer indemnification or warranty‑related obligations.
−Removed: Convertible Senior Notes — On January 26, 2021, the Company completed a private offering of $ 690,000 of 0.125 % convertible senior notes due 2026 (the “2026 Notes”).
−Removed: The Company incurred $ 18,055 of expenses in connection with the 2026 Notes offering consisting of the payment of initial purchasers’ discounts and commissions, professional fees, and other expenses (“transaction costs”).
−Removed: In connection with the pricing of the 2026 Notes, the Company entered into capped call options with certain of the initial purchasers or their respective affiliates and certain other financial institutions.
−Removed: The capped call options are expected to reduce potential dilution to the Company’s Class B Common Stock upon any conversion of 2026 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap.
−Removed: The Company paid premiums of $ 25,530 in connection with the capped call options (see Note 10).
−Removed: On June 28, 2021, the Company completed a private offering of $ 575,000 of 0.375 % convertible senior notes due 2027 (the “2027 Notes”).
−Removed: The Company incurred $ 15,065 of expenses in connection with the 2027 Notes offering consisting of transaction costs.
−Removed: In connection with the pricing of the 2027 Notes, the Company entered into capped call options with certain of the initial purchasers or their respective affiliates and certain other financial institutions.
−Removed: The capped call options are expected to reduce potential dilution to the Company’s Class B Common Stock upon any conversion of 2027 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap.
−Removed: The Company paid premiums of $ 25,875 in connection with the capped call options (see Note 10).
−Removed: Initial Public Offering — On September 25, 2020, the Company completed its IPO.
−Removed: The selling stockholders sold 12,360,991 shares of Class B Common Stock at a public offering price of $ 22.00 per share.
−Removed: The Company did not sell any shares in the IPO and did not receive any of the proceeds from the sale of the Class B Common Stock sold by the selling stockholders (see Notes 13 and 15).
−Removed: For the year ended December 31, 2020, the Company recorded $ 26,130 in Expenses associated with initial public offering in the consolidated statement of operations.
−Removed: These expenses included certain non‑recurring costs relating to the Company’s IPO, consisting of the payment of underwriting discounts and commissions applicable to the sale of shares by the selling stockholders, professional fees, and other expenses.
−Removed: Follow-On Public Offering — On November 17, 2020, the Company completed its follow‑on public offering of 11,500,000 shares of Class B Common Stock at a public offering price of $ 32.00 per share (the “Follow‑On Offering”).
−Removed: The Company sold 9,603,965 shares of Class B Common Stock (inclusive of 1,500,000 shares sold upon the exercise by the underwriters of their option to purchase additional shares of the Company’s Class B Common Stock).
−Removed: The selling stockholders sold 1,896,035 shares of Class B Common Stock.
−Removed: The Company received net proceeds of $ 294,429 after deducting expenses of $ 12,898 .
−Removed: The Company did not receive any of the proceeds from the sale of the Class B Common Stock sold by the selling stockholders.
−Removed: Expenses associated with the Follow‑On Offering included certain non‑recurring costs, consisting of the payment of underwriting discounts and commissions applicable to the sale of shares by the Company, professional fees, and other expenses.
−Removed: The Company agreed to pay certain expenses in connection with the Follow‑On Offering on behalf of the selling stockholders and made an accounting policy election to offset these expenses against the Follow‑On Offering proceeds (see Note 13).
−Removed: Special Dividend — On August 28, 2020, the Company’s board of directors declared a special dividend of $ 1.50 per share of the Company’s common stock ($ 392,489 in the aggregate) (the “Special Dividend”), payable to all stockholders of record as of August 31, 2020, including dividends which accrue on certain unvested restricted stock and restricted stock units (“RSUs”).
−Removed: The Company used its bank credit facility to pay the Special Dividend (see Note 10).
−Removed: In connection with the Special Dividend declaration, an in kind adjustment was made to phantom shares issuable pursuant to the Company’s nonqualified deferred compensation plan (see Note 12) and the exercise price of all outstanding stock options at that time were reduced by $ 1.50 , but not lower than $ 0.01 (see Note 15).
Recent Accounting Pronouncements
−Removed: In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.
+Added: In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.
+Added: 2023‑09, Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures (“ASU 2023‑09”), which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S.
+Added: and foreign jurisdictions.
+Added: ASU 2023‑09 is effective for the Company for the annual reporting period beginning after December 15, 2024.
+Added: Early adoption is permitted.
+Added: The Company is currently evaluating the impact of the adoption of ASU 2023‑09 on its consolidated financial statements and related disclosures.
+Added: In November 2023, the FASB issued ASU No.
+Added: 2023‑07, Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures (“ASU 2023‑07”), which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how the Company’s CODM uses reported segment profit or loss information in assessing segment performance and allocating resources.
+Added: ASU 2023‑07 is effective for the Company for the annual reporting period beginning after December 15, 2023, and interim periods beginning after December 15, 2024.
+Added: Early adoption is permitted, including adoption in an interim period.
+Added: The Company is currently evaluating the impact of the adoption of ASU 2023‑07 on its consolidated financial statements and related disclosures.
+Added: Recently Adopted Accounting Guidance
+Added: In March 2020, the FASB issued ASU No.
2020‑04, Reference Rate Reform (Topic 848):
−Removed: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020‑04”), which provides optional expedients and exceptions for applying U.S.
−Removed: GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.
+Added: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020‑04”), which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.
ASU 2020‑04 applies only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform between March 12, 2020 and December 31, 2022.
1 unchanged sentence
2022‑06, Reference Rate Reform (Topic 848):
−Removed: Deferral of the Sunset Date of Topic 848 (“ASU 2022‑06”), which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting by extending the sunset date of Topic 848 to December 31, 2024.
+Added: Deferral of the Sunset Date of Topic 848 , which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting by extending the sunset date of Topic 848 to December 31, 2024.
The expedients and exceptions provided by these ASUs do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2024, except for hedging relationships existing as of December 31, 2024, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship.
−Removed: The Company had no transactions that were impacted by these ASUs during the year ended December 31, 2022.
+Added: The Company adopted these ASUs during the second quarter of 2023 (see Note 10) and the adoption did not have a material impact on the Company’s consolidated financial statements.
Revenue from Contracts with Customers
+Added: Disaggregation of Revenues
+Added: The Company’s revenues consist of the following:
+Added: Year Ended December 31,
+Added: 2023 2022 2021
+Added: Subscriptions:
+Added: Enterprise subscriptions (1)
+Added: $ 433,321 $ 345,678 $ 290,097
+Added: SELECT subscriptions 258,288 264,308 269,283
+Added: Term license subscriptions 388,698 350,234 253,427
+Added: Subscriptions 1,080,307 960,220 812,807
+Added: Perpetual licenses 46,038 43,377 53,080
+Added: Subscriptions and licenses 1,126,345 1,003,597 865,887
+Added: Recurring 16,370 17,804 21,343
+Added: Other 85,698 77,681 77,816
+Added: Services 102,068 95,485 99,159
+Added: Total revenues $ 1,228,413 $ 1,099,082 $ 965,046
+Added: (1) Enterprise subscriptions includes revenue attributable to E365 subscriptions of $ 411,025 , $ 306,901 , and $ 223,293 for the years ended December 31, 2023, 2022, and 2021, respectively.
+Added: The Company recognizes perpetual licenses and the term license component of subscriptions as revenue when either the licenses are delivered or at the start of the subscription term.
+Added: For the years ended December 31, 2023, 2022, and 2021, the Company recognized $ 592,737 , $ 513,736 , and $ 412,375 of license related revenues, respectively, of which $ 546,699 , $ 470,359 , and $ 359,295 , respectively, were attributable to the term license component of the Company’s subscription based commercial offerings recorded in Subscriptions in the consolidated statements of operations.
+Added: The Company derived 8 % of its total revenues through channel partners for the years ended December 31, 2023, 2022, and 2021.
+Added: Revenue from external customers is attributed to individual countries based upon the location of the customer.
+Added: Revenues by geographic region are as follows:
+Added: Year Ended December 31,
+Added: 2023 2022 2021
+Added: $ 650,926 $ 584,794 $ 483,087
+Added: EMEA 353,550 312,804 300,123
+Added: APAC 223,937 201,484 181,836
+Added: Total revenues $ 1,228,413 $ 1,099,082 $ 965,046
+Added: (1) Americas includes the U.S., Canada, and Latin America, including the Caribbean.
+Added: Revenue attributable to the U.S.
+Added: totaled $ 511,828 , $ 459,511 , and $ 393,865 for the years ended December 31, 2023, 2022, and 2021, respectively.
Nature of Products and Services
+Added: The Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the expected consideration received in exchange for those goods or services.
The Company generates revenues from subscriptions, perpetual licenses, and services.
+Added: The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the Company expects the benefit of those costs to be longer than one year.
+Added: The contract costs are amortized based on the economic life of the goods and services to which the contract costs relate.
+Added: The Company has determined that costs under certain sales incentive programs meet the requirements to be capitalized.
+Added: The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less.
+Added: These costs include the Company’s internal sales force compensation program and certain channel partner sales incentive programs for which the annual compensation is commensurate with annual sales activities.
Subscriptions
−Removed: Enterprise subscriptions — The Company provides enterprise subscription offerings, which provide its enterprise accounts with complete and unlimited global access to the Company’s comprehensive portfolio of solutions.
−Removed: Enterprise 365 (“E365”) subscriptions are charged to accounts primarily based upon daily usage.
+Added: Enterprise Subscriptions
+Added: The Company provides enterprise subscription offerings, which provide its enterprise accounts with complete and unlimited global access to the Company’s comprehensive portfolio of solutions.
+Added: E365 subscriptions require a CSS as described below and are charged to accounts primarily based upon daily usage.
The daily usage fee includes a term license component, SELECT maintenance and support, hosting, and Success Blueprints, which are designed to achieve business outcomes through more efficient and effective use of the Company’s software.
3 unchanged sentences
The term of E365 subscriptions aligns with calendar quarters and revenue is recognized based on actual usage.
−Removed: Alternatively, Enterprise License Subscriptions (“ELS”) provide access for a prepaid fee, which is based on the
−Removed: account’s usage of software in the preceding year, to effectively create a fee‑certain consumption‑based arrangement.
+Added: Alternatively, enterprise license subscriptions (“ELS”) provide access for a prepaid fee, which is based on the account’s usage of software in the preceding year, to effectively create a fee‑certain consumption‑based arrangement.
ELS contain a term license component, SELECT maintenance and support, and performance consulting days.
The SELECT maintenance and support benefits under ELS do not include a portfolio balancing performance obligation.
−Removed: Revenue is allocated to the various performance obligations based on their respective standalone selling price (“SSP”).
+Added: Revenue is allocated to the various performance obligations based on their respective SSP.
Revenue allocated to the term license component is recognized upon delivery at the start of the subscription term while revenues for the SELECT maintenance and support and the performance consulting days are recognized as delivered over the subscription term.
Billings in advance are recorded as Deferred revenues in the consolidated balance sheets.
−Removed: SELECT subscriptions — The Company provides prepaid annual recurring subscriptions that accounts (which are based on distinct contractual and billing relationships with the Company, where affiliated entities of a single parent company may each have an independent account with the Company) can elect to add to a new or previously purchased perpetual license.
+Added: SELECT Subscriptions
+Added: The Company provides prepaid annual recurring subscriptions that accounts (which are based on distinct contractual and billing relationships with the Company, where affiliated entities of a single parent company may each have an independent account with the Company) can elect to add to a new or previously purchased perpetual license.
SELECT provides accounts with benefits, including upgrades, comprehensive technical support, pooled licensing benefits, annual portfolio balancing exchange rights, learning benefits, certain Azure‑based cloud collaboration services, mobility advantages, and access to other available benefits.
2 unchanged sentences
These performance obligations are accounted for ratably over the term as a single performance obligation.
−Removed: Term license subscriptions — The Company provides annual, quarterly, and monthly term licenses for its software products.
+Added: Term License Subscriptions
+Added: The Company provides annual, quarterly, and monthly term licenses for its software products.
Term license subscriptions contain a term license component and SELECT maintenance and support.
4 unchanged sentences
Monthly term license (“MTL”) subscriptions are identical to QTL subscriptions, except for the term of the license, and the manner in which they are monetized.
−Removed: MTL subscriptions require a Cloud Services Subscription (“CSS”), which is described below.
+Added: MTL subscriptions require a CSS, which is described below.
For ATL, revenue allocated to the term license component is recognized upon delivery at the start of the subscription term while revenue for the SELECT maintenance and support is recognized as delivered over the subscription term.
21 unchanged sentences
Revenues are recognized as services are performed.
−Removed: The Company primarily utilizes its direct internal sales force and also has arrangements through independent channel partners to promote and sell Bentley products and subscriptions to end‑users.
−Removed: Channel partners are authorized to promote the sale of an authorized set of Bentley products and subscriptions within an authorized geography under a Channel Partner Agreement.
+Added: The Company primarily utilizes its direct internal sales force and also has arrangements through independent channel partners to promote and sell its products and subscriptions to end‑users.
+Added: Channel partners are authorized to promote the sale of an authorized set of the Company’s products and subscriptions within an authorized geography under a Channel Partner Agreement.
Significant Judgments and Estimates
12 unchanged sentences
This right is included in the initial and subsequent renewal terms and the Company reestablishes the revenue deferral for the material right upon the beginning of the renewal term.
−Removed: As of December 31, 2022 and 2021, the Company has deferred $ 17,338 and $ 18,020 , respectively, related to portfolio balancing exchange rights which is included in Deferred revenues in the consolidated balance sheets.
−Removed: Contract Assets and Contract Liabilities
−Removed: Contract assets $ 575 $ 336
−Removed: Deferred revenues 243,073 232,593
+Added: Unbilled Revenues
+Added: Unbilled revenues represent revenues that have not yet been billed to customers due to timing differences in usage and billing cycles, and are included in Accounts receivable in the consolidated balance sheets.
+Added: As of December 31, 2023 and 2022, unbilled revenues were $ 129,494 and $ 113,217 , respectively.
+Added: Contract Balances
As of December 31, 2023 and 2022, the Company’s contract assets relate to performance obligations completed in advance of the right to invoice and are included in Prepaid and other current assets in the consolidated balance sheets.
−Removed: Contract assets were not impaired as of December 31, 2022 and 2021.
+Added: Contract assets were not material as of December 31, 2023 or 2022.
Deferred revenues consist of billings made or payments received in advance of revenue recognition from subscriptions and services.
The timing of revenue recognition may differ from the timing of billings to users.
+Added: As of December 31, 2023 and 2022, total deferred revenues on the consolidated balance sheets were $ 269,647 and $ 243,073 , respectively.
For the year ended December 31, 2023, $ 213,021 of revenues that were included in the December 31, 2022 deferred revenues balance were recognized.
−Removed: There were additional deferrals of $ 221,126 , which were primarily related to new billings and acquisitions (see Note 4).
+Added: There were additional deferrals of $ 237,193 , which were primarily related to new billings and acquisitions.
For the year ended December 31, 2022, $ 204,279 of revenues that were included in the December 31, 2021 deferred revenues balance were recognized.
−Removed: There were additional deferrals of $ 215,947 , which were primarily related to new billings and acquisitions (see Note 4).
+Added: There were additional deferrals of $ 221,126 , which were primarily related to new billings and acquisitions.
+Added: As of December 31, 2023 and 2022, the Company has deferred $ 18,269 and $ 17,338 , respectively, related to portfolio balancing exchange rights which is included in Deferred revenues in the consolidated balance sheets.
Remaining Performance Obligations
1 unchanged sentence
As of December 31, 2023, amounts allocated to these remaining performance obligations are $ 269,647 , of which the Company expects to recognize approximately 94 % over the next 12 months with the remaining amount thereafter.
−Removed: Disaggregation of Revenues
−Removed: The Company’s revenues consist of the following:
−Removed: Year Ended December 31,
−Removed: 2022 2021 2020
−Removed: Subscriptions:
−Removed: Enterprise subscriptions (1)
−Removed: $ 345,678 $ 290,097 $ 221,524
−Removed: SELECT subscriptions 264,308 269,283 270,749
−Removed: Term license subscriptions 350,234 253,427 187,000
−Removed: Subscriptions 960,220 812,807 679,273
−Removed: Perpetual licenses 43,377 53,080 57,382
−Removed: Subscriptions and licenses 1,003,597 865,887 736,655
−Removed: Recurring 17,804 21,343 17,389
−Removed: Other 77,681 77,816 47,500
−Removed: Services 95,485 99,159 64,889
−Removed: Total revenues $ 1,099,082 $ 965,046 $ 801,544
−Removed: (1) Enterprise subscriptions includes revenue attributable to E365 subscriptions of $ 306,901 , $ 223,293 , and $ 110,979 for the years ended December 31, 2022, 2021, and 2020, respectively.
−Removed: The Company recognizes perpetual licenses and the term license component of subscriptions as revenue when either the licenses are delivered or at the start of the subscription term.
−Removed: For the years ended December 31, 2022, 2021, and 2020, the Company recognized $ 513,736 , $ 412,375 , and $ 338,792 of license related revenues, respectively, of which $ 470,359 , $ 359,295 , and $ 281,410 , respectively, were attributable to the term license component of the Company’s subscription based commercial offerings recorded in Subscriptions in the consolidated statements of operations.
−Removed: The Company derived 8 % of its total revenues through channel partners for the years ended December 31, 2022, 2021, and 2020.
−Removed: Revenue from external customers is attributed to individual countries based upon the location of the customer.
−Removed: Revenues by geographic region are as follows:
−Removed: Year Ended December 31,
−Removed: 2022 2021 2020
−Removed: $ 584,794 $ 483,087 $ 395,746
−Removed: Europe, the Middle East, and Africa (“EMEA”) 312,804 300,123 254,036
−Removed: Asia-Pacific (“APAC”)
−Removed: 201,484 181,836 151,762
−Removed: Total revenues $ 1,099,082 $ 965,046 $ 801,544
−Removed: (1) Americas includes the U.S., Canada, and Latin America (including the Caribbean).
−Removed: Revenue attributable to the U.S.
−Removed: totaled $ 459,511 , $ 393,865 , and $ 348,222 for the years ended December 31, 2022, 2021, and 2020, respectively.
−Removed: For the years ended December 31, 2022, 2021, and 2020, the Company completed 6 , 13 , and 6 acquisitions, respectively, for an aggregate purchase price of $ 765,098 , $ 1,269,844 , and $ 102,094 , respectively.
−Removed: On January 31, 2022, the Company completed the acquisition of Power Line Systems, a leader in software for the design of overhead electric power transmission lines and their structures, for $ 695,968 in cash, net of cash acquired.
−Removed: On June 17, 2021, the Company completed the acquisition of Seequent, a leader in software for geological and geophysical modeling, geotechnical stability, and cloud services for geodata management and collaboration, for $ 883,336 in cash, net of cash acquired, plus 3,141,342 shares of the Company’s Class B Common Stock.
−Removed: The operating results of the acquired businesses, except for Seequent, were not material, individually or in the aggregate, to the Company’s consolidated statements of operations.
+Added: The Company’s software license agreements typically provide for indemnification of customers for intellectual property infringement claims.
+Added: The Company also warrants to customers, when requested, that its software products operate substantially in accordance with standard specifications for a limited period of time.
+Added: The Company has not incurred significant obligations under customer indemnification or warranty provisions historically and does not expect to incur significant obligations in the future.
+Added: Accordingly, the Company does not maintain accruals for potential customer indemnification or warranty‑related obligations.
The aggregate details of the Company’s acquisition activity are as follows:
−Removed: Acquisitions Completed in
+Added: Acquisitions Completed During
Year Ended December 31,
5 unchanged sentences
Net cash paid $ 26,023 $ 743,007 $ 1,034,983
−Removed: (1) Of the cash paid at closing for the years ended December 31, 2022, 2021, and 2020, $ 3,000 , $ 8,701 , and $ 3,413 , respectively, was deposited into an escrow account to secure any potential indemnification and other obligations of the seller.
+Added: (1) Of the cash paid at closing for the year ended December 31, 2023, $ 1,000 was deposited into an escrow account to secure any potential indemnification and other obligations of the seller.
+Added: On January 31, 2022, the Company completed the acquisition of PLS, a leader in software for the design of overhead electric power transmission lines and their structures, for $ 695,968 in cash, net of cash acquired.
+Added: On June 17, 2021, the Company completed the acquisition of Seequent, a leader in software for geological and geophysical modeling, geotechnical stability, and cloud services for geodata management and collaboration, for $ 883,336 in cash, net of cash acquired, plus 3,141,342 shares of the Company’s Class B common stock.
+Added: The operating results of the acquired businesses, except for Seequent, were not material, individually or in the aggregate, to the Company’s consolidated statements of operations.
The fair value of the contingent consideration from acquisitions is included in the consolidated balance sheets as follows:
Accruals and other current liabilities $ — $ 1,196
−Removed: Other liabilities — 1,231
Contingent consideration from acquisitions $ — $ 1,196
5 unchanged sentences
The purchase price for each acquisition has been allocated to the net tangible and intangible assets and liabilities based on their estimated fair values at the respective acquisition date.
−Removed: The Company is in the process of finalizing the purchase accounting for three acquisitions completed during the year ended December 31, 2022.
+Added: The Company is in the process of finalizing the purchase accounting for two acquisitions completed during the year ended December 31, 2023.
Identifiable assets acquired and liabilities assumed were provisionally recorded at their estimated fair values on the respective acquisition date.
3 unchanged sentences
Acquisition costs are expensed as incurred and are recorded in General and administrative in the consolidated statements of operations.
−Removed: For the years ended December 31, 2022, 2021, and 2020, the Company’s acquisition expenses were $ 11,758 , $ 20,471 , and $ 2,227 , respectively, which include costs related to legal, accounting, valuation, insurance, general administrative, and other consulting fees.
−Removed: For the year ended December 31, 2022, $ 9,804 of the Company’s acquisition expenses related to the acquisition of Power Line Systems.
−Removed: For the year ended December 31, 2021, $ 16,557 and $ 1,644 of the Company’s acquisition expenses related to the acquisition of Seequent and Power Line Systems, respectively.
+Added: For the years ended December 31, 2023, 2022, and 2021, the Company’s acquisition expenses were $ 5,879 , $ 11,758 , and $ 20,471 , respectively, which include costs related to legal, accounting, valuation, insurance, and other consulting and transaction fees.
+Added: For the year ended December 31, 2022, $ 9,804 of the Company’s acquisition expenses related to the acquisition of PLS.
+Added: For the year ended December 31, 2021, $ 16,557 and $ 1,644 of the Company’s acquisition expenses related to the acquisition of Seequent and PLS, respectively.
The following summarizes the fair values of the assets acquired and liabilities assumed, as well as the weighted average useful lives assigned to acquired intangible assets at the respective date of each acquisition (including contingent consideration):
−Removed: Acquisitions Completed in
+Added: Acquisitions Completed During
Year Ended December 31,
12 unchanged sentences
Property and equipment — 1,316 4,383
+Added: Deferred income taxes 2,151 — —
Other assets 6 7 874
5 unchanged sentences
1,000 6,972 38,256
−Removed: Non-compete agreement (useful life of 5 years)
In-process research and development — — 3,700
9 unchanged sentences
Net assets acquired $ 26,827 $ 765,098 $ 1,269,844
−Removed: (1) Of the total 3,141,342 shares issued at closing, 83,627 shares are subject to forfeiture if post‑closing employment service conditions are not met and accordingly are being recorded as stock‑based compensation expense over the related forfeiture period of two years (see Note 15).
+Added: (1) Of the total 3,141,342 shares issued at closing, 83,627 shares are subject to forfeiture if post‑closing employment service conditions are not met and accordingly were recorded as stock‑based compensation expense over the related forfeiture period of two years .
(2) A fair value adjustment of $ 16,943 was applied to the stock consideration due to restrictions on the transfer of securities.
+Added: The Company allocates the purchase price for each acquisition to the net tangible and intangible assets acquired and liabilities assumed based on their estimated fair value at the respective acquisition date, with the exception of deferred revenues which are recognized and measured on the acquisition date in accordance with the Company’s revenue recognition policies in Note 3.
The fair values of the working capital, other assets (liabilities), and property and equipment approximated their respective carrying values as of the acquisition date.
−Removed: Deferred revenues were determined in accordance with the Company’s revenue recognition policies (see Note 3).
The fair values of the intangible assets were primarily determined using the income approach.
1 unchanged sentence
The cash flows were based on estimates used to price the acquisitions and the discount rates applied were benchmarked with reference to the implied rate of return from the Company’s pricing model and the weighted average cost of capital.
+Added: Goodwill is measured as the excess of the purchase price over the value of net identifiable assets acquired.
+Added: While best estimates and assumptions are used to accurately value assets acquired and liabilities assumed at the acquisition date, as well as contingent and non‑contingent consideration, where applicable, the Company’s estimates are inherently uncertain and subject to refinement.
+Added: Any adjustments to estimated fair value are recorded to goodwill, provided that the Company is within the measurement period (up to one year from the acquisition date) and that the Company continues to collect information to determine estimated fair value.
+Added: Subsequent to the measurement period or the Company’s final determination of estimated fair value, whichever comes first, adjustments are recorded in the consolidated statements of operations.
Goodwill recorded in connection with the acquisitions was attributable to synergies expected to arise from cost saving opportunities, as well as future expected cash flows.
1 unchanged sentence
Unaudited Pro Forma Financial Information
−Removed: Had the acquisition of Seequent been made at the beginning of 2020, unaudited pro forma total revenues for the years ended December 31, 2021 and 2020 would have been $ 1,017,975 and $ 877,584 , respectively.
−Removed: Net income, net income per share, basic, and net income per share, diluted for the years ended December 31, 2021 and 2020 would not have been materially different than the amounts reported primarily due to the pro forma adjustments to reflect the amortization of purchased intangibles and the cost to finance the transaction, net of the related tax effects.
+Added: Had the acquisition of Seequent been made at the beginning of 2020, unaudited pro forma total revenues for the year ended December 31, 2021 would have been $ 1,017,975 .
+Added: Net income, net income per share, basic, and net income per share, diluted for the year ended December 31, 2021 would not have been materially different than the amounts reported primarily due to the pro forma adjustments to reflect the amortization of purchased intangibles and the cost to finance the transaction, net of the related tax effects.
The unaudited pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2020.
11 unchanged sentences
Depreciation expense for the years ended December 31, 2023, 2022, and 2021 was $ 12,368 , $ 10,706 , and $ 11,217 , respectively.
+Added: Property and equipment are recorded at cost less accumulated depreciation.
+Added: Depreciation is calculated using the straight‑line method over the estimated useful lives of the assets.
+Added: Leasehold improvements are depreciated over the shorter of the estimated useful life of the leasehold improvements or the lease term.
+Added: Land is not depreciated.
+Added: Depreciation for equipment commences once it is placed in service, and depreciation for buildings and leasehold improvements commences once they are ready for their intended use.
+Added: Estimated useful lives of property and equipment are as follows:
+Added: Building and improvements 25 years
+Added: Computer equipment and software 3 years
+Added: Furniture, fixtures, and equipment 5 years
+Added: Aircraft 6 years
+Added: Automobiles 3 years
+Added: Cost of maintenance and repairs is charged to expense as incurred.
+Added: Upon retirement or other disposition, the cost of the asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of operations.
+Added: The Company evaluates the recoverability of property and equipment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable.
+Added: If circumstances require an asset to be tested for possible impairment, the Company first compares the undiscounted cash flows expected to be generated by that asset to its carrying value.
+Added: If the carrying value of the asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value.
+Added: No impairment of property and equipment occurred for the years ended December 31, 2023, 2022, and 2021.
Related Party Equipment Sale
In January 2022, the Audit Committee of the Company’s Board of Directors authorized the Company to sell 50 % of its interest in the Company’s aircraft at fair market value to an entity controlled by the Company’s Chief Executive Officer.
−Removed: The transaction was completed on February 1, 2022 for $ 2,380 and resulted in a gain of $ 2,029 , which was recorded in Other income, net in the consolidated statement of operations for the year ended December 31, 2022.
+Added: The transaction was completed on February 1, 2022 for $ 2,380 and resulted in a gain of $ 2,029 , which was recorded in Other (expense) income, net in the consolidated statements of operations for the year ended December 31, 2022 (see Note 20).
Subsequent to the transaction, ongoing operating and fixed costs of the aircraft are shared on a proportional use basis subject to a cost-sharing agreement.
−Removed: Such costs were not material during the year ended December 31, 2022.
+Added: Such costs were not material during the years ended December 31, 2023 and 2022.
The Company determined this transaction was with a related party.
10 unchanged sentences
Balance, December 31, 2023 $ 2,269,336
+Added: Goodwill consists of the excess of cost over the fair value of net assets acquired in business combinations.
+Added: Goodwill is not amortized, but instead is tested annually for impairment on October 1, or more frequently if events occur or circumstances change that would more likely than not reduce its fair value below its carrying amount.
+Added: The Company allocates goodwill to reporting units on a relative fair value basis.
+Added: In testing for goodwill impairment, the Company may first qualitatively assess whether it is more likely than not (a likelihood of more than 50 percent) that a goodwill impairment exists.
+Added: If it is determined that a quantitative assessment is required and the carrying amount exceeds its fair value, the Company will recognize goodwill impairment in the amount in which the carrying amount of the reporting unit exceeds its fair value, but not to exceed the carrying amount of goodwill within the reporting unit.
+Added: There was no impairment of goodwill as a result of the Company’s annual impairment assessments conducted for the years ended December 31, 2023, 2022, or 2021.
Details of intangible assets other than goodwill are as follows:
14 unchanged sentences
350 ( 276 ) 74 350 ( 207 ) 143
−Removed: 485,707 ( 193,436 ) 292,271 410,343 ( 168,056 ) 242,287
−Removed: Intangible assets not subject to amortization:
−Removed: In-process research and development — — — 3,547 — 3,547
Total intangible assets $ 484,195 $ ( 235,408 ) $ 248,787 $ 485,707 $ ( 193,436 ) $ 292,271
5 unchanged sentences
Total amortization expense $ 51,219 $ 53,592 $ 33,726
+Added: Intangible assets arise from acquisitions and principally consist of goodwill, trademarks, customer relationships, in‑process research and development, and acquired software and technology.
+Added: Intangible assets, other than goodwill and in‑process research and development, are amortized on a straight‑line basis over their estimated useful lives.
Amortization expense for the years following December 31, 2023 are estimated as follows:
2 unchanged sentences
Investments consist of the following:
−Removed: December 31, 2022 December 31, 2021
Cost method investments $ 21,044 $ 22,174
2 unchanged sentences
Cost Method Investments
−Removed: Through iTwin Ventures , the Company invests in technology development companies, generally in the form of equity interests or convertible notes.
−Removed: In July 2022, the Company acquired an equity interest in Teralytics Holdings AG, a global platform company for human mobility analysis, via contribution of its Streetlytics mobility data business (“Streetlytics”) and cash.
−Removed: The transaction resulted in an insignificant gain from the divestiture of Streetlytics, which was recorded in Other income, net in the consolidated statements of operations for the year ended December 31, 2022.
−Removed: As of December 31, 2022, the investment in Teralytics was $ 11,130 .
−Removed: The Company invested a total of $ 15,107 , including the contribution of Streetlytics, for the year ended December 31, 2022, and $ 2,781 for the year ended December 31, 2021.
+Added: The Company applies the cost method of accounting for its investment in which it does not have the ability to exercise significant influence over operating and financial policies.
+Added: Under the cost method, the Company records the investment based on original cost less impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same investee.
+Added: The Company’s share of income or loss of such companies is not included in the Company’s consolidated statements of operations.
+Added: Through its iTwin Ventures initiative, the Company invests in technology development companies, generally in the form of equity interests or convertible notes.
+Added: In March 2023, the Company acquired an equity interest in Worldsensing, a leading global connectivity hardware platform company for infrastructure monitoring, via contribution of its sensemetrics’ Thread connectivity device business (the “Thread business”) and cash.
+Added: The non‑cash contribution of the Thread business resulted in an insignificant gain, which was recorded in Other (expense) income, net in the consolidated statements of operations for the year ended December 31, 2023 (see Note 20).
+Added: In July 2022, the Company acquired an equity interest in Teralytics Holdings AG (“Teralytics”), a global platform company for human mobility analysis, via contribution of its Streetlytics mobility data business (“Streetlytics”) and cash.
+Added: The non‑cash contribution of Streetlytics resulted in an insignificant gain, which was recorded in Other (expense) income, net in the consolidated statements of operations for the year ended December 31, 2022 (see Note 20).
+Added: The Company tests its investments for impairment whenever circumstances indicate that the carrying value of the investment may not be recoverable.
+Added: During the year ended December 31, 2023, the Company recognized impairment charges of $ 14,588 to write‑down certain cost method investments to their fair value primarily as a result of the investees’ decline in operating performance and the overall decline in the venture investment valuation environment.
+Added: The impairment charges included $ 11,130 to write‑off the Company’s investment in Teralytics.
+Added: The impairment charges were recorded in Other (expense) income, net in the consolidated statements of operations for the year ended December 31, 2023 (see Note 20).
+Added: No impairment of investments occurred for the years ended December 31, 2022 or 2021.
+Added: During the year ended December 31, 2023, the Company recognized gains on investments of $ 2,360 , which was recorded in Other (expense) income, net in the consolidated statements of operations (see Note 20).
+Added: During the year ended December 31, 2023, the Company invested a total of $ 12,841 , including $ 8,928 of cash and non-cash for its investment in Worldsensing.
+Added: During the year ended December 31, 2022, the Company invested a total of $ 15,107 , including $ 11,130 of cash and non-cash for its investment in Teralytics.
+Added: As of December 31, 2023, the Company’s investment balance in Worldsensing was $ 8,928 .
+Added: As of December 31, 2023 and 2022, the Company’s investment balance in Teralytics was zero and $ 11,130 , respectively.
Equity Method Investments
−Removed: The Company is party to joint ventures, which are accounted for using the equity method.
+Added: The Company applies the equity method of accounting for its investment in which it does have the ability to exercise significant influence over operating and financial policies.
+Added: Under the equity method, the Company recognizes its initial investment at cost and updates the carrying value of its investment by its proportional share of income or losses from the investment.
+Added: In addition, the Company decreases the carrying value by any dividends received from the investee.
+Added: The Company does not otherwise adjust the carrying value to reflect changes to the fair market value of the investment.
+Added: The Company’s equity method investments in joint ventures are considered related parties.
For the years ended December 31, 2023 and 2022, the Company invested $ 2,261 and $ 2,343 , respectively.
−Removed: The Company’s operating leases consist of office facilities, office equipment, and automobiles, and the Company’s finance lease consists of computer equipment.
−Removed: The finance lease expired during the second quarter of 2022 and was not material for the periods presented.
−Removed: As of December 31, 2022, the Company’s leases have remaining terms of less than one year to eight years , some of which include one or more options to renew, with renewal terms from one year to ten years and some of which include options to terminate the leases from less than one year to five years .
+Added: For the years ended December 31, 2023 and 2022, transactions between the Company and its joint ventures were not material to the Company’s consolidated financial statements.
+Added: The Company’s operating leases consist of office facilities, office equipment, and automobiles.
+Added: As of December 31, 2023, the Company’s leases have remaining terms of less than one year to ten years , some of which include one or more options to renew, with renewal terms from one year to five years and some of which include options to terminate the leases from less than one year to five years .
+Added: The Company determines if an arrangement is a lease at inception.
+Added: Operating leases are included in Operating lease right‑of‑use assets, Operating lease liabilities , and Long‑term operating lease liabilities in the consolidated balance sheets.
+Added: Operating lease right‑of‑use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease.
+Added: Operating lease right‑of‑use assets and operating lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.
+Added: The Company uses its incremental borrowing rate, if the Company’s leases do not provide an implicit rate, based on the information available at the commencement date in determining the present value of lease payments.
+Added: The incremental borrowing rate is determined based on the Company’s estimated credit rating, the term of the lease, economic environment where the asset resides, and full collateralization.
+Added: The operating lease right‑of‑use assets also include any lease payments made and are reduced by any lease incentives.
+Added: Options to extend or terminate the lease are considered in determining the lease term when it is reasonably certain that the option will be exercised.
+Added: Lease expense for lease payments is recognized on a straight‑line basis over the lease term.
+Added: For contracts with lease and non‑lease components, the Company has elected not to allocate the contract consideration, and account for the lease and non-lease components as a single lease component.
+Added: Payments under the Company’s lease arrangements are primarily fixed, however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the operating lease assets and liabilities.
+Added: Variable lease cost may include common area maintenance, property taxes, utilities, and fluctuations in rent due to a change in an index or rate.
+Added: The Company has elected not to recognize a right‑of‑use asset or lease liability for short‑term leases (leases with a term of twelve months or less).
+Added: Short‑term leases are recognized in the consolidated statements of operations on a straight‑line basis over the lease term.
The components of operating lease cost reflected in the consolidated statements of operations were as follows:
23 unchanged sentences
Total operating lease liabilities $ 42,271
−Removed: As of December 31, 2022, the Company had additional operating lease minimum lease payments of $ 2,669 for executed leases that have not yet commenced, primarily for office locations.
+Added: As of December 31, 2023, the Company had additional minimum operating lease payments of $ 804 for executed leases that have not yet commenced, primarily for office locations.
+Added: The Company evaluates the recoverability of right‑of‑use assets whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable.
+Added: If circumstances require an asset to be tested for possible impairment, the Company first compares the undiscounted cash flows expected to be generated by that asset to its carrying value.
+Added: If the carrying value of the asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value.
+Added: During the year ended December 31, 2023, the Company recognized impairment charges of $ 2,239 to write‑down certain right‑of‑use assets to their fair value primarily as a result of the decision to vacate certain leased facilities.
+Added: The impairment charges were recorded in General and administrative in the consolidated statements of operations.
+Added: No impairment of right‑of‑use assets occurred for the years ended December 31, 2022 or 2021.
Accruals and Other Current Liabilities
4 unchanged sentences
Due to customers 16,924 13,720
+Added: Accrued realignment costs 12,459 —
Accrued indirect taxes 10,722 9,766
−Removed: Accrued acquisition stay bonus 9,135 9,461
−Removed: Employee stock purchase plan contributions 5,230 4,818
Accrued professional fees 5,970 4,984
−Removed: Accrued cloud provisioning costs 4,224 5,862
+Added: Employee stock purchase plan contributions 5,790 5,230
+Added: Accrued acquisition stay bonus 4,336 9,135
Non-contingent consideration from acquisitions 3,576 2,434
+Added: Accrued cloud provisioning costs 3,572 4,224
Deferred compensation plan liabilities 2,355 2,067
4 unchanged sentences
Long‑term debt consists of the following:
−Removed: Bank credit facility:
−Removed: Revolving loan facility $ 345,597 $ —
−Removed: Principal 195,000 200,000
−Removed: Unamortized debt issuance costs ( 396 ) ( 534 )
−Removed: Term loan net carrying value 194,604 199,466
−Removed: Bank credit facility net carrying value 540,201 199,466
−Removed: Principal 687,830 690,000
−Removed: Unamortized debt issuance costs ( 11,045 ) ( 14,677 )
−Removed: 2026 Notes net carrying value 676,785 675,323
−Removed: Principal 575,000 575,000
+Added: Credit facility:
+Added: Revolving loan facility due November 2025 $ 92,028 $ 345,597
+Added: Term loan due November 2025 190,000 195,000
+Added: 2026 Notes 687,830 687,830
+Added: 2027 Notes 575,000 575,000
Unamortized debt issuance costs ( 16,455 ) ( 22,731 )
−Removed: 2027 Notes net carrying value 563,710 561,203
−Removed: Total net carrying value 1,780,696 1,435,992
+Added: Total debt 1,528,403 1,780,696
Current portion of long-term debt ( 10,000 ) ( 5,000 )
−Removed: Total long-term debt $ 1,775,696 $ 1,430,992
−Removed: Bank Credit Facility
−Removed: The Company is party to a Credit Agreement dated December 19, 2017, (as amended from time to time) which provides for an $ 850,000 senior secured revolving loan facility that matures on November 15, 2025 (the “Credit Facility”).
−Removed: Debt issuance costs are amortized to interest expense through the maturity date.
−Removed: When the Company amended the Credit Facility on January 25, 2021, to increase the senior secured revolving loan facility and extend the maturity date, the Company performed an extinguishment versus modification assessment on a lender‑by‑lender basis resulting in the write‑off of unamortized debt issuance costs of $ 353 and the capitalization of fees paid to lenders and third parties of $ 3,577 .
+Added: Long-term debt $ 1,518,403 $ 1,775,696
+Added: Credit Facility
+Added: The Company has a Credit Facility which provides for an $ 850,000 senior secured revolving loan facility that matures on November 15, 2025.
The Credit Facility also provides up to $ 50,000 of letters of credit and other borrowings subject to availability, including an $ 85,000 U.S.
dollar swingline sub‑facility and a $ 200,000 incremental “accordion” sub‑facility.
−Removed: The Company had $ 150 of letters of credit and surety bonds outstanding as of December 31, 2022 and 2021.
+Added: Debt issuance costs are amortized to interest expense through the maturity date.
+Added: When the Company amended the Credit Facility on January 25, 2021, to increase the senior secured revolving loan facility and extend the maturity date, the Company performed an extinguishment versus modification assessment on a lender‑by‑lender basis resulting in the write‑off of unamortized debt issuance costs of $ 353 and the capitalization of fees paid to lenders and third parties of $ 3,577 .
+Added: On December 22, 2021, the Company amended the Credit Facility to provide for a $ 200,000 senior secured term loan with a maturity of November 15, 2025 (the “Term Loan”).
+Added: The Term Loan requires principal repayment at the end of each calendar quarter.
+Added: Beginning with March 31, 2022 and ending with December 31, 2023, the Company was required to repay $ 1,250 per quarter.
+Added: Beginning with March 31, 2024 and ending with the last such date prior to the maturity date, the Company is required to repay $ 2,500 per quarter.
+Added: The Company incurred $ 540 of debt issuance costs related to the Term Loan.
+Added: The Company used borrowings under the Term Loan to pay down borrowings under the swingline sub‑facility and revolving loan facility under the Credit Facility.
+Added: The Company had $ 150 of letters of credit and surety bonds outstanding as of December 31, 2023 and 2022 under the Credit Facility.
As of December 31, 2023 and 2022, the Company had $ 757,822 and $ 504,253 , respectively, available under the Credit Facility.
−Removed: Under the Credit Facility, the Company may make either Euro currency or non‑Euro currency interest rate elections.
−Removed: Interest on the Euro currency borrowings bear a base interest rate of LIBOR plus a spread ranging from 125 basis points (“bps”) to 225 bps as determined by the Company’s net leverage ratio.
−Removed: Under the non‑Euro currency elections, Credit Facility borrowings bear a base interest rate of the highest of (i) the prime rate, (ii) the overnight bank funding effective rate plus 50 bps, or (iii) LIBOR plus 100 bps, plus a spread ranging from 25 bps to 125 bps as determined by the Company’s net leverage ratio.
+Added: Effective June 23, 2023, the Company amended the Credit Facility to replace the referenced interest rate based on LIBOR with SOFR.
+Added: Revolving loan borrowings under the Credit Facility bear interest at variable rates that reset every one, three, or six months depending on the period selected by the Company.
+Added: Under the Term SOFR elections, revolving loan borrowings bear an interest rate of the applicable term SOFR rate plus 10 bps, plus a spread ranging from 125 bps to 225 bps as determined by the Company’s net leverage ratio.
+Added: Under the non‑Term SOFR elections, revolving loan borrowings bear a base interest rate of the highest of (i) the prime rate, (ii) the overnight bank funding effective rate plus 50 bps, or (iii) the applicable term SOFR rate plus 10 bps, plus a spread ranging from 25 bps to 125 bps as determined by the Company’s net leverage ratio.
+Added: Swingline borrowings under the Credit Facility bear interest that resets daily.
+Added: Interest on U.S.
+Added: dollar swingline borrowings bear an interest rate of the daily simple SOFR rate plus 3.5 bps, plus a spread ranging from 125 bps to 225 bps as determined by the Company’s net leverage ratio.
+Added: The Company cannot make optional currency swingline borrowings without the consent of the applicable swingline lender.
+Added: Term loan borrowings under the Credit Facility bear interest at variable rates that reset every one, three, or six months depending on the period selected by the Company.
+Added: Under the Term SOFR elections, term loan borrowings bear an interest rate of the applicable term SOFR rate plus 10 bps, plus a spread ranging from 100 bps to 200 bps as determined by the Company’s net leverage ratio.
+Added: Under the non‑Term SOFR elections, term loan borrowings bear a base interest rate of the highest of (i) the prime rate, (ii) the overnight bank funding effective rate plus 50 bps, or (iii) the applicable term SOFR rate plus 10 bps, plus a spread ranging from 0 bps to 100 bps as determined by the Company’s net leverage ratio.
In addition, a commitment fee for the unused Credit Facility ranges from 20 bps to 30 bps as determined by the Company’s net leverage ratio.
2 unchanged sentences
The agreement governing the Credit Facility contains customary positive and negative covenants, including restrictions on our ability to pay dividends and make other restricted payments, as well as events of default, including, without limitation, payment defaults, breaches of representations and warranties, covenants defaults, cross-defaults to certain other indebtedness in excess of $ 50,000 , certain events of bankruptcy and insolvency, judgment defaults in excess of $ 10,000 , failure of any security document supporting the Credit Facility to be in full force and effect, and a change of control.
−Removed: The Credit Facility also contains customary financial covenants, including maximum net leverage ratios.
+Added: The Credit Facility also contains customary financial covenants, including maximum net leverage ratio.
As of December 31, 2023 and 2022, the Company was in compliance with all covenants in its Credit Facility.
Voluntary prepayments of amounts outstanding under the Credit Facility, in whole or in part, are permitted at any time, so long as the Company gives notice as required by the Credit Facility.
−Removed: However, if prepayment is made with respect to a LIBOR‑based loan and the prepayment is made on a date other than an interest payment date, the Company must pay customary breakage costs.
−Removed: On December 22, 2021, the Company amended the Credit Facility to provide for a $ 200,000 senior secured term loan with a maturity of November 15, 2025 (the “2021 Term Loan”) and included certain other conforming amendments.
−Removed: The 2021 Term Loan requires principal repayment at the end of each calendar quarter.
−Removed: Beginning with March 31, 2022 and ending with December 31, 2023, the Company is required to repay $ 1,250 per quarter.
−Removed: Beginning with March 31, 2024 and ending with the last such date prior to the maturity date, the Company is required to repay $ 2,500 per quarter.
−Removed: The Company incurred $ 540 of debt issuance costs related to the 2021 Term Loan.
−Removed: The Company used borrowings under the 2021 Term Loan to pay down borrowings under the swingline sub‑facility and revolving loan facility under the Credit Facility.
−Removed: Under the 2021 Term Loan, the Company may make either Euro currency or non-Euro currency interest rate elections.
−Removed: Interest on the Euro currency borrowings bear a base interest rate of LIBOR, plus a spread ranging from 100 bps to 200 bps as determined by the Company’s net leverage ratio.
−Removed: Under the non-Euro currency elections, the 2021 Term Loan bears a base interest rate of the highest of (i) the prime rate, (ii) the overnight bank funding effective rate plus 50 bps, or (iii) LIBOR plus 100 bps, plus a spread ranging from 0 bps to 100 bps as determined by the Company’s net leverage ratio.
−Removed: Prior to the IPO, on September 2, 2020, the Company amended the Credit Facility to incur a term loan of $ 125,000 (the “2020 Term Loan”) with a maturity of December 18, 2022.
−Removed: The Company used the proceeds from the 2020 Term Loan and borrowings under the revolving loan facility under the Credit Facility to pay the Special Dividend declared by the Company’s board of directors on August 28, 2020 (see Note 1).
−Removed: The Company incurred $ 432 of debt issuance costs related to the 2020 Term Loan.
−Removed: In November 2020, the Company used a portion of the net proceeds from the Follow‑On Offering to repay the 2020 Term Loan (see Note 13).
+Added: However, if prepayment is made with respect to a SOFR‑based loan and the prepayment is made on a date other than an interest payment date, the Company is subject to customary breakage costs.
Convertible Senior Notes
6 unchanged sentences
The Company used the remainder of the net proceeds from the sale of the 2026 Notes for general corporate purposes and towards funding certain acquisitions, including Seequent (see Note 4).
−Removed: During the fourth quarter of 2022, the Company paid $ 1,998 in cash to repurchase $ 2,170 aggregate principal amount of its outstanding 2026 Notes through open market transactions resulting in an insignificant gain, which was recorded in Other income, net in the consolidated statement of operations for the year ended December 31, 2022.
+Added: During the fourth quarter of 2022, the Company paid $ 1,998 in cash to repurchase $ 2,170 aggregate principal amount of its outstanding 2026 Notes through open market transactions resulting in an insignificant gain, which was recorded in Other (expense) income, net in the consolidated statements of operations for the year ended December 31, 2022.
The 2026 Notes were repurchased under the Company’s Repurchase Program authorization (see Note 13).
24 unchanged sentences
As of December 31, 2023, none of the conditions of the 2026 Notes to early convert has been met.
−Removed: The 2026 Notes are the Company’s senior, unsecured obligations that rank senior in right of payment to the Company’s future indebtedness that is expressly subordinated to the 2026 Notes, rank equally in right of payment with the Company’s existing and future senior unsecured indebtedness that is not so subordinated (including the Company’s 2027 Notes, see the section titled “—2027 Notes” below), effectively subordinated to the Company’s existing and future secured indebtedness (including obligations under the Company’s senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness, and structurally subordinated to all existing and future indebtedness and other liabilities (including trade payables and preferred equity (to the extent the Company is not a holder thereof)) of the Company’s subsidiaries.
+Added: The 2026 Notes are the Company’s senior, unsecured obligations that rank senior in right of payment to the Company’s future indebtedness that is expressly subordinated to the 2026 Notes, rank equally in right of payment with the Company’s existing and future senior unsecured indebtedness that is not so subordinated (including the Company’s 2027 Notes, refer to the section titled “2027 Notes” below), effectively subordinated to the Company’s existing and future secured indebtedness (including obligations under the Company’s senior secured credit facilities), to the extent of the value of the collateral securing such indebtedness, and structurally subordinated to all existing and future indebtedness and other liabilities (including trade payables and preferred equity (to the extent the Company is not a holder thereof)) of the Company’s subsidiaries.
The 2026 Notes contain both affirmative and negative covenants.
7 unchanged sentences
The capped call options are indexed to the Company’s own common stock and classified in stockholders’ equity.
−Removed: As such, the premiums paid for the capped call options have been included as a net reduction to Additional paid-in capital in the consolidated balance sheet.
+Added: As such, the premiums paid for the capped call options were included as a net reduction to Additional paid-in capital in the consolidated balance sheets as of December 31, 2021.
On June 28, 2021, the Company completed a private offering of $ 575,000 of 0.375 % convertible senior notes due 2027.
39 unchanged sentences
The capped call options are indexed to the Company’s own common stock and classified in stockholders’ equity.
−Removed: As such, the premiums paid for the capped call options have been included as a net reduction to Additional paid-in capital in the consolidated balance sheet.
−Removed: Interest Expense
−Removed: Interest expense consists of the following:
+Added: As such, the premiums paid for the capped call options were included as a net reduction to Additional paid-in capital in the consolidated balance sheets as of December 31, 2021.
+Added: Derivative Arrangements
+Added: The Company records derivative instruments as an asset or liability measured at fair value and depending on the nature of the hedge, the corresponding changes in the fair value of these instruments are recorded in the consolidated statements of operations or comprehensive income.
+Added: If the derivative is determined to be a hedge, changes in the fair value of the derivative are offset against the change in the fair value of the hedged assets or liabilities through the consolidated statements of operations or recognized in Other comprehensive income (loss), net of taxes until the hedged item is recognized in the consolidated statements of operations.
+Added: The ineffective portion of a derivative’s change in fair value is recognized in earnings.
+Added: Also, changes in the entire fair value of a derivative that is not designated as a hedge are recognized in earnings.
+Added: Effective on April 2, 2020, the Company entered into an interest rate swap with a notional amount of $ 200,000 and a ten‑year term to reduce the interest rate risk associated with the Credit Facility.
+Added: Effective on June 26, 2023, the Company amended the interest rate swap agreement to replace the LIBOR rate to SOFR under the ISDA Fallback Protocols included within the agreement.
+Added: Subsequent to the amendment, the Company will continue to pay a fixed interest rate of 72.9 bps, and will receive a floating interest rate equal to daily SOFR plus an ARRC spread adjustment of 11.448 bps.
+Added: The interest rate swap is not designated as a hedging instrument for accounting purposes.
+Added: The Company accounts for the interest rate swap as either an asset or a liability on the consolidated balance sheets and carries the derivative at fair value (see Note 17).
+Added: Gain (loss) from the change in fair value and payments related to the interest rate swap are recognized in Other income (expense), net in the consolidated statements of operations (see Note 20).
+Added: The bank counterparty to the derivative potentially exposes the Company to credit-related losses in the event of nonperformance.
+Added: To mitigate that risk, the Company only contracts with counterparties who meet the Company’s minimum requirements under its counterparty risk assessment process.
+Added: The Company monitors counterparty risk on at least a quarterly basis and adjusts its exposure as necessary.
+Added: The Company does not enter into derivative instrument transactions for trading or speculative purposes.
+Added: Interest Expense, Net
+Added: Interest expense, net consists of the following:
Year Ended December 31,
2023 2022 2021
−Removed: Bank credit facility:
−Removed: Revolving loan facility (1)
−Removed: $ 15,798 $ 3,448 $ 5,680
−Removed: Term loans (1)
−Removed: 7,413 117 502
+Added: Contractual interest expense $ ( 34,973 ) $ ( 26,275 ) $ ( 5,464 )
Amortization and write-off of deferred debt issuance costs ( 7,291 ) ( 7,291 ) ( 5,955 )
−Removed: 24,363 4,874 7,167
−Removed: 0.125 % Coupon interest
−Removed: Amortization of deferred debt issuance costs 3,632 3,378 —
−Removed: 4,510 4,181 —
−Removed: 0.375 % Coupon interest
−Removed: 2,186 1,096 —
−Removed: Amortization of deferred debt issuance costs 2,507 1,268 —
+Added: Other interest income (expense)
933 ( 1,490 ) ( 108 )
−Removed: Other obligations 1,490 108 50
−Removed: Total interest expense $ 35,056 $ 11,527 $ 7,217
−Removed: (1) The revolving loan facility and term loans weighted average interest rate was 3.84 %, 2.03 %, and 1.92 % for the years ended December 31, 2022, 2021, and 2020, respectively.
+Added: Interest income 1,538 421 306
+Added: Interest expense, net $ ( 39,793 ) $ ( 34,635 ) $ ( 11,221 )
+Added: The weighted average interest rate on borrowings under the Credit Facility were 7.13 %, 3.84 %, and 2.03 % for the years ended December 31, 2023, 2022, and 2021, respectively.
Scheduled maturities of long‑term debt are as follows:
December 31, 2023
+Added: 2024 $ 10,000
Total scheduled maturities of long-term debt $ 1,544,858
Executive Bonus Plan
−Removed: Certain of the Company’s key employees, including its named executive officers, participate in the Bentley Systems, Incorporated Bonus Pool Plan, as amended and restated, effective as of September 22, 2020 (the “Bonus Plan”).
+Added: Certain of the Company’s key employees, including its named executive officers, participate in the Company’s Bonus Plan.
Pursuant to the Bonus Plan, participants are eligible to receive incentive bonuses that are determined based on the Company’s adjusted Management Report Operating Income (“MROI”), as defined in the plan agreement and before deduction for such plan payments.
−Removed: For purposes of the Bonus Plan, the bonus pool thereunder may be funded with up to an aggregate of 20 % of the Company’s adjusted MROI, subject to approval by the board of directors, with payments made to plan participants based on each such participant’s allocated interest in the bonus pool.
+Added: For purposes of the Bonus Plan, the bonus pool thereunder may be funded with up to an aggregate of 20 % of the Company’s adjusted MROI, subject to approval by the Sustainability Committee of the Company’s Board of Directors, with payments made to plan participants based on each such participant’s allocated interest in the bonus pool.
The plan permits the deduction of certain holdback amounts from the plan’s pool, from which amounts can then be allocated to fund items including equity and/or cash incentive compensation for non‑plan participants and participant charitable contributions.
−Removed: On November 2, 2022, the Sustainability Committee of the Company’s board of directors approved an amendment to the Bonus Plan such that with respect to current year payouts and thereafter, one‑third of the Company’s Chief Investment Officer’s allocated percentage interest will be multiplied by a coefficient derived from the performance of the Company’s BSY Investments group (the Company’s executive team focused on portfolio development, mergers and acquisitions, venture capital investing, digital integrator business activities, and various incubating and accelerating business activities).
−Removed: This coefficient is generally determined by calculating the annual increase (or decrease) in value of the BSY Investments portfolio, taking into account applicable fees and an annual hurdle rate, in all cases, as approved by the Company’s nonemployee directors.
+Added: On November 2, 2022, the Sustainability Committee of the Company’s Board of Directors approved an amendment to the Bonus Plan such that with respect to fiscal year 2022, one‑third of the Company’s Chief Investment Officer’s allocated percentage interest will be multiplied by a coefficient derived from the performance of the Company’s BSY Investments group (the Company’s executive team focused on portfolio development, mergers and acquisitions, venture capital investing, digital integrator business activities, and various incubating and accelerating business activities).
+Added: This coefficient is generally determined by calculating the annual increase (or decrease) in value of the BSY Investments portfolio, taking into account applicable fees and an annual hurdle rate, in all cases, as approved by the Company’s non-employee directors.
+Added: The Company’s Chief Investment Officer retired effective March 31, 2023 and received one Bonus Plan payout during 2023 in respect to the 2022 fiscal year under the amended allocated percentage interest.
A participant may defer any portion, or all, of such participant’s incentive bonus payable pursuant to the Bonus Plan into the DCP (see Note 12).
−Removed: Prior to September 22, 2020, a participant’s non‑deferred incentive bonus was payable in cash.
−Removed: Effective September 22, 2020, the Bonus Plan provides, in part, that a participant may elect to receive any portion, or all, of such participant’s non‑deferred incentive bonus in the form of shares of fully vested Class B Common Stock issued under the Bentley Systems, Incorporated 2020 Omnibus Incentive Plan (the “2020 Incentive Award Plan”) beginning in the fourth quarter of 2020, subject to the limitation described below.
+Added: The Bonus Plan provides, in part, that a participant may elect to receive any portion, or all, of such participant’s non‑deferred incentive bonus in the form of shares of fully vested Class B common stock issued under the Bentley Systems, Incorporated 2020 Omnibus Incentive Plan (the “2020 Incentive Award Plan”), subject to the limitation described below.
The Company records the election of non‑deferred incentive bonus in the form of shares of fully vested Class B common stock as stock‑based compensation expense in the consolidated statements of operations (see Note 15).
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dollar value of shares of fully vested Class B common stock payable in respect of the non‑deferred incentive bonuses exceeds $ 7,500 , the portion of each participant’s non‑deferred incentive bonus payable in shares of fully vested Class B common stock will be reduced pro rata such that the $ 7,500 limit is not exceeded, and, for each affected participant, the amount of such reduction will be payable in cash.
−Removed: For the years ended December 31, 2022, 2021, and 2020, the incentive compensation, including cash payments, election to receive shares of fully vested Class B Common Stock beginning in the fourth quarter of 2020, and deferred compensation to plan participants, recognized under this plan (net of all applicable holdbacks) was $ 33,242 , $ 33,454 , and $ 34,340 , respectively.
+Added: For the years ended December 31, 2023, 2022, and 2021, the incentive compensation, including cash payments, election to receive shares of fully vested Class B common stock, and deferred compensation to plan participants, recognized under this plan (net of all applicable holdbacks) was $ 21,463 , $ 33,242 , and $ 33,454 , respectively.
Retirement Plans
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Elective participant deferrals and discretionary Company awards are received in the form of phantom shares of the Company’s Class B common stock, which are valued for accounting purposes in the same manner as actual shares of Class B common stock, and are recorded as stock‑based compensation expense in the consolidated statements of operations (see Note 15).
+Added: The DCP has 50,000,000 shares of Class B common stock reserved for issuance.
+Added: As of December 31, 2023, shares of Class B common stock available for future issuance under the DCP were 4,421,623 .
In August 2021, the Company’s Board of Directors approved an amendment to the DCP, which offered to certain active executives in the DCP a one‑time, short‑term election to reallocate a limited portion of their DCP holdings from phantom shares of the Company’s Class B common stock into other phantom investment funds.
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While DCP participants’ investments in phantom shares remain equity classified, as they will be settled in shares of Class B common stock upon eventual distribution, the amendment and elections resulted in a change to liability classification for the reallocated phantom investments, as they will be settled in cash upon eventual distribution.
−Removed: As a result, during the year ended December 31, 2021, the Company reclassified cumulative compensation cost of $ 4,739 from Additional paid-in capital to Accruals and other current liabilities or Deferred compensation plan liabilities in the consolidated balance sheet and recognized a compensation charge of $ 90,721 to Deferred compensation plan expenses in the consolidated statement of operations to record the reallocated deferred compensation plan liabilities at their fair value of $ 95,460 .
+Added: As a result, during the year ended December 31, 2021, the Company reclassified cumulative compensation cost of $ 4,739 from Additional paid-in capital to Accruals and other current liabilities or Deferred compensation plan liabilities in the consolidated balance sheets and recognized a compensation charge of $ 90,721 to Deferred compensation plan expenses in the consolidated statements of operations to record the reallocated deferred compensation plan liabilities at their fair value of $ 95,460 .
DCP participants’ holdings in phantom investment funds are classified as liabilities in either Accruals and other current liabilities or Deferred compensation plan liabilities in the consolidated balance sheets as they will be settled in cash upon eventual distribution.
The deferred compensation plan liabilities are marked to market at the end of each reporting period, with changes in the liabilities recorded as an expense (income) to Deferred compensation plan in the consolidated statements of operations.
−Removed: Deferred compensation plan income was $ 15,782 for the year ended December 31, 2022.
−Removed: Deferred compensation plan expense was $ 95,046 , and $ 177 for the years ended December 31, 2021 and 2020, respectively.
+Added: Deferred compensation plan expense (income) was $ 13,580 , $( 15,782 ), and $ 95,046 for the years ended December 31, 2023, 2022, and 2021, respectively.
For the years ended December 31, 2023, 2022, and 2021, DCP elective participant deferrals were $ 1,765 , $ 6,580 , and $ 2,619 , respectively.
No discretionary contributions were made to the DCP during the years ended December 31, 2023, 2022, and 2021.
−Removed: Pursuant to the terms of the DCP, in connection with the Special Dividend (see Note 1) declared on August 28, 2020, participants received 2,709,851 phantom shares in lieu of the Special Dividend.
As of December 31, 2023 and 2022, phantom shares of the Company’s Class B common stock issuable by the DCP were 17,364,980 and 21,587,831 , respectively.
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Effective January 1, 2022, the Company matches 50 %, up to a maximum of 6 % of qualified cash compensation for each eligible participating colleague.
−Removed: For the years ended December 31, 2021 and 2020, the Company matched 50 %, up to a maximum of 5 % of “qualified cash compensation” for each eligible participating colleague.
+Added: For the year ended December 31, 2021, the Company matched 50 %, up to a maximum of 5 % of qualified cash compensation for each eligible participating colleague.
The Company’s matching contributions to the 401(k) Plan were $ 5,260 , $ 4,933 , and $ 4,114 , for the years ended December 31, 2023, 2022, and 2021, respectively.
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Preferred and Common Stock
−Removed: Initial Public Offering
−Removed: On September 25, 2020, the Company completed its IPO.
−Removed: The selling stockholders sold 12,360,991 shares of Class B Common Stock at a public offering price of $ 22.00 per share.
−Removed: The Company did not sell any shares in the IPO and did not receive any of the proceeds from the sale of the Class B Common Stock sold by the selling stockholders.
−Removed: For the year ended December 31, 2020, the Company recorded $ 26,130 in Expenses associated with initial public offering in the consolidated statement of operations.
−Removed: These expenses included certain non‑recurring costs relating to the Company’s IPO, consisting of the payment of underwriting discounts and commissions applicable to the sale of shares by the selling stockholders, professional fees, and other expenses.
−Removed: In connection with the IPO, the Company’s amended and restated Certificate of Incorporation authorizes shares of undesignated preferred stock.
−Removed: See below for further detail.
−Removed: Follow-On Public Offering
−Removed: On November 17, 2020, the Company completed its Follow‑On Offering of 11,500,000 shares of Class B Common Stock at a public offering price of $ 32.00 per share.
−Removed: The Company sold 9,603,965 shares of Class B Common Stock (inclusive of 1,500,000 shares sold upon the exercise by the underwriters of their option to purchase additional shares of the Company’s Class B Common Stock).
−Removed: The selling stockholders sold 1,896,035 shares of Class B Common Stock.
−Removed: The Company received net proceeds of $ 294,429 after deducting expenses of $ 12,898 .
−Removed: The Company did not receive any of the proceeds from the sale of the Class B Common Stock sold by the selling stockholders.
−Removed: Expenses associated with the Follow‑On Offering included certain non‑recurring costs, consisting of the payment of underwriting discounts and commissions applicable to the sale of shares by the Company, professional fees, and other expenses.
−Removed: The Company agreed to pay certain expenses in connection with the Follow‑On Offering on behalf of the selling stockholders and made an accounting policy election to offset these expenses against the Follow‑On Offering proceeds.
−Removed: The Follow‑On Offering net proceeds were used to repay outstanding borrowings under the 2020 Term Loan and revolving loan facility of the Company’s Credit Facility (see Note 10).
Preferred Stock Authorized and Selected Terms
−Removed: Upon the closing of the IPO, the Company’s amended and restated Certificate of Incorporation authorizes the Company to issue up to 100,000,000 shares of preferred stock.
+Added: The Company’s amended and restated Certificate of Incorporation authorizes the Company to issue up to 100,000,000 shares of preferred stock.
Preferred stock has rights, preferences, and privileges which may be designated from time to time by the Company’s Board of Directors.
Common Stock Authorized and Selected Terms
−Removed: Upon the closing of the IPO, the Company’s amended and restated Certificate of Incorporation authorizes the Company to issue up to 100,000,000 shares of Class A Common Stock and up to 1,800,000,000 shares of Class B Common Stock.
−Removed: Prior to the IPO, the Company amended and restated its Certificate of Incorporation on April 20, 2018 to authorize 320,000,000 shares of Class A Common Stock and 600,000,000 shares of Class B Common Stock.
−Removed: Upon the closing of the IPO, the rights of the holders of Class A Common Stock and Class B Common Stock are identical, except with respect to voting and conversion rights.
+Added: The Company’s amended and restated Certificate of Incorporation authorizes the Company to issue up to 100,000,000 shares of Class A common stock and up to 1,800,000,000 shares of Class B common stock.
+Added: The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights.
Each share of Class B common stock is entitled to one vote per share, while each share of Class A common stock is entitled to 29 votes per share and is convertible at any time into one share of Class B common stock.
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Class A common stock also will automatically convert into shares of Class B common stock upon the affirmative vote of at least 90 % of the then outstanding shares of Class A common stock or such time that the Bentley family (the Bentleys, certain other family members and trusts and other entities controlled by or primarily for the benefit of the Bentleys and their families, collectively) directly or indirectly, own less than 20 % of the issued and outstanding Class B common stock on a fully-diluted basis (assuming the conversion of all issued and outstanding Class A common stock).
−Removed: Pursuant to the terms of the Company’s amended and restated Certificate of Incorporation in effect prior to the IPO, each share of Class B Common Stock had the same rights and privileges as each share of Class A Common Stock, except that the holders of outstanding shares of Class B Common Stock did not have any right to vote on, or consent with respect to, any matters to be voted on or consented to by the stockholders of the Company except as was required by law, and the shares of Class B Common Stock were not included in determining the number of shares voting or entitled to vote on any such matters.
+Added: For the year ended December 31, 2023, 64,130 shares of Class A common stock were converted to Class B common stock.
BSY Stock Repurchase Program
−Removed: On May 11, 2022, the Company announced that its board of directors approved the BSY Stock Repurchase Program (the “Repurchase Program”) authorizing the Company to repurchase up to $ 200,000 of the Company’s Class B Common Stock through June 30, 2024.
+Added: On May 11, 2022, the Company announced that its Board of Directors approved the Repurchase Program authorizing the Company to repurchase up to $ 200,000 of the Company’s Class B common stock through June 30, 2024.
On December 14, 2022, the Company’s Board of Directors amended the Repurchase Program to allow the Company also to repurchase its outstanding convertible senior notes.
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The exact number of shares and/or notes to be repurchased by the Company is not guaranteed, and the Repurchase Program may be suspended, modified, or discontinued at any time without prior notice.
−Removed: For the year ended December 31, 2022, the Company repurchased 896,126 shares for $ 28,250 , and $ 2,170 aggregate principal amount of our outstanding 2026 Notes for $ 1,998 (see Note 10).
+Added: The Company did not repurchase shares under the Repurchase Program for the year ended December 31, 2023.
+Added: For the year ended December 31, 2022, the Company repurchased 896,126 shares for $ 28,250 , and $ 2,170 aggregate principal amount of our outstanding 2026 Notes for $ 1,998 (see Note 10) under the Repurchase Program.
As of December 31, 2023, $ 169,752 was available under the Company’s Board of Directors authorization for future repurchases of Class B common stock and/or outstanding convertible senior notes under the Repurchase Program.
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On June 17, 2021, the Company issued 3,141,342 shares of the Company’s Class B common stock pursuant to the acquisition of Seequent (see Note 4).
−Removed: The Company has a Class B Common Stock Purchase Agreement with a strategic investor (the “Common Stock Purchase Agreement”), pursuant to which the investor was, prior to our IPO, able to acquire in a series of transactions up to $ 250,000 of the Company’s Class B Common Stock at the then prevailing fair market value, either directly from selling stockholders, in which case the Company would act as pass through agent, or by funding the Company’s repurchase and subsequent sale to the investor of shares acquired by the Company from existing Company stockholders.
−Removed: The Company had the right to retain a portion of the shares that would otherwise be sold to the investor.
−Removed: As of December 31, 2020, the investor reached the maximum purchase amount of $ 250,000 and, subsequent to our IPO, no longer had the right to acquire shares in repurchase transactions.
+Added: The Company has a Class B Common Stock Purchase Agreement with a strategic investor (the “Common Stock Purchase Agreement”), pursuant to which the investor acquired the maximum purchase amount of $ 250,000 of the Company’s Class B common stock.
The Common Stock Purchase Agreement grants to the strategic investor certain informational and protective rights, including, for so long as the Company remains party to a long-term strategic collaboration agreement with the investor the right to participate in any sale process the Company may undertake.
The Common Stock Purchase Agreement expires in 2030.
−Removed: During the year ended December 31, 2020, the investor purchased 4,574,399 shares under the Common Stock Purchase Agreement, with 3,769,346 of such shares having been repurchased by the Company and re-sold to the investor for consideration of $ 58,349 and 805,053 shares acquired directly by the investor for consideration of $ 12,462 .
For the year ended December 31, 2023, the Company issued 2,621,959 shares of Class B common stock to colleagues who exercised their stock options, net of 238,627 shares withheld at exercise to pay for the cost of the stock options, as well as for $ 6,581 of applicable income tax withholdings.
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The Company received $ 5,605 in proceeds from the exercise of stock options.
−Removed: For the year ended December 31, 2020, the Company paid $ 1,454 for 128,007 shares sold back to the Company upon exercise of the Put and Call provisions under its applicable equity incentive plans (see Note 15).
−Removed: Upon the completion of the IPO, the Put and Call provisions of the Company’s amended and restated 2015 Equity Incentive Plan (the “2015 Equity Incentive Plan”) terminated automatically.
For the year ended December 31, 2022, the Company issued 185,178 shares of Class B common stock related to the exercise of acquisition options (see Note 15), net of 714,822 shares withheld at exercise to pay for the cost of the options.
3 unchanged sentences
Of the total 569,166 shares awarded for the year ended December 31, 2022, 124,116 shares were sold back to the Company in the same period to pay for applicable income tax withholdings of $ 5,197 .
+Added: Of the total 407,473 shares awarded for the year ended December 31, 2021, 168,718 shares were sold back to the Company in the same period to pay for applicable income tax withholdings of $ 8,739 .
For the years ended December 31, 2023, 2022, and 2021, the Company issued 3,410,006 , 3,541,375 , and 2,378,645 shares of Class B common stock, respectively, to DCP participants in connection with distributions from the plan.
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The distribution in shares for the year ended December 31, 2021 totaled 3,820,099 shares of which 1,441,454 shares were sold back to the Company in the same period to pay for applicable income tax withholdings of $ 69,007 .
−Removed: For the years ended December 31, 2022 and 2021, the Company did not repurchase shares from its profit‑sharing plan.
−Removed: The Company repurchased 549,834 shares from its profit‑sharing plan for $ 6,970 for the year ended December 31, 2020.
The Company declared cash dividends during the periods presented as follows:
15 unchanged sentences
Total $ 0.12 $ 33,537
−Removed: (1) Includes declared dividends for certain restricted stock awards and restricted stock units, and are net of forfeitures.
−Removed: (2) As discussed in Note 1, on August 28, 2020, the Company’s board of directors declared a Special Dividend of $ 1.50 per share of the Company’s common stock ($ 392,489 in the aggregate).
Dividends Declared Subsequent to December 31, 2023
−Removed: In January 2023, the Company declared cash dividends of $ 0.05 per share payable on March 7, 2023 to all stockholders of record of Class A and Class B Common Stock as of the close of business on February 21, 2023.
+Added: In February 2024, our Board of Directors approved cash dividends of $ 0.06 per share payable on March 28, 2024 to all stockholders of record of Class A and Class B common stock as of the close of business on March 20, 2024.
Global Employee Stock Purchase Plan
−Removed: Effective September 22, 2020, the Company’s board of directors and its stockholders adopted and approved the Bentley Systems, Incorporated Global Employee Stock Purchase Plan (the “ESPP”).
−Removed: The ESPP provides eligible colleagues of the Company with an opportunity to contribute up to 15 % of their eligible compensation toward the purchase of the Company’s Class B Common Stock at a discounted price, up to a maximum of $ 25 per year and subject to any other plan limitations.
+Added: The Bentley Systems, Incorporated Global Employee Stock Purchase Plan (the “ESPP”) provides eligible colleagues of the Company with an opportunity to contribute up to 15 % of their eligible compensation toward the purchase of the Company’s Class B common stock at a discounted price, up to a maximum of $ 25 per year and subject to any other plan limitations.
The ESPP has 25,000,000 shares of Class B common stock reserved for issuance.
−Removed: As of December 31, 2022, shares of Class B Common Stock available for future issuance under the ESPP were 24,587,878 .
−Removed: The ESPP has been implemented by means of consecutive offering periods, with the first offering period commencing on the first trading day on or after January 1, 2021 and ending on the last trading day on or before June 30, 2021.
−Removed: Unless otherwise determined by the board of directors, offering periods will run from January 1st (or the first trading day thereafter) through June 30th (or the first trading day prior to such date), and from July 1st (or the first trading day thereafter) through December 31st (or the first trading day prior to such date).
−Removed: The purchase price per share at which shares of Class B Common Stock are sold in an offering period under the ESPP will be equal to the lesser of 85 % of the fair market value of a share of Class B Common Stock (i) on the first trading day of the offering period, or (ii) on the purchase date (i.e., the last trading day of the purchase period).
+Added: Unless otherwise determined by the Board of Directors, the ESPP has been implemented by means of consecutive offering periods, which will run from January 1st (or the first trading day thereafter) through June 30th (or the first trading day prior to such date), and from July 1st (or the first trading day thereafter) through December 31st (or the first trading day prior to such date).
+Added: The purchase price per share at which shares of Class B common stock are sold in an offering period under the ESPP will be equal to the lesser of 85 % of the fair market value of a share of Class B common stock (i) on the first trading day of the offering period, or (ii) on the purchase date (i.e., the last trading day of the offering period).
During the year ended December 31, 2023, colleagues who elected to participate in the ESPP purchased a total of 315,840 shares of Class B common stock, net of shares withheld, resulting in cash proceeds to the Company of $ 9,988 .
2 unchanged sentences
Of the total 314,471 shares purchased, 7,065 shares were sold back to the Company to pay for applicable income tax withholdings of $ 273 .
−Removed: During the year ended December 31, 2020, no shares were issued under the ESPP.
+Added: During the year ended December 31, 2021, colleagues who elected to participate in the ESPP purchased a total of 104,716 shares of Class B common stock, net of shares withheld, resulting in cash proceeds to the Company of $ 3,846 .
+Added: Of the total 111,486 shares purchased, 6,770 shares were sold back to the Company to pay for applicable income tax withholdings of $ 438 .
As of December 31, 2023 and 2022, $ 5,790 and $ 5,230 of ESPP withholdings via colleague payroll deduction were recorded in Accruals and other current liabilities in the consolidated balance sheets, respectively.
+Added: As of December 31, 2023, shares of Class B common stock available for future issuance under the ESPP were 24,272,038 .
Accumulated Other Comprehensive Loss
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Balance, December 31, 2021 ( 90,867 ) ( 907 ) ( 91,774 )
−Removed: Other comprehensive (loss) income, before taxes
+Added: Other comprehensive income, before taxes
1,459 820 2,279
Tax expense — ( 245 ) ( 245 )
−Removed: Other comprehensive (loss) income, net of taxes
+Added: Other comprehensive income, net of taxes
1,459 575 2,034
3 unchanged sentences
Tax expense — ( 89 ) ( 89 )
−Removed: Other comprehensive income, net of taxes
+Added: Other comprehensive income (loss), net of taxes
4,774 ( 21 ) 4,753
Balance, December 31, 2023 $ ( 84,634 ) $ ( 353 ) $ ( 84,987 )
−Removed: Equity Awards and Instruments
−Removed: Effective September 22, 2020, the Company adopted and approved the 2020 Incentive Award Plan.
−Removed: The 2020 Incentive Award Plan provides for the granting of stock, stock options, restricted stock, RSUs, and other stock‑based or performance‑based awards to certain directors, officers, colleagues, consultants, and advisors of the Company.
−Removed: The 2020 Incentive Award Plan provides that the total number of shares of Class B Common Stock that may be issued under the 2020 Incentive Award Plan is 25,000,000 (the “Absolute Share Limit”).
−Removed: Effective December 31, 2021, the board of directors amended the 2020 Incentive Award Plan to eliminate a provision that automatically increased the Absolute Share Limit on the first day of each fiscal year in an amount equal to the lower of 1 % of the total number of shares of Class B Common Stock outstanding on the last day of the immediately preceding fiscal year and a lower number of shares of Class B Common Stock as determined by the Company’s board of directors.
−Removed: For fiscal year 2021, the board of directors determined that the increase to the Absolute Share Limit would be set at zero.
−Removed: The 2020 Incentive Award Plan terminates in September 2030.
−Removed: Equity awards that are expired, canceled, forfeited, or terminated for any reason will be available for future grant under the 2020 Incentive Award Plan.
−Removed: As of December 31, 2022, equity awards available for future grants under the 2020 Incentive Award Plan were 22,127,401 .
−Removed: The Company also has equity awards outstanding under its 2015 Equity Incentive Plan, which provided for the granting of awards in the form of stock options, stock appreciation rights, dividend equivalent rights, restricted stock, RSUs, and stock grants.
−Removed: The 2015 Equity Incentive Plan had 50,000,000 shares of Class B Common Stock reserved for issuance and terminates in November 2024.
−Removed: Following the completion of the IPO, no further awards may be granted under the 2015 Equity Incentive Plan.
−Removed: Equity Awards
−Removed: Stock Options
−Removed: Stock options generally vest ratably on each of the first four anniversaries of the grant date.
−Removed: Prior to the IPO, stock options granted under the 2015 Equity Incentive Plan included Put and Call provisions that allowed colleagues who have exercised an option to sell all or part of their shares acquired upon such exercise to the Company at the fair market value at the time of the sale.
−Removed: The exercise period for the Put right began on the second day after the six‑month anniversary of the date the option was exercised and ended after an additional 30 days.
−Removed: The Call right provision allowed the Company to purchase all or a part of the shares acquired by a colleague upon exercise of an option, at the fair market value at the time of such purchase.
−Removed: The Company could exercise the Call right at any time within seven months of the later of i) the optionee’s termination of service with the Company, or ii) the optionee’s (or his or her beneficiary’s) exercise of such option after a termination of service.
−Removed: These Put and Call rights terminated upon the completion of the IPO.
−Removed: In accordance with the terms of the 2015 Equity Incentive Plan, in connection with the payment of the Special Dividend of $ 1.50 per share of the Company’s common stock on September 2, 2020, the Company equitably reduced the exercise price of each outstanding stock option granted under the 2015 Equity Incentive Plan by $ 1.50 , but not lower than $ 0.01 (see Note 1).
−Removed: Restricted Stock and RSUs
−Removed: Under the equity incentive plans, the Company may grant both time‑based and performance‑based shares of restricted Class B Common Stock and RSUs to eligible colleagues.
−Removed: Time‑based awards generally vest ratably on each of the first four anniversaries of the grant date.
−Removed: Performance‑based awards vesting is determined by the achievement of certain business profitability and growth targets, which include growth in annualized recurring revenues, as well as actual bookings for perpetual licenses and non‑recurring services, and certain non‑financial performance targets.
−Removed: Performance targets are generally set for performance periods of one to three years .
−Removed: Shares of restricted stock have voting rights and, subject to the terms of the award agreements, the time‑based restricted stock awards generally accrue declared dividends which are paid upon vesting.
−Removed: RSUs, which may be cash or share‑settled depending on the award, do not have voting rights, but, subject to the terms of the award agreements, generally accrue declared dividends which are paid upon vesting.
−Removed: Beginning with the April 2021 grant, time‑based RSUs have dividend equivalent rights and do not accrue cash dividends.
−Removed: Certain historical RSUs granted in 2016 under the Company’s 2015 Equity Incentive Plan have dividend equivalent rights and do not accrue cash dividends.
−Removed: Recipients of the Company’s outstanding performance‑based restricted stock awards and RSUs are paid dividends prior to vesting.
−Removed: Under the equity incentive plans, the Company may grant unrestricted, fully vested shares of Class B Common Stock to eligible colleagues.
−Removed: Prior to the IPO, any such shares awarded had Put and Call rights similar to those described above with respect to stock options, which terminated upon the completion of the IPO .
−Removed: Stock-Based Compensation Expense
+Added: Stock-Based Compensation
Total stock‑based compensation expense consists of the following:
1 unchanged sentence
2023 2022 2021
−Removed: Restricted stock and RSUs expense (1)
+Added: Restricted stock and restricted stock units (“RSUs”) expense
$ 54,606 $ 40,754 $ 19,917
1 unchanged sentence
ESPP expense (see Note 13) 2,407 2,890 2,118
−Removed: Stock option expense 2,150 3,271 6,858
Stock grants expense 600 450 445
+Added: Stock option expense 343 2,150 3,271
DCP elective participant deferrals expense (1) (see Note 12)
−Removed: IPO vested restricted stock and RSU expense — — 15,102
Total stock-based compensation expense (2)
$ 72,972 $ 75,206 $ 49,045
−Removed: (1) Includes acquisition‑related shares for the years ended December 31, 2022 and 2021 (see Note 4).
(1) DCP elective participant deferrals expense excludes deferred incentive bonus payable pursuant to the Bonus Plan.
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The Company accounts for forfeitures of equity awards as those forfeitures occur.
−Removed: The fair value of the common stock during periods prior to the IPO was determined by the board of directors at each award grant date based upon a variety of factors, including the results obtained from independent third‑party valuations, the Company’s financial position, and historical financial performance.
−Removed: Stock Options
−Removed: The fair value of each stock option award was estimated on the date of grant using the Black‑Scholes option pricing model.
−Removed: The determination of the fair value of share‑based payment awards using an option pricing model is affected by the Company’s stock price, as well as assumptions regarding a number of complex and subjective variables, which are estimated as follows:
−Removed: Expected volatility .
−Removed: The expected stock price volatility for the Company’s common stock was estimated by using the average historic price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the stock option grants.
−Removed: The Company intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of the Company’s own common stock share price becomes available.
−Removed: Expected dividend yield .
−Removed: The expected dividend yield is calculated by dividing the Company’s annual dividend, based on the most recent quarterly dividend rate, by the Company’s common stock price (as described above) on the grant date.
−Removed: Risk‑free interest rate .
−Removed: The risk‑free interest rate is based on the yields of U.S.
−Removed: Treasury securities with maturities similar to the expected term of the stock options at the time of grant.
−Removed: Expected term .
−Removed: The expected term represents the period that the Company’s stock‑based awards are expected to be outstanding.
−Removed: The expected term is based on the simplified method, which represents the average period from vesting to the expiration of the award.
−Removed: The Company did not grant stock options during the years ended December 31, 2022 and 2021.
−Removed: Stock options granted during the year ended December 31, 2020 were forfeited as of December 31, 2020.
−Removed: The following is a summary of stock option activity and related information under the Company’s applicable equity incentive plans:
−Removed: Weighted Average
−Removed: Average Remaining Aggregate
−Removed: Stock Exercise Price Contractual Intrinsic
−Removed: Options Per Share Life (in years) Value
−Removed: Outstanding, December 31, 2021 6,917,925 $ 5.26
−Removed: Exercised ( 3,011,160 ) 4.86
−Removed: Forfeited and expired ( 112,250 ) 5.65
−Removed: Outstanding, December 31, 2022 3,794,515 $ 5.57 0.9 $ 119,096
−Removed: Exercisable, December 31, 2022 2,849,765 $ 5.52 0.8 $ 89,600
−Removed: For the years ended December 31, 2022, 2021, and 2020, the Company received cash proceeds of $ 8,338 , $ 5,605 , and $ 9,128 , respectively, related to the exercise of stock options.
−Removed: The total intrinsic value of stock options exercised for the years ended December 31, 2022, 2021, and 2020 was $ 101,643 , $ 270,614 , and $ 72,275 , respectively.
−Removed: As of December 31, 2022, there was $ 349 of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted average period of approximately 0.2 years.
−Removed: Acquisition Options — In addition to stock options granted under the Company’s equity incentive plans, in connection with an acquisition completed in March 2018, the Company issued to certain selling shareholder entities options to acquire an aggregate of up to 900,000 shares of Class B Common Stock.
−Removed: The options had a five‑year term, were exercisable on March 27, 2022, and had an initial exercise price of $ 6.805 per share.
−Removed: The options had a four‑year service condition, which was incorporated into the Company’s Call rights.
−Removed: The exercise price of the options was subject to a cap and collar adjustment mechanism that automatically reduces (but not to less than $ 0.01 ) or increases the exercise price based on the difference between the exercise price and the fair market value of the Company’s Class B Common Stock on the exercise date.
−Removed: The fair value of the awards was estimated on the date of grant using the Black‑Scholes option pricing model.
−Removed: The grant date fair value of each option was $ 3.44 .
−Removed: Any shares of Class B Common Stock acquired upon exercise of the options were generally entitled to the Put and Call rights summarized above under “Stock Options,” and the options contain customary adjustment provisions in case of stock splits, stock dividends, or other corporate transactions.
−Removed: Upon the completion of the IPO, the Put and Call provisions, as well as the incorporated service condition, of the Company’s acquisition options terminated automatically and as such, the Company accelerated $ 1,548 of previously unrecognized stock‑based compensation associated with these options for the year ended December 31, 2020.
−Removed: The Company recorded a total of $ 2,012 of stock‑based compensation expense associated with these options for the year ended December 31, 2020.
−Removed: During the year ended December 31, 2022, 900,000 options were exercised.
−Removed: No acquisition options remain outstanding as of December 31, 2022.
+Added: The fair value of the common stock during periods prior to the IPO was determined by the Board of Directors at each award grant date based upon a variety of factors, including the results obtained from independent third‑party valuations, the Company’s financial condition, and historical financial performance.
Restricted Stock and RSUs
−Removed: The fair value of restricted stock and RSUs is determined by the product of the number of shares granted and the Company’s common stock price (as described above) on the grant date.
+Added: Under the equity incentive plans, the Company may grant both time‑based and performance‑based shares of restricted Class B common stock and RSUs to eligible colleagues.
+Added: Time‑based awards generally vest ratably on each of the first four anniversaries of the grant date.
+Added: Performance‑based awards vesting is determined by the achievement of certain business growth targets, which include growth in ARR, as well as actual bookings for perpetual licenses and non‑recurring services.
+Added: Performance targets are generally set for performance periods of one year to three years .
+Added: The fair value of restricted stock and RSUs is determined by the product of the number of shares granted and the Company’s common stock price on the grant date.
+Added: Shares of restricted stock have voting rights and, subject to the terms of the award agreements, the time‑based restricted stock awards generally accrue declared dividends which are paid upon vesting.
+Added: RSUs, which may be cash or share‑settled depending on the award, do not have voting rights, but, subject to the terms of the award agreements, generally accrue declared dividends which are paid upon vesting.
+Added: Beginning with the April 2021 grant, time‑based RSUs have dividend equivalent rights and do not accrue cash dividends.
+Added: Certain historical RSUs granted in 2016 under the Company’s amended and restated 2015 Equity Incentive Plan (the “2015 Equity Incentive Plan”) have dividend equivalent rights and do not accrue cash dividends.
+Added: Recipients of the Company’s outstanding performance‑based restricted stock awards and RSUs are paid dividends prior to vesting.
The following is a summary of unvested restricted stock and RSU activity and related information under the Company’s applicable equity incentive plans:
Time- Performance-
−Removed: Time- Performance- Weighted Weighted
−Removed: Total Based Based Average Average
−Removed: Restricted Restricted Restricted Grant Date Grant Date
−Removed: Stock Stock Stock Fair Value Fair Value
−Removed: and RSUs and RSUs and RSUs Per Share Per Share
+Added: Time- Weighted Weighted
+Added: Total Based Average Average
+Added: Restricted Restricted Performance- Grant Date Grant Date
+Added: Stock Stock Based Fair Value Fair Value
+Added: and RSUs and RSUs RSUs Per Share Per Share
Unvested, December 31, 2022 3,068,851 2,706,078 (3)
9 unchanged sentences
(3) Includes 199,076 time‑based RSUs granted during the three months ended March 31, 2022 to certain officers and key employees, which cliff vest on January 31, 2025.
−Removed: (4) Relates to the 2021 annual performance period.
−Removed: Total stock‑based compensation expense associated with these awards was fully recognized as of December 31, 2021.
(4) Primarily relates to the 2022 annual performance period, except for 185,186 performance‑based RSUs granted during the year ended December 31, 2022 with extraordinary terms, which are described below.
+Added: (5) Primarily relates to the 2023 annual performance period, except for 13,367 additional shares earned based on the achievement of 2022 performance goals for performance‑based RSUs granted during the year ended December 31, 2022.
During the year ended December 31, 2022, the Company granted 185,186 performance‑based RSUs to certain officers and key employees, which vest subject to the achievement of certain performance goals over a three‑year performance period (the “Performance Period”).
−Removed: For each year of the Performance Period, one‑third of the performance‑based RSUs will be subject to a cliff, whereby no vesting of that portion will occur unless the Company’s Adjusted EBITDA margin equals or exceeds the relevant target level for such year.
−Removed: Provided Adjusted EBITDA margin targets are met, the total number of performance‑based RSUs that will vest is determined by the achievement of growth targets, which include growth in annualized recurring revenues, as well as actual bookings for perpetual licenses and non‑recurring services.
+Added: For each year of the Performance Period, one‑third of the performance‑based RSUs will be subject to a cliff, whereby no vesting of that portion will occur unless the Company’s applicable margin metrics (which, for 2022, was Adjusted EBITDA margin and for 2023 and 2024, will be Adjusted OI w/SBC margin, excluding the impact of foreign currency exchange fluctuations) also equals or exceeds the relevant target level for such year.
+Added: Provided that the applicable margin targets are met, the total number of performance‑based RSUs that will vest is determined by the achievement of growth targets, which include growth in ARR, as well as actual bookings for perpetual licenses and non‑recurring services.
Final actual vesting will be determined on January 31, 2025.
−Removed: During the year ended December 31, 2022, the Company granted performance‑based RSUs to certain officers and key employees, which vest subject to the achievement of certain performance goals related to the 2022 annual performance period.
−Removed: Provided Adjusted EBITDA margin targets are met, the total number of performance‑based RSUs that will vest is determined by the achievement of growth targets, which include growth in annualized recurring revenues, as well as actual bookings for perpetual licenses and non‑recurring services.
−Removed: The on‑target number of performance‑based RSUs granted is 126,426 .
−Removed: To the extent performance exceeds the applicable targets for 2022, these grantees could earn a maximum of 125 % of the number of on‑target annual performance‑based RSUs granted or 158,032 performance‑based RSUs.
+Added: The 2023 Adjusted OI w/SBC margin target, excluding the impact of foreign currency exchange fluctuations, and the 2022 Adjusted EBITDA margin target for the performance-based RSUs were met.
In 2016, the Company granted RSUs subject to performance‑based vesting as determined by the achievement of certain business growth targets.
3 unchanged sentences
The weighted average grant date fair values of RSUs granted were $ 42.29 , $ 38.18 , and $ 52.48 for the years ended December 31, 2023, 2022, and 2021, respectively.
−Removed: The weighted average grant date fair value of restricted stock and RSUs granted was $ 16.03 for the year ended December 31, 2020.
For the years ended December 31, 2023, 2022, and 2021, restricted stock and RSUs were issued net of 161,841 , 112,698 , and 125,825 shares, respectively, which were sold back to the Company to settle applicable income tax withholdings of $ 7,299 , $ 4,491 , and $ 7,293 , respectively.
As of December 31, 2023, there was $ 82,891 of unrecognized compensation expense related to unvested time‑based restricted stock and RSUs, which is expected to be recognized over a weighted average period of approximately 1.7 years.
−Removed: There was no remaining unrecognized compensation expense related to unvested performance‑based restricted stock.
As of December 31, 2023, there was $ 2,609 of unrecognized compensation expense related to unvested performance‑based RSUs, which is expected to be recognized over a weighted average period of approximately 1.0 years.
+Added: Under the equity incentive plans, the Company may grant unrestricted, fully vested shares of Class B common stock.
The fair value of stock grants is determined by the product of the number of fully vested Class B common stock granted and the Company’s common stock price on the grant date.
The total expense related to stock grants is recognized on the grant date as the issued awards are fully vested.
−Removed: For the years ended December 31, 2022, 2021, and 2020, the Company granted 13,632 , 7,824 , and 21,956 fully vested shares of Class B Common Stock, respectively, with a fair value of $ 450 , $ 450 , and $ 319 , respectively.
+Added: For the years ended December 31, 2023, 2022, and 2021, the Company granted 12,639 , 13,632 , and 7,824 fully vested shares of Class B common stock, respectively.
+Added: Stock Options
+Added: The fair value of each stock option award was estimated on the date of grant using the Black‑Scholes option pricing model.
+Added: Stock options generally vest ratably on each of the first four anniversaries of the grant date.
+Added: The Company did not grant stock options during the years ended December 31, 2023, 2022, and 2021.
+Added: The following is a summary of stock option activity and related information under the Company’s applicable equity incentive plans:
+Added: Weighted Average
+Added: Average Remaining Aggregate
+Added: Stock Exercise Price Contractual Intrinsic
+Added: Options Per Share Life (in years) Value
+Added: Outstanding, December 31, 2022 3,794,515 $ 5.57
+Added: Exercised ( 2,860,586 ) 5.52
+Added: Forfeited and expired ( 17,500 ) 5.68
+Added: Outstanding, December 31, 2023 916,429 $ 5.74 0.2 $ 42,559
+Added: Exercisable, December 31, 2023 916,429 $ 5.74 0.2 $ 42,559
+Added: For the years ended December 31, 2023, 2022, and 2021, the Company received cash proceeds of $ 11,715 , $ 8,338 , and $ 5,605 , respectively, related to the exercise of stock options.
+Added: The total intrinsic value of stock options exercised for the years ended December 31, 2023, 2022, and 2021 was $ 112,025 , $ 101,643 , and $ 270,614 , respectively.
+Added: As of December 31, 2023, there was no remaining unrecognized compensation expense related to unvested stock options.
+Added: Acquisition Options
+Added: In addition to stock options granted under the Company’s equity incentive plans, in connection with an acquisition completed in March 2018, the Company issued to certain selling shareholder entities options to acquire an aggregate of up to 900,000 shares of Class B common stock.
+Added: As of December 31, 2020, the Company fully recognized the stock‑based compensation expense associated with these options.
+Added: During the year ended December 31, 2022, 900,000 options were exercised.
+Added: No acquisition options remain outstanding as of December 31, 2022.
The ESPP is considered a compensatory plan as it provides eligible colleagues an option to purchase shares of the Company’s Class B common stock for 85 % of the lower of the price of the first day of the offering period or the last day of the offering period (i.e., the purchase date).
2 unchanged sentences
Stock‑based compensation expense is recognized ratably over the respective offering period.
+Added: Equity Incentive Plans
+Added: The Company’s 2020 Incentive Award Plan provides for the granting of stock, stock options, restricted stock, RSUs, and other stock‑based or performance‑based awards to certain directors, officers, colleagues, consultants, and advisors of the Company, and terminates in September 2030.
+Added: The 2020 Incentive Award Plan provides that 25,000,000 shares of Class B common stock may be issued for equity awards.
+Added: Equity awards that are expired, canceled, forfeited, or terminated for any reason will be available for future grant under the 2020 Incentive Award Plan.
+Added: As of December 31, 2023, equity awards available for future grants under the 2020 Incentive Award Plan were 20,946,599 .
+Added: The Company also has equity awards outstanding under the 2015 Equity Incentive Plan, which terminates in November 2024.
+Added: Following the completion of the IPO, no further awards may be granted under the 2015 Equity Incentive Plan.
The components of Income before income taxes consist of the following:
5 unchanged sentences
$ 183,527 $ 198,275 $ 93,329
−Removed: The (Provision) benefit for income taxes consists of the following:
+Added: The Benefit (provision) for income taxes consists of the following:
Year Ended December 31,
8 unchanged sentences
198,878 5,126 19,745
−Removed: (Provision) benefit for income taxes
+Added: Benefit (provision) for income taxes
$ 143,241 $ ( 21,283 ) $ 3,448
4 unchanged sentences
Federal statutory rate 21.0 % 21.0 % 21.0 %
−Removed: State income taxes, net of federal benefit 1.0 ( 2.7 ) 2.9
+Added: State and local income taxes, net of federal benefit ( 0.3 ) 1.0 ( 2.7 )
Stock-based compensation ( 22.9 ) ( 21.4 ) ( 52.5 )
3 unchanged sentences
Foreign tax rate differential ( 3.0 ) ( 2.0 ) ( 6.9 )
−Removed: Net tax on foreign earnings (GILTI/FDII/FTC) 0.9 — 0.5
+Added: Net tax on foreign earnings (GILTI/FDII) 4.2 0.9 —
Transaction costs ( 0.1 ) 0.5 3.9
−Removed: Income tax reserves ( 0.1 ) 0.1 ( 0.5 )
−Removed: Permanent book/tax differences — ( 1.0 ) ( 0.6 )
−Removed: Expenses associated with IPO — — 3.3
+Added: Tax impact of internal legal entity restructuring ( 93.1 ) — —
Other 2.2 ( 0.2 ) ( 2.8 )
Effective income tax rate ( 78.0 %) 10.7 % ( 3.7 %)
+Added: For the year ended December 31, 2023, the effective tax rate was lower as compared to the year ended December 31, 2022 primarily due to the discrete tax benefit recognized as a result of the internal legal entity restructuring described below.
+Added: The benefit of the internal legal entity restructuring was partially offset by an increase in the effective tax rate impact of the GILTI inclusion due to the mandatory capitalization of research and development expenses for U.S.
+Added: tax purposes and a decrease in discrete tax benefits related to stock-based compensation, net of the impact from officer compensation limitation provisions, recognized during the current year.
+Added: For the years ended December 31, 2023 and 2022, the Company recorded discrete tax benefits of $ 14,648 and $ 20,501 , respectively, associated with windfall tax benefits from stock‑based compensation, net of the impact from officer compensation limitation provisions.
+Added: During the fourth quarter of 2023, the Company recognized a net discrete income tax benefit of $ 170,784 attributable to internal legal entity restructuring and related intra-entity transactions as part of its continuing efforts to align intellectual property ownership with the Company’s business operating model.
+Added: These transactions resulted in the recognition of deferred tax benefits arising from the net increase in deferred tax assets related to intangibles and goodwill of $ 171,622 .
+Added: The deferred tax assets represent the undiscounted future anticipated cash tax impacts of basis differences, which are expected to be realized through tax amortization over the next 13 years.
For the year ended December 31, 2022, the effective tax rate was higher as compared to the year ended December 31, 2021, primarily due to the 2021 effective tax rate impact, net of officer compensation limitation provisions, related to the 2021 compensation charge of $ 90,721 to Deferred compensation plan expenses to record reallocated deferred compensation plan liabilities at fair value (see Note 12).
−Removed: For the years ended December 31, 2022, 2021, and 2020, the Company recognized tax benefits of $ 20,501 , $ 14,890 , and $ 954 , respectively, associated with windfall tax benefits from stock‑based compensation, net of the impact from officer compensation limitation provisions.
−Removed: The effective tax rate for the year ended December 31, 2021 was lower as compared to the year ended December 31, 2020 primarily due to the tax benefits noted above.
+Added: For the years ended December 31, 2022 and 2021, the Company recorded discrete tax benefits of $ 20,501 and $ 14,890 , respectively, associated with windfall tax benefits from stock‑based compensation, net of the impact from officer compensation limitation provisions.
+Added: Tax Cuts and Jobs Act (the “JOBS Act”) requires certain GILTI earned by a controlled foreign corporation (“CFC”) to be included in the gross income of the CFC’s U.S.
+Added: The Company has elected the “period cost method” and treats taxes due on future U.S.
+Added: inclusions in taxable income related to GILTI as a current‑period expense when incurred.
+Added: The JOBS Act allows a U.S.
+Added: corporation a deduction equal to a certain percentage of its foreign‑derived intangible income (“FDII”).
The following is a summary of the significant components of the Company’s deferred tax assets and liabilities:
1 unchanged sentence
Accrued compensation $ 38,220 $ 35,298
−Removed: Net operating loss (“NOL”) and credit carryforwards
+Added: NOL and credit carryforwards
19,677 14,960
+Added: Intangible assets including goodwill 137,576 —
Convertible debt and 163(j) limitation 14,364 13,349
10 unchanged sentences
Operating lease right-of-use assets ( 6,762 ) ( 8,381 )
−Removed: Deferred revenues — ( 3,421 )
Prepaid expenses ( 2,746 ) ( 2,877 )
3 unchanged sentences
Net deferred tax assets (liabilities) $ 203,113 $ 1,401
−Removed: The Company had deferred tax assets for tax credits and net operating losses, net of unrecognized tax positions, primarily related to:
+Added: The Company recognizes deferred income tax assets and liabilities for the expected future tax consequences of NOL carryforwards, credit carryforwards, and temporary differences between financial statement carrying amounts of assets and liabilities and their respective tax bases, using enacted tax rates in effect for the year in which the items are expected to reverse.
+Added: The Company had deferred tax assets for tax credits and NOLs, net of unrecognized tax positions, primarily related to:
Jurisdiction:
December 31, 2023 Begin to Expire
−Removed: Federal NOL $ 1,963 Indefinite
+Added: Federal NOL $ 3,497 2034
Federal research and development credits 201 2039
2 unchanged sentences
State research and development credits 667 2030
−Removed: United Kingdom (“U.K.”) NOL
−Removed: 6,864 Indefinite
+Added: NOL 6,759 Indefinite
research and development credits 760 Indefinite
Canadian research and development credit 1,037 2030
−Removed: As of December 31, 2022 and 2021, the Company recorded a valuation allowance against net deferred tax assets related to NOLs and tax attributes in certain jurisdictions of $ 3,321 and $ 1,899 , respectively.
−Removed: During the year ended December 31, 2022, the Company increased the valuation allowance by $ 1,422 , which was primarily related to the increase in the outside basis difference on equity method investments.
−Removed: During the year ended December 31, 2022, the Company repatriated $ 150,000 of undistributed previously taxed earnings generated by its foreign subsidiaries to the U.S.
−Removed: The repatriations were used to fund the acquisition of Power Line Systems (see Note 4).
−Removed: The cash repatriations did not have a material impact on Provision for income taxes for the year ended December 31, 2022.
+Added: As of December 31, 2023 and 2022, the Company has a valuation allowance recorded against net deferred tax assets related to NOLs and tax attributes in certain jurisdictions of $ 2,664 and $ 3,321 , respectively.
+Added: During the year ended December 31, 2023, the Company decreased the valuation allowance by $ 657 , which was primarily related to the partial utilization of U.S.
+Added: capital loss carryforwards.
+Added: A valuation allowance is required when it is more likely than not that all or a portion of deferred tax assets will not be realized.
+Added: The Company assesses the available positive and negative evidence to estimate whether the existing deferred tax assets will be realized.
We have provided for any applicable income taxes associated with current year distributions, as well as any earnings that are expected to be distributed in the future, in the calculation of the income tax provision.
5 unchanged sentences
It is not practicable to estimate the additional income taxes related to indefinitely reinvested earnings or the basis differences related to investments in subsidiaries.
−Removed: A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits is as follows:
+Added: The following is a reconciliation of the changes in gross unrecognized tax benefits:
Year Ended December 31,
8 unchanged sentences
As of December 31, 2023, 2022, and 2021, the Company had total unrecognized tax benefits including interest and penalties of $ 557 , $ 1,194 , and $ 1,704 , respectively, of which $ 554 , $ 1,181 , and $ 1,273 , respectively, would impact the Company’s effective tax rate if recognized.
−Removed: The Company records accrued interest and penalties, where applicable, related to unrecognized tax benefits as part of the (Provision) benefit for income taxes .
−Removed: Interest expense and penalties related to unrecognized tax benefits resulted in a (decrease) increase of the (Provision) benefit for income taxes of $( 89 ), $ 101 , $( 20 ) for the years ended December 31, 2022, 2021, and 2020, respectively.
+Added: Interest expense and penalties related to unrecognized tax benefits included in the Benefit (provision) for income taxes was $ 194 , $ 89 , $( 101 ) for the years ended December 31, 2023, 2022, and 2021, respectively.
The cumulative accrued interest and penalties related to unrecognized tax benefits were $ 91 , $ 284 , and $ 373 as of December 31, 2023, 2022, and 2021, respectively.
−Removed: The Company is subject to income tax in the U.S., as well as numerous state and foreign jurisdictions.
+Added: The Company is subject to income tax in the U.S.
+Added: (federal and state) and numerous foreign jurisdictions.
+Added: Significant judgment is required in evaluating the Company’s tax positions and determining the provision for income taxes.
+Added: During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain.
+Added: The Company establishes reserves for tax‑related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due.
+Added: These reserves are established when the Company believes that certain positions might be challenged despite its belief that the Company’s tax return positions are fully supportable.
+Added: The tax benefit recognized is based on the largest amount that is greater than 50 percent likely of being realized upon ultimate settlement.
+Added: The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of tax audits.
+Added: The Provision for income taxes in the consolidated statements of operations includes the impact of reserve provisions and changes to reserves that are considered appropriate.
+Added: The Company records accrued interest and/or penalties, where applicable, related to unrecognized tax benefits as part of the Benefit (provision) for income taxes in the consolidated statements of operations.
+Added: The Company records the amount of uncertain taxes expected to be paid in the next 12 months as a current liability and records the remaining amount in Other liabilities in the consolidated balance sheets.
The Company is currently under audit in the U.K.
for years 2018 through 2021.
+Added: The Company is also under audit in the Netherlands for years 2018 through 2021.
In addition, the Company is under audit in various other foreign taxing jurisdictions that are not material to the consolidated financial statements.
2 unchanged sentences
The Company also may be subject to examination by other significant jurisdictions, including the Irish Revenue Commissioners for Irish tax purposes for years 2019 through 2023 and by the Inland Revenue Department for New Zealand Tax purposes for years 2018 through 2023.
+Added: In December 2021, the Organization for Economic Co-operation and Development (“OECD”) adopted model rules to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as “Pillar 2”).
+Added: The OECD has continued to issue administrative guidance and interpretations regarding the Pillar 2 rules.
+Added: A number of E.U.
+Added: and G20 member nations, including locations where the Company currently has operations, are at various stages in the process of enacting tax legislation to incorporate aspects of the Pillar 2 rules.
+Added: For countries that have adopted the model rules, certain aspects of the Pillar 2 rules will be effective in 2024, while other aspects are expected to become effective in 2025.
+Added: Due to the uncertainty regarding which countries will enact Pillar 2 legislation and in what form the legislation will be adopted, as well as uncertainty regarding the timing of individual country legislative action and the underlying complexity of the rules, we are still assessing the impact, if any, of the Pillar 2 legislation on the Company.
Fair Value of Financial Instruments
+Added: The Company categorizes its assets and liabilities measured at fair value into a three‑level hierarchy, based on the priority of the inputs to the respective valuation technique.
+Added: The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).
+Added: An asset or liability’s classification within the fair value hierarchy is based on the lowest level of significant input to its valuation.
+Added: The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.
+Added: The fair value hierarchy consists of the following three levels:
+Added: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
+Added: Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
+Added: Level 3 inputs are unobservable inputs based on management’s own assumptions used to measure assets and liabilities at fair value.
The Company’s financial instruments include cash equivalents, account receivables, certain other assets, accounts payable, accruals, certain other current and long‑term liabilities, and long‑term debt.
−Removed: The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments as of December 31, 2022 and 2021:
Current Assets and Current Liabilities — In general, the carrying amounts reported on the Company’s consolidated balance sheets for current assets and current liabilities approximate their fair values due to the short‑term nature of those instruments.
−Removed: Acquisition contingent consideration — The fair value of these liabilities is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.
+Added: The following methods and assumptions were used by the Company in estimating its fair value measurements for Level 2 and Level 3 financial instruments as of December 31, 2023 and 2022:
+Added: Acquisition Contingent Consideration — The fair value of these liabilities is generally determined using a cost or income approach and is measured based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.
The valuation of contingent consideration uses assumptions the Company believes would be made by a market participant.
−Removed: Interest rate swap — The fair value of the Company’s interest rate swap asset or liability is determined using an income approach and is measured based on the implied forward rates from the U.S.
−Removed: Dollar one‑month LIBOR yield curve.
+Added: Interest Rate Swap — The fair value of the Company’s interest rate swap asset or liability is determined using an income approach and is measured based on the implied forward rates for the remaining term of the interest rate swap.
The Company considers these valuation inputs to be Level 2 inputs in the fair value hierarchy.
7 unchanged sentences
Deferred Compensation Plan Liabilities — The fair value of deferred compensation plan liabilities, including the liability classified phantom investments in the DCP, are marked to market at the end of each reporting period.
−Removed: A financial asset or liability classification is determined based on the lowest level input that is significant to the fair value measurement.
−Removed: The fair value hierarchy consists of the following three levels:
−Removed: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
−Removed: Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
−Removed: Level 3 inputs are unobservable inputs based on management’s own assumptions used to measure assets and liabilities at fair value.
Financial assets and financial liabilities carried at fair value measured on a recurring basis consist of the following:
5 unchanged sentences
Total assets $ 1 $ 32,162 $ — $ 32,163
−Removed: Acquisition contingent consideration (3)
−Removed: $ — $ — $ 1,196 $ 1,196
Deferred compensation plan liabilities (3)
16 unchanged sentences
(2) Included in Other assets in the consolidated balance sheets.
−Removed: (3) Included in Other liabilities , except for current liabilities of $ 1,196 and $ 5,382 as of December 31, 2022 and 2021, respectively, which are included in Accruals and other current liabilities in the consolidated balance sheets.
−Removed: Acquisition contingent consideration liability is measured at fair value and is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.
−Removed: The valuation of contingent consideration uses assumptions the Company believes would be made by a market participant.
(3) Included in Deferred compensation plan liabilities , except for current liabilities of $ 2,355 and $ 2,067 as of December 31, 2023 and 2022, respectively, which are included in Accruals and other current liabilities in the consolidated balance sheets.
10 unchanged sentences
Commitments and Contingencies
−Removed: Purchase Commitment — In the normal course of business, the Company enters into various purchase commitments for goods and services.
−Removed: As of December 31, 2022, the non‑cancelable future cash purchase commitment for services related to the cloud provisioning of the Company’s software solutions was $ 14,981 through May 2023.
−Removed: The Company expects to fully consume its contractual commitment in the ordinary course of operations.
−Removed: Operating Leases — The Company leases certain office facilities, office equipment, and automobiles under operating leases having initial or remaining non‑cancelable terms in excess of one year (see Note 8).
−Removed: Litigation — From time to time, the Company is involved in certain legal actions arising in the ordinary course of business.
+Added: Purchase Commitments
+Added: In the normal course of business, the Company enters into various purchase commitments for goods and services.
+Added: During the year ended December 31, 2023, the Company entered into approximately $ 158,000 of non‑cancelable future cash purchase commitments for services related to cloud provisioning of the Company’s software solutions and for other software costs.
+Added: As of December 31, 2023, total non‑cancelable future cash purchase commitments were $ 127,000 , of which the Company expects $ 50,000 to be paid over the next 12 months and $ 77,000 to be paid through September 2028.
+Added: The Company expects to fully consume its contractual commitments in the ordinary course of operations.
+Added: From time to time, the Company is involved in certain legal actions arising in the ordinary course of business.
In management’s opinion, based upon the advice of counsel, the outcome of such actions is not expected to have a material adverse effect on the Company’s future financial position, results of operations, or cash flows.
2 unchanged sentences
Long‑lived assets (other than goodwill), net of depreciation and amortization by geographic region (see Notes 5, 6, and 8) are as follows:
+Added: Americas (1)(2)
$ 272,492 $ 164,729
EMEA 40,411 32,372
−Removed: APAC 167,670 184,245
+Added: 14,460 167,670
Total long-lived assets $ 327,363 $ 364,771
(1) Americas includes the U.S., Canada, and Latin America, including the Caribbean.
−Removed: Interest Expense, Net
−Removed: Interest expense, net consists of the following:
−Removed: Year Ended December 31,
−Removed: 2022 2021 2020
−Removed: Interest expense (see Note 10) $ ( 35,056 ) $ ( 11,527 ) $ ( 7,217 )
−Removed: Interest income 421 306 437
−Removed: Interest expense, net $ ( 34,635 ) $ ( 11,221 ) $ ( 6,780 )
−Removed: Other Income, Net
−Removed: Other income, net consists of the following:
+Added: (2) The change in balances period over period was due to an internal legal entity restructuring executed by the Company during the fourth quarter of 2023 (see Note 16).
+Added: Other (Expense) Income, Net
+Added: Other (expense) income, net consists of the following:
Year Ended December 31,
2023 2022 2021
−Removed: Gain (loss) from:
+Added: (Loss) gain from:
Change in fair value of interest rate swap (see Note 17) $ ( 5,038 ) $ 27,083 $ 9,770
2 unchanged sentences
Sale of aircraft (see Note 5) — 2,029 —
−Removed: Change in fair value of acquisition contingent consideration 1,427 ( 550 ) 1,340
−Removed: Payments related to interest rate swap 1,947 ( 1,270 ) ( 696 )
−Removed: Other income, net
+Added: Change in fair value of acquisition contingent consideration (see Note 17) — 1,427 ( 550 )
+Added: Receipts (payments) related to interest rate swap
8,803 1,947 ( 1,270 )
−Removed: Total other income, net
+Added: Other (expense) income, net (2)
( 13,484 ) 1,713 1,184
−Removed: (1) Foreign exchange (loss) gain is primarily attributable to foreign currency translation derived mainly from U.S.
+Added: Total other (expense) income, net
+Added: $ ( 7,222 ) $ 24,298 $ 9,961
+Added: (1) Foreign exchange gain (loss) is primarily attributable to foreign currency translation derived mainly from U.S.
dollar denominated cash and cash equivalents, account receivables, customer deposits, and intercompany balances held by foreign subsidiaries.
Intercompany finance transactions primarily denominated in U.S.
−Removed: Dollars resulted in unrealized foreign exchange (losses) gains of $( 7,369 ), $( 779 ) and $ 22,310 for the years ended December 31, 2022, 2021, and 2020, respectively.
+Added: dollars resulted in unrealized foreign exchange gains (losses) of $ 3,163 , $( 7,369 ), and $( 779 ) for the years ended December 31, 2023, 2022, and 2021, respectively.
+Added: (2) Other (expense) income, net includes investment impairment and other charges of $( 16,988 ), partially offset by gains on investments of $ 2,360 for the year ended December 31, 2023 (see Note 7).
+Added: Realignment Costs
+Added: During the fourth quarter of 2023, the Company approved a strategic realignment program to better serve the Company’s accounts and to better align resources with the strategy of the business, including reinvestment in go-to-market functions, as well as in AI product development (the “2023 Program”).
+Added: The Company incurred realignment costs of $ 12,579 for the year ended December 31, 2023 related to the aforementioned program, which represents termination benefits for colleagues whose roles were impacted.
+Added: The 2023 Program activities have been broadly implemented across the Company’s various businesses with the intention that substantially all actions, including payment of the termination benefits, will be fully completed by mid‑2024.
+Added: Realignment costs by expense classification were as follows:
+Added: Cost of revenues:
+Added: Cost of subscriptions and licenses $ 839
+Added: Cost of services 1,246
+Added: Total cost of revenues 2,085
+Added: Operating expenses:
+Added: Research and development 4,995
+Added: Selling and marketing 4,012
+Added: General and administrative 1,487
+Added: Total operating expenses 10,494
+Added: Total realignment costs $ 12,579
+Added: Accruals and other current liabilities in the consolidated balance sheets included amounts related to the realignment activities as follows:
+Added: Balance, December 31, 2022 $ —
+Added: Realignment costs 12,579
+Added: Payments ( 268 )
+Added: Adjustments (1)
+Added: Balance, December 31, 2023 $ 12,459
+Added: (1) Adjustments includes foreign currency translation.
Net Income Per Share
+Added: Net income per share of Class A and Class B common stock amounts are computed using the two‑class method required for participating securities, using the treasury stock method for awards under the Company’s equity compensation plans and ESPP, and using the if‑converted method for the convertible senior notes.
+Added: In addition, the weighted average number of shares of the Company’s Class A and Class B common stock is inclusive of undistributed shares held in the DCP as phantom shares of the Company’s Class B common stock.
The Company issues certain performance-based RSUs determined to be participating securities because holders of such shares have non-forfeitable dividend rights in the event of the Company’s declaration of a dividend for common shares.
3 unchanged sentences
For the Company’s diluted net income per share numerator, interest expense, net of tax, attributable to the assumed conversion of the convertible senior notes is added back to basic net income attributable to common stockholders.
−Removed: For the Company’s diluted net income per share denominator, the basic weighted average number of shares is adjusted by the effect of dilutive securities, including awards under the Company’s equity compensation plans and ESPP, and by the dilutive effect of the assumed conversion of the convertible senior notes.
+Added: For the Company’s diluted net income per share denominator, the basic weighted average number of shares is adjusted for the effect of dilutive securities, including awards under the Company’s equity compensation plans and ESPP, and for the dilutive effect of the assumed conversion of the convertible senior notes.
Diluted net income per share attributable to common stockholders is computed by dividing diluted net income attributable to common stockholders by the weighted average number of fully diluted common shares.
28 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.