BENTLEY SYSTEMS INC 10-K

Item 9A. Controls and Procedures Evaluation of Effectiveness of Disclosure Controls and Procedures Our management maintains disclosure controls and procedures as defined in Rules 13a‑15(e) and 15d‑15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is processed, recorded, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), as appropriate, to allow for timely decisions regarding required disclosure. We evaluated, under the supervision and with the participation of management, including our principal executive and principal financial officers, the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2024, our disclosure controls and procedures were effective at the reasonable assurance level. Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Bentley Systems, Incorporated have been detected. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a‑15(f) under the Securities Exchange Act of 1934, as amended). Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (2013) . Our management has concluded that, as of December 31, 2024, our internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our independent registered public accounting firm, KPMG LLP, has issued an audit report on the effectiveness of our internal control over financial reporting, which is included in Part II, Item 8 of this Annual Report on Form 10‑K. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a or 15d of the Exchange Act that occurred during the quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 56 Item 9B. Other Information Rule 10b5-1 Trading Plans On November 19, 2024 , Brock Ballard , the Company’s Chief Revenue Officer , 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 20,047 shares of our Class B common stock. Mr. Ballard’s plan expires on December 2, 2025 . On December 6, 2024 , Michael M. Campbell , the Company’s former Chief Product Officer , 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). The Company estimates that Mr. Campbell could sell up to an aggregate of 9,000 shares of its Class B common stock under the plan, though the final number of shares sold will depend upon a variety of factors, including applicable tax rates. Mr. Campbell’s plan expires on October 1, 2025 . On December 10, 2024 , Gregory S. Bentley , the Company’s Executive Chair and President , 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 763,457 shares of our Class B common stock. Mr. Bentley’s plan expires on June 30, 2026 . On December 12, 2024 , David R. Shaman , the Company’s Chief Legal Officer and Secretary , 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). The Company estimates that Mr. Shaman could sell up to an aggregate of 127,942 shares of its Class B common stock under the plan. Mr. Shaman’s plan expires on December 20, 2025 . During the three months ended December 31, 2024, 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.” Dividends Declared Subsequent to December 31, 2024 On February 20, 2025, our Board of Directors declared a $0.07 per share dividend for the first quarter of 2025. The cash dividend will be payable on March 27, 2025 to all stockholders of record of Class A and Class B common stock as of the close of business on March 19, 2025. The Company publicly announced the dividend declaration on February 26, 2025. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 57 PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this item is incorporated by reference to our 2025 Proxy Statement, which will be filed with the SEC not later than 120 days subsequent to December 31, 2024. Information About Our Executive Officers The following sets forth certain information as of February 26, 2025, regarding our executive officers. Name Age Position Gregory S. Bentley 69 Executive Chair and President Nicholas H. Cumins 48 Chief Executive Officer Werner Andre 55 Chief Financial Officer Brock Ballard 48 Chief Revenue Officer James Lee 45 Chief Operating Officer David R. Shaman 59 Chief Legal Officer and Secretary Gregory S. Bentley has served as our President since June 1996 and as our Executive Chair since July 2024. He served as our Chief Executive Officer from August 2000 to July 2024. Prior to joining us in 1991, Mr. Bentley founded and served as chief executive officer of Devon Systems International, Inc., a provider of financial trading software, which was sold to SunGard Data Systems, Inc. in 1987. Mr. Bentley served as a director of SunGard and a member of its audit committee from 1991 through 2005. He holds a B.S. in Economics and an M.B.A. in Finance and Decision Sciences from the Wharton School, University of Pennsylvania. Nicholas H. Cumins has served as our Chief Executive Officer since July 1, 2024 and is responsible for our overall strategy and growth. Mr. Cumins previously served as our Chief Operating Officer since January 1, 2022. Mr. Cumins joined us in September 2020 as our Chief Product Officer. Prior to joining us, Mr. Cumins served as general manager of SAP Marketing Cloud, a comprehensive marketing automation platform, from 2018 to 2020. Mr. Cumins also served as chief product officer of Scytl, a platform for online voting, in Barcelona from 2016 to 2018, and senior vice president of product with OpenX, a pioneer in programmatic advertising, in Los Angeles from 2013 to 2016. He holds Maîtrise de Droit (Law) and Maîtrise de Sciences de Gestion (Business) degrees from University Paris II Panthéon-Assas, Paris, France. 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. Mr. Andre joined us in 2015 as Global Corporate Controller and served as our Chief Accounting Officer from 2020 through March 2024. Prior to joining us, Mr. Andre served as the assistant corporate controller – international accounting and reporting for Rockwood Holdings, Inc. from 2010 to 2015, and held several roles with PricewaterhouseCoopers LLP from 1995 to 2010. He holds B.S. and M.B.A. degrees in Accounting and Financial Reporting from the University for Economics and Business Administration in Vienna. Brock Ballard has served as our Chief Revenue Officer since January 1, 2023 and is responsible for leading all of our accounts globally. Mr. Ballard joined us in 2020 as Vice President and Regional Executive, Americas. Prior to joining us, Mr. Ballard served in sales leadership positions with Dassault Systèmes, Autodesk, Inc., and Océ. He holds a Bachelor of Arts in Communication and Information Sciences from the University of Alabama. 58 James Lee has served as our Chief Operating Officer since joining us in January 2025. Mr. Lee is responsible for strengthening cross-functional planning and execution, driving operational excellence, and overseeing corporate development. Prior to joining us, Mr. Lee joined Google in 2020 and served as the general manager of the startups and AI business at Google Cloud, an infrastructure and platform services business, since 2023. Prior to joining Google, Mr. Lee worked at SAP, an enterprise software solutions company, from 2008 to 2020, most recently serving as Chief Operating Officer for SAP Ariba and Fieldglass. He holds a Master of Business Administration from Harvard Business School, a Bachelor of Commerce from the University of British Columbia, and a Diploma in Piano Performance from the Royal Conservatory of Music. David R. 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. Mr. Shaman previously served as Deputy General Counsel from 2006 to 2015. Prior to joining us in 1998, Mr. Shaman was an associate at the law firm Covington & Burling LLP. Mr. Shaman’s international experience includes eight years leading our legal operations outside the United States, as well as tenures at the European Commission, Directorate-General for Informatics in Brussels and Harlequin Limited, a software company in Cambridge, United Kingdom. He holds a Bachelor’s degree in Mathematics from the University of Pennsylvania, a J.D. from Harvard Law School, and a Diploma in Mathematical Statistics from Cambridge University. Item 11. Executive Compensation The information required by this item is incorporated by reference to our 2025 Proxy Statement, which will be filed with the SEC not later than 120 days subsequent to December 31, 2024. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this item is incorporated by reference to our 2025 Proxy Statement, which will be filed with the SEC not later than 120 days subsequent to December 31, 2024. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item is incorporated by reference to our 2025 Proxy Statement, which will be filed with the SEC not later than 120 days subsequent to December 31, 2024. Item 14. Principal Accountant Fees and Services The information required by this item is incorporated by reference to our 2025 Proxy Statement, which will be filed with the SEC not later than 120 days subsequent to December 31, 2024. 59 PART IV Item 15. Exhibit and Financial Statement Schedules (a) The following documents are filed as part of this report: 1. Financial Statements: Page Report of Independent Registered Public Accounting Firm ( KPMG LLP , Philadelphia, Pennsylvania , PCAOB ID: 185 ) F- 1 Consolidated Balance Sheets F- 3 Consolidated Statements of Operations F- 4 Consolidated Statements of Comprehensive Income F- 5 Consolidated Statements of Equity F- 6 Consolidated Statements of Cash Flows F- 7 Notes to Consolidated Financial Statements F- 9 2. Financial Statement Schedules: Financial statement schedules have been omitted since they are either not required, not applicable, or the information is included in the consolidated financial statements or notes thereto. 3. Exhibits: Exhibit Number Description 3.1 Amended and Restated Certificate of Incorporation of Bentley Systems, Incorporated (filed as Exhibit 3.1 to our Current Report on Form 8‑K filed on September 25, 2020 (File No. 001-39548) and incorporated herein by reference) 3.2 Amended and Restated Bylaws of Bentley Systems, Incorporated (filed as Exhibit 3.2 to our Current Report on Form 8‑K filed on September 25, 2020 (File No. 001-39548) and incorporated herein by reference) 4.1 Form of Bentley Systems, Incorporated Class B common stock certificate (filed as Exhibit 4.1 to our Registration Statement on Form S‑1/A filed on September 18, 2020 (File No. 333-248246) and incorporated herein by reference) 4.2 Indenture, dated as of January 26, 2021, between Bentley Systems, Incorporated and Wilmington Trust, National Association, as trustee (filed as Exhibit 4.1 to our Current Report on Form 8‑K filed on January 26, 2021 (File No. 001-39548) and incorporated herein by reference) 4.3 Form of 0.125% Convertible Senior Note due 2026 (included as Exhibit A in Exhibit 4.1 to our Current Report on Form 8‑K filed on January 26, 2021 (File No. 001-39548) and incorporated herein by reference) 4.4 Indenture, dated as of June 28, 2021, between Bentley Systems, Incorporated and Wilmington Trust, National Association, as trustee (filed as Exhibit 4.1 to our Current Report on Form 8‑K filed on June 29, 2021 (File No. 001-39548) and incorporated herein by reference) 4.5 Form of 0.375% Convertible Senior Note due 2027 (included as Exhibit A in Exhibit 4.1 to our Current Report on Form 8‑K filed on June 29, 2021 (File No. 001-39548) and incorporated herein by reference) 4.6 Description of Bentley Systems, Incorporated Securities (filed as Exhibit 4.4 to our Annual Report on Form 10‑K filed on March 2, 2021 (File No. 001-39548) and incorporated herein by reference) 60 Exhibit Number Description 10.1 Form of Capped Call Confirmation relating to the 0.125% Convertible Senior Note due 2026 (filed as Exhibit 10.1 to our Current Report on Form 8‑K filed on January 26, 2021 (File No. 001-39548) and incorporated herein by reference) 10.2 Form of Capped Call Confirmation relating to the 0.375% Convertible Senior Note due 2027 (filed as Exhibit 10.1 to our Current Report on Form 8‑K filed on June 29, 2021 (File No. 001-39548) and incorporated herein by reference) 10.3 Second Amended and Restated Credit Agreement, dated as of October 18, 2024, by and among Bentley Systems, Incorporated, the lenders party thereto, and PNC Bank, National Association, as administrative agent (filed as Exhibit 10.1 to our Current Report on Form 8 - K filed on October 22, 2024 (File No. 001 - 39548) and incorporated herein by reference) 10.4† Bentley Systems, Incorporated 2020 Omnibus Incentive Plan (filed as Exhibit 10.1 to our Current Report on Form 8‑K filed on September 25, 2020 (File No. 001-39548) and incorporated herein by reference) 10.5† Amendment No. 1 to the Bentley Systems, Incorporated 2020 Omnibus Incentive Plan (filed as Exhibit 10.10 to our Annual Report on Form 10‑K filed on March 1, 2022 (File No. 001-39548) and incorporated herein by reference) 10.6† 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. 001-39548) and incorporated herein by reference) 10.7† 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. 001-39548) and incorporated herein by reference) 10.8† Bentley Systems, Incorporated Nonqualified Deferred Compensation Plan, as amended and restated effective as of September 22, 2020 (filed as Exhibit 10.3 to our Current Report on Form 8‑K filed on September 25, 2020 (File No. 001-39548) and incorporated herein by reference) 10.9† Amendment No. 1 to the Amended and Restated Bentley Systems, Incorporated Nonqualified Deferred Compensation Plan (filed as Exhibit 10.1 to our Quarterly Report on Form 10‑Q filed on November 9, 2021 (File No. 001-39548) and incorporated herein by reference) 10.10† Bentley Systems, Incorporated Nonqualified Deferred Compensation Plan for Non-Employee Directors, as amended and restated effective as of January 1, 2015 (filed as Exhibit 10.7 to our Registration Statement on Form S‑1/A filed on September 8, 2020 (File No. 333-248246) and incorporated herein by reference) 10.11† Bentley Systems, Incorporated Bonus Pool Plan, as amended and restated effective as of September 22, 2020 (filed as Exhibit 10.4 to our Current Report on Form 8‑K filed on September 25, 2020 (File No. 001-39548) and incorporated herein by reference) 10.12† Amendment No. 1 to the Amended and Restated Bentley Systems, Incorporated Bonus Pool Plan (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) 10.13† Amendment No. 2 to the Amended and Restated Bentley Systems, Incorporated Bonus Pool Plan (filed as Exhibit 10.3 to our Current Report on Form 8 ‑ K/A filed on June 28, 2024 (File No. 001 ‑ 39548) and incorporated herein by reference) 10.14† Bentley Systems, Incorporated Severance Policy for Key Executives (filed as Exhibit 10.1 to our Current Report on Form 8 ‑ K/A filed on June 28, 2024 (File No. 001 ‑ 39548) and incorporated herein by reference) 10.15† Letter Agreement by and among Nicholas H. Cumins, Bentley Systems, Incorporated, and Bentley Systems France S.a.r.l. (filed as Exhibit 10.2 to our Current Report on Form 8 ‑ K/A filed on June 28, 2024 (File No. 001 ‑ 39548) and incorporated herein by reference) 61 Exhibit Number Description 10.16 Common Stock Purchase Agreement, by and among Bentley Systems, Incorporated, Siemens AG, and the persons listed as “Key Holders” therein, dated September 23, 2016, as amended on October 28, 2016, and April 23, 2018 (filed as Exhibit 10.2 to our Registration Statement on Form S‑1 filed on August 21, 2020 (File No. 333-248246) and incorporated herein by reference) 19* Bentley Systems, Incorporated Insider Trading Policy 21* List of Subsidiaries 23* Consent of Independent Registered Public Accounting Firm 31.1* Certification of CEO pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended 31.2* Certification of CFO pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended 32* Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97 Bentley Systems, Incorporated Incentive Compensation Clawback Policy, as Adopted on August 17, 2023 Pursuant to Nasdaq Rule 5608 (filed as Exhibit 97 to our Annual Report on Form 10‑K filed on February 27, 2024 (File No. 001-39548) and incorporated herein by reference) 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 101.SCH Inline XBRL Taxonomy Extension Schema 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase 101.LAB Inline XBRL Taxonomy Extension Label Linkbase 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase 104 Cover page formatted as Inline XBRL and contained in Exhibit 101 † Management contract or compensatory plan or arrangement. * Filed or furnished herewith. 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: We hereby file the exhibits listed in the attached Exhibit Index. (c) Financial Statement Schedules: None. Item 16. Form 10–K Summary None. 62 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Bentley Systems, Incorporated Date: February 26, 2025 By: /s/ N ICHOLAS H. C UMINS Nicholas H. Cumins Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of February 26, 2025. Signature Title /s/ N ICHOLAS H. C UMINS Chief Executive Officer and Director Nicholas H. Cumins (Principal Executive Officer) /s/ W ERNER A NDRE Chief Financial Officer Werner Andre (Principal Financial Officer) /s/ T HOMAS F. T RIMBACK Chief Accounting Officer and Global Controller Thomas F. Trimback (Principal Accounting Officer) /s/ G REGORY S. B ENTLEY Executive Chair and President Gregory S. Bentley /s/ B ARRY J. B ENTLEY Director Barry J. Bentley /s/ K EITH A. B ENTLEY Director Keith A. Bentley /s/ R AYMOND B. B ENTLEY Director Raymond B. Bentley /s/ K IRK B. G RISWOLD Director Kirk B. Griswold /s/ J ANET B. H AUGEN Director Janet B. Haugen /s/ B RIAN F. H UGHES Director Brian F. Hughes 63 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Bentley Systems, Incorporated: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of Bentley Systems, Incorporated and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the years in the three‑year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable F-1 assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter 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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. IT systems used in subscriptions and licenses revenues As discussed in Note 3 to the consolidated financial statements and disclosed in the consolidated statements of operations, the Company recorded $1,353,095 thousand of total revenues for the year ended December 31, 2024, of which $1,269,323 thousand related to subscriptions and licenses. There are high volumes of subscription and license transactions processed across multiple information technology (IT) systems. We identified the evaluation of the sufficiency of audit evidence over subscriptions and licenses revenues as a critical audit matter. This matter required especially subjective auditor judgment because of the number of IT applications involved in the subscriptions and licenses revenue recognition process. This matter also included determining the nature and extent of audit evidence obtained over subscriptions and licenses revenues and required specialized skills and knowledge for the performance of certain procedures. The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and extent of procedures to be performed over subscriptions and licenses revenues, including the determination of the IT applications subject to testing. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s subscriptions and licenses revenue process, including associated IT controls. We assessed the recorded subscriptions and licenses revenues by selecting a sample of transactions and comparing the amounts recognized for consistency with underlying documentation, including contracts with customers. We also involved IT professionals with specialized skills and knowledge, who assisted in testing key reports, application controls and general IT controls over certain IT applications that are used by the Company in its subscriptions and licenses revenue recognition process. We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence. /s/ KPMG LLP We have served as the Company’s auditor since 2002. Philadelphia, Pennsylvania February 26, 2025 F-2 BENTLEY SYSTEMS, INCORPORATED Consolidated Balance Sheets (in thousands, except share and per share data) December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 64,009 $ 68,412 Accounts receivable 322,862 302,501 Allowance for doubtful accounts ( 8,395 ) ( 8,965 ) Prepaid income taxes 13,066 12,812 Prepaid and other current assets 50,531 44,797 Total current assets 442,073 419,557 Property and equipment, net 33,798 40,100 Operating lease right-of-use assets 32,303 38,476 Intangible assets, net 213,959 248,787 Goodwill 2,367,179 2,269,336 Investments 25,764 23,480 Deferred income taxes 198,286 212,831 Other assets 86,445 67,283 Total assets $ 3,399,807 $ 3,319,850 Liabilities and Equity Current liabilities: Accounts payable $ 16,479 $ 18,094 Accruals and other current liabilities 536,417 457,348 Deferred revenues 245,729 253,785 Operating lease liabilities 11,656 11,645 Income taxes payable 4,053 9,491 Current portion of long-term debt — 10,000 Total current liabilities 814,334 760,363 Long-term debt 1,388,088 1,518,403 Deferred compensation plan liabilities 96,684 88,181 Long-term operating lease liabilities 26,894 30,626 Deferred revenues 16,641 15,862 Deferred income taxes 8,612 9,718 Income taxes payable 3,615 7,337 Other liabilities 3,819 5,378 Total liabilities 2,358,687 2,435,868 Commitments and contingencies (Note 18) Equity: Preferred stock, $ 0.01 par value, authorized 100,000,000 shares; none issued or outstanding as of December 31, 2024 and 2023 — — Class A common stock, $ 0.01 par value, authorized 100,000,000 shares; issued and outstanding 11,537,627 shares as of December 31, 2024 and 2023 115 115 Class B common stock, $ 0.01 par value, authorized 1,800,000,000 shares; issued and outstanding 290,439,703 and 284,728,210 shares as of December 31, 2024 and 2023, respectively 2,905 2,848 Additional paid-in capital 1,217,986 1,127,234 Accumulated other comprehensive loss ( 104,078 ) ( 84,987 ) Accumulated deficit ( 75,941 ) ( 161,932 ) Total Bentley Systems stockholders’ equity 1,040,987 883,278 Noncontrolling interest 133 704 Total equity 1,041,120 883,982 Total liabilities and equity $ 3,399,807 $ 3,319,850 See accompanying notes to consolidated financial statements. F-3 BENTLEY SYSTEMS, INCORPORATED Consolidated Statements of Operations (in thousands, except share and per share data) Year Ended December 31, 2024 2023 2022 Revenues: Subscriptions $ 1,223,362 $ 1,080,307 $ 960,220 Perpetual licenses 45,961 46,038 43,377 Subscriptions and licenses 1,269,323 1,126,345 1,003,597 Services 83,772 102,068 95,485 Total revenues 1,353,095 1,228,413 1,099,082 Cost of revenues: Cost of subscriptions and licenses 173,340 169,406 147,578 Cost of services 84,427 96,677 89,435 Total cost of revenues 257,767 266,083 237,013 Gross profit 1,095,328 962,330 862,069 Operating expense (income): Research and development 281,247 274,619 257,856 Selling and marketing 255,177 224,336 195,622 General and administrative 210,374 180,738 174,647 Deferred compensation plan 12,382 13,580 ( 15,782 ) Amortization of purchased intangibles 33,998 38,515 41,114 Total operating expenses 793,178 731,788 653,457 Income from operations 302,150 230,542 208,612 Interest expense, net ( 22,044 ) ( 39,793 ) ( 34,635 ) Other income (expense), net 12,949 ( 7,222 ) 24,298 Income before income taxes 293,055 183,527 198,275 (Provision) benefit for income taxes ( 58,726 ) 143,241 ( 21,283 ) Equity in net income (losses) of investees, net of tax 104 19 ( 2,212 ) Net income 234,433 326,787 174,780 Less: Net income (loss) attributable to noncontrolling interest ( 354 ) — — Net income attributable to Bentley Systems $ 234,787 $ 326,787 $ 174,780 Net income per share attributable to Bentley Systems stockholders: Basic $ 0.75 $ 1.05 $ 0.57 Diluted $ 0.72 $ 1.00 $ 0.55 Weighted average shares: Basic 314,886,615 312,358,823 309,226,677 Diluted 333,774,167 332,503,633 331,765,158 See accompanying notes to consolidated financial statements. F-4 BENTLEY SYSTEMS, INCORPORATED Consolidated Statements of Comprehensive Income (in thousands) Year Ended December 31, 2024 2023 2022 Net income $ 234,433 $ 326,787 $ 174,780 Other comprehensive (loss) income, net of taxes: Foreign currency translation adjustments ( 19,308 ) 4,774 1,459 Actuarial gain (loss) on retirement plan, net of tax effect of $( 45 ), $( 89 ), and $( 245 ), respectively 175 ( 21 ) 575 Total other comprehensive (loss) income, net of taxes ( 19,133 ) 4,753 2,034 Comprehensive income 215,300 331,540 176,814 Less: Net income (loss) attributable to noncontrolling interest ( 354 ) — — Less: Other comprehensive income (loss) attributable to noncontrolling interest ( 42 ) — — Comprehensive income attributable to Bentley Systems $ 215,696 $ 331,540 $ 176,814 See accompanying notes to consolidated financial statements. F-5 BENTLEY SYSTEMS, INCORPORATED Consolidated Statements of Equity (in thousands, except share data) Total Accumulated Bentley Class A and Class B Additional Other Systems Non- Common Stock Paid-In Comprehensive Accumulated Stockholders' Controlling Total Shares Par Value Capital Loss Deficit Equity Interest Equity Balance, December 31, 2021 282,526,719 $ 2,825 $ 937,805 $ ( 91,774 ) $ ( 439,634 ) $ 409,222 $ — $ 409,222 Net income — — — — 174,780 174,780 — 174,780 Other comprehensive income — — — 2,034 — 2,034 — 2,034 Dividends declared — — — — ( 34,353 ) ( 34,353 ) — ( 34,353 ) Shares issued in connection with DCP, net 3,541,375 35 ( 27 ) — ( 24,254 ) ( 24,246 ) — ( 24,246 ) DCP elective participant deferrals — — 6,580 — — 6,580 — 6,580 Shares issued in connection with Bonus Plan, net 445,050 5 21,920 — ( 5,197 ) 16,728 — 16,728 Shares issued in connection with employee stock purchase plan, net 307,406 3 10,332 — ( 273 ) 10,062 — 10,062 Stock option exercises, net 2,613,659 26 8,312 — ( 9,188 ) ( 850 ) — ( 850 ) Acquisition option exercises, net 185,178 2 ( 2 ) — — — — — Shares issued for stock grants, net 13,632 — 450 — — 450 — 450 Stock-based compensation expense — — 45,100 — — 45,100 — 45,100 Shares related to restricted stock, net 277,594 3 ( 4 ) — ( 4,491 ) ( 4,492 ) — ( 4,492 ) Repurchases of Class B common stock under approved program ( 896,126 ) ( 9 ) — — ( 28,241 ) ( 28,250 ) — ( 28,250 ) Other — — — — ( 15 ) ( 15 ) — ( 15 ) Noncontrolling interest acquired — — — — — — 704 704 Balance, December 31, 2022 289,014,487 2,890 1,030,466 ( 89,740 ) ( 370,866 ) 572,750 704 573,454 Net income — — — — 326,787 326,787 — 326,787 Other comprehensive income — — — 4,753 — 4,753 — 4,753 Dividends declared — — — — ( 58,756 ) ( 58,756 ) — ( 58,756 ) Shares issued in connection with DCP, net 3,410,006 34 ( 34 ) — ( 38,456 ) ( 38,456 ) — ( 38,456 ) DCP elective participant deferrals — — 1,765 — — 1,765 — 1,765 Shares issued in connection with Bonus Plan, net 247,867 3 16,788 — ( 5,756 ) 11,035 — 11,035 Shares issued in connection with employee stock purchase plan, net 315,840 3 9,985 — ( 845 ) 9,143 — 9,143 Stock option exercises, net 2,621,959 26 11,689 — ( 6,581 ) 5,134 — 5,134 Shares issued for stock grants, net 12,639 — 600 — — 600 — 600 Stock-based compensation expense — — 55,982 — — 55,982 — 55,982 Shares related to restricted stock, net 643,039 7 ( 7 ) — ( 7,299 ) ( 7,299 ) — ( 7,299 ) Other — — — — ( 160 ) ( 160 ) — ( 160 ) Balance, December 31, 2023 296,265,837 2,963 1,127,234 ( 84,987 ) ( 161,932 ) 883,278 704 883,982 Net income (loss) — — — — 234,787 234,787 ( 354 ) 234,433 Other comprehensive loss — — — ( 19,091 ) — ( 19,091 ) ( 42 ) ( 19,133 ) Dividends declared — — — — ( 72,115 ) ( 72,115 ) — ( 72,115 ) Shares issued in connection with DCP 4,707,845 47 ( 47 ) — — — — — DCP elective participant deferrals — — 188 — — 188 — 188 Shares issued in connection with Bonus Plan 282,340 3 14,473 — — 14,476 — 14,476 Shares issued in connection with employee stock purchase plan, net 253,578 2 11,226 — ( 348 ) 10,880 — 10,880 Stock option exercises, net 844,283 8 3,999 — ( 2,195 ) 1,812 — 1,812 Shares issued for stock grants, net 11,391 — 600 — — 600 — 600 Stock-based compensation expense — — 60,322 — — 60,322 — 60,322 Shares related to restricted stock, net 904,789 9 ( 9 ) — ( 9,966 ) ( 9,966 ) — ( 9,966 ) Repurchases of Class B common stock under approved program ( 1,292,733 ) ( 12 ) — — ( 64,347 ) ( 64,359 ) — ( 64,359 ) Other — — — — 175 175 ( 175 ) — Balance, December 31, 2024 301,977,330 $ 3,020 $ 1,217,986 $ ( 104,078 ) $ ( 75,941 ) $ 1,040,987 $ 133 $ 1,041,120 See accompanying notes to consolidated financial statements. F-6 BENTLEY SYSTEMS, INCORPORATED Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2024 2023 2022 Cash flows from operating activities: Net income $ 234,433 $ 326,787 $ 174,780 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization, and impairment 64,608 71,861 71,537 Deferred income taxes 12,571 ( 198,878 ) ( 5,126 ) Stock-based compensation expense 74,417 72,972 75,206 Deferred compensation plan 12,382 13,580 ( 15,782 ) Amortization of deferred debt issuance costs 7,338 7,291 7,291 Change in fair value of derivative ( 10 ) 5,038 ( 27,083 ) Foreign currency remeasurement (gain) loss ( 785 ) ( 452 ) 6,000 Other 7,794 21,047 2,593 Changes in assets and liabilities, net of effect from acquisitions: Accounts receivable ( 32,064 ) ( 5,180 ) ( 60,938 ) Prepaid and other assets ( 6,006 ) 4,112 14,053 Accounts payable, accruals, and other liabilities 74,953 68,733 29,181 Deferred revenues ( 1,789 ) 19,933 2,292 Income taxes payable, net of prepaid income taxes ( 12,550 ) 9,852 320 Net cash provided by operating activities 435,292 416,696 274,324 Cash flows from investing activities: Purchases of property and equipment and investment in capitalized software ( 14,046 ) ( 25,002 ) ( 18,546 ) Proceeds from sale of aircraft — — 2,380 Acquisitions, net of cash acquired ( 130,407 ) ( 26,023 ) ( 743,007 ) Purchases of investments ( 1,435 ) ( 11,602 ) ( 10,954 ) Proceeds from investments — 2,123 — Other 2,621 — — Net cash used in investing activities ( 143,267 ) ( 60,504 ) ( 770,127 ) Cash flows from financing activities: Proceeds from credit facilities 517,643 588,154 833,292 Payments of credit facilities ( 474,356 ) ( 841,723 ) ( 487,694 ) Payments of debt issuance costs ( 6,184 ) — — Settlement of convertible senior notes — — ( 1,998 ) Repayments of term loan ( 190,000 ) ( 5,000 ) ( 5,000 ) Payments of contingent and non-contingent consideration ( 3,022 ) ( 4,324 ) ( 8,460 ) Payments of dividends ( 72,115 ) ( 58,756 ) ( 34,493 ) Proceeds from stock purchases under employee stock purchase plan 11,228 9,988 10,335 Proceeds from exercise of stock options 4,007 11,715 8,338 Payments for shares acquired including shares withheld for taxes ( 12,504 ) ( 58,937 ) ( 43,561 ) Repurchases of Class B common stock under approved program ( 64,359 ) — ( 28,250 ) Other ( 188 ) ( 191 ) 525 Net cash (used in) provided by financing activities ( 289,850 ) ( 359,074 ) 243,034 Effect of exchange rate changes on cash and cash equivalents ( 6,578 ) ( 390 ) ( 4,884 ) Decrease in cash and cash equivalents ( 4,403 ) ( 3,272 ) ( 257,653 ) Cash and cash equivalents, beginning of year 68,412 71,684 329,337 Cash and cash equivalents, end of year $ 64,009 $ 68,412 $ 71,684 F-7 BENTLEY SYSTEMS, INCORPORATED Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2024 2023 2022 Supplemental information: Cash paid for income taxes $ 59,745 $ 43,619 $ 29,478 Income tax refunds 2,219 1,188 3,588 Interest paid 17,202 37,389 26,581 Non-cash investing and financing activities: Cost method investment — 3,500 5,936 Contingent acquisition consideration — — 1,390 Deferred, non-contingent consideration, net — 525 749 Share-settled Bonus Plan awards 14,476 16,791 21,925 DCP elective participant deferrals 188 1,765 6,580 See accompanying notes to consolidated financial statements. F-8 BENTLEY SYSTEMS, INCORPORATED Notes to Consolidated Financial Statements (in thousands, except share and per share data) Note 1: Description of Business and Summary of Significant Accounting Policies Business and Operations Bentley Systems is the infrastructure engineering software company. The Company’s purpose is to advance the world’s infrastructure for better quality of life. 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. The Company serves enterprises and professionals across the infrastructure lifecycle by improving project delivery and asset performance. The Company’s Bentley Open engineering applications and Seequent geoprofessional applications are primarily cloud-connected desktop modeling and simulation applications that support the breadth of engineering and geoprofessional disciplines. Bentley Infrastructure Cloud , provided via cloud and hybrid environments, extends enterprise collaboration during project delivery, and helps manage engineering information during operations and maintenance. Bentley Asset Analytics solutions automatically detect and analyze issues to trigger key operational workflows, improving overall asset performance. Powering these products is our Cesium and iTwin Platform , the Company’s cloud‑native technology platform to create, curate, and leverage infrastructure digital twins, which was augmented through the acquisition of Cesium in September 2024. Through the Company’s platform, existing products are becoming increasingly iTwin -enabled to take advantage of digital twin capabilities, and the Company is developing a new generation of iTwin -native, data-centric applications that leverage AI to increase engineering productivity. Basis of Presentation and Consolidation The accompanying consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. The consolidated financial statements and accompanying notes have been prepared in U.S. dollars and in accordance with GAAP. The Company is party to joint ventures, which are accounted for using the equity method. All intercompany accounts and transactions have been eliminated in consolidation. 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. The assets and liabilities of foreign subsidiaries are translated from their respective functional currencies into U.S. dollars at the rates in effect at the balance sheet date, and revenue and expense amounts are translated at average rates during the period. Foreign currency translation adjustments are recorded as a component of Other comprehensive income (loss), net of taxes in the consolidated statements of comprehensive income. Accounting Policies 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. 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. Below is a discussion of accounting policies and methods used in our consolidated financial statements that are not presented within other footnotes. F-9 Cost of Revenues — Cost of subscriptions and licenses in the consolidated statements of operations primarily include headcount‑related costs, as well as cloud‑related costs incurred for servicing the Company’s customers using cloud provisioned solutions and the Company’s license administration platform. Cost of subscriptions and licenses also include channel partner compensation for providing sales coverage to users, depreciation of property and equipment, and amortization of capitalized software costs associated with servicing software subscriptions and the Company’s ACDP described below, and amortization of intangible assets associated with acquired software and technology. Cost of services in the consolidated statements of operations 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. 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. Under its ACDP (the Company’s structured approach to an in‑house business incubator function), the Company capitalizes certain development costs related to certain projects once technological feasibility is established. Technological feasibility is established when a detailed program design has been completed and documented, the Company has established that the necessary skills, hardware, and software technology are available to produce the product, and there are no unresolved high‑risk development issues. Once the software is ready for its intended use, amortization is recorded over the software’s estimated useful life (generally three years ). For the years ended December 31, 2024, 2023, and 2022, total costs capitalized under the ACDP were $ 3,878 , $ 4,558 , and $ 7,060 , respectively. Additionally, for the years ended December 31, 2024, 2023, and 2022, total ACDP related amortization recorded in Cost of subscriptions and licenses in the consolidated statements of operations was $ 3,720 , $ 7,711 , and $ 6,626 , respectively. 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. No impairment of capitalized ACDP costs occurred for the years ended December 31, 2024 or 2022. 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. As of December 31, 2024 and 2023, $ 12,961 and $ 13,148 of ACDP capitalized costs were recorded in Other assets in the consolidated balance sheets, respectively. Advertising Expense — The Company expenses advertising costs as incurred. Advertising expense of $ 6,383 , $ 5,365 , and $ 6,888 is included in Selling and marketing in the consolidated statements of operations for the years ended December 31, 2024, 2023, and 2022, respectively. 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. As of December 31, 2024 and 2023, all of the Company’s cash and cash equivalents consisted of money market funds and cash held in checking accounts maintained at various financial institutions. Cash equivalents are recorded at cost, which approximates fair value. 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 accounts receivable (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. 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. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. F-10 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. 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: Year Ended December 31, 2024 2023 Balance, beginning of year $ 8,965 $ 9,303 Additions to reserve 7,365 6,651 Write-offs, net of recoveries ( 7,634 ) ( 7,106 ) Foreign currency translation adjustments ( 301 ) 117 Balance, end of year $ 8,395 $ 8,965 Concentration of Credit Risk — Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of its cash and cash equivalents, and receivables. To reduce credit risk, the Company performs ongoing credit evaluations of its customers and limits the amount of credit extended when deemed necessary. Generally, the Company requires no collateral from its customers. 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. No single customer accounted for more than 2% of the Company’s total revenues for the years ended December 31, 2024, 2023, or 2022. 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. Internal-Use Software Implementation Costs — The Company has entered into cloud-based software hosting arrangements related to new internal-use information technology systems, including a new enterprise resource planning system, human capital management system, and customer relationship management system for which it incurs implementation costs. Certain costs are capitalized and included in Prepaid and other current assets or Other assets in the consolidated balance sheets, depending on the short- or long-term nature of such costs. Costs incurred during the preliminary project stage and post-implementation stage are expensed as incurred. Capitalized internal-use software implementation costs are amortized, beginning on the date the related software is ready for its intended use, on a straight-line basis over the remaining term of the hosting arrangement primarily as a component of General and administrative in the consolidated statements of operations. Options to extend the hosting arrangement are considered in determining the remaining term when it is reasonably certain that the option will be exercised. As of December 31, 2024 and 2023, capitalized internal-use software implementation costs were $ 18,791 and $ 4,779 , respectively. Note 2: Recent Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024‑03, Income Statements–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024‑03”), which requires enhanced disclosure of income statement expense categories to improve transparency and provide financial statement users with more detailed information about the nature, amount, and timing of expenses impacting financial performance. ASU 2024-03 is effective for the Company for the annual reporting period beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments in ASU 2024-03 may be adopted either on a prospective basis to financial statements issued for reporting periods after the effective date or on a retrospective basis to all periods presented. The Company is currently evaluating the impact of the adoption of ASU 2024‑03, however, other than additional disclosure, the Company does not expect a change to the consolidated financial statements. F-11 In March 2024, the SEC adopted the final rule under SEC Release No. 33‑11275, The Enhancement and Standardization of Climate‑Related Disclosures for Investors . The final rule requires registrants to disclose certain climate‑related information in registration statements and annual reports. The final rule disclosure requirements will begin phasing in prospectively for the Company’s fiscal year beginning January 1, 2025. Subsequent to issuance, the final rule became the subject of litigation and the SEC issued a stay to allow the legal process to proceed. The Company is currently evaluating the impact of the final rule on its consolidated financial statements disclosures. In December 2023, the FASB issued ASU No. 2023‑09, Income Taxes (Topic 740): 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. and foreign jurisdictions. ASU 2023‑09 is effective for the Company for the annual reporting period beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2023‑09 on its consolidated financial statements and related disclosures. Recently Adopted Accounting Guidance In November 2023, the FASB issued ASU No. 2023‑07, Segment Reporting (Topic 280): 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, segment profit or loss, and how the Company’s CODM uses reported segment profit or loss information in assessing segment performance and allocating resources on an interim and annual basis. The Company adopted this ASU during the year ended December 31, 2024 (see Note 19). Note 3: Revenue from Contracts with Customers Disaggregation of Revenues The Company’s revenues consist of the following: Year Ended December 31, 2024 2023 2022 Subscriptions: Enterprise subscriptions (1) $ 530,367 $ 433,321 $ 345,678 SELECT subscriptions 258,504 258,288 264,308 Term license subscriptions 434,491 388,698 350,234 Subscriptions 1,223,362 1,080,307 960,220 Perpetual licenses 45,961 46,038 43,377 Subscriptions and licenses 1,269,323 1,126,345 1,003,597 Services: Recurring 14,642 16,370 17,804 Other 69,130 85,698 77,681 Services 83,772 102,068 95,485 Total revenues $ 1,353,095 $ 1,228,413 $ 1,099,082 (1) Enterprise subscriptions are primarily revenues attributable to E365 subscriptions of $ 517,997 , $ 411,025 , and $ 306,901 for the years ended December 31, 2024, 2023, and 2022, respectively. 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. For the years ended December 31, 2024, 2023, and 2022, the Company recognized $ 679,811 , $ 592,737 , and $ 513,736 of license related revenues, respectively, of which $ 633,850 , $ 546,699 , and $ 470,359 , 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. F-12 Revenue from external customers is attributed to individual countries based upon the location of the customer. Revenues by geographic region are as follows: Year Ended December 31, 2024 2023 2022 Americas (1) $ 717,002 $ 650,926 $ 584,794 EMEA 388,384 353,550 312,804 APAC 247,709 223,937 201,484 Total revenues $ 1,353,095 $ 1,228,413 $ 1,099,082 (1) Americas includes the U.S., Canada, and Latin America (including the Caribbean). Revenue attributable to the U.S. totaled $ 561,683 , $ 511,828 , and $ 459,511 for the years ended December 31, 2024, 2023, and 2022, respectively. 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. 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. The Company derived 7 %, 8 %, and 8 % of its total revenues through channel partners for the years ended December 31, 2024, 2023, and 2022, respectively. Nature of Products and Services 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. Subscriptions and perpetual licenses are typically paid upfront, and services are typically paid in arrears, based on the contract terms as described below, generally with payment terms of 30 days. The Company does not have any material variable consideration, such as obligations for returns, refunds, or warranties. Subscriptions 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. 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. E365 revenues are recognized based upon usage incurred by the account. Usage is primarily defined as distinct user access on a daily basis. E365 subscriptions can contain quarterly usage floors or ceilings. The term of E365 subscriptions aligns with calendar quarters and revenue is recognized based on actual usage. 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. 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. SELECT subscriptions revenues are recognized as distinct performance obligations are satisfied. The performance obligations within the SELECT offering, outside of the portfolio balancing exchange right, are concurrently delivered and have the same pattern of recognition. These performance obligations are accounted for ratably over the term as a single performance obligation. F-13 Term License Subscriptions 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. Revenue is allocated to the various performance obligations based on their SSP. Annual term licenses (“ATL”) are generally prepaid annually for named user access to specific products and include the Company’s Virtuoso subscriptions sold via the Company’s Virtuosity eStore for practitioner licenses. Virtuoso subscriptions are bundles with customizable training and expert consultation administered through “keys” or credits. Quarterly term license (“QTL”) subscriptions allow accounts to pay quarterly in arrears for license usage that is beyond their prepaid subscriptions. 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. 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. For Virtuoso keys, revenue is recognized as services are delivered. For usage‑based QTL and MTL subscriptions, revenues are recognized based upon usage incurred by the account. Usage is defined as peak usage over the respective terms. The terms of QTL and MTL subscriptions align with calendar quarters and calendar months, respectively, and revenue is recognized based on actual usage. Visas are QTLs or ATLs enabling users to access specific project or enterprise information and entitles users to certain functionality of the Company’s ProjectWise and AssetWise systems. The Company’s standard offerings are usage based with monetization through the Company’s CSS program as described below. CSS is a program designed to streamline the procurement, administration, and payment process. The program requires an estimation of annual usage for CSS eligible offerings and a deposit of funds in advance. Actual consumption is monitored and invoiced against the deposit on a calendar quarter basis. CSS balances not utilized for eligible products or services may roll over to future periods or are refundable. Paid and unconsumed CSS balances are recorded in Accruals and other current liabilities in the consolidated balance sheets. Software and services consumed under CSS are recognized pursuant to the applicable revenue recognition guidance for the respective software or service and classified as subscriptions or services based on their respective nature. Perpetual Licenses Perpetual licenses may be sold with or without attaching a SELECT subscription. Historically, attachment and retention of the SELECT subscription has been high given the benefits of the SELECT subscription discussed above. Perpetual licenses revenues are recognized upon delivery of the license to the user. Services The Company provides professional services, including training, implementation, configuration, customization, and strategic consulting services. The Company performs projects on both a time and materials and a fixed fee basis. Certain of the Company’s fixed‑fee arrangements, including its Success Services offerings, are structured as subscription‑like, packaged offerings that are annually recurring in nature. Success Services are standard service offerings that provide a level of dedicated professional services above the standard technical support offered to all accounts as part of their SELECT or enterprise agreement. Revenues are recognized as services are performed. F-14 Significant Judgments and Estimates The Company’s contracts with customers may include promises to transfer licenses (perpetual or term‑based), maintenance, and services to a user. Judgment is required to determine if the promises are separate performance obligations, and if so, the allocation of the transaction price to each performance obligation. When an arrangement includes multiple performance obligations which are concurrently delivered and have the same pattern of transfer to the customer, the Company accounts for those performance obligations as a single performance obligation. For contracts with more than one performance obligation, the transaction price is allocated among the performance obligations in an amount that depicts the relative SSP of each obligation. Judgment is required to determine the SSP for each distinct performance obligation. In instances where SSP is not directly observable, such as when the Company does not sell the product or service separately, the Company determines the SSP using information that may include market conditions and other observable inputs. The Company uses a range of amounts to estimate SSP when it sells each of the products and services separately and needs to determine whether there is a discount that should be allocated based on the relative SSP of the various products and services. The Company’s SELECT agreement provides users with perpetual licenses a right to exchange software for other eligible perpetual licenses on an annual basis upon renewal. The Company refers to this option as portfolio balancing and has concluded that the portfolio balancing feature represents a material right resulting in the deferral of the associated revenue. Judgment is required to estimate the percentage of users who may elect to portfolio balance and considers inputs such as historical user elections. This feature is available once per term and must be exercised prior to the respective renewal term. The Company recognizes the associated revenue upon election or when the portfolio balancing right expires. 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. Unbilled Accounts Receivable Unbilled accounts receivable represent amounts that are unbilled due to agreed-upon contractual terms in which billing occurs subsequent to revenue recognition, and are included in Accounts receivable in the consolidated balance sheets. As of December 31, 2024 and 2023, unbilled accounts receivable were $ 159,924 and $ 129,494 , respectively. Contract Balances As of December 31, 2024 and 2023, 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. Contract assets were not material as of December 31, 2024 or 2023. Deferred revenues consist of billings made or payments received in advance of revenue recognition from subscriptions and services. The primary changes in the Company’s deferred revenues are due to our performance under the contracts and new billings made or payments received in advance of revenue recognition from subscriptions and services. The satisfaction of performance obligations typically lags behind payments received under revenue from contracts with customers. For the year ended December 31, 2024, $ 231,114 of revenues that were included in the December 31, 2023 deferred revenues balance were recognized. There were additional deferrals of $ 233,910 , which were primarily related to new billings. For the year ended December 31, 2023, $ 213,021 of revenues that were included in the December 31, 2022 deferred revenues balance were recognized. There were additional deferrals of $ 237,193 , which were primarily related to new billings and acquisitions. As of December 31, 2024 and 2023, the Company deferred $ 18,540 and $ 18,269 , respectively, related to portfolio balancing exchange rights which is included in Deferred revenues in the consolidated balance sheets. F-15 Costs to Obtain a Contract with a Customer 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. The contract costs are amortized based on the economic life of the goods and services to which the contract costs relate. The Company has determined that costs under certain sales incentive programs meet the requirements to be capitalized. 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. 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. As of December 31, 2024 and 2023, deferred costs of $ 4,490 and $ 4,958 , respectively, were included in Prepaid and other current assets in the consolidated balance sheets and $ 10,715 and $ 10,242 , respectively, were included in Other assets in the consolidated balance sheets. Amortization expense related to assets recognized from costs to obtain a contract with a customer was $ 5,241 , $ 5,567 , and $ 3,898 and is included in Cost of subscriptions and licenses and Selling and marketing in the consolidated statements of operations for the years ended December 31, 2024, 2023, and 2022, respectively. Impairments of contract cost assets were not material during the years ended December 31, 2024, 2023, or 2022. Remaining Performance Obligations The Company’s contracts with customers include amounts allocated to performance obligations that will be satisfied at a later date. As of December 31, 2024, amounts allocated to these remaining performance obligations are $ 262,370 , of which the Company expects to recognize approximately 94 % over the next 12 months with the remaining amount thereafter. Note 4: Acquisitions The aggregate details of the Company’s acquisition activity are as follows: Acquisitions Completed During Year Ended December 31, 2024 2023 2022 Number of acquisitions 3 3 6 Cash paid at closing (1) $ 143,299 $ 26,287 $ 763,228 Cash acquired ( 12,892 ) ( 264 ) ( 20,221 ) Net cash paid $ 130,407 $ 26,023 $ 743,007 (1) Of the cash paid at closing, $ 11,000 was held in an escrow account to secure any potential indemnification and other obligations of the seller as of December 31, 2024. 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. The operating results of the acquired businesses were not material, individually or in the aggregate, to the Company’s consolidated statements of operations. F-16 The fair value of non-contingent consideration from acquisitions is included in the consolidated balance sheets as follows: December 31, 2024 2023 Accruals and other current liabilities $ — $ 3,576 Non-contingent consideration from acquisitions $ — $ 3,576 The operating results of the acquired businesses are included in the Company’s consolidated financial statements from the closing date of each respective acquisition. 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): Acquisitions Completed During Year Ended December 31, 2024 2023 2022 Consideration: Cash paid at closing $ 143,299 $ 26,287 $ 763,228 Contingent consideration — — 1,390 Deferred, non-contingent consideration, net — 525 749 Other 108 15 ( 269 ) Total consideration $ 143,407 $ 26,827 $ 765,098 Assets acquired and liabilities assumed: Cash $ 12,892 $ 264 $ 20,221 Accounts receivable and other current assets 6,102 1,742 8,890 Operating lease right-of-use assets 103 397 1,237 Property and equipment — — 1,316 Deferred income taxes — 2,151 — Other assets 86 6 7 Software and technology (weighted average useful life of 5 , 3 , and 5 years, respectively) 7,025 3,077 10,608 Customer relationships (weighted average useful life of 3 , 6 , and 10 years, respectively) 284 3,900 82,278 Trademarks (weighted average useful life of 10 , 5 and 8 years, respectively) 5,145 1,000 6,972 Total identifiable assets acquired excluding goodwill 31,637 12,537 131,529 Accruals and other current liabilities ( 5,778 ) ( 624 ) ( 4,079 ) Deferred revenues ( 2,427 ) ( 4,623 ) ( 14,176 ) Operating lease liabilities ( 103 ) ( 397 ) ( 1,237 ) Deferred income taxes ( 136 ) — ( 5,745 ) Total liabilities assumed ( 8,444 ) ( 5,644 ) ( 25,237 ) Net identifiable assets acquired excluding goodwill 23,193 6,893 106,292 Goodwill 120,214 19,934 658,806 Net assets acquired $ 143,407 $ 26,827 $ 765,098 F-17 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. The fair values of the intangible assets were primarily determined using the income approach. When applying the income approach, indications of fair values were developed by discounting future net cash flows to their present values at market‑based rates of return. 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. Goodwill is measured as the excess of the purchase price over the value of net identifiable assets acquired. 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. 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. 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. The Company expects $ 26,444 of the goodwill recorded relating to the 2024 acquisitions will be deductible for income tax purposes. The Company is in the process of finalizing the purchase accounting for certain acquisitions completed during the year ended December 31, 2024. The initial accounting for these business combinations is not complete because the evaluation necessary to assess the fair values of certain net assets acquired is still in process. The provisional amounts are subject to revision until the evaluations are completed to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. The allocation of the purchase price may be modified from the date of the acquisition as more information is obtained about the fair values of assets acquired and liabilities assumed, however, such measurement period cannot exceed one year. The primary areas of preliminary purchase price allocation that are not yet finalized are amounts for tax assets and liabilities and residual goodwill. Note 5: Property and Equipment, Net Property and equipment, net consist of the following: December 31, 2024 2023 Land $ 1,341 $ 2,811 Building and improvements 32,115 31,025 Computer equipment and software 50,696 46,202 Furniture, fixtures, and equipment 9,183 9,799 Aircraft 2,038 2,038 Other 40 89 Property and equipment, at cost 95,413 91,964 Less: Accumulated depreciation ( 61,615 ) ( 51,864 ) Total property and equipment, net $ 33,798 $ 40,100 Depreciation expense for the years ended December 31, 2024, 2023, and 2022 was $ 13,684 , $ 12,368 , and $ 10,706 , respectively. F-18 Property and equipment are recorded at cost less accumulated depreciation. Depreciation is calculated using the straight‑line method over the estimated useful lives of the assets. Leasehold improvements are depreciated over the shorter of the estimated useful life of the leasehold improvements or the lease term. Land is not depreciated. 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. Estimated useful lives of property and equipment are as follows: Useful Life Building and improvements 25 years Computer equipment and software 3 years Furniture, fixtures, and equipment 5 years Aircraft 6 years Automobiles 3 years Cost of maintenance and repairs is charged to expense as incurred. 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. 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. 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. 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. Impairments of property and equipment were not material during the years ended December 31, 2024 or 2023. No impairment of property and equipment occurred for the year ended December 31, 2022. 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. 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 (expense), 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. Such costs were not material during the years ended December 31, 2024, 2023, and 2022. The Company determined this transaction was with a related party. Note 6: Goodwill and Other Intangible Assets The Company’s intangible assets primarily arise from acquisitions and principally consist of goodwill, trademarks, customer relationships, and acquired software and technology. Intangible assets, other than goodwill, are amortized on a straight‑line basis over their estimated useful lives. F-19 Goodwill The changes in the carrying amount of goodwill are as follows: Balance, December 31, 2022 $ 2,237,184 Acquisitions 19,934 Foreign currency translation adjustments 11,732 Other adjustments 486 Balance, December 31, 2023 2,269,336 Acquisitions 120,214 Foreign currency translation adjustments ( 21,538 ) Other adjustments ( 833 ) Balance, December 31, 2024 $ 2,367,179 Goodwill consists of the excess of cost over the fair value of net assets acquired in business combinations. 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. The Company allocates goodwill to reporting units on a relative fair value basis. 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. 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. There was no impairment of goodwill as a result of the Company’s annual impairment assessments conducted for the years ended December 31, 2024, 2023, or 2022. Other Intangible Assets Details of intangible assets other than goodwill are as follows: December 31, 2024 December 31, 2023 Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value Intangible assets subject to amortization: Software and technology 3 - 5 years $ 86,578 $ ( 61,671 ) $ 24,907 $ 89,693 $ ( 59,045 ) $ 30,648 Customer relationships 3 - 10 years 315,773 ( 162,175 ) 153,598 323,442 ( 142,378 ) 181,064 Trademarks 3 - 10 years 74,034 ( 38,593 ) 35,441 70,710 ( 33,709 ) 37,001 Non-compete agreements 5 years 350 ( 337 ) 13 350 ( 276 ) 74 Total intangible assets $ 476,735 $ ( 262,776 ) $ 213,959 $ 484,195 $ ( 235,408 ) $ 248,787 The aggregate amortization expense for purchased intangible assets with finite lives was reflected in the Company’s consolidated statements of operations as follows: Year Ended December 31, 2024 2023 2022 Cost of subscriptions and licenses $ 12,681 $ 12,704 $ 12,478 Amortization of purchased intangibles 33,998 38,515 41,114 Total amortization expense $ 46,679 $ 51,219 $ 53,592 F-20 Amortization expense for the years following December 31, 2024 are estimated as follows: 2025 $ 45,779 2026 37,276 2027 29,855 2028 28,994 2029 27,440 Thereafter 44,615 $ 213,959 Intangible assets other than goodwill are 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. In testing intangible assets other than goodwill for impairment, the Company may first qualitatively assess whether it is more likely than not (a likelihood of more than 50 percent) that an intangible asset impairment exists. If it is determined that a quantitative assessment is required, the Company will evaluate the cash flows generated by the underlying asset, including estimated future operation results, trends, or other determinants of fair value. If the total of the expected future undiscounted cash flows were less than the carrying amount of the asset, the Company would recognize an impairment charge to the extent the carrying amount of the asset exceeded its estimated fair value. There was no impairment of intangible assets for the years ended December 31, 2024, 2023, or 2022. Note 7: Investments Investments consist of the following: December 31, 2024 2023 Cost method investments $ 23,289 $ 21,044 Equity method investments 2,475 2,436 Total investments $ 25,764 $ 23,480 Cost Method 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. 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. The Company’s share of income or loss of such companies is not included in the Company’s consolidated statements of operations. The Company invests in technology development companies, generally in the form of equity interests or convertible notes. 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. The non‑cash contribution of the Thread business resulted in an insignificant gain, which was recorded in Other income (expense), net in the consolidated statements of operations for the year ended December 31, 2023. 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. The non‑cash contribution of Streetlytics resulted in an insignificant gain, which was recorded in Other income (expense), net in the consolidated statements of operations for the year ended December 31, 2022. F-21 The Company tests its investments for impairment whenever circumstances indicate that the carrying value of the investment may not be recoverable. Impairment of investments was not material during the year ended December 31, 2024. 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. The impairment charges included $ 11,130 to write‑off the Company’s investment in Teralytics. The impairment charges were recorded in Other income (expense), net in the consolidated statements of operations for the year ended December 31, 2023 (see Note 20). No impairment of investments occurred for the year ended December 31, 2022. During the year ended December 31, 2023, the Company recognized gains on investments of $ 2,360 , which were recorded in Other income (expense), net in the consolidated statements of operations (see Note 20). During the year ended December 31, 2024, the Company invested a total of $ 1,435 . 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. As of December 31, 2024 and 2023, the Company’s investment balance in Worldsensing was $ 8,928 . During the second quarter of 2024, the Company acquired a business from Teralytics for $ 5,000 . During the fourth quarter of 2024, the Company sold its ownership percentage in Teralytics, which resulted in no gain. The carrying value of Teralytics was zero as of December 31, 2023. Equity Method Investments 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. 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. In addition, the Company decreases the carrying value by any dividends received from the investee. The Company does not otherwise adjust the carrying value to reflect changes to the fair market value of the investment. The Company’s equity method investments in joint ventures are considered related parties. No investments were made during the year ended December 31, 2024. During the year ended December 31, 2023, the Company invested $ 2,261 . During the years ended December 31, 2024 and 2023, transactions between the Company and its joint ventures were not material to the Company’s consolidated financial statements. Note 8: Leases The Company’s operating leases consist of office facilities, office equipment, and automobiles. As of December 31, 2024, the Company’s leases have remaining terms of less than one year to nine 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 . The Company determines if an arrangement is a lease at inception. 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. 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. 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. 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. 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. The operating lease right‑of‑use assets also include any lease payments made and are reduced by any lease incentives. 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. Lease expense for lease payments is recognized on a straight‑line basis over the lease term. F-22 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. 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. Variable lease cost may include common area maintenance, property taxes, and utilities. 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). 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: Year Ended December 31, 2024 2023 2022 Operating lease cost (1) $ 17,890 $ 20,008 $ 20,772 Variable lease cost 4,681 4,594 4,658 Short-term lease cost — — 16 Total operating lease cost $ 22,571 $ 24,602 $ 25,446 (1) Operating lease cost includes rent cost related to operating leases for office facilities of $ 16,927 , $ 19,199 , and $ 20,027 for the years ended December 31, 2024, 2023, and 2022, respectively. Supplemental operating cash flows and other information related to leases was as follows: Year Ended December 31, 2024 2023 2022 Cash paid for operating leases included in operating cash flows $ 14,345 $ 17,899 $ 19,587 Right-of-use assets obtained in exchange for new operating lease liabilities (1) $ 11,341 $ 17,015 $ 10,722 (1) Right‑of‑use assets obtained in exchange for new operating lease liabilities does not include the impact from acquisitions of $ 103 , $ 397 , and $ 1,237 for the years ended December 31, 2024, 2023, and 2022, respectively. The weighted average remaining lease term for operating leases was 4.3 years and 4.6 years as of December 31, 2024 and 2023, respectively. The weighted average discount rate was 5.2 % and 4.8 % as of December 31, 2024 and 2023, respectively. Maturities of operating lease liabilities are as follows: December 31, 2024 2025 $ 13,587 2026 10,236 2027 7,335 2028 5,127 2029 3,483 Thereafter 4,002 Total future lease payments 43,770 Less: Imputed interest ( 5,220 ) Total operating lease liabilities $ 38,550 As of December 31, 2024, the Company had additional minimum operating lease payments of $ 496 for executed leases that have not yet commenced, primarily for office locations. F-23 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. 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. 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. During the year ended December 31, 2024 and 2023, the Company recognized impairment charges of $ 2,823 and $ 2,239 , respectively, to write‑down certain right‑of‑use assets to their fair value primarily as a result of the decision to vacate certain leased facilities. The impairment charges were recorded within various cost of revenues and operating expense line items in the consolidated statements of operations based on the function of the associated right‑of‑use asset. No impairment of right‑of‑use assets occurred for the years ended December 31, 2022. Note 9: Accruals and Other Current Liabilities Accruals and other current liabilities consist of the following: December 31, 2024 2023 Cloud Services Subscription deposits $ 366,895 $ 284,276 Accrued compensation 47,121 43,316 Accrued benefits 40,762 39,983 Due to customers 16,995 16,924 Accrued indirect taxes 9,769 10,722 Accrued acquisition stay bonus 7,536 4,336 Accrued professional fees 5,854 5,970 Employee stock purchase plan contributions 5,577 5,790 Accrued cloud provisioning costs 4,579 3,572 Deferred compensation plan liabilities 3,798 2,355 Accrued realignment costs — 12,459 Non-contingent consideration from acquisitions — 3,576 Other accrued and current liabilities 27,531 24,069 Total accruals and other current liabilities $ 536,417 $ 457,348 Note 10: Long-Term Debt Long‑term debt consists of the following: December 31, 2024 2023 Credit facilities: Revolving loan facility due October 2029 $ 135,315 $ — Revolving loan facility due November 2025 — 92,028 Term loan due November 2025 — 190,000 2026 Notes 687,830 687,830 2027 Notes 575,000 575,000 Unamortized debt issuance costs ( 10,057 ) ( 16,455 ) Total debt 1,388,088 1,528,403 Less: Current portion of long-term debt — ( 10,000 ) Long-term debt $ 1,388,088 $ 1,518,403 F-24 Credit Facilities On October 18, 2024, the Company entered into the Credit Facility, which provides the Company with a $ 1,300,000 revolving credit facility, including a $ 125,000 swingline loan and $ 125,000 in letters of credit. The Credit Facility also provides the Company with a $ 500,000 “accordion” feature to increase the facility in the form of both revolving indebtedness and/or incremental term loans. On October 18, 2024, the Company used borrowings under the Credit Facility to repay a portion of the revolving indebtedness outstanding under the 2017 Credit Facility and all of the outstanding senior secured term loan. In connection with the termination of the 2017 Credit Facility and entrance into the Credit Facility, the Company performed an extinguishment versus modification assessment on a lender-by-lender basis resulting in the write-off of an insignificant amount of unamortized debt issuance costs. Additionally, $ 6,184 of capitalized fees paid to lenders and third parties associated with the Credit Facility were recorded in Prepaid and other current assets or Other assets in the consolidated balance sheets, depending on the short- or long-term nature of such costs. Debt issuance costs are amortized to Interest expense, net , in the consolidated statements of operations through the maturity date. The Credit Facility matures on October 18, 2029, subject to a “revolving maturity date” on the date that is 91 days prior to the maturity date of the Company’s outstanding convertible debt, unless on such date the Company meets certain liquidity requirements. Voluntary prepayments under the Credit Facility are permitted at any time without payment of any prepayment premiums. Revolving loan borrowings under the Credit Facility bear interest, at the Company’s option, at the Alternative Base Rate or Term SOFR that reset every one, three, or six months. Under the Term SOFR elections, revolving loan borrowings bear an interest rate of the applicable Term SOFR rate plus a credit spread adjustment of 10 bps, plus a spread ranging from 125 bps to 225 bps as determined by the Company’s net leverage ratio. 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 daily simple SOFR rate plus 100 bps, plus a spread ranging from 25 bps to 125 bps as determined by the Company’s net leverage ratio. Swingline borrowings under the Credit Facility bear interest that resets daily. Interest on swingline borrowings bear an interest rate of the daily simple SOFR rate plus a credit spread adjustment of 10 bps, plus a spread ranging from 125 bps to 225 bps as determined by the Company’s net leverage ratio. In addition, a commitment fee for the unused revolving credit facility ranges from 20 bps to 30 bps per annum as determined by the Company’s net leverage ratio. Borrowings under the Credit Facility are guaranteed by the Company’s material first tier domestic subsidiaries and are secured by a first priority security interest in substantially all of the Company’s and the guarantors’ U.S. assets, including pledges of the stock of each of their directly owned domestic and foreign subsidiaries, with the latter limited to 65 % of such stock. The agreement governing the Credit Facility contains customary affirmative and negative covenants, including restrictions on our ability to pay dividends, repurchase our Class B common stock, 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 $ 100,000 , 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. The Credit Facility also contains customary financial covenants, including net leverage ratio, net senior secured leverage ratio, and interest coverage ratio. Prior to entering into the Credit Facility, the Company’s 2017 Credit Facility provided for an $ 850,000 senior secured revolving loan facility that was scheduled to mature on November 15, 2025. F-25 On December 22, 2021, the Company amended the 2017 Credit Facility to provide for a $ 200,000 senior secured term loan with a maturity of November 15, 2025 (the “Term Loan”). The Term Loan required principal repayment at the end of each calendar quarter. Beginning with March 31, 2022 and ending with December 31, 2023, the Company was required to repay $ 1,250 per quarter. Beginning with March 31, 2024 and ending with the last such date prior to the maturity date, the Company was required to repay $ 2,500 per quarter. 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. The Company had $ 150 of letters of credit outstanding and $ 1,164,535 available under the Credit Facility as of December 31, 2024. The Company had $ 150 of letters of credit outstanding and $ 757,822 available under the 2017 Credit facility as of December 31, 2023. As of December 31, 2024 and 2023, the Company was in compliance with all covenants in its credit facilities. Convertible Senior Notes 2026 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 were issued pursuant to an indenture, dated as of January 26, 2021, between the Company and Wilmington Trust, National Association, as trustee (the “2026 Trustee”) (the “2026 Indenture”). Interest will accrue from January 26, 2021 and will be payable semi‑annually in arrears in cash on January 15 and July 15 of each year, with the first payment due on July 15, 2021. The 2026 Notes will mature on January 15, 2026, unless earlier converted, redeemed or repurchased. 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 (expense), 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). Prior to October 15, 2025, the 2026 Notes will be convertible at the option of the holder only under the following circumstances: (1) during any calendar quarter (and only during such quarter) commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per share of the Company’s Class B common stock exceeds 130 % of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any ten consecutive trading day period (such ten consecutive trading day period, the “measurement period”) in which the trading price per $1 principal amount of 2026 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of the Company’s Class B common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s Class B common stock, as described in the 2026 Indenture; and (4) if the Company calls the 2026 Notes for redemption. On or after October 15, 2025 until 5:00 p.m., New York City time, on the second scheduled trading day immediately before the maturity date, the 2026 Notes will be convertible at the option of the holder at any time. The Company will settle conversions by paying or delivering, as applicable, cash, shares of the Company’s Class B common stock, or a combination of cash and shares of the Company’s Class B common stock, at the Company’s election, based on the applicable conversion rate. The initial conversion rate is 15.5925 shares of the Company’s Class B common stock per $1 principal amount of 2026 Notes, which represents an initial conversion price of approximately $ 64.13 per share, and is subject to adjustment as described in the 2026 Indenture. If a “make-whole fundamental change” (as defined in the 2026 Indenture) occurs, then the Company will, in certain circumstances, increase the conversion rate for a specified period of time. F-26 The Company has the option to redeem the 2026 Notes in whole or in part at any time after January 20, 2024 and on or before the 40 th scheduled trading day immediately before the maturity date if the last reported sale price per share of the Company’s Class B common stock exceeds 130 % of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during any 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (2) the trading day immediately before the date the Company sends such notice. The redemption price will be equal to the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Upon a fundamental change (as defined in the 2026 Indenture), holders may, subject to certain exceptions, require the Company to purchase their 2026 Notes in whole or in part for cash at a price equal to the principal amount of the 2026 Notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date (as defined in the 2026 Indenture). In addition, upon a Make‑Whole Fundamental Change (as defined in the 2026 Indenture), the Company will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its 2026 Notes in connection with such Make‑Whole Fundamental Change. No adjustment to the conversion rate will be made if the stock price in such Make‑Whole Fundamental Change is either less than $ 44.23 per share or greater than $ 210.00 per share. The Company will not increase the conversion rate to an amount that exceeds 22.6090 shares per $1 principal amount of 2026 Notes, subject to adjustment. The 2026 Indenture also contains a customary merger covenant. Under the 2026 Indenture, the 2026 Notes may be accelerated upon the occurrence of certain customary events of default. If certain bankruptcy and insolvency‑related events of default with respect to the Company occur, the principal of, and accrued and unpaid interest on, all of the then outstanding 2026 Notes shall automatically become due and payable. If any other event of default occurs and is continuing, the 2026 Trustee by notice to the Company, or the holders of the 2026 Notes of at least 25 % in principal amount of the outstanding 2026 Notes by notice to the Company and the 2026 Trustee, may declare the principal of, and accrued and unpaid interest on, all of the then outstanding 2026 Notes to be due and payable. Notwithstanding the foregoing, the 2026 Indenture provides that, to the extent the Company elects, the sole remedy for an event of default relating to certain failures by the Company to comply with reporting covenant in the 2026 Indenture consists exclusively of the right to receive additional interest on the 2026 Notes. The 2026 Notes were accounted for as debt, with no bifurcation of the embedded conversion feature. Transaction costs were recorded as a direct deduction from the related debt liability in the consolidated balance sheets and are amortized to interest expense over the term of the 2026 Notes. The effective interest rate for the 2026 Notes is 0.658 %. As of December 31, 2024, none of the conditions of the 2026 Notes to early convert has been met. 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. As of December 31, 2024 and 2023, the Company was in compliance with all covenants in the 2026 Notes. F-27 Capped Call Options — 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. 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. The cap price of the capped call options is initially $ 72.9795 per share, which represents a premium of 65 % above the last reported sale price per share of the Company’s Class B common stock on the Nasdaq Global Select Market on January 21, 2021 and is subject to customary adjustments under the terms of the capped call options. The capped call options were entered into in conjunction with the issuance of the 2026 Notes, however, they are legally separate agreements that can be separately exercised, with the receipt of shares under the capped call options having no effect on the 2026 Notes, and are legally detachable. As the capped call options are both legally detachable and separately exercisable from the 2026 Notes, the Company accounts for the capped call options separately from the 2026 Notes. The capped call options are indexed to the Company’s own common stock and classified in Bentley Systems stockholders’ equity. 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. 2027 Notes On June 28, 2021, the Company completed a private offering of $ 575,000 of 0.375 % convertible senior notes due 2027. The 2027 Notes were issued pursuant to an indenture, dated as of June 28, 2021, between the Company and Wilmington Trust, National Association, as trustee (the “2027 Trustee”) (the “2027 Indenture”). Interest will accrue from June 28, 2021 and will be payable semi‑annually in arrears in cash on January 1 and July 1 of each year, with the first payment due on January 1, 2022. The 2027 Notes will mature on July 1, 2027, unless earlier converted, redeemed or repurchased. Prior to April 1, 2027, the 2027 Notes will be convertible at the option of the holder only under the following circumstances: (1) during any calendar quarter (and only during such quarter) commencing after the calendar quarter ending on September 30, 2021, if the last reported sale price per share of the Company’s Class B common stock exceeds 130 % of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any ten consecutive trading day period (such ten consecutive trading day period, the “measurement period”) in which the trading price per $1 principal amount of 2027 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of the Company’s Class B common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s Class B common stock, as described in the 2027 Indenture; and (4) if the Company calls the 2027 Notes for redemption. On or after April 1, 2027 until 5:00 p.m., New York City time, on the second scheduled trading day immediately before the maturity date, the 2027 Notes will be convertible at the option of the holder at any time. The Company will settle conversions by paying or delivering, as applicable, cash, shares of the Company’s Class B common stock, or a combination of cash and shares of the Company’s Class B common stock, at the Company’s election, based on the applicable conversion rate. The initial conversion rate is 12.0153 shares of the Company’s Class B common stock per $1 principal amount of 2027 Notes, which represents an initial conversion price of approximately $ 83.23 per share, and is subject to adjustment as described in the 2027 Indenture. If a “make-whole fundamental change” (as defined in the 2027 Indenture) occurs, then the Company will, in certain circumstances, increase the conversion rate for a specified period of time. The Company has the option to redeem the 2027 Notes in whole or in part at any time after July 5, 2024 and on or before the 40 th scheduled trading day immediately before the maturity date if the last reported sale price per share of the Company’s Class B common stock exceeds 130 % of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during any 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (2) the trading day immediately before the date the Company sends such notice. The redemption price will be equal to the principal amount of the 2027 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. F-28 Upon a fundamental change (as defined in the 2027 Indenture), holders may, subject to certain exceptions, require the Company to purchase their 2027 Notes in whole or in part for cash at a price equal to the principal amount of the 2027 Notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date (as defined in the 2027 Indenture). In addition, upon a Make‑Whole Fundamental Change (as defined in the 2027 Indenture), the Company will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its 2027 Notes in connection with such Make‑Whole Fundamental Change. No adjustment to the conversion rate will be made if the stock price in such Make‑Whole Fundamental Change is either less than $ 61.65 per share or greater than $ 325.00 per share. The Company will not increase the conversion rate to an amount that exceeds 16.2206 shares per $1 principal amount of 2027 Notes, subject to adjustment. The 2027 Indenture also contains a customary merger covenant. Under the 2027 Indenture, the 2027 Notes may be accelerated upon the occurrence of certain customary events of default. If certain bankruptcy and insolvency‑related events of default with respect to the Company occur, the principal of, and accrued and unpaid interest on, all of the then outstanding 2027 Notes shall automatically become due and payable. If any other event of default occurs and is continuing, the 2027 Trustee by notice to the Company, or the holders of the 2027 Notes of at least 25 % in principal amount of the outstanding 2027 Notes by notice to the Company and the 2027 Trustee, may declare the principal of, and accrued and unpaid interest on, all of the then outstanding 2027 Notes to be due and payable. Notwithstanding the foregoing, the 2027 Indenture provides that, to the extent the Company elects, the sole remedy for an event of default relating to certain failures by the Company to comply with reporting covenant in the 2027 Indenture consists exclusively of the right to receive additional interest on the 2027 Notes. The 2027 Notes were accounted for as debt, with no bifurcation of the embedded conversion feature. Transaction costs were recorded as a direct deduction from the related debt liability in the consolidated balance sheets and are amortized to interest expense over the term of the 2027 Notes. The effective interest rate for the 2027 Notes is 0.864 %. As of December 31, 2024, none of the conditions of the 2027 Notes to early convert has been met. The 2027 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 2027 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 2026 Notes), 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 2027 Notes contain both affirmative and negative covenants. As of December 31, 2024 and 2023, the Company was in compliance with all covenants in the 2027 Notes. Capped Call Options — 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. 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. The cap price of the capped call options is initially $ 95.5575 per share, which represents a premium of 55 % above the last reported sale price per share of the Company’s Class B common stock on the Nasdaq Global Select Market on June 23, 2021 and is subject to customary adjustments under the terms of the capped call options. The capped call options were entered into in conjunction with the issuance of the 2027 Notes, however, they are legally separate agreements that can be separately exercised, with the receipt of shares under the capped call options having no effect on the 2027 Notes, and are legally detachable. As the capped call options are both legally detachable and separately exercisable from the 2027 Notes, the Company accounts for the capped call options separately from the 2027 Notes. The capped call options are indexed to the Company’s own common stock and classified in Bentley Systems stockholders’ equity. 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. F-29 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. 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. The ineffective portion of a derivative’s change in fair value is recognized in earnings. Also, changes in the entire fair value of a derivative that is not designated as a hedge are recognized in earnings. 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 a portion of the Company’s floating rate debt. Effective on June 26, 2023, the Company amended the interest rate swap agreement to replace the London Interbank Offered Rate rate with SOFR under the ISDA Fallback Protocols included within the agreement. 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. The interest rate swap is not designated as a hedging instrument for accounting purposes. 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). 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). The bank counterparty to the derivative potentially exposes the Company to credit-related losses in the event of nonperformance. To mitigate that risk, the Company only contracts with counterparties who meet the Company’s minimum requirements under its counterparty risk assessment process. The Company monitors counterparty risk on at least a quarterly basis and adjusts its exposure as necessary. The Company does not enter into derivative instrument transactions for trading or speculative purposes. Interest Expense, Net Interest expense, net consists of the following: Year Ended December 31, 2024 2023 2022 Contractual interest expense $ ( 16,967 ) $ ( 34,973 ) $ ( 26,275 ) Amortization of deferred debt issuance costs ( 7,338 ) ( 7,291 ) ( 7,291 ) Other interest (expense) income ( 469 ) 933 ( 1,490 ) Interest income 2,730 1,538 421 Interest expense, net $ ( 22,044 ) $ ( 39,793 ) $ ( 34,635 ) The weighted average interest rate on credit facility borrowings were 7.22 %, 7.13 %, and 3.84 % for the years ended December 31, 2024, 2023, and 2022, respectively. Scheduled maturities of long‑term debt are as follows: December 31, 2024 2026 $ 687,830 2027 575,000 2029 135,315 Total scheduled maturities of long-term debt $ 1,398,145 F-30 Note 11: Executive Incentive Plans Executive Bonus Plan The Company maintains the Bonus Plan, which is a legacy plan from decades prior to the Company’s IPO and was established to compensate a limited set of executives with substantial holdings of the Company’s common stock. As of January 1, 2024, Gregory S. Bentley was the sole remaining participant in the 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. 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 (the “Committee”), 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. As part of Gregory S. Bentley’s transition to the role of Executive Chair effective July 1, 2024, on June 26, 2024, the Committee approved Amendment No. 2 to the Bonus Plan pursuant to which (in addition to other conforming changes) Mr. Bentley’s fractional interest under the Bonus Pool Plan was reduced from 12/33 to 4/33 effective July 1, 2024. On November 2, 2022, the Committee 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). 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. 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). 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 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). Such election must be made prior to the start of the applicable calendar quarter for which the incentive bonus is to be paid, and the number of shares of Class B common stock payable in respect of such elected amount is calculated using a volume-weighted average price of the Company’s Class B common stock for the period commencing on the ten th trading day prior to the end of the applicable calendar quarter and ending on the ten th trading day following the end of the applicable calendar quarter. Notwithstanding participants’ elections to receive shares of fully vested Class B common stock in respect of their non‑deferred incentive bonus payments, if, in any calendar quarter, the aggregate U.S. 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. For the years ended December 31, 2024, 2023, and 2022, 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 $ 16,337 , $ 21,463 , and $ 33,242 , respectively. F-31 Career Stock Program In connection with Nicholas H. Cumins’ transition to the role of Chief Executive Officer effective July 1, 2024, on June 26, 2024, the Committee adopted a compensatory program (the “Career Stock Program”) pursuant to which the Company may grant restricted stock units (“RSUs”) awards under the 2020 Plan. As of December 31, 2024, Mr. Cumins is the sole participant in the Career Stock Program. Under the Career Stock Program, the Committee may from time to time grant RSU awards to program participants, the amount of which is to be determined based upon the Company’s Adjusted OI w/SBC growth in the year preceding the date of grant (the “Performance Year”), specifically, an amount equal to 10 percent of the difference between realized Adjusted OI w/SBC growth during the Performance Year and an inflation-adjusted target growth level for such Performance Year. Any such awards, if made, would thereafter cliff vest five years following the end of the Performance Year and would otherwise be subject to the terms and conditions of the 2020 Plan. As of December 31, 2024, the Committee has not yet made any awards to Mr. Cumins with respect to the Career Stock Program. Note 12: Retirement Plans Deferred Compensation Plan Under the Company’s 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. 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). The DCP has 50,000,000 shares of Class B common stock reserved for issuance. As of December 31, 2024, shares of Class B common stock available for future issuance under the DCP were 4,349,950 . 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. 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. Deferred compensation plan expense (income) was $ 12,382 , $ 13,580 , and $( 15,782 ) for the years ended December 31, 2024, 2023, and 2022, respectively. For the years ended December 31, 2024, 2023, and 2022, DCP elective participant deferrals were $ 188 , $ 1,765 , and $ 6,580 , respectively. No discretionary contributions were made to the DCP during the years ended December 31, 2024, 2023, and 2022. As of December 31, 2024 and 2023, phantom shares of the Company’s Class B common stock issuable by the DCP were 12,728,808 and 17,364,980 , respectively. The total liabilities related to the DCP is included in the consolidated balance sheets as follows: December 31, 2024 2023 Accruals and other current liabilities $ 3,798 $ 2,355 Deferred compensation plan liabilities 96,684 88,181 Total DCP liabilities $ 100,482 $ 90,536 F-32 Other Plans The Company maintains a qualified 401(k) profit‑sharing plan (the “401(k) Plan”) for the benefit of substantially all U.S.‑based full‑time colleagues. The Company may make discretionary profit‑sharing contributions to the 401(k) Plan. The Company matches 50 %, up to a maximum of 6 % of qualified cash compensation for each eligible participating colleague. The Company’s matching contributions to the 401(k) Plan were $ 5,472 , $ 5,260 , and $ 4,933 , for the years ended December 31, 2024, 2023, and 2022, respectively. The Company also maintains various retirement benefit plans (primarily defined contribution plans) for colleagues of its international subsidiaries. The Company’s contributions to these plans were $ 13,531 , $ 13,208 , and $ 11,803 , for the years ended December 31, 2024, 2023, and 2022, respectively. Note 13: Preferred and Common Stock Preferred Stock Authorized and Selected Terms 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 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. 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. Class A common stock will automatically convert into Class B common stock upon certain transfers, and its votes per share will be reduced to 11 in the event none of the Bentleys (Barry J. Bentley, Gregory S. Bentley, Keith A. Bentley, Raymond B. Bentley, and Richard P. Bentley, collectively) serves as a Company director or executive officer. 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). During 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 In May 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 . In December 2022, the Company’s Board of Directors amended the Repurchase Program to allow the Company also to repurchase its outstanding convertible senior notes. This additional authorization did not increase the overall dollar limit of the Repurchase Program. The Company’s authorization under the Repurchase Program approved in May 2022 expired on June 30, 2024. In March 2024, the Company’s Board of Directors approved an extension to the Repurchase Program authorizing the Company to repurchase up to $ 200,000 of the Company’s Class B common stock and/or outstanding convertible senior notes from June 30, 2024 through June 30, 2026 . As of December 31, 2024, $ 173,155 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. F-33 The shares and outstanding convertible senior notes proposed to be acquired in the Repurchase Program may be repurchased from time to time in open market transactions, through privately negotiated transactions, or by other means in accordance with federal securities laws. The Company intends to fund repurchases from available working capital and cash provided by operating activities. The timing, as well as the number and value of shares and/or outstanding convertible senior notes repurchased under the Repurchase Program, will be determined by the Company at its discretion and will depend on a variety of factors, including management’s assessment of the intrinsic value of the Company’s shares, the market price of the Company’s Class B common stock and outstanding convertible senior notes, general market and economic conditions, available liquidity, compliance with the Company’s debt and other agreements, and applicable legal requirements. The exact number of shares and/or outstanding convertible senior 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. During the year ended December 31, 2024, the Company repurchased 1,292,733 shares for $ 64,359 under the Repurchase Program. The Company did not make repurchases under the Repurchase Program during the year ended December 31, 2023. During the year ended December 31, 2022, the Company repurchased 896,126 shares for $ 28,250 , and $ 2,170 aggregate principal amount of the Company’s outstanding 2026 Notes for $ 1,998 (see Note 10) under the Repurchase Program. Common Stock Issuances, Sales, and Repurchases During the year ended December 31, 2024, the Company issued 4,707,845 shares of Class B common stock to DCP participants in connection with distributions from the plan. There were no shares sold back to the Company as they were issued on a gross basis during the year ended December 31, 2024. During the year ended December 31, 2023, the Company issued 3,410,006 shares of Class B common stock to DCP participants in connection with distributions from the plan, net of 935,939 shares which were sold back to the Company in the same period to pay for applicable income tax withholdings of $ 38,456 . During the year ended December 31, 2022, the Company issued 3,541,375 shares of Class B common stock to DCP participants in connection with distributions from the plan, net of 500,332 shares which were sold back to the Company in the same period to pay for applicable income tax withholdings of $ 24,246 . During the year ended December 31, 2024, the Company issued 282,340 shares of Class B common stock, respectively, in connection with Bonus Plan incentive compensation. There were no shares sold back to the Company as they were issued on a gross basis during the year ended December 31, 2024. During the year ended December 31, 2023, the Company issued 247,867 shares of Class B common stock in connection with the Bonus Plan incentive compensation, net of 135,314 shares which were sold back to the Company in the same period to pay for applicable income tax withholdings of $ 5,756 . During the year ended December 31, 2022, the Company issued 445,050 shares of Class B common stock in connection with the Bonus Plan incentive compensation, net of 124,116 shares which were sold back to the Company in the same period to pay for applicable income tax withholdings of $ 5,197 . During the year ended December 31, 2024, the Company issued 844,283 shares of Class B common stock to colleagues who exercised their stock options, net of 67,146 shares withheld at exercise to pay for the cost of the stock options, as well as for $ 2,195 of applicable income tax withholdings. The Company received $ 4,007 in cash proceeds from the exercise of stock options. During 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. The Company received $ 11,715 in cash proceeds from the exercise of stock options. During the year ended December 31, 2022, the Company issued 2,613,659 shares of Class B common stock to colleagues who exercised their stock options, net of 397,501 shares withheld at exercise to pay for the cost of the stock options, as well as for $ 9,188 of applicable income tax withholdings. The Company received $ 8,338 in cash proceeds from the exercise of stock options. F-34 During 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. The Company did not receive any proceeds from the exercise of these options. 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. Dividends The Company declared cash dividends during the periods presented as follows: Dividend Per Share Amount 2024: Fourth quarter $ 0.06 $ 18,130 Third quarter 0.06 18,134 Second quarter 0.06 17,980 First quarter 0.06 17,871 Total $ 0.24 $ 72,115 2023: Fourth quarter $ 0.05 $ 14,764 Third quarter 0.05 14,768 Second quarter 0.05 14,702 First quarter 0.05 14,522 Total $ 0.20 $ 58,756 2022: Fourth quarter $ 0.03 $ 8,730 Third quarter 0.03 8,592 Second quarter 0.03 8,678 First quarter 0.03 8,353 Total $ 0.12 $ 34,353 Dividends Declared Subsequent to December 31, 2024 In February 2025, our Board of Directors approved cash dividends of $ 0.07 per share payable on March 27, 2025 to all stockholders of record of Class A and Class B common stock as of the close of business on March 19, 2025. Global Employee Stock Purchase Plan 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. F-35 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). 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, 2024, colleagues who elected to participate in the ESPP purchased a total of 253,578 shares of Class B common stock, net of shares withheld, resulting in cash proceeds to the Company of $ 11,228 . Of the total 260,437 shares purchased, 6,859 shares were sold back to the Company to pay for applicable income tax withholdings of $ 348 . 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 . Of the total 333,324 shares purchased, 17,484 shares were sold back to the Company to pay for applicable income tax withholdings of $ 845 . During the year ended December 31, 2022, colleagues who elected to participate in the ESPP purchased a total of 307,406 shares of Class B common stock, net of shares withheld, resulting in cash proceeds to the Company of $ 10,335 . 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 . As of December 31, 2024 and 2023, $ 5,577 and $ 5,790 of ESPP withholdings via colleague payroll deduction were recorded in Accruals and other current liabilities in the consolidated balance sheets, respectively. As of December 31, 2024, shares of Class B common stock available for future issuance under the ESPP were 24,018,460 . Note 14: Accumulated Other Comprehensive Loss Accumulated other comprehensive loss consists of the following: Foreign Actuarial (Loss) Currency Gain on Translation Retirement Plan Total Balance, December 31, 2021 $ ( 90,867 ) $ ( 907 ) $ ( 91,774 ) Other comprehensive income, before taxes 1,459 820 2,279 Tax expense — ( 245 ) ( 245 ) Other comprehensive income, net of taxes 1,459 575 2,034 Less: Other comprehensive income (loss) attributable to noncontrolling interest — — — Balance, December 31, 2022 ( 89,408 ) ( 332 ) ( 89,740 ) Other comprehensive income, before taxes 4,774 68 4,842 Tax expense — ( 89 ) ( 89 ) Other comprehensive income (loss), net of taxes 4,774 ( 21 ) 4,753 Less: Other comprehensive income (loss) attributable to noncontrolling interest — — — Balance, December 31, 2023 ( 84,634 ) ( 353 ) ( 84,987 ) Other comprehensive (loss) income, before taxes ( 19,308 ) 220 ( 19,088 ) Tax expense — ( 45 ) ( 45 ) Other comprehensive (loss) income, net of taxes ( 19,308 ) 175 ( 19,133 ) Less: Other comprehensive income (loss) attributable to noncontrolling interest ( 42 ) — ( 42 ) Balance, December 31, 2024 $ ( 103,900 ) $ ( 178 ) $ ( 104,078 ) F-36 Note 15: Stock-Based Compensation Total stock‑based compensation expense consists of the following: Year Ended December 31, 2024 2023 2022 Restricted stock and RSUs expense $ 58,921 $ 54,606 $ 40,754 Bonus Plan expense (see Note 11) 12,344 14,801 28,571 ESPP expense (see Note 13) 2,426 2,407 2,890 Stock grants expense 600 600 450 Stock option expense — 343 2,150 DCP elective participant deferrals expense (1) (see Note 12) 126 215 391 Total stock-based compensation expense (2) $ 74,417 $ 72,972 $ 75,206 (1) DCP elective participant deferrals expense excludes deferred incentive bonus payable pursuant to the Bonus Plan. (2) As of December 31, 2024 and 2023, $ 1,556 and $ 4,043 remained in Accruals and other current liabilities in the consolidated balance sheets, respectively. Total stock‑based compensation expense is included in the consolidated statements of operations as follows: Year Ended December 31, 2024 2023 2022 Cost of subscriptions and licenses $ 1,506 $ 4,444 $ 2,781 Cost of services 3,142 3,196 2,055 Research and development 20,862 19,380 27,209 Selling and marketing 12,972 11,565 8,898 General and administrative 35,935 34,387 34,263 Total stock-based compensation expense $ 74,417 $ 72,972 $ 75,206 Stock‑based compensation expense is 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. Specifically for performance‑based RSUs, stock‑based compensation expense is measured at the grant date fair value of the award and is recognized ratably over the requisite service period based on the number of awards expected to vest at each reporting date. The Company accounts for forfeitures of equity awards as those forfeitures occur. 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. Bentley Systems, Incorporated 2020 Omnibus Incentive Plan The Company’s 2020 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. The 2020 Plan provides that 25,000,000 shares of Class B common stock may be issued for equity awards. Equity awards that are expired, canceled, forfeited, or terminated for any reason will be available for future grant under the 2020 Plan. As of December 31, 2024, equity awards available for future grants under the 2020 Plan were 19,709,483 . F-37 Restricted Stock and RSUs Under the 2020 Plan, the Company may grant both time‑based and performance‑based shares of restricted Class B common stock and RSUs to eligible colleagues. Time‑based awards generally vest ratably on each of the first four anniversaries of the grant date. 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. Performance targets are generally set for performance periods of one year to three years . The fair value of restricted stock and RSUs is determined by the product of the number of shares granted and the Company’s Class B common stock price on the grant date. 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. RSUs, which may be cash or share‑settled depending on the award, do not have voting rights and, subject to the terms of the award agreements, the time‑based RSUs have dividend equivalent rights and do not accrue cash dividends. 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 RSUs activity and related information: Time- Performance- Based Based Time- Weighted Weighted Total Based Average Average Restricted Restricted Performance- Grant Date Grant Date Stock Stock Based Fair Value Fair Value and RSUs and RSUs RSUs Per Share Per Share Unvested, December 31, 2023 3,303,849 2,938,208 (3) 365,641 (5) $ 39.87 $ 39.21 Granted 1,661,929 (1) 1,455,017 (4) 206,912 (6) 50.48 49.49 Vested ( 1,237,464 ) ( 1,055,674 ) ( 181,790 ) 38.06 39.15 Forfeited and canceled ( 311,305 ) ( 269,848 ) ( 41,457 ) 40.68 43.42 Unvested, December 31, 2024 3,417,009 (2) 3,067,703 349,306 $ 45.45 $ 44.83 (1) For the year ended December 31, 2024, the Company only granted RSUs. (2) Includes 34,652 RSUs which are expected to be settled in cash. (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. (4) Includes 300,964 time‑based RSUs granted during the three months ended June 30, 2024 to certain officers, which vest 20 % on each of December 15, 2025, 2026, 2027, 2028, and 2029. (5) Primarily relates to the 2023 annual performance period. Includes 185,186 performance‑based RSUs granted during the year ended December 31, 2022 with extraordinary terms, which are described below. (6) Primarily relates to the 2024 annual performance period. Includes 1,335 additional shares earned based on the achievement of 2023 performance goals for performance-based RSUs granted during the year ended December 31, 2023. 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”). 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 was Adjusted OI w/SBC margin, excluding the impact of foreign currency exchange fluctuations) also equals or exceeds the relevant target level for such year. 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. As of December 31, 2024, 162,038 of the aforementioned performance‑based RSUs were outstanding. On January 31, 2025, 162,038 performance‑based RSUs were determined to be vested based on the achievement of the performance goals during the Performance Period. F-38 In 2016, the Company granted RSUs subject to performance‑based vesting as determined by the achievement of certain business growth targets. Certain colleagues elected to defer delivery of such shares upon vesting. During the years ended December 31, 2024, 2023, and 2022, 1,569 , 1,562 , and 10,888 shares, respectively, were delivered to colleagues, and 32 , 36 , and 30 additional shares, respectively, were earned as a result of dividends. As of December 31, 2024, 2023, and 2022, 6,300 , 7,837 , and 9,363 shares, respectively, of these vested and deferred RSUs remained outstanding. The weighted average grant date fair values of RSUs granted were $ 50.36 , $ 42.29 , and $ 38.18 for the years ended December 31, 2024, 2023, and 2022, respectively. For the years ended December 31, 2024, 2023, and 2022, restricted stock and RSUs were issued net of 197,328 , 161,841 , and 112,698 shares, respectively, which were sold back to the Company to settle applicable income tax withholdings of $ 9,966 , $ 7,299 , and $ 4,491 , respectively. As of December 31, 2024, there was $ 96,151 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 1.9 years. As of December 31, 2024, there was $ 1,802 of unrecognized compensation expense related to unvested performance‑based RSUs, which is expected to be recognized over a weighted average period of approximately 2.0 years. Stock Grants Under the 2020 Plan, 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. For the years ended December 31, 2024, 2023, and 2022, the Company granted 11,391 , 12,639 , and 13,632 fully vested shares of Class B common stock, respectively, with a fair value of $ 600 , $ 600 , and $ 450 , respectively. Stock Options The fair value of each stock option award was estimated on the date of grant using the Black‑Scholes option pricing model. Stock options generally vest ratably on each of the first four anniversaries of the grant date. The Company did not grant stock options during the years ended December 31, 2024, 2023, and 2022. The following is a summary of stock option activity and related information: Weighted Average Stock Exercise Price Options Per Share Outstanding, December 31, 2023 916,429 $ 5.74 Exercised ( 911,429 ) 5.74 Forfeited and expired ( 5,000 ) 5.74 Outstanding, December 31, 2024 — $ 0.00 F-39 For the years ended December 31, 2024, 2023, and 2022, the Company received cash proceeds of $ 4,007 , $ 11,715 , and $ 8,338 , respectively, related to the exercise of stock options. The total intrinsic value of stock options exercised for the years ended December 31, 2024, 2023, and 2022 was $ 40,775 , $ 112,025 , and $ 101,643 , respectively. As of December 31, 2024, there was no remaining unrecognized compensation expense related to unvested stock options. Acquisition Options 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. As of December 31, 2020, the Company fully recognized the stock‑based compensation expense associated with these options. During the year ended December 31, 2022, 900,000 options were exercised. No acquisition options remained outstanding as of December 31, 2022. ESPP 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). The fair value of each purchase right under the ESPP was calculated as the sum of its components, which includes the discount, a six‑month call option, and a six‑month put option. The call and put options were valued using the Black‑Scholes option pricing model. Stock‑based compensation expense is recognized ratably over the respective offering period. Equity Awards Subsequent to December 31, 2024 In January 2025, in connection with the appointment of the Company’s Chief Operating Officer, the Company granted 165,344 time‑based RSUs, which vest as follows: 14 % on May 13, 2025, 14 % on December 15, 2025, and 18 % on each of December 15, 2026, 2027, 2028, and 2029. The unrecognized compensation expense related to these RSUs is approximately $ 7,700 , which is expected to be recognized over a weighted average period of approximately 4.9 years. Note 16: Income Taxes The components of Income before income taxes consist of the following: Year Ended December 31, 2024 2023 2022 Domestic $ 118,624 $ 16,652 $ 98,188 International 174,431 166,875 100,087 Income before income taxes $ 293,055 $ 183,527 $ 198,275 F-40 The (Provision) benefit for income taxes consists of the following: Year Ended December 31, 2024 2023 2022 Current: Federal $ ( 7,194 ) $ ( 12,899 ) $ ( 2,307 ) State ( 2,674 ) ( 2,567 ) ( 1,387 ) Foreign ( 36,287 ) ( 40,171 ) ( 22,715 ) ( 46,155 ) ( 55,637 ) ( 26,409 ) Deferred: Federal ( 7,627 ) 134,516 3,547 State ( 4,057 ) 29,514 60 Foreign ( 887 ) 34,848 1,519 ( 12,571 ) 198,878 5,126 (Provision) benefit for income taxes $ ( 58,726 ) $ 143,241 $ ( 21,283 ) A reconciliation of the U.S. statutory federal income tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, 2024 2023 2022 Federal statutory rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of federal benefit 2.1 ( 0.3 ) 1.0 Stock-based compensation ( 16.0 ) ( 22.9 ) ( 21.4 ) Non-deductible officer compensation 14.1 14.9 11.0 Tax credits ( 3.0 ) ( 5.8 ) ( 2.9 ) Withholding taxes 3.4 4.9 2.8 Foreign tax rate differential ( 3.3 ) ( 3.0 ) ( 2.0 ) Net tax on foreign earnings (GILTI/FDII) 0.5 4.2 0.9 Transaction costs 0.1 ( 0.1 ) 0.5 Tax impact of internal legal entity restructuring — ( 93.1 ) — Other 1.1 2.2 ( 0.2 ) Effective income tax rate 20.0 % ( 78.0 %) 10.7 % For the year ended December 31, 2024, the effective tax rate was higher as compared to the year ended December 31, 2023 primarily due to the discrete tax benefit recognized as a result of the internal legal entity restructuring during the fourth quarter of 2023 described below, as well as a decrease in discrete tax benefits related to stock‑based compensation, net of the impact from officer compensation limitation provisions, partially offset by the decrease in the adverse effective tax rate impact of the net tax on foreign earnings. The decrease in net tax on foreign earnings is primarily related to increased foreign creditable taxes available to reduce the net impact of the GILTI inclusion. 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 during the fourth quarter of 2023 described below. For the years ended December 31, 2024, 2023, and 2022, the Company recorded discrete tax benefits of $ 5,583 , $ 14,648 , and $ 20,501 , respectively, associated with windfall tax benefits from stock‑based compensation, net of the impact from officer compensation limitation provisions. F-41 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. 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 . As of December 31, 2023, the deferred tax assets represented the undiscounted future anticipated cash tax impacts of basis differences, which were expected to be realized through tax amortization over the next 13 years, beginning in 2024. 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. 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 year ended December 31, 2023 as compared to the prior year. The U.S. 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. shareholder. The Company has elected the “period cost method” and treats taxes due on future U.S. inclusions in taxable income related to GILTI as a current‑period expense when incurred. The JOBS Act allows a U.S. 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: December 31, 2024 2023 Deferred tax assets: Accrued compensation $ 32,875 $ 38,220 NOL and credit carryforwards 19,679 19,677 Intangible assets including goodwill 142,293 137,576 Convertible debt and 163(j) limitation 5,281 14,364 Lease liabilities 5,810 7,610 Other accruals not currently deductible 1,294 502 Allowance for doubtful accounts 1,048 1,852 Deferred revenues 1,899 4,402 Other 581 2,852 Total deferred tax assets 210,760 227,055 Less: Valuation allowance ( 4,474 ) ( 2,664 ) Net deferred tax assets 206,286 224,391 Deferred tax liabilities: Operating lease right-of-use assets ( 4,607 ) ( 6,762 ) Prepaid expenses ( 714 ) ( 2,746 ) Unrealized gains and losses ( 8,522 ) ( 8,131 ) Property and equipment ( 2,769 ) ( 3,639 ) Total deferred tax liabilities ( 16,612 ) ( 21,278 ) Net deferred tax assets (liabilities) $ 189,674 $ 203,113 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. F-42 The Company had deferred tax assets for tax credits and NOLs, net of unrecognized tax positions, primarily related to: Jurisdiction: December 31, 2024 Begin to Expire U.S. Federal NOL $ 3,176 2034 U.S. Federal research and development credits 139 2039 U.S. Federal foreign tax credits 235 2028 U.S. State NOL 1,316 2036 U.S. State research and development credits 919 2032 U.K. NOL 5,737 Indefinite U.K. research and development credits 1,400 Indefinite Canadian research and development credit 1,216 2030 As of December 31, 2024 and 2023, the Company has a valuation allowance recorded against net deferred tax assets related to NOLs and tax attributes in certain jurisdictions of $ 4,474 and $ 2,664 , respectively. During the year ended December 31, 2024, the Company increased the valuation allowance by $ 1,810 , which was primarily related to taxable losses in various foreign jurisdictions. 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. 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. No additional provision has been made for U.S. and non‑U.S. income taxes on the undistributed earnings of subsidiaries that are expected to be indefinitely reinvested. As of December 31, 2024, certain subsidiaries had approximately $ 298,041 of cumulative undistributed earnings that have been deemed permanently reinvested. A liability could arise if our intention to indefinitely reinvest such earnings were to change and amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed. The potential tax implications of unremitted earnings are driven by the facts at the time of the distribution. It is not practicable to estimate the additional income taxes related to indefinitely reinvested earnings or the basis differences related to investments in subsidiaries. The following is a reconciliation of the changes in gross unrecognized tax benefits: Year Ended December 31, 2024 2023 2022 Gross unrecognized tax benefits, beginning of year $ 466 $ 910 $ 1,331 Increases for tax positions of prior years — 12 — Decreases for tax positions of prior years ( 26 ) ( 9 ) ( 121 ) Increases for tax positions related to the current year — — — Decreases relating to settlements with taxing authorities ( 382 ) — ( 35 ) Reductions as a result of lapse of the statute of limitations ( 58 ) ( 447 ) ( 265 ) Gross unrecognized tax benefits, end of year $ — $ 466 $ 910 As of December 31, 2024, 2023, and 2022, the Company had total unrecognized tax benefits including interest and penalties of $ 0 , $ 557 , and $ 1,194 , respectively, of which $ 0 , $ 554 , and $ 1,181 , respectively, would impact the Company’s effective tax rate if recognized. Interest expense and penalties related to unrecognized tax benefits included in the (Provision) benefit for income taxes were $ 91 , $ 194 , $ 89 for the years ended December 31, 2024, 2023, and 2022, respectively. The cumulative accrued interest and penalties related to unrecognized tax benefits were $ 0 , $ 91 , and $ 284 as of December 31, 2024, 2023, and 2022, respectively. F-43 The Company is subject to income tax in the U.S. (federal and state) and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company’s tax positions and determining the provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company establishes reserves for tax‑related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. 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. The tax benefit recognized is based on the largest amount that is greater than 50 percent likely of being realized upon ultimate settlement. The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The (Provision) benefit for income taxes in the consolidated statements of operations includes the impact of reserve provisions and changes to reserves that are considered appropriate. The Company records accrued interest and/or penalties, where applicable, related to unrecognized tax benefits as part of the (Provision) benefit for income taxes in the consolidated statements of operations. 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 2022 and in Canada for years 2021 through 2023. In addition, the Company is under audit in various other foreign taxing jurisdictions that are not material to the consolidated financial statements. The Company’s U.S. consolidated federal income tax returns for years 2021 through 2024 may be subject to examination by the Internal Revenue Service. The Company also may be subject to examination by other significant jurisdictions, including the Irish Revenue Commissioners for Irish tax purposes for years 2015 through 2024 and by the Inland Revenue Department for New Zealand Tax purposes for years 2019 through 2024. 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”). The OECD has continued to issue administrative guidance and interpretations regarding the Pillar 2 rules. A number of E.U. 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. For countries that have adopted the model rules, certain aspects of the Pillar 2 rules became effective in 2024, while other aspects are expected to become effective in 2025. 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. Pillar 2 legislation did not have a material impact on the (Provision) benefit for income taxes in the consolidated statements for the year ended December 31, 2024. Note 17: Fair Value of Financial Instruments 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. 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). An asset or liability’s classification within the fair value hierarchy is based on the lowest level of significant input to its valuation. 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. F-44 The fair value hierarchy consists of the following three levels: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. 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. 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. 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. The following methods and assumptions were used by the Company in estimating its fair value measurements for Level 2 financial instruments as of December 31, 2024 and 2023: 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. Long-Term Debt — The fair value of the Company’s credit facility borrowings approximated its carrying value based upon discounted cash flows at current market rates for instruments with similar remaining terms. The Company considers these valuation inputs to be Level 2 inputs in the fair value hierarchy. As of December 31, 2024, the estimated fair value of the 2026 Notes and 2027 Notes was $ 671,123 and $ 519,271 , respectively. As of December 31, 2023, the estimated fair value of the 2026 Notes and 2027 Notes was $ 684,205 and $ 516,051 , respectively. The estimated fair value of the 2026 Notes and 2027 Notes is based on quoted market prices of the Company’s instrument in markets that are not active and are classified as Level 2 within the fair value hierarchy. Considerable judgment is necessary to interpret the market data and develop estimates of fair values. Accordingly, the estimates presented are not necessarily indicative of the amounts at which these instruments could be purchased, sold, or settled. 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. Financial assets and financial liabilities carried at fair value measured on a recurring basis consist of the following: December 31, 2024 Level 1 Level 2 Total Assets: Money market funds (1) $ 5,648 $ — $ 5,648 Interest rate swap (2) — 32,172 32,172 Total assets $ 5,648 $ 32,172 $ 37,820 Liabilities: Deferred compensation plan liabilities (3) $ 100,482 $ — $ 100,482 Cash-settled equity awards (4) 440 — 440 Total liabilities $ 100,922 $ — $ 100,922 F-45 December 31, 2023 Level 1 Level 2 Total Assets: Money market funds (1) $ 1 $ — $ 1 Interest rate swap (2) — 32,162 32,162 Total assets $ 1 $ 32,162 $ 32,163 Liabilities: Deferred compensation plan liabilities (3) $ 90,536 $ — $ 90,536 Cash-settled equity awards (4) 781 — 781 Total liabilities $ 91,317 $ — $ 91,317 (1) Included in Cash and cash equivalents in the consolidated balance sheets. (2) Included in Other assets in the consolidated balance sheets. (3) Included in Deferred compensation plan liabilities , except for current liabilities of $ 3,798 and $ 2,355 as of December 31, 2024 and 2023, respectively, which are included in Accruals and other current liabilities in the consolidated balance sheets. (4) Included in Accruals and other current liabilities in the consolidated balance sheets. Note 18: Commitments and Contingencies Purchase Commitments In the normal course of business, the Company enters into various purchase commitments for goods and services. During the years ended December 31, 2024 and 2023, the Company entered into approximately $ 45,500 and $ 158,000 , respectively, of non‑cancelable future cash purchase commitments for services related to cloud provisioning of the Company’s software solutions and for internal‑use software costs. As of December 31, 2024, total non‑cancelable future cash purchase commitments were approximately $ 113,700 , of which the Company expects approximately $ 59,200 to be paid over the next 12 months and approximately $ 54,500 to be paid through September 2029. The Company expects to fully consume its contractual commitments in the ordinary course of operations. Litigation 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. Guarantees The Company’s software license agreements typically provide for indemnification of customers for intellectual property infringement claims. 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. 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. Accordingly, the Company does not maintain accruals for potential customer indemnification or warranty‑related obligations. F-46 Note 19: Segment and Geographic Information The Company operates and manages its business in a single reportable segment, the development and marketing of computer software and related services. The Company defines its CODM to be its Chief Executive Officer, who reviews financial information presented on a consolidated basis. The Company’s reported measures of profit or loss for segment reporting purposes are Net income and Adjusted OI w/SBC. The CODM is regularly provided Net income and Adjusted OI w/SBC to understand the Company’s financial and operating results across accounting periods and for comparison of the Company’s results to those of other companies. The CODM regularly reviews Adjusted OI w/SBC for internal budgeting and forecasting purposes, to evaluate operating performance, and to make decisions on allocation of resources. The CODM does not use segment asset information to evaluate operating performance or allocate resources. The presentation of Net income is included in the Company’s consolidated statements of operations. Adjusted OI w/SBC is a non‑GAAP financial measure and is defined as operating income adjusted for the following: amortization of purchased intangibles, expense (income) relating to deferred compensation plan liabilities, acquisition expenses, and realignment expenses (income), for the respective periods. Reconciliation of operating income to Adjusted OI w/SBC: Year Ended December 31, 2024 2023 2022 Operating income $ 302,150 $ 230,542 $ 208,612 Amortization of purchased intangibles (see Note 6) 46,679 51,219 53,592 Deferred compensation plan 12,382 13,580 ( 15,782 ) Acquisition expenses (1) 10,222 17,866 25,398 Realignment expenses (2) 789 11,470 2,109 Adjusted OI w/SBC $ 372,222 $ 324,677 $ 273,929 Further explanation of certain of the Company’s adjustments in arriving at Adjusted OI w/SBC are as follows: (1) Acquisition expenses . The Company incurs expenses for professional services rendered in connection with business combinations, which are recorded in General and administrative in the consolidated statements of operations. Also included in the Company’s acquisition expenses are retention incentives paid to executives of the acquired companies. For the year ended December 31, 2022, $ 9,804 of the Company’s acquisition expenses related to the Company’s platform acquisition of PLS. (2) Realignment expenses . During the fourth quarter of 2023, the Company approved the 2023 Program. For the years ended December 31, 2024 and 2023, the Company recognized realignment costs related to the aforementioned program of $ 847 and $ 12,579 , respectively, which represent termination benefits for colleagues whose roles were impacted (see Note 21). For the year ended December 31, 2023, Realignment expenses were partially offset by income associated with the continued wind down of the Company’s Russian entities. For the year ended December 31, 2022, Realignment expenses were comprised of asset impairments and termination benefits as a result of the Company’s decision to wind down business and exit the Russian market beginning in the second quarter of 2022. “Headcount‑related” costs are considered the Company’s significant expense category and primarily include salaries, benefits, bonuses, stock‑based compensation expense, employment taxes, travel, training, and realignment of the Company’s colleagues, and third‑party personnel expenses and related overhead. The CODM is regularly provided headcount‑related costs to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, to evaluate financial performance, and to align colleague resources and evaluate compensation to support the Company’s operational efficiency and maximize long‑term growth. Headcount‑related costs of $ 787,248 , $ 748,772 , and $ 665,310 are included in Cost of subscriptions and licenses , Cost of services , Research and development , Selling and marketing , and General and administrative in the consolidated statements of operations for the years ended December 31, 2024, 2023, and 2022, respectively. F-47 Under the Company’s Net income measure of profit or loss for segment reporting purposes, other segment items were $ 331,414 , $ 152,854 , and $ 258,992 for the years ended December 31, 2024, 2023, and 2022, respectively. These other segment items primarily include cloud‑related costs incurred for servicing the Company’s accounts using cloud provisioned solutions and the Company’s license administration platform, channel partner compensation for providing sales coverage to users, marketing costs, acquisition costs, depreciation expense, and amortization expense recorded in Cost of subscriptions and licenses , Cost of services , Research and development , Selling and marketing , and General and administrative . Additionally, other segment items include Deferred compensation plan expense (income), Amortization of purchased intangibles , and non‑operating expense (income) amounts presented in the consolidated statements of operations. Under the Company’s Adjusted OI w/SBC measure of profit or loss for segment reporting purposes, other segment items were $ 202,994 , $ 179,246 , and $ 173,483 for the years ended December 31, 2024, 2023, and 2022, respectively. These other segment items primarily include cloud‑related costs incurred for servicing the Company’s accounts using cloud provisioned solutions and the Company’s license administration platform, channel partner compensation for providing sales coverage to users, marketing costs, and depreciation expense recorded in Cost of subscriptions and licenses , Cost of services , Research and development , Selling and marketing , and General and administrative . Within the reconciliation of Adjusted OI w/SBC, retention incentives paid to executives of acquired companies included as a component of acquisition expenses and costs associated with the 2023 Program included as a component of realignment expenses totaling $ 9,369 , $ 24,282 , and $ 13,640 for the years ended December 31, 2024, 2023, and 2022, respectively, are excluded from the calculation of headcount‑related costs. Revenues by geographic region are presented in Note 3. Long‑lived assets (other than goodwill), net of depreciation and amortization by geographic region (see Notes 5, 6, and 8) are as follows: December 31, 2024 2023 Americas (1) $ 230,964 $ 272,492 EMEA 32,712 40,411 APAC 16,384 14,460 Total long-lived assets $ 280,060 $ 327,363 (1) Americas includes the U.S., Canada, and Latin America (including the Caribbean). F-48 Note 20: Other Income (Expense), Net Other income (expense), net consists of the following: Year Ended December 31, 2024 2023 2022 Gain (loss) from: Change in fair value of interest rate swap (see Note 17) $ 10 $ ( 5,038 ) $ 27,083 Foreign exchange (1) 939 2,497 ( 9,901 ) Sale of aircraft (see Note 5) — — 2,029 Change in fair value of acquisition contingent consideration (see Note 17) — — 1,427 Receipts related to interest rate swap 9,309 8,803 1,947 Other income (expense), net (2) 2,691 ( 13,484 ) 1,713 Total other income (expense), net $ 12,949 $ ( 7,222 ) $ 24,298 (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. (2) Other income (expense), net for the year ended December 31, 2023 includes investment impairment and other charges of $( 16,988 ), partially offset by gains on investments of $ 2,360 (see Note 7). Note 21: Realignment Costs 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 in product development. For the years ended December 31, 2024 and 2023, the Company incurred realignment costs related to the aforementioned program of $ 847 and $ 12,579 , respectively, which represent termination benefits for colleagues whose roles were impacted. The 2023 Program activities have been broadly implemented across the Company’s various businesses, which were substantially completed by the end of the second quarter of 2024, and payments of termination benefits were completed as of December 31, 2024. Realignment costs (income) by expense classification were as follows: Year Ended December 31, 2024 2023 Cost of revenues: Cost of subscriptions and licenses $ 1,227 $ 839 Cost of services ( 85 ) 1,246 Total cost of revenues 1,142 2,085 Operating expenses: Research and development ( 118 ) 4,995 Selling and marketing 413 4,012 General and administrative ( 590 ) 1,487 Total operating expenses ( 295 ) 10,494 Total realignment costs $ 847 $ 12,579 F-49 Accruals and other current liabilities in the consolidated balance sheets included amounts related to the realignment activities as follows: Balance, December 31, 2022 $ — Realignment costs 12,579 Payments ( 268 ) Adjustments (1) 148 Balance, December 31, 2023 $ 12,459 Realignment costs 847 Payments ( 12,768 ) Adjustments (1) ( 538 ) Balance, December 31, 2024 $ — (1) Adjustments include foreign currency translation and other adjustments. Note 22: Net Income Per Share Attributable to Bentley Systems Stockholders To compute the numerator of basic net income per share attributable to Bentley Systems stockholders , u ndistributed net income attributable to Bentley Systems allocated to participating securities (described further below) using the required two‑class method, is subtracted from net income attributable to Bentley Systems. The denominator of basic net income per share attributable to Bentley Systems stockholders is the weighted average number of shares, 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. As of December 31, 2024, 2023, and 2022, there were 349,306 , 365,641 , and 362,773 participating securities outstanding, respectively. To compute the numerator of diluted net income per share attributable to Bentley Systems stockholders , interest expense, net of tax, attributable to the assumed conversion of the convertible senior notes using the if‑converted method is added back to basic net income attributable to Bentley Systems . To compute the denominator of diluted net income per share attributable to Bentley Systems stockholders , 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 using the treasury stock method , and for the dilutive effect of the assumed conversion of the convertible senior notes using the if‑converted. Except with respect to voting and conversion, the rights of the holders of the Company’s Class A and Class B common stock are identical. Each class of shares has the same rights to dividends and allocation of income (loss) and, therefore, net income per share attributable to Bentley Systems stockholders would not differ under the two‑class method. F-50 The details of basic and diluted net income per share attributable to Bentley Systems stockholders are as follows : Year Ended December 31, 2024 2023 2022 Numerator: Net income attributable to Bentley Systems $ 234,787 $ 326,787 $ 174,780 Less: Net income attributable to Bentley Systems allocated to participating securities ( 84 ) ( 74 ) ( 42 ) Basic net income attributable to Bentley Systems stockholders 234,703 326,713 174,738 Add: Interest expense, net of tax, attributable to assumed conversion of convertible senior notes 6,880 6,874 6,810 Diluted net income attributable to Bentley Systems stockholders $ 241,583 $ 333,587 $ 181,548 Denominator: Basic weighted average shares 314,886,615 312,358,823 309,226,677 Dilutive effect of stock options, restricted stock, and RSUs 1,185,014 2,435,456 4,705,172 Dilutive effect of ESPP 68,752 75,568 166,606 Dilutive effect of assumed conversion of convertible senior notes 17,633,786 17,633,786 17,666,703 Diluted weighted average shares 333,774,167 332,503,633 331,765,158 Net income per share attributable to Bentley Systems stockholders: Basic $ 0.75 $ 1.05 $ 0.57 Diluted $ 0.72 $ 1.00 $ 0.55 There were no anti‑dilutive securities for the years ended December 31, 2024 or 2023. For the year ended December 31, 2022, 718,105 RSUs were excluded from the calculation of diluted net income per share attributable to Bentley Systems stockholders as including them would have an anti‑dilutive effect. F-51