BENTLEY SYSTEMS INC 10-K

Item 1. Business Bentley Systems: The Infrastructure Engineering Software Company We enable infrastructure professionals and their organizations, by “going digital” through our software and cloud services offerings, to better design, build, and operate better infrastructure. We were founded in 1984 by the Bentley brothers and on September 25, 2020, we completed our initial public offering (“IPO”). Our enduring commitment is to develop and support the most comprehensive portfolio of integrated software offerings across professional disciplines, project and asset lifecycles, infrastructure sectors, and geographies. Our software enables digital workflows across engineering disciplines, across distributed project teams, and from offices to the field. Moreover, we believe that our offerings, in particular our infrastructure digital twin solutions, empower the achievement of sustainable development goals (“SDGs”) by helping our users – infrastructure professionals – realize outcomes that are more sustainable and resilient. We deliver our solutions via on‑premises, cloud, and hybrid environments. Our users engineer, construct, and operate projects and assets across the following infrastructure sectors: • public works (including roads, rail, bridges, tunnels, airports, ports, and federal, state, and municipal agencies)/ utilities (including networks for electricity, gas, communications, and water, wastewater, and drainage). We estimate that this sector represents 49% of the net infrastructure asset value of the global top 500 infrastructure owners based on the 2022 edition of the Bentley Infrastructure 500 Top Owners , our annual compilation of the world’s largest infrastructure owners ranked by net depreciated value of their tangible fixed assets; • resources (including mining, oil and gas “upstream,” offshore, pipelines, environmental management, and renewable energy). We estimate that this sector represents 21% of the global top 500 infrastructure owners’ net infrastructure asset value; • industrial (including discrete and process manufacturing, oil and gas “downstream,” and power generation). We estimate that this sector represents 18% of the global top 500 infrastructure owners’ net infrastructure asset value; and • commercial/facilities (including office buildings, retail facilities, hospitals, and campuses). We estimate that this sector represents 12% of the global top 500 infrastructure owners’ net infrastructure asset value. We address both the project and asset lifecycle phases of infrastructure, each with applications and enterprise information systems. Our Project Lifecycle solutions encompass conception, planning, surveying, design, engineering, simulation, and construction, as well as the collaboration offerings required to coordinate and share the work of interdisciplinary and/or distributed project teams. Our Asset Lifecycle solutions span the operating life of commissioned infrastructure assets, allowing our accounts to manage engineering changes for safety and compliance and to model performance and reliability to support operating and maintenance decisions. 4 Our Solutions We offer solutions for enterprises and professionals across the infrastructure lifecycle. Our Engineering Applications and Geoprofessional Applications support the breadth of engineering and geoprofessional disciplines and are primarily desktop applications for professional practitioners. Our project delivery and asset performance Enterprise Systems are provided via cloud and hybrid environments, developed respectively to extend enterprise collaboration during project delivery, and to manage and leverage engineering information during operations and maintenance. Our Industry Solutions solve domain‑specific problems for owners of infrastructure assets, and the project delivery ecosystems that support these owners. Our cloud-native iTwin Platform solutions enable digital twin workflows, which can span project and asset lifecycles. Our comprehensive solutions for the entire project delivery and asset performance lifecycle—spanning conception, planning, surveying, subsurface, design, simulation, construction, and operations—include Engineering Applications , Geoprofessional Applications , Enterprise Systems , Industry Solutions , and our iTwin Platform for infrastructure digital twins. Engineering Applications . Our Engineering Applications are for modeling and simulation. Our modeling applications are domain-specific authoring tools used by professionals for the 3D design and documentation of infrastructure assets. Our simulation applications enable engineers to analyze the functional performance of the designs created with our modeling applications (or those of competitive vendors), preferably in iterative digital workflows, to improve engineering outcomes and to ensure compliance with design codes. 5 Benefits of our Engineering Applications to infrastructure engineers include: • Better designs . Our modeling and simulation applications work together to improve infrastructure engineering quality, for instance to enable users to participate in data-centric workflows, including for integration, validation of design intent, rules checking, clash detection, component queries and reuse, quality assurance, and digital-twin deliverables creation. Each application is for a specific purpose (asset-type or discipline; for example, OpenRoads for roadway design), and supports corresponding asset-specific engineering workflows (for example, the workflow a civil engineer would use in designing a road) by virtue of: • Better engineering productivity . We endeavor to provide in our applications the most advanced and automated intelligence for transforming engineers’ conceptual decisions into complete, detailed, and editable deliverables; and • Better configurability and continuity. We take care to enable users to continuously refine their modeling preferences and standards across successive generations of our applications. This capability enables engineers, throughout their careers, to maintain continuity and compatibility with their preferred interfaces, formats, and methodologies, while advancing their work at the leading edge of innovation; • Better deliverables . Our applications share a common modeling environment to enable streamlined coordination and production of multi-discipline documentation; and • Better handoff . Our comprehensive modeling environment and our supplemental cloud services enable projects to enrich information sharing (and to minimize problematic translations) across project delivery processes. For instance: • by starting with reality modeling of existing conditions (often from drone surveying); • by sharing engineering component definitions across disciplines and projects; and • through “constructioneering” digital workflows, which automate the exchange of 3D design models to control GPS-enabled construction equipment (for earthmoving and paving), and to validate and preserve the resulting 3D as‑built models for maintenance. Geoprofessional Applications . Our Geoprofessional Applications support modeling and simulation to help engineers and scientists develop a detailed understanding, and take full account of, near and deep subsurface conditions. Our acquisition of Seequent Holdings Limited (“Seequent”) added industry‑leading earth modeling, subsurface‑data management, and geoprofessional team collaboration software to our portfolio. The integration of these sophisticated technologies in combination with our existing geotechnical products, supplements visible built asset representations above ground with more probabilistic modeling of invisible subsurface conditions – deepening the potential of infrastructure digital twins. Benefits of our geoprofessional applications to infrastructure professionals include: • Delivering a clearer picture of what lies beneath . Our geodata modeling and visualization technologies helps geoprofessionals see what lies in the subsurface. When they can see it, they can understand it and make better decisions that reduce ground risk throughout the project lifecycle – saving budget and compressing timelines; 6 • Connecting workflows . As infrastructure and engineering projects become ever more complex, users need greater confidence in the earth sciences disciplines which support all surface infrastructure. The combination of Seequent’s subsurface and our existing geotechnical products means users have more flexibility in how they comprehensively solve complex subsurface and engineering problems; and • Better decisions that benefit people and the planet . Our geoprofessional applications help geoprofessionals to develop vital mineral resources more sustainably, design and build better infrastructure, protect the environment, source renewable energy, and help resolve historical challenges such as groundwater contamination. Our technology enables engineers and geoprofessionals to collaborate - ensuring infrastructure digital twins can reach full subsurface depths and augment environmental and economic resilience. Enterprise Systems . Our Enterprise Systems, which span the end-to-end lifecycle and value chain of the world’s infrastructure, support data management and collaborative workflows for both project delivery and asset performance. Our Enterprise Systems combine to form the Bentley Infrastructure Cloud, encompassing ProjectWise , for project delivery, SYNCHRO , for construction; and AssetWise , for asset operations. This data-centric, federated environment leverages digital twin workflows, powered by iTwin, to open up data contained in engineering files through automated and intrinsic mapping to our infrastructure schemas. These schemas are open and extensible, and can link to reality modeling and Internet of Things (“IoT”) devices, thereby creating the potential for unifying, cloud-based solutions across the lifecycle of infrastructure engineering. Project Delivery Systems . Our Project Delivery systems support information and document management, engineering‑specific collaboration and work‑sharing for distributed project teams and enterprises, and construction planning, modeling and execution. The scope of these solutions is not limited to users of only our own engineering applications. Often during the project delivery lifecycle, key data are constantly changing, with inputs received from multiple sources, resulting in the need for a single source of information that is used to collect, manage, and disseminate information for the whole project team. Our software assures that the rapidly-changing data are managed in a common data environment (“CDE”) such that only the correct milestone versions can be shared and referenced across the project, while embedded digital twin workflows, powered by iTwin, enable interdisciplinary design review and advanced design validation to improve the effectiveness and quality of designs and the integration of reality modeling data. This functionality enables infrastructure project organizations to “virtualize” their talent so that the required work can be shared by all participants everywhere through our software, reducing the need for physical co-location of the project resources. Users of our Project Delivery systems can also apply analytics at the level of engineering fidelity across all projects, learn from and reuse rich project data, and retain knowledge to enhance the quality and efficiency of future projects. Our SYNCHRO 4D construction modeling software spatially and temporally integrates a project’s 3D engineering models into its construction schedules to assess sequencing strategies and to visualize and understand planned and actual progress over the project timeline. Our solutions also enable project delivery teams to optimally define and manage discrete engineering, construction, and installation work packages, including the construction trades’ “workface planning,” which considers crafts and materials by day and zone. For work packages, which increasingly take advantage of modular offsite fabrication and manufacturing, our software manages and enables 4D visualization of the necessary spatial and logistical interfaces, which enable users to, among other things, perform virtual walk-throughs, query model information, and analyze embedded property data using a simple web browser. Benefits of our Project Delivery systems to project delivery enterprises include: • Distributed work-sharing. Our solutions incorporate the rigorous workflow protocols required for structured coordination across engineering and construction supply chains and across geographies, enabling global sourcing for integrated project delivery, while maximizing economics, quality, and safety ; and simultaneously creating visibility and traceability in deliverables workflows, with a comprehensive audit trail; 7 • Comprehensive collaboration. Our software leverages cloud and hybrid environments to streamline the aggregation, distribution, and interaction for project deliverables, ensuring that the right project participants have the right information in the right format at the right time, including at the project site and on every device; and • Construction visibility. Our solutions’ broad span and continuous detail across design integration, construction modeling and work packaging, and mixed‑reality 4D visualization, advances predictability, accountability, and safety throughout the construction process. Asset Performance Systems . Our Asset Performance systems span the operating life of commissioned infrastructure assets, capturing and managing changes to engineering models and enterprise information for compliance and safety, and to model performance and reliability to support operating and maintenance decisions. Our Asset Performance systems are used to manage engineering information and geospatial relationships for operating and provisioning infrastructure across all sectors, including linear networks for transportation, energy transmission and distribution, water, and communications. Our asset performance modeling provides the needed analytical context for “right-time” data, including from IoT sensor capabilities, to yield actionable insights. Benefits of our Asset Performance systems for owner‑operators include: • Better compliance and assurance. Our systems intrinsically enforce the rigor appropriate for operating infrastructure assets in order to provide dependable visibility into the impact of changes; • Better asset performance. Our solutions include operational dashboards that provide decision support insights to maintain and improve throughput and reliability; and • Better risk management. Our solutions include predictive analytics that identify potential problems before they occur and ensure the accessibility of best‑available engineering information and models for mitigation and resilience. Industry Solutions. Our Industry Solutions solve domain‑specific problems for owners of infrastructure assets, and the project delivery ecosystems that support these owners. These offerings span reality modeling, urban mobility simulation, and design and engineering of utility and communication networks; and support fit‑for‑purpose infrastructure digital twins through configurations of our iTwin Platform. Benefits of our current Industry Solutions include: • Evergreen reality models. Our reality modeling software maintains engineering‑ready 3D models of cities, asset sites, or project sites, incorporating incrementally updated surveys, and thus ensures that project teams or engineering departments can rely on up‑to‑date geospatial context for digital workflows; • Domain specific solutions. Our Industry Solutions for transportation owners solve such problems as managing their assets, bridge inspections, and determining safe routes for oversize or overweight vehicles. For cities, our solutions help with planning, visualization, and mapping, including 3D mobile mapping. For utilities, our solutions help in the design and operation of electric distribution and transmission networks and substations, and gas and district energy networks; • Better resilience. Our solutions can integrate geotechnical, structural/seismic, and hydrological engineering modeling with evergreen 3D city models to harden infrastructure from flood and other natural hazards, and to apply engineering simulations for mitigation and emergency response; 8 • Resource conservation. Taking full advantage of our solutions can significantly increase efficiency and reduce waste. For instance, our water network modeling tools, applied to compare “as‑designed” specifications to observed flows and pressures, can help to non‑invasively locate subsurface water network leaks; and • Fit‑for‑purpose infrastructure digital twins . We leverage our deep domain expertise and our iTwin Platform to support fit‑for‑purpose digital twins, such as our current offerings for industrial plants, water and wastewater networks, and communications towers, as well as asset-specific solutions, powered by iTwin, such as those for bridge or dam operators that enable virtual asset inspections, unified access to sensor data, and the ability to identify and classify defects. iTwin Platform. Our iTwin Platform for infrastructure digital twin offerings, leveraging our infrastructure schemas, enables our users to create and curate cloud‑native 4D/5D digital representations of physical infrastructure assets, incorporating underlying engineering information, federated with operational data, and then to model, simulate, analyze, chronicle, and predict performance over time. Using digital twins, our users can more fully extend digital workflows across project delivery and asset performance, increasing the value of infrastructure engineers’ work. Our iTwin Platform powers the Bentley Infrastructure Cloud to add digital twin capabilities to our project delivery, 4D construction, and asset performance offerings. It also supports an emerging ecosystem of third-party developers who can participate by using iTwin.js, an open‑source development library, to develop desktop, mobile, or web apps that leverage the iTwin Platform or that augment iTwin products from us or from other third parties. While iTwin.js is open source, use of the iTwin Platform or of our products built on the iTwin Platform do require licenses from us. Applications from Bentley Systems and third parties can participate in digital twin workflows through connectors, which enable any engineering file format to create an iModel, populating the iTwin Platform database. An iModel is a distributed database based on our infrastructure schema. It maintains transactional information to manage change as data is added or changed. In 2022, we took further advantage of our iTwin Platform to introduce the following productized offerings: • iTwin Experience. A cloud product that empowers owner-operators’ and their constituents’ insights into critical infrastructure by visualizing and navigating digital twins. iTwin Experience accelerates engineering firms’ “digital integrator” initiatives to create and curate asset-specific digital twins, incorporating their proprietary machine learning, analytics, and asset performance algorithms. iTwin Experience acts as a “single pane of glass,” overlaying engineering technology (“ET”), operations technology (“OT”), and information technology (“IT”) to enable users to visualize, query, and analyze infrastructure digital twins in their full context, at any level of granularity, at any scale, all geo-coordinated and fully searchable; • iTwin Capture. A solution for capturing, analyzing, and sharing reality data, that enables users to create engineering-ready, high resolution 3D models of infrastructure assets using drone video and survey imagery from any digital camera, scanner, or mobile mapping device. Infrastructure digital twins of any existing assets can accordingly start with reality modeling, rather than requiring building information modeling (“BIM”). iTwin Capture offers the highest-fidelity and most versatile means of capturing reality to serve as the digital context for surveying, design, monitoring, and inspection processes; and • iTwin IoT. A solution for acquiring and analyzing sensor data, that enables users to incorporate IoT data created by sensors and condition monitoring devices. Infrastructure IoT can be used for real-time safety and risk monitoring in operations and construction activities, including to measure and visualize environmental changes, structural movement, or deterioration for condition assessment, maintenance scheduling, and to prompt precautionary interventions. By incorporating real-time data at scale from among hundreds of sensor types, iTwin IoT increases the value of engineering and geotechnical data. 9 The iTwin Platform accordingly powers the Bentley Infrastructure Cloud, which encompasses ProjectWise , for project delivery, SYNCHRO , for construction; and AssetWise , for asset operations. In addition to these specific use cases, benefits of our digital twin solutions broadly to project delivery firms and owner‑operators include: • Managing change . The design and construction of an infrastructure asset is complex and can take many years with participation of many different organizations working together as a widely distributed team. An operational asset may be designed to last many decades, with even more different stakeholders. Managing data transactions (who, what, when) against a timeline is key to enabling many digital twin workflows, such as revisiting why a design change was made at a particular point in time, orchestrating data from contributing disciplines to conduct design reviews, or comparing the performance of an asset at different points in time; • Advanced insights . For project delivery, digital twins can reveal insights beyond what would be visible with traditional workflows; for example, a digital twin can show 3D heat maps highlighting where changes in a design have been unusually pervasive, indicating possible design flaws. For asset performance, such insights from digital twins can be used to evaluate different strategies for optimizing operational efficiencies and throughput; • Predictive analytics . For project delivery, digital twins and machine learning can compare the progress of a current project with similar projects that have been previously completed, and identify in advance potential bottlenecks, in time to take corrective action. For asset performance, a digital twin can track observations from various operational inputs against design intelligence to predict future failures and recommend maintenance actions to minimize downtime; • Continuous and comprehensive design reviews . For project delivery, digital twins can aggregate and align design models and data from all sources “on the fly” (without interruptions for translations, and without specialized software) to present immersive 3D status visualization in a web browser for any authorized stakeholder to participate in ongoing interactive design reviews; • Convergence of OT, IT, and now ET . Infrastructure owner‑operators are increasingly able to instrument their assets with IoT sensors, producing torrents of OT data that are difficult to interpret. Software advances in IT can in turn make data from enterprise resource systems, such as maintenance work order history, accessible for analytics. But even OT and IT together cannot inform decisions for improved asset performance as sufficiently as when combined with accessibility to comparable analytics from the assets’ engineering models, which we refer to as ET. Infrastructure digital twins notably enable the convergence of ET with OT and IT. With infrastructure digital twins, the design intent (the “digital DNA” captured in the digital twins’ engineering models and simulations) can serve as a baseline for comparison to IoT-monitored “as‑operated” performance, in light of the asset’s operations and maintenance history stored in IT systems, to enable integrated analytics to provide timely insights and recommended actions to optimize safety and performance; and 10 • Addressing a wide range of emerging use cases. There are proliferating use cases to address infrastructure lifecycle issues that are made possible by semantically opening up engineering data to be combined with observed operational data. Many of these use cases have heretofore been impractical by virtue of having required multiple disconnected steps in a manual process. For example, maintenance of a bridge traditionally depends upon manual visual inspections, generally requiring human inspectors climbing precariously to capture photographs and to produce written inspection assessments. The work can be dangerous, and entail subjective judgements which may not be repeatable. A digital twin for a bridge, on the other hand, advances periodic inspections to more continuous and/or real-time monitoring. Sensors on the bridge can gather data on traffic flow, vibration, and other indicators. Drones can (increasingly autonomously) capture imagery to be processed into a high-resolution reality model of the bridge, to which artificial intelligence (machine learning) can be applied to recognize cracks, corrosion, or other defects or changes in the bridge that may affect structural integrity. The digital twin’s structural models (which were initially developed to validate the “as‑designed” capacity) can then be reapplied to the “as‑operated” bridge conditions, to indicate to engineers potential needs for maintenance or remediation interventions. In addition to comparable operational engineering use cases for every existing infrastructure asset, there are at least as many non-engineering use cases where infrastructure digital twins can be leveraged, such as 3D city models being used to adapt for mobility and safety under pandemic lockdowns. Comprehensiveness of Our Offerings Our offerings are comprehensive across professional disciplines, lifecycle stages, infrastructure sectors, and geographies, resulting in what we believe to be durable competitive advantages: Professional Disciplines . Each infrastructure project requires seamless and deep collaboration among professional disciplines, which can include civil, structural, geotechnical, subsurface engineers, and process engineers, architects, geospatial professionals, city and regional planners, contractors, fabricators, and operations and maintenance engineers. Our open modeling and open simulation applications facilitate iterative interactions between disciplines and coordination across project participants. Additionally, we believe our collaboration systems lead the market in managing infrastructure engineering firms’ preferred work-in-progress workflows. For example, to illustrate the benefits of interdisciplinary digital workflows in roadway design, our offerings’ comprehensiveness can enhance both safety and economics by enriching the interfaces between geotechnical (earthworks) and structural analyses to share full 3D modeling details. Previously, structural decisions tended to be based on just a single imported parameter for subsurface foundation strength, frequently resulting in designs that included specifications and reinforcing materials beyond what was necessary to sufficiently mitigate risk. The importance of integrating our offerings broadly across disciplines is also a reason that we have always prioritized interoperability with competitors’ design tools. For major projects, owners and their contractors want to have the choice of the best professionals in every discipline, rather than limiting their choices to those using a particular software vendor’s applications. Our offerings win acceptance within major organizations and projects both through our breadth of applications, and through each application’s virtuosity in interpreting and emulating formats beyond our own. Lifecycle Stages . Both project delivery enterprises and owner‑operators benefit from our solutions, which enable digital workflows to extend between project and asset lifecycles, from design to construction and ultimately asset management. This capability allows our users’ digital engineering models to be leveraged as the context for real-time condition monitoring to achieve better and safer operations and maintenance. For an example of advantageous digital workflows from projects to assets, consider our solutions for permitting and routing of over‑weight and over‑sized loads by departments of transportation. Instead of routing based merely on static maximum load ratings for each bridge, we use actual bridge design models for dynamic structural simulations, and 3D clearances of the actual load configurations. As a result, user organizations are able to engineer safe routes to maximize commerce while protecting bridge longevity. 11 Infrastructure Sectors . Most major engineering and project delivery firms pursue an ever‑changing mix of projects across the public works/utilities, industrial, resources, and commercial/facilities sectors and for flexibility tend to favor an infrastructure engineering software vendor whose portfolio correspondingly spans their full breadth. This comprehensiveness provides diversification for our own business, as an incidental advantage. For example, when there have been cyclical downturns in the primarily privately‑financed industrial, resources, and commercial/facilities sectors, we have historically witnessed offsetting counter‑cyclical government investment in public works/utilities. Geographies . While design codes may vary by country, infrastructure purposes and engineering practices are fundamentally the same throughout the world, which makes it possible for our infrastructure modeling applications to be used globally. Our offerings are available in most major languages, supporting country‑specific design codes, standards, and conventions. Our development teams are also globally dispersed, due in part to acquisitions made in various countries, but also to provide any needed last mile localization of our applications. Our global comprehensiveness enables our project delivery accounts to compete more efficiently across geographic markets, thus also providing global supply‑chain sourcing choices for owners. The Digital Twins Opportunity We believe that digital progress in infrastructure advancement has to date lagged other economic domains for several reasons, including that: • most existing infrastructure assets predate engineering modeling software; • engineers’ work, including by way of BIM or geographic information systems (“GIS”), has been sequestered in native file formats that amount to “dark data,” inaccessible without the software that was used to create it, and therefore unavailable for use in digital workflows or analytics; and • construction processes are often fragmented and isolated from digital workflows altogether, resulting in engineering information being effectively abandoned between the project and the asset lifecycle phases of infrastructure. Over our company’s history, as computing capabilities have advanced, the scope of infrastructure engineering software has correspondingly increased. However, project and asset lifecycle software markets have developed independently from one another and connecting digital workflows have not been offered. We believe that the new advancement of BIM and GIS to “evergreen” infrastructure digital twins will have the effect of merging what have to date been separate market spaces as well as enabling new use cases that were not possible or practical with previous technologies. 12 Period Project Lifecycle Software Asset Lifecycle Software 1985 – 1995 2D Drafting (Computer Aided Design or CAD): Workstations and then personal computers make possible interactive graphical applications to automate the creation of previously manually drafted 2D engineering drawings. 2D Mapping: Workstations and personal computers make possible interactive graphical applications to automate the creation of maps. 1996 – 2005 Collaboration: Networked personal computers and servers provide platforms for file-sharing and referencing. CDEs are introduced. GIS: Networked personal computers and servers enable querying and visualization of geographic data. 2006 – 2015 3D BIM : Increased personal computing power enables the development of 3D applications for design of specific asset types including buildings, process plants, roads, and water networks. CDEs and the internet lead to global work-sharing and collaborative BIM. Geospatial: Increased computing address space enables geo-coordinated engineering models. GPS technology enables alignment of digital components and real-world coordinates. Asset Performance Management (“APM”): solutions are introduced for reliability-centered maintenance and risk-based inspection. 2015 – 2018 Reality Modeling : Advances in digital imagery, unmanned aerial vehicles (“UAVs” or “drones”), and specialized software enable the automated capture of “as-operated” conditions of an asset or site in an engineering-ready, geo-coordinated 3D model. Cloud ubiquity enables Common Data Environments to evolve into Connected Data Environments. APM evolves into Asset Performance Modeling , with engineering models recalibrated to reproduce and understand observed behaviors, and apply algorithms and analytics to derive insights and drive decisions. 2019 – Present 4D Digital Twins: Digital twins make possible the simulation of the behavior and the visualization (including through both virtual and augmented reality environments) of the changes of a project or infrastructure asset over time. Digital twins are continually updated in a cloud database and remain current and “evergreen,” over the full project and asset lifecycle, through continuous surveying of the physical context and embedded links to inputs from connected IoT sensors in the operating asset. With digital twins, users are empowered to better understand the impact of changes over time for projects and assets to improve project, construction, and operational efficiencies, predictability, and overall outcomes, while the leveraging of artificial intelligence and machine learning automates processes and workflows. 2022 The Industrial Metaverse: Many of the use cases for digital twins – visualization, real-time collaboration and enhanced simulation – are well served by emerging and immersive technologies that support the metaverse, including virtual reality headsets and holographic technology that simulates the real world. We are supporting this new technology enthusiastically by facilitating interoperability between our digital twin technology and the consumer-facing interfaces created by prominent gaming and mixed-reality leaders, such as Epic, Nvidia, and Microsoft, thereby enabling iTwin platform to provide the key content that makes the industrial metaverse valuable for purposes including 4D planning, autonomous inspection, remote operations, and real-time collaboration. 13 To enable infrastructure engineering to catch up to other sectors and to advance in “going digital,” we have enabled infrastructure digital twins, cloud‑provisioned digital representations of projects and assets that incorporate and converge their 3D physical conditions (digital context) for reality, their underlying engineering information (digital components) for veracity, and their 4D timeline of changes (digital chronology) for fidelity, enabling the merging of project and asset lifecycle workflows. This merging, for example, enables, among other things, carbon assessment in infrastructure digital twin solutions to allow for the benchmarking, assessment, and reduction in carbon embodied in infrastructure assets. Digital twin solutions are now made possible by new technologies including UAVs and their intrinsic “surveying” sensors, machine learning, cloud computing, open‑source development libraries, distributed ledger software, and mixed‑reality visualization. Our software to leverage these advancements for digital twin offerings includes: • Reality modeling software , which processes any combination of overlapping digital photography, video, and scanned imagery to produce a 3D reality model. Our software then uses machine learning to recognize and classify components within the 3D model (such as equipment, structural elements, pipes, valves, tags, and nameplates). This process populates the reality model’s digital context with these digital components, adding intelligence which can be aligned with engineering models from the design stage; and • iModels , which can be created through connectors which we provide for our own engineering applications or for the major third‑party applications (and which can be developed for any others using our Application Programming Interfaces (“APIs”)). Connectors transform data from the application’s proprietary format to correspond to the iModel’s distributed database schema. Since the iModel schema is comprehensive across infrastructure engineering disciplines (and can be extended as needed), all project and asset data can be aligned semantically and spatially with all other relevant models and data, allowing all this information to be accessed and queried to maximize the digital twin’s values of reality, veracity, and fidelity. 14 We believe that the growing adoption of infrastructure digital twins will serve to overcome the factors that have held back the digital advancement of infrastructure engineering, and will facilitate the broader use of intelligent engineering data in the operation of infrastructure assets. Moreover, we believe that due to the comprehensiveness of our solutions across project and asset lifecycles, infrastructure digital twins and newly enabled digital workflows spanning design, construction, and operations, will most particularly benefit our users and enhance our competitiveness. To further benefit us in the long run, our iTwin Ventures initiative invests in early-stage software companies building infrastructure digital twin solutions, especially those leveraging our iTwin platform. Our Primary Growth Initiatives Incremental to our long-standing programmatic acquisition strategy, since 2020 we have determinedly invested internal resources to augment our organic growth rate, with increasing success, through the following primary growth initiatives: • For Accretion in Enterprise Accounts : E365 Success Teams. Enterprise 365 (“E365”) is our premier enterprise subscription that bundles virtually-delivered expert services through our Success Force with our software solutions, enabling us to work strategically with subscriber accounts to achieve the business outcomes they seek. Through our embedded Enterprise Success teams and established Success processes, E365 accounts prioritize each calendar quarter their choices among our growing library of “Blueprints” for digital workflows. The Blueprints for establishing and propagating these workflows, which increase productivity and throughput by leveraging our products and cloud services, are implemented by our virtually dedicated Success professionals, most of whom are credentialed and experienced infrastructure engineers. In each E365 account’s quarterly business review, the completed Blueprints are assessed, and newly prioritized Blueprints assigned. We have honed this process and are continuously improving our Blueprints based on feedback in their adoption. Accordingly, we have substantiated that E365 helps our users implement, propagate, and upgrade our solutions more quickly, encouraging greater consumption of our software and stronger account relationships. We intend to continue to expand the reach of our E365 subscription within ultimately virtually all of our enterprise accounts; • For Penetration and Accretion in Small and Medium-Sized Businesses (“SMBs”) : Virtuosity. Our Virtuoso subscription, which was our first ecommerce offering ever, combines the benefits of our software as well as our Success Force. Through a software subscription for each individual practitioner and the bundled availability of “keys” entitling expert assistance, SMBs are led to take advantage of the full breadth and depth of our software solutions enabling cost-effective implementations and increased usage. Initially, this Virtuosity-branded business was staffed with inside sales colleagues, many with an engineering background, and we continue to grow this global group now exceeding 160 quota carriers. However, our strategy for SMBs, in competition with competitors who reach these prospects through typically small channel partners, is to transition an ever-greater portion of the interaction to be via “low touch” and ultimately “no touch” digital experience. The deployment and development of digital technologies for this is a substantial part of our capital program. New business from SMB accounts, including from hundreds of new “logos” each quarter, has become a substantial contributor to our overall Annualized Recurring Revenues (ARR) growth, and we are encouraged to continue and increase this Virtuosity investment; and 15 • Catalyzing the Infrastructure Digital Twin Ecosystem : BSY Investments. We believe more than ever that infrastructure digital twins will provide the greatest benefits from “going digital” in infrastructure engineering, as digital twins enable the practices and workflows of our users to become more data-centric. This evolution, we believe, will enable our users to apply new technologies such as machine learning and artificial intelligence to their projects and will create opportunities for engineering services to introduce data-centric offerings to owner-operators, such as proprietary analytics, benchmarking, and for data quality improvement. While we intend for our iTwin Platform to serve as the foundational system that makes all these data-centric benefits possible, their realization depends upon a digital twin ecosystem to provide these surrounding data services, which fall outside of our own preferred business focus. However, while engineering firms (which make up approximately half of our existing business) express interest in this “digital integrator” services opportunity, they lack firsthand experience or examples of successful business models. Hence, Cohesive represents our own investment to create a captive global “digital integrator.” Its charter is to adopt and prove successful commercial models that we can subsequently demonstrate and impart to engineering firms, who could together provide at scale these valuable digital integrator services to all infrastructure owner operators, accelerating infrastructure digital twins. In addition, our corporate venture capital fund iTwin Ventures is chartered to foster digital twin innovations through startups and emerging companies. iTwin Ventures also evangelizes and may initially subsidize the adoption of our iTwin Platform by many investee companies and others. We believe these investments will catalyze the further propagation of digital twins and, accordingly, the consumption of our solutions. Our Software Offerings Our software offerings are managed within Engineering Applications , Geoprofessional Applications , Enterprise Systems , Industry Solutions , and iTwin Platform . 16 Engineering Applications We undertake to provide comprehensive open modeling and open simulation applications for infrastructure design integration. Our open modeling applications include: • MicroStation , for flexible 3D design and documentation providing the common modeling environment upon which our applications are built; • OpenRoads , for the planning, 3D design, and documentation of roads and highways; • OpenRail , for the planning, 3D design, and documentation of rail and transit systems; • OpenPlant , for the 2D and 3D design and documentation of process plants; • OpenBuildings , for the 3D design and documentation of buildings and their integrated structural, HVAC, electrical, and plumbing systems; • OpenBridge , for the 3D design and documentation of bridges; • OpenSite , for the optimal planning, 3D design, and documentation of building, residential development, and infrastructure sites; and • OpenFlows , for water, wastewater, and stormwater system planning, design, and operations, incorporating hydrological, hydraulic, and flood modeling. Our open simulation applications include: • STAAD and RAM , for analysis and simulation respectively of infrastructure and building structural performance; • ADINA , for nonlinear simulation and analysis; • SACS , for analysis and simulation of offshore structural performance; • MOSES , for analysis and simulation of floating structures; • AutoPIPE , for analysis and simulation of pipe stress in industrial process plants; • SITEOPS , for simulation of compliant site layout, and optimization of earthworks, drainage, and parking; • CUBE , for multi-modal transportation network modeling and land-use modeling; • EMME , for multimodal urban, regional, and transport planning; and • LEGION , for pedestrian traffic simulation. 17 Geoprofessional Applications We undertake to provide comprehensive modeling and simulation of near and deep subsurface conditions. Our applications include: • Leapfrog , for 3D implicit modeling designed to rapidly integrate, communicate, and interpret geological data; • AGS Workbench , for processing, inversion, and visualization of geophysical data; • GeoStudio , for integrated geotechnical analysis for analyzing slope stability, groundwater flow, and heat and mass transfer in soil and rock; • Imago , for the capture and management of drilling core images; • MX Deposit , cloud drill hole software for simplifying and controlling how drill and other field data is collected, managed, and shared throughout the lifecycle of an ore deposit from early exploration through to mine production; • Oasis montaj , for the quality control, correction, visualization, analysis, and interpretation of geophysical, geologic and geochemical data; • PLAXIS , for geotechnical analysis to solve common and complex geotechnical problems, including advanced analysis for excavations, foundations, tunnels, and other infrastructure projects; and • OpenGround , for geotechnical information management for collecting, reporting, managing, visualizing, analyzing, and accessing geotechnical data. Enterprise Systems Our Enterprise Systems, which include solutions for both project delivery and asset performance, are powered by our iTwin Platform and infrastructure schemas, and integrate with our engineering applications to enable better creation, delivery, and ongoing operation of better infrastructure, through complete and evergreen digital twins. These offerings, which combine to form the Bentley Infrastructure Cloud, include the following: Our Project Delivery systems support collaboration, work‑sharing, and 4D construction modeling for infrastructure project delivery enterprises and include: • ProjectWise , for helping teams to manage, share, and distribute work‑in‑progress engineering content. ProjectWise enables all stakeholders involved in design and engineering to share and find information, conduct collaborative design reviews, and manage contractual exchanges faster for maximum team productivity; • 4D Design Review , a ProjectWise service built on the iTwin Platform that allows project participants to leverage a digital twin throughout the project delivery lifecycle and that provides browser‑level immersive visualization, change management, and project analytics. Through our infrastructure schemas, this solution also aligns design file data across multiple disciplines for comprehensive 3D and 4D design reviews and across all projects to understand dependencies, and to reuse datasets, including for machine learning to develop proprietary analytics; and 18 • SYNCHRO , for 4D/5D construction modeling across schedule simulation and immersive virtual or augmented visualization; cloud-based construction operational solutions for project and field management; and advanced work packaging, inclusive of engineering, construction, and installation work packages, and trade and task workface planning. Our Asset Performance systems manage engineering information and geospatial relationships for operating and provisioning infrastructure across all sectors and include: • AssetWise , for asset performance throughout the operations and maintenance lifecycle of infrastructure assets and their associated networks, in transportation, energy, and communications. AssetWise services include: • AssetWise ALIM , for managing infrastructure asset information and linear networks and for controlling and managing change over the asset lifecycle; • AssetWise Asset Reliability , for reducing equipment downtime and limiting business risk associated with equipment failures, while increasing safety, reliability, and cost effectiveness; • AssetWise Enterprise Interoperability , for enabling access to multiple data sources from third‑party providers, and integrating them in operations and maintenance workflows; • AssetWise 4D Analytics , for employing advanced analytics and machine learning, particularly to IoT time series, to gather insights to understand current conditions and predict future performance; • AssetWise Linear Network Management , for managing transportation network infrastructure and associated information including assets and linear events; and • Seequent Central , a cloud solution designed for geoprofessional teams to visualize, track, integrate, and manage their subsurface data in a single, centralized, auditable environment. Industry Solutions Our Industry Solution offerings solve domain‑specific problems for owners of infrastructure assets, and the project delivery ecosystems that support these owners. Many offerings extend AssetWise and/or leverage the iTwin Platform. Industry Solution offerings include: • iTwin Experience , for empowering owner-operators’ and their constituents’ insights into critical infrastructure by visualizing and navigating digital twins by enabling users to visualize, query, and analyze infrastructure digital twins in their full context, at any level of granularity, at any scale, all geo-coordinated and fully searchable. Predecessor products include OpenCities ; • iTwin Capture , for capturing, analyzing, and sharing reality data, enables users to create engineering-ready, high resolution 3D models of infrastructure assets using drone video and survey imagery. Predecessor products include ContextCapture and Orbit3D ; • iTwin IoT , for acquiring and analyzing sensor data, enables users to seamlessly incorporate IoT data created by sensors and condition monitoring devices. Predecessor products include those from sensemetrics , Vista Data Vision , and eagle.io ; • AssetWise Linear SUPERLOAD , for automating the safe routing and permitting of overweight/oversized vehicles; 19 • AssetWise Linear Analytics , for visualizing and understanding vast quantities of linear network data to identify trends and anomalies, and optimize maintenance decisions, for rail or road networks; • AssetWise Inspections , for performing inspections of bridges and related assets; • OpenUtilities , for the design and management of electric, gas, and district energy networks, and substations; • OpenTower , for the design of communications towers, including for 5G capacity; • OpenWindPower , for the design of fixed and floating wind turbine structures; • Power Line (PLS) applications, for design of overhead electric power transmission, distribution, and communication lines and their structures; • SPIDA , for modeling and analysis of overhead electric distribution network systems; • PlantSight , a digital twin solution for operating industrial plants; and • WaterSight , a digital twin solution for water and wastewater networks. iTwin Platform Our iTwin Platform for infrastructure digital twins enables Bentley Systems and other third‑party developers to build applications and solutions for a wide range of potential digital twin use cases. We have used this platform to create cloud services which complement and extend project delivery systems and asset performance systems offerings, to create fit‑for‑purpose industry digital twin solutions, and to support an emerging ecosystem of third‑party developers. This platform powers the Bentley Infrastructure Cloud and its constituent solutions, which are unified and made interoperable by Bentley Systems’ incorporated infrastructure schemas. The next priority for the iTwin Platform is to improve our modelling and simulation applications by incorporating the simultaneous creation of iModels along with existing deliverable files. We expect that users of such applications will accordingly gain new data-centric benefits to make their projects more efficient, more connected, and the results more valuable than before. Rather than disrupting our users’ existing workflows, we expect that this will be accomplished by seamlessly augmenting their current tools, file formats, and deliverables. Our Commercial Offerings Licensing Models Our applications are offered through perpetual licenses or term licenses, priced dependent on the country of purchase and use. Most accounts owning perpetual licenses subscribe to our SELECT coverage which, in addition to providing support and upgrades, enables the use of their licenses for each product to be pooled within each country. For most larger accounts (generally a minimum of $100,000 annualized recurring revenues), our enterprise subscription offerings provide complete and unlimited global access to our comprehensive portfolio of solutions. Our E365 subscription is a global consumption‑based plan with consumption measurement durations of less than one year, primarily priced uniformly per application per day of actual usage in any country, and inclusive of Success Services (described below) delivered by our colleagues to assist with expanding and gaining the most value from usage of our software. Prior to the launch of our E365 subscription in 2018, we traditionally offered an enterprise license subscription (“ELS”), which entitles unlimited use of any of our applications for an annual fixed fee, reset annually generally based on actual usage (within each country) for the previous year. Almost all of our largest ELS accounts have upgraded to E365, and each quarter many of the largest remaining SELECT subscriber accounts upgrade to the E365 program. 20 Our ProjectWise and AssetWise Enterprise Systems are offered under our cloud services subscription program, charged quarterly based on actual users of “visas” for various levels of functionality. Visa pricing include Azure provisioning at our cost, although some accounts elect to continue on‑premises and/or hybrid hosting. Commercial models eligible for our Cloud Services Subscription (“CSS”), such as our E365 subscription, entail an annual funding commitment, generally paid upfront, based on an estimation of services to be used for the upcoming year. Actual consumption is monitored and invoiced against the deposit on a calendar quarter basis. Accounts are charged only for what gets used, and deposited amounts never expire. At the end of 2022, accounts representing approximately 60% of our total annualized recurring revenues had chosen to institute our commercial models of CSS and/or E365 consumption funding for licensing of our software. User Success Over the last three years, we have reorganized our activities focused on substantive support for existing users and their accounts into our User Success group, consisting of over 600 colleagues, most with domain experience and credentials in infrastructure engineering. User Success has enabled us to transition from traditional paradigms of on‑demand technical support, and episodically contracted professional services, to instead delivering proactive and continuous engagement with users and accounts through “Success Plans.” Success Plans are designed with our accounts’ business outcomes in mind ensuring that users and accounts maximize the value achieved from our solutions. Working collaboratively with our accounts, User Success Specialists deliver Success Plans through structured engagements based on explicit and standardized “Success Blueprints” that include annual planning, virtual or in-person engagements with subject matter experts, and quarterly business reviews. Typically, our User Success colleagues engage with our accounts remotely. Success Plans, based on allotted credits toward multiple Success Blueprints per calendar quarter, are bundled into our E365 commercial program which has grown rapidly among our larger accounts. Our Accounts We provide our software solutions to over 40,000 accounts in 194 countries worldwide. Our revenues are balanced and diversified between engineering and construction contracting firms who work together to deliver the design and construction of capital projects (representing 50%, 56%, and 57% of our 2022, 2021, and 2020 total revenues, respectively), and their clients, the world’s public and private infrastructure asset owners and operators (representing 50%, 44%, and 43% of our 2022, 2021, and 2020 total revenues, respectively). We do not have material account concentration. No account, including any group of accounts under common control or accounts that are affiliates of each other, represented more than 2.0% of our total revenues in 2022, or more than 2.5% of our total revenues in 2021, or 2020. Our Technology Our business is singularly focused on software for infrastructure engineering, primarily for the world’s largest projects and assets. As a result, we manage our software products to meet constraints imposed for fitness to this purpose. Our market position is built on several reputational hallmarks, including: • generational stability of file formats, corresponding to the long lives of infrastructure projects and assets; • commitment to openness and interoperability with competitors’ file formats; • continuity of software applications’ lifecycles, never jeopardizing users’ cumulative investments by requiring them to “start over”; and • highest capacity and performance, versus competitors, for large infrastructure models and datasets. 21 Application Framework Our software solutions are delivered using flexible, reusable, and open technology, which results in highly integrated applications and cloud services that support comprehensive digital workflows in a scalable manner. For example, our modeling and simulation applications, including MicroStation , leverage a set of reusable components for graphics editing, visualization, solid modeling, and other capabilities. This open framework supports the addition of domain specific features, allowing us to offer highly compatible and well-integrated discipline‑specific applications based on this common framework. Microsoft Integration Our software leverages Microsoft’s platform technologies. We seek to take full advantage of integration with Microsoft Office 365 and other horizontal applications such as Teams for workflows that unify our engineering applications within enterprise environments across all computing form factors and devices. iTwin Platform Our iTwin Platform is a collection of cloud services used to create, curate, and leverage digital twins. The platform is used by us to create complementary digital twin offerings for current products, to embed digital twin capabilities in current products, and to support fit‑for‑purpose digital twin solutions for particular domains. Third parties can use the iModel.js open-source APIs to create desktop, mobile, and web apps, as well as cloud services and agents, that leverage and extend the iTwin Platform. They can create new digital twin applications or solutions or provide complementary applications or services to existing Bentley Systems and third‑party solutions. The iTwin platform is managed by us on Azure providing anywhere, anytime access to infrastructure digital twin solutions for all stakeholders. Our Licensing and Administration Platform All of our applications and systems share a cloud‑native platform for license pooling, management of subscription entitlements, and usage reporting for us and for accounts, including for commercial consumption metrics. Our platform also logs usage of particular “instrumented” functions within our applications to enable our Blueprints to be of most value. Our platform can also provide in-application messaging to users from our User Success group. Our Acquisitions Since our founding, we have purposefully pursued a strategy of regularly acquiring and integrating specialized infrastructure engineering software businesses, including 36 acquisitions over the past five years. As a public company, we have been able to make platform acquisitions which appreciably increase our scale and/or the scope of our platform capabilities. Our platform acquisitions have been: • Seequent (2021), and subsequent complementary programmatic acquisitions, to enable infrastructure digital twin capabilities to incorporate modeling and simulation of full subsurface depths, and advancing infrastructure resilience and sustainability by helping geoprofessionals to understand environmental conditions and to mitigate environmental risks; and • Power Line Systems (2022), to bring design, analysis, and management of overhead electric power transmission lines and structures to our grid digital twin solutions. Power Line Systems substantially completes the reach of our comprehensive portfolio for the lifecycle integration of grid infrastructure across electrical transmission, substation, and distribution assets, and communications towers. 22 Our relatively numerous and frequent programmatic acquisitions, which most often “fill white space” within our ecosystem and add their particular value principally by virtue of our existing platform comprehensiveness, and accordingly we consider this programmatic aspect of our growth as characteristically within our mainstream business performance (unlike platform acquisitions). Our average historical annualized recurring revenues growth rate from programmatic acquisitions over the last five years has been approximately 1.5% measured on a constant currency basis. Examples of recent programmatic acquisitions, along with their purposes, include: • GroupBC (2020), to bring additional common data environment solutions for construction projects and infrastructure assets, and federate to iTwin cloud services, extending the value of project and asset information through digital twins; • Cohesive Solutions (2020), and subsequent complementary programmatic acquisitions, to bring digital integrator expertise for the convergence, through digital twin cloud services, of digital engineering models (ET), with IT and OT, for infrastructure assets in the utilities, energy, and facilities sectors; • Inro (2021), to add traffic simulation software for multi‑modal mobility digital twins; • Vista Data Vision (2021), to add intrinsic IoT capabilities for infrastructure digital twins to incorporate real‑time sensor data. By virtue of the resulting “infrastructure IoT” standardization, the full IoT ecosystem becomes seamlessly accessible for IT/OT/ET integration through infrastructure digital twins; • SPIDA Software (2021), adds a key element to our grid digital twin solutions, the design, analysis, and management of utility pole systems, which deliver the environmentally vulnerable “last mile” of critical infrastructure for vital energy and communications; • Adina R&D (2022), adds nonlinear simulation capabilities to users of our comprehensive modeling and simulation software portfolio for infrastructure engineering; and • Vetasi (2022), acquired through Cohesive , adds the largest IBM Maximo and enterprise asset management system consultancy team across Europe, Africa, and ASEAN countries, with headquarters in the United Kingdom and operations based in Poland, Indonesia, South Africa, Spain, Ukraine, and Australia. Our Competition The market for our software solutions is highly competitive and subject to change. We compete against large, global, publicly‑traded companies that have resources greater than our own, and also against small, new, or geographically‑focused firms that specialize in developing niche software offerings. While we do not believe that any competitor offers a portfolio as comprehensive as ours, we do face strong competition, varying by infrastructure lifecycle phase and sector: • our key competitors in public works/utilities applications include Autodesk, Inc., Trimble Inc., and Hexagon AB; • our key competitors in industrial applications include Hexagon AB, the AVEVA unit of Schneider Electric, and Dassault Systèmes; • our key competitors in resources applications include Hexagon AB, the AVEVA unit of Schneider Electric, and Dassault Systèmes; • our key competitors in commercial/facilities applications include Autodesk, Inc., Nemetschek SE, and Trimble Inc.; • our key competitors in project delivery systems include Autodesk, Inc. and Oracle Corporation; and 23 • our key competitors in asset performance systems include Aspen Technology, Inc., the AVEVA unit of Schneider Electric, Environmental Systems Research Institute, Inc., and General Electric Corp. The principal competitive factors affecting our market include: • product features, performance, and effectiveness; • reliability and security; • product line breadth, depth, and continuity; • comprehensiveness of offerings across disciplines and infrastructure sectors; • specification by and endorsement of infrastructure owners, and degree of adoption across the relevant supply chain; • familiarity and loyalty by professionals throughout their training and careers; • ability to integrate with other technology; • capacity to operate at scale; • capabilities for configurability and APIs; • ease of use and efficient workflows; • price, commercial model, and total cost of use; • support of industry standards; • strength of sales and marketing efforts; and • brand awareness and reputation. We believe we compete favorably against our competitors based on the factors above and that we distinguish ourselves through our comprehensive software portfolio, our commitment to both integration and interoperability across the entire infrastructure lifecycle, our flexible commercial models, and our direct sales channels. Our Sales and Marketing We bring our offerings to market primarily through direct sales channels that generated approximately 92% of our 2022 total revenues. Our direct sales channel includes: • Account Managers, who are responsible for our largest accounts. For pre‑sales technical activities, Account Managers are supported by the engineering domain experts within our User Success organization; and • Our Virtuosity inside sales colleagues and global ecommerce platform, which serves primarily our smaller‑ to medium‑sized prospects and accounts, incorporating our Success Force technical experts who help to sell to and advise users across our account base. We rely on specialist channel partners in geographic regions where we do not currently have a meaningful presence or where, for some of our offerings, direct sales efforts are less economically feasible. Channel partners accounted for approximately 8% of our 2022 total revenues. 24 Sales cycles for our applications tend to be relatively short, measured in weeks. The most prevalent transactions are increases by accounts in their use of our applications already in use. Our sales model allows and encourages accounts to try usage of our applications that are new to them with minimal obligation. We act upon our logs of such new usage to assign user success colleagues to help the new users in this expanded adoption. Our ProjectWise and AssetWise Enterprise Systems offerings are generally sold through either proactive proposals or responses to requests for proposal, so sales cycles for those offerings range from months to several quarters. We have a comprehensive global proposals team to assure appropriate business development resources are allocated, to quality‑assure efficient and effective proposal contents, and to maximize the capture ratio for our proposal pursuit. Our marketing functions include: • Corporate marketing , to build brand awareness, brand equity, and thought leadership, including through corporate events and programs covering industry trends and challenges, and to conduct market research and industry studies; • Industry and product marketing , for demand generation through digital marketing channels, including our website, Internet advertising, webinars, and virtual events, and paid and organic social media, and through traditional marketing channels such as trade print advertising, press releases, editorial placements, industry‑specific trade shows and conferences, in‑person seminars, and locally‑sponsored events; and • Regional marketing , to localize and deliver our marketing programs throughout the world. We also invest in our annual Year in Infrastructure Conference, which brings together leading infrastructure thought leaders from around the world for presentations on innovative projects, to learn about the latest advances to our applications and cloud offerings, and to network and share best practices. Our associated Year in Infrastructure and Going Digital Awards in 2022, which was livestreamed across the globe, attracted over 250 project nominations from our accounts to be judged by independent juries in 12 categories for digital advancements in infrastructure engineering. Our Research and Development We continue to make substantial investments in research and development because we believe the infrastructure engineering software market presents compelling opportunities for the application of new technologies that advance our current solutions. Our research and development roadmap balances technology advances and new offerings with continuous enhancements to existing offerings. Our allocation of research and development resources is guided by management‑established priorities, input from product managers, and user and sales force feedback. We had approximately 2,100 colleagues engaged globally in software research and development as of December 31, 2022. Each of our product advancement groups for Engineering Applications, Geoprofessional Applications, Enterprise Systems, and Industry Solutions have research and development resources and responsibilities. Our iTwin Platform group consists of approximately 200 colleagues and is entirely devoted to the rapid development of new and incremental cloud‑native services for infrastructure digital twins. Our separate Technology office assesses the potential of new software technologies and sources. As part of our resource allocation process, we also conduct a cost‑benefit analysis of acquiring available technology in the marketplace versus developing our own solutions. Our Portfolio Development office, in addition to pursuing appropriate acquisitions and digital-integrator startups, allocates funding for internal “acceleration” projects, to “make” rather than “buy.” Each such project is staffed with colleagues dedicated to the “intrapreneurial” incubation of a new offering, which is brought back to its respective sponsoring product advancement group after market introduction. 25 For the years ended December 31, 2022, 2021, and 2020, our research and development spending was $257.9 million, $220.9 million, and $185.5 million, respectively, and as a percentage of our total revenues was 23.5%, 22.9%, and 23.1%, respectively. Our Intellectual Property We believe that the success of our business depends more on the quality of our proprietary software solutions, technology, processes, and domain expertise than on copyrights, patents, trademarks, and trade secrets. While we consider our intellectual property rights to be valuable, we do not believe that our competitive position depends primarily on obtaining legal protection for our software solutions and technology. Instead, we believe that our competitive position depends primarily on our ability to maintain a leadership position by developing innovative proprietary software solutions, technology, information, processes, and know‑how. Nevertheless, we rely on a combination of copyrights, patents, trademarks, and trade secrets in the United States (“U.S.”) and other jurisdictions to secure our intellectual property, and we use contractual provisions and non‑disclosure agreements to protect it. As of December 31, 2022, we had 143 patents granted and 61 patents pending in the U.S., the first of which expires on January 3, 2023, and 27 patents granted and 59 patents pending internationally, the first of which expires on September 9, 2023. In addition, from time to time we enter into collaboration arrangements and in‑bound licensing agreements with third parties, including certain of our competitors, in order to expand the functionality and interoperability of our software solutions. We are not substantially dependent upon any one of these arrangements, and we are not obligated to pay any material royalty or license fees with respect to them. Our patents cover systems and methods relating to various aspects of software for infrastructure design and modeling, collaboration and work‑sharing, and infrastructure asset operations. Among other things, our patents address a broad range of issues in infrastructure domains from analyzing building energy usage and structural analysis, railway system maintenance, water network design and operation and augmented reality, as well as techniques for creating, storing, displaying, and processing infrastructure models. To innovate and increase our strategic position, our software developers are incentivized to alert our internal patent committee to innovations that might be patentable or of strategic value. In 2022, our patent committee reviewed 26 invention disclosures submitted by our software developers, and filed 26 U.S. and two foreign patent applications, while 17 U.S. and four foreign patents were granted. We also plan to assess appropriate occasions for seeking patent and other intellectual property protections for aspects of our technology and solutions that we believe constitute innovations providing significant competitive advantages. We have registered 167 trademarks, including “Bentley,” “MicroStation,” “AssetWise,” and “ProjectWise,” with the U.S. Patent and Trademark Office and in several jurisdictions outside the U.S. Our names, logos, website names, and addresses are owned by us or licensed by us. This Annual Report on Form 10‑K contains trademarks, trade names, and service marks of other companies, which are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this Annual Report on Form 10‑K may appear without the ®, TM, or SM symbols, but the lack of those references is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names, and service marks. We do not intend our use or display of other parties’ trademarks, trade names, or service marks to imply, and such use or display should not be construed to imply, endorsement or sponsorship of us by these other parties. 26 Environmental, Social, and Governance (“ESG”) At Bentley Systems, our commitment to ESG is driven by our service to engineering and related professions, and the positive impacts our products enable through the design, building, and operation of the world’s infrastructure. Enabling the United Nations’ SDGs is our commitment that we will continually innovate in ways that promote sustainable infrastructure and drive progress towards ambitious global goals. Our purpose is to empower SDGs through our users’ use of our technology, most notably through infrastructure digital twin solutions, helping to drive resilient and sustainable infrastructure outcomes. In support of that vision, we have combined the two acronyms ESG and SDG to form ES(D)G, our approach to conducting our business in ways that ensures trust and responsibility by empowering sustainable development goals and bringing to light the environmental handprint of our software and services. In 2022, we continued to build upon our strong commitment to sustainability with an emphasis on strategy, governance, and transparency. ESG Strategy In our second year of formal ESG strategy, we wanted to engage our stakeholders to assess our current performance and ensure that our priorities are aligned with their needs. We conducted our inaugural ESG materiality assessment by interviewing directors, executive leadership, and colleagues from across the organization as well as key accounts, users, suppliers, and investors to determine the areas of ESG that are most important for our business and to our stakeholders. The results showed us that we are well aligned with our stakeholders and identified the topics that will be the focal point of our ESG efforts. The full details of this assessment will be released in our inaugural ESG report later this year. From this assessment, our ESG steering committee is working to develop approaches to manage and improve on priority ESG topics. One such area is our climate strategy, where we have made significant progress in the last year. While our products support climate solutions for our users, we learned through our engagement that our stakeholders would like us to align our business with leading climate science. In 2022, we worked with a climate consultancy firm to quantify our entire greenhouse gas footprint, including our value chain emissions, to understand our current performance and trends. From this analysis, we were able to model feasible pathways to align our business with a Net‑Zero future. Late last year, we submitted a near term (2030) climate target to the Science Based Targets initiative (SBTi) to reduce our absolute emissions for direct operations (Scope 1 and 2) and the emissions intensity of our value chain emissions (Scope 3) on an economic intensity basis. ESG Governance In 2022, we continued to drive good governance of ESG across our organization through regular engagement and enhanced policies. The sustainability committee of our board of directors met quarterly to assess the progress of our ESG efforts, including engagement in our materiality assessment. We also published new ESG‑related policies, including our global tax policy, to ensure proper controls of priority topics. We also increased the size of our internal ESG steering committee to include additional business function leads for better governance. The group is working to enhance our strategies for priority ESG topics following our materiality assessment and to increase organizational efficiency for reporting, responding to relevant inquiries, and allocating resources to enhance performance. ESG Disclosure We enhanced several areas of disclosure in 2022, including publishing our greenhouse gas inventory, Employment Information Report (EEO‑1) data, Sustainability Accounting Standards Board (SASB) index, and Global Reporting Index (GRI) index on our ESG data center. We also reported to Climate Disclosure Program (CDP) and other relevant questionnaires to ensure our current performance is understood and easy to reference for our stakeholders. Our emphasis on increased transparency has yielded several improvements to relevant ratings, including an A rating from MSCI and a Low-Risk rating from Sustainalytics. We are continuing to increase transparency aligned with our materiality assessment and look forward to publishing several new disclosures in our inaugural ESG report later this year. 27 To learn more, visit our ESG website at https://www.bentley.com/company/esg-overview/. The information posted on this website is not incorporated into this Annual Report on Form 10‑K. Human Capital Management We consider our colleagues a key success factor in driving our continued growth. Our overall talent strategy focuses on creating a meaningful experience for our colleagues through our inclusive and engaging culture in which our colleagues develop, collaborate, contribute, thrive, and ultimately make a positive impact through advancing the world’s infrastructure. As of December 31, 2022, we had approximately 5,000 full‑time colleagues globally, including approximately 2,000 in the Americas (the U.S., Canada, and Latin America (including the Caribbean)), approximately 1,400 in Europe, the Middle East, and Africa (“EMEA”), and approximately 1,600 in Asia‑Pacific (“APAC”). None of our full‑time U.S. colleagues are unionized. Outside the U.S., a small overall portion of our colleagues in certain countries are represented by a colleague representative organization, such as a union or colleague association. Our colleagues bring 67 languages to fulfill the needs of our globally dispersed accounts and users. Our colleagues are highly qualified with an average of six years of total service with the Company and advanced academic credentials, including over 130 doctoral degrees and over 1,300 master’s‑level degrees. We believe our enriching experience, culture of belonging, and core values are key drivers for attracting, developing, and retaining successful colleagues. Our approach to colleague success focuses on supporting and empowering all our colleagues to create their unique, multi-dimensional success stories at Bentley Systems. Successful colleague career journeys in turn enable our success at Bentley Systems and that of our users. We do this by creating a purposeful experience centered on our colleagues and their well‑being, striving to remain competitive with our peers, and embed opportunity, engagement, diversity, inclusion, and continuous growth throughout the entire colleague lifecycle. Talent Acquisition Strategy Our Talent Acquisition Strategy leverages best practices to attract, engage, and hire diverse top talent who will accelerate Bentley Systems’ success. Thanks to our culture and values, investment in colleague development opportunities, and competitive total rewards, we enjoy high levels of colleague referrals to supplement our corporate hiring practices, which are encouraged through our colleague referral program. We also build relationships with universities around the world as part of our Graduate Development Program to hire talented graduates into rotational assignments, which provides curated growth and development opportunities while creating a solid talent pipeline for our critical business units and teams. As part of our commitment to diversity, equity, and inclusion (“DEI”), we deploy strategies to identify diverse candidates with each open position, take measures to keep our Talent Acquisition process free of bias, and in the U.S., we intentionally partner and advertise jobs with organizations focused on women, veterans, people of color, people with disabilities, and LGBTQ+ populations. As part of our university efforts, we partner with Historically Black Colleges and Universities (“HBCUs”) in the U.S. and provide free Bentley Systems software learning licenses to HBCU students. We also expand our reach to students in our local communities via partnerships with organizations like CodePath, a non-profit organization striving to eliminate educational inequity in technical education. 28 Colleague Experience We define Colleague Experience as the way in which our colleagues observe, internalize, and interpret interactions at work. It is shaped by experiences along our colleague journey and moments that matter within our role, workspace, manager, culture, and community. Our colleague strategy is to ensure that these experiences are positive and impactful, and that we take a colleague-centric approach in all that we do. We will achieve this through focused efforts to enhance personal, work, and organizational experiences, creating a strong sense of belonging, and building trust. Our colleague strategy includes a variety of approaches including investing in learning and development, career growth, regular performance feedback, rewards and recognition, opportunities for meaningful connection, and equipping our colleagues with tools and facilities so they can perform at their best. We involve colleagues in surveys, focus groups, and other discussions to influence our priorities and talent agenda so each colleague can be successful. Professional Development We are committed to investing in our most valuable resource, our colleagues. We provide our colleagues with various tools and opportunities to enhance their professional development and, as a result, the career potential of each individual. Our goal is to enable and empower colleagues with learning and development resources to support their continuous growth as individual contributors, team managers, or organization leaders. We offer: • Dedicated On-Demand Resources. Colleagues across the company have continuous access to resources and information to support their needs across the colleague lifecycle. Customized content includes focused support for various populations like colleagues, managers, and new hires to meet the various needs of our diverse colleague base. These robust offerings provide colleagues with just-in-time support and guidance. Content focuses on topics such as goal setting, competency training, coaching, feedback, performance reviews, and career development as relevant to each colleague; • Learning and Development Opportunities. Colleagues are encouraged to create a habit of learning and to develop foundational and core job function skills to improve efficiency and productivity. We offer live classroom learning, curated learning pathways, and open access to a powerful learning platform, connecting colleagues with content from over 30 integrated providers and millions of curated articles, videos, courses, podcasts, and events. Learning focuses on not only functional or technical skills but also those that enhance colleague experience and well-being, such as FranklinCovey’s The 7 Habits of Highly Effective People and Mental Health First Aid; • Career Development. We encourage colleagues to take ownership of their career development. We support our colleagues in crafting their development plans with their managers and provide opportunities for career growth and mobility through internal transfers, promotions, and expansion of roles and skills. Our managers are trained to support and empower their team members by giving continuous feedback and supporting their career goals. Career Development offerings for colleagues include self-assessments, career planning guides, goal-setting tools, skill development, mentorship, and career management resources. Our Bentley Network of Women (NOW) Program is a career development program focused on supporting women at Bentley Systems to develop their skills and advance their careers through mentorship, networking, and live sessions featuring senior colleagues at Bentley Systems, as well as external speakers and subject matter experts; 29 • Leadership Development Programs. Through our Leadership Excellence and Development (LEAD) program, participants are partnered with another leader in a cross-functional role at Bentley Systems and together leverage a custom-curated learning pathway that equips participants to succeed in current and future challenges. The program is founded on our leadership competencies and, in addition to developing leadership skills, also facilitates a “one Bentley” mindset through cross-functional collaboration and alignment. The learning pathway features internal and external learning and development content, 360 feedback, personality assessment, reflection, and action to solidify learnings and new skills. In addition to the LEAD program, we also offer foundational skill training and executive coaching as needed to invest in our leaders; • Educational Assistance Program. The Educational Assistance Program encourages professional development through formal education so that colleagues may further develop job-related skills and enhance career progression within Bentley Systems. This program covers a range of training programs and courses leading to degrees and certifications; and • Subsidized Professional Memberships and Subscriptions. We reimburse colleagues for the annual fees related to continuing membership in, or subscription to, professional organizations that are directly related to the colleague’s role. Engagement and Performance Management Colleague engagement is critical to maintaining our strong sense of corporate culture. We encourage meaningful and continuous performance feedback through efforts like annual performance and feedback reviews, quarterly alignment sessions, 360 feedback, and engagement and pulse surveys. These regular exercises ensure that we are executing business objectives, providing resources to optimize our colleagues’ performance and potential, and ensuring our colleagues are motivated and engaged. In our 2022 Annual Colleague Engagement Survey, we were pleased to report a 92% participation rate across the organization despite macro challenges like remote work impacting our colleagues. Of the colleagues who participated in the survey, 85% responded they were proud to work for Bentley Systems and 87% responded they would gladly recommend Bentley Systems as a place to work to people they know and respect. Diversity, Equity, and Inclusion As a global company with colleagues of different cultures, backgrounds, and perspectives based in more than 40 countries worldwide, our diversity is what makes us successful. We are committed to fostering and continuing to build programs to promote DEI so all colleagues can reach their highest performance and potential. We have developed intentional strategies and programs focused on increasing diversity and equity, as well as fostering a culture of inclusion and well‑being in the workplace. These strategies and programs include: • Building Diversity. In 2022, we continued to invest in our diversity partnerships to create a more diverse workplace. We enhanced our Bentley Education focus on exposing diverse students to Science, Technology, Engineering, and Mathematics (STEM) education. We partnered with Building 21, a school district of Philadelphia public high school, to pilot a paid summer internship for interested students. We are also a supporter of the American Heart Association’s STEM for Red campaign, bringing STEM education and career advice to female students in the Philadelphia School District. In addition, we continue to partner with HBCUs to provide mentoring and engineering programs for college students. We enhanced our partnerships with diverse professional organizations such as the Conference of Minority Transportation Officials (COMTO) and the National Society of Black Engineers (NSBE) to advance equitable opportunities for underrepresented groups in the transportation and engineering industries. We pro-actively implemented pre-hire assessments to reduce implicit bias in the hiring process; 30 • Colleagues. We continue to foster belonging and create an inclusive workplace through our colleague resource groups, the Inclusion, Diversity, and Equity Alliance (“IDEA”), which provides our colleagues a platform to join other colleagues from all regions, levels, demographics, and departments to build community and celebrate our diversity and differences. IDEA currently has five focus groups: OpenPride, OpenAbilities, People of Color in the U.S., Women at Bentley, and our newest group, Veterans at Bentley. Our IDEA groups have built strong communities and provided platforms for discussion and learning by hosting book clubs, anti‑racist training, panel discussions, speaker sessions, community engagement, and celebrating global awareness days and events. We continue to develop ways in which we can better serve and support our global colleagues through peer written articles geared at cultivating a more accepting workplace. Internally, we continue to actively invest in the advancement of women colleagues through Bentley Network of Women (NOW), a development and mentoring program for women globally at the Director level and below; and • Awareness and Training. We have implemented robust DEI training as part of our annual compliance commitments. We have held interactive sessions with our executives, emerging leaders, and talent acquisition in fostering DEI and eliminating unconscious bias, and have implemented training for hiring managers to ensure fairness in the interview process. We provide paid parental leave in several countries around the world, including the U.S., and in the U.S., we provide benefits for qualified gender affirming surgery and regularly invest in our colleagues’ mental health. We plan to continue our commitments to gender pay parity and analysis, and benefits to ensure our colleagues’ well‑being. As a result of these efforts, we were named a 2022 Chambers and Partners Diversity and Inclusion Awards: North America winner. These awards celebrate the achievements of firms, companies, and individuals who are furthering the advancement of diversity and inclusion across the U.S. and Canada. We were also named a Civic 50 Greater Philadelphia 2022 honoree by the Philadelphia Foundation, honoring the top community‑minded companies in Philadelphia for good corporate citizenship. Additional information on our DEI program can be found on our website at www.bentley.com/en/about-us/diversity-equity-inclusion. Infrastructure-Empowered Work Flexibility Our global footprint, with a substantial proportion of colleagues reporting to a manager on a different continent, prepared us well for the adaptions which became necessary during the COVID‑19 pandemic, and accelerated our learning curve for colleague success. Work flexibility continues to be instrumental both for our business and for our colleagues’ well‑being. Our Infrastructure Empowered Workforce Plan (“IEWP”) is our intentional approach which is meant, through productive and enjoyable facilities, to attract colleagues to take advantage of our evolving physical offices for necessary in-person collaboration, while institutionalizing the flexibility to work remotely otherwise, fully enabled by appropriate technologies. IEWP is a deliberate strategy that differentiates us as an employer of choice as we encourage our colleagues to make the best of both remote and in‑office working worlds to perform at a high level, make meaningful connections, and contribute to our success and, accordingly, to the world’s economy and environment, which depends on infrastructure. IEWP is built on a solid foundation of trust, empowering colleagues and their managers to make responsible and effective choices about the right balance between working from the office and remotely. This plan does not require colleagues to come into the office at any specific frequency. Rather, it allows colleagues the flexibility to make these choices with their manager, to achieve business success, and maintain a high level of productivity and engagement. We are modernizing our workplace related policies and processes, and are providing the equipment, facilities, tools, and training for colleagues and managers to work effectively in a globally dispersed environment while enhancing colleague experience and success. IEWP allows our colleagues across the globe to contribute to Bentley Systems’ success in a meaningful way while enhancing belonging and work-life balance. 31 Corporate Information Bentley Systems, Incorporated was incorporated in Delaware in 1987 and is headquartered in Exton, Pennsylvania. We were originally incorporated in California in 1984 upon our founding. Website Access to Reports Our internet address is www.bentley.com. The information posted on our website is not incorporated into this Annual Report on Form 10‑K. Our Annual Report on Form 10-K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on the Investor Relations portion of our website at www.bentley.com (or investors.bentley.com) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the U.S. Securities and Exchange Commission (“SEC”). 32